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Equinox Gold Stock: Santa Luz Is Now Producing (NYSE:EQX)

Gold Nuggets and Flakes in Pan

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Introduction

Vancouver-based Equinox Gold (NYSE:EQX) reported its fourth-quarter and full-year 2021 outcomes on February 24, 2022.

Note: This article is a necessary replace to the article printed on January 19, 2022.

In my previous article, I analyzed the 4Q21 preliminary gold manufacturing, and this text covers the 4Q21 and full-year 2021 outcomes, together with gold manufacturing. However, the manufacturing numbers have modified slightly and have been up to date.

Just a few highlights

Equinox Gold Q4 2021 highlights

EQX: Financial Highlights This autumn Presentation (Equinox Gold )

Equinox Gold produced 210,432 Au oz, in 4Q21, an 54.3% enhance over 4Q20 (136,352 oz) and up 50.6% sequentially. The firm

Achieved 2021 steerage with a complete manufacturing of 602,110 ounces.

The revenues got here in at $381.23 million, a large bounce from the identical quarter a yr in the past. The firm posted a $184.08 million internet revenue, double final yr’s $91.24 million internet revenue quarter.

Investment thesis

The firm is advancing effectively and has wonderful future development potential, qualifying it as a superb long-term funding.

Equinox Gold is mining primarily in secure jurisdictions in North and South America with seven producing mines and eight with the Santa Luz venture, which can produce about 110,500 Au ounces per yr with the primary gold pour completed in late March.

Equinox Gold The santa Luz project

EQX The Santa Luz venture commissioning Presentation (Equinox Gold)

Furthermore, on October 27, 2021, Equinox Gold introduced the groundbreaking for the full-scale development of the Greenstone Mine in Ontario, Canada.

Below is a abstract of important knowledge:

Equinox Gold - Premier Americas Gold producer

EQX: Map Presentation This autumn (Equinox Gold)

Equinox Gold is a dependable proxy for gold. The steel has skilled a lot volatility over the previous twelve months and can most likely proceed to fluctuate extensively.

However, we’ve got loved a robust momentum for the gold worth benefiting from the struggle in Ukraine and a regarding bounce in inflation fueled by pink scorching commodity costs.

With the Fed turning hawkish once more and keen to behave aggressively in opposition to inflation that it sees as too excessive, we could quickly witness a gold worth reversal again to beneath $1,850 per ounce.

It is the principle cause why I like to recommend short-term buying and selling LIFO a big half (~40%) of your lengthy place to revenue from the gold volatility and cut back the chance of a sudden turnaround for the more serious.

Stock efficiency

Equinox Gold has outperformed the VanEck Vectors Gold Miners ETF (NYSEARCA: GDX) and is now up 18% on a one-year foundation.

EQX vs GDX price
Data by YCharts

CEO Christian Milau stated within the conference name:

we have put collectively a group of corporations and belongings over the past 4 years, and we’re excited to be at this level in our development cycle right here the place we have got the diversified Americas gold producer with the seven producing mines quickly to be eight, one Santa Luz is ramping up in quarter two this yr and 5 thrilling development initiatives.

Equinox Gold – Financial Snapshot 4Q21 – The Raw Numbers

Equinox Gold 4Q20 1Q21 2Q21 3Q21 4Q21
Total Revenues in $ Million 252.63 229.70 226.22 245.13 381.23
Net Income in $ Million 65.25 50.32 325.74 -5.24 184.08
EBITDA $ Million 103.54 118.73 364.16 47.55 244.29
EPS diluted in $/share 0.31 0.14 0.96 -0.02 0.54
Operating Cash circulate in $ Million 82.93 79.36 20.17 64.76 155.42
Capital Expenditure in $ Million 50.91 70.87 94.41 71.51 107.44
Free Cash Flow in $ Million 32.02 8.49 -74.24 -6.75 47.99
Total Cash $ Million 344.93 317.53 513.91 459.93 546.03
Total Long time period Debt in $ Million 545.24 547.36 540.53 545.09 540.69
Shares excellent (diluted) in Million 266.03 291.62 343.63 300.51 350.97

Data Source: Company launch

Gold Production And Balance Sheet Details

1 – Revenues had been a whopping $381.23 million in 4Q21

Equinox Gold - Revenue trend

EQX: Chart Quarterly Revenues historical past (Fun Trading)

Equinox Gold reported revenues for the fourth quarter of 2021 of $381.23 million. I like to recommend checking the desk above for the stability sheet knowledge.

