Source: Streetwise Reports 11/21/2019
The company’s performance during the quarter is covered in a Haywood report.
In a Nov. 1 research note, Haywood analyst Kerry Smith reported that Equinox Gold Corp. (EQX:TSX.V), in its first quarter of commercial production at the Aurizona mine, “delivered a solid Q3/19, beating expectations, and is already generating free cash flow.”
Smith highlighted that Equinox’s Q3/19 financials beat expectations. Cash flow per share was US$0.33, above Haywood and consensus’ forecast of US$0.28 and US$0.31, respectively. Earnings per share of US$0.07 was slightly below consensus’ forecast of US$0.075.
As for gold production, Equinox yielded 62,656 ounces in Q3/19 from both its Aurizona and Mesquite mines at an average cash