This quarter, Equinox accomplished the acquisition of Premier, rising diversification and scale with a 50% curiosity within the Greenstone gold venture in Canada and a 100% curiosity within the working gold-silver Mercedes mine in Mexico. Moreover, Equinox elevated Greenstone’s possession curiosity to 60%. Also,

  • Sold ten million shares of Solaris for complete money proceeds of $66.7 million.
  • Sold the Pilar Mine for $38.0 million, a 1% internet smelter return royalty and 11.6 million shares of Pilar Gold Inc.
  • Invested C$51 million in i-80 Gold Corp. to keep up an approximate 25% curiosity on a completely diluted foundation.
  • Announced settlement to promote the Mercedes Mine for $100 million, a 2% internet smelter return and 24.73 million shares of Bear Creek Mining Corporation (“Bear Creek”).

2 – Free money circulate was $47.99 million in 4Q21

Equinox Gold Free cash flow

EQX: Chart Quarterly Free money circulate History (Fun Trading)

Note: The generic free money circulate is the money from operations minus CapEx.

Trailing twelve-year free money circulate was a lack of $24.51 million with a free money circulate for 4Q21 of $47.99 million.

3 – No extra Net debt and money of $546.03 million in 4Q21

Equinox Gold debt and cash

EQX: Chart Quarterly Cash versus Debt History (Fun Trading)

No Net debt as of December 31, 2021. The complete money was $546.03 million, and liquidity is ~$505 million now.

Equinox Gold Liquidity

EQX: Presentation Liquidity (Equinox Gold)

4 – Gold manufacturing consolidated particulars – 4Q21 gold manufacturing was 210,432 Au Oz (212,255 Au Oz offered)

Equinox Gold - Gold production

EQX: Chart Quarterly Gold Production historical past (Fun Trading)

AISC in 4Q21 was $1,266 per ounce offered, and the gold worth realized was $1,792 per ounce.

Equinox Gold AISC and gold price realized

EQX: Chart Quarterly AISC and gold worth historical past (Fun Trading)

5 – 2022 Guidance

Production steerage is up considerably from 2021 with 625K to 710K oz of gold and AISC of $1,300 to $1,375 per gold offered.

Equinox Gold 2022 guidance

EQX: 2022 Guidance Presentation (Equinox Gold)

Note: On November 4, 2021 – Equinox introduced that it had filed a National Instrument 43-101 technical report relating to the pre-feasibility research for an growth at its Aurizona gold mine in Brazil and an up to date Mineral Reserve and Mineral Resource estimate for Aurizona, the outcomes of which had been introduced on September 20, 2021.

The principal change to gold manufacturing steerage comes from Santa Luz, a brand new producing mine for the corporate.

6 – Production particulars per mine for the final eight quarters

Equinox Gold - Gold production per mine

EQX: Chart Quarterly gold manufacturing per mine historical past (Fun Trading)

Equinox Gold owns seven working mines now after the sale of Pilar.

Also, Equinox commenced full-scale development at Greenstone with,

a development funds on a 100% foundation (of which Equinox Gold will fund 60%) of C$1.53 billion ($1.23 billion at a fee of USD: CAD 1.25), together with a $177 million contingency

Initial capital estimate up to date in October 2021 to mirror agency provider quotes following detailed engineering, a evaluation and replace of capital prices, and an elevated contingency together with a provision for future inflation and potential COVID-19 impacts

Initial money spend might be decreased by roughly $100 million by means of lease financing for cellular gear and offset economically by as much as $70 million of pre-commercial manufacturing revenues (at $1,750 per oz gold worth).

Equinox Gold Greenstone new project

EQX: Greenstone new venture (Equinox Gold)

7 – Proven and Probable Mineral Reserves

Equinox Gold Proven and Probable Mineral Reserves

EQX: 2021 Mineral reserves Presentation (Equinox Gold)

Mineral reserves are actually 16.402 Moz.

Technical Analysis (Short Term)

EQX stock technical analysis

EQX: TA Chart (Fun Trading)

EQX kinds an ascending channel sample with resistance at $9 and help at $8.1.

The buying and selling technique that I like to recommend is promoting about 25%-35% of your place between $8.85 and $9.25. The current gold cross (50MA crossing the 200MA) is a superb optimistic sign.

It is cheap to build up EQX beneath $8.15 once more.

Watch the gold worth like a hawk.

Warning: The TA chart should be up to date regularly to be related. It is what I’m doing in my inventory tracker. The chart above has a attainable validity of a couple of week. Remember, the TA chart is a instrument solely that can assist you undertake the proper technique. It shouldn’t be a strategy to foresee the long run. No one and nothing can.

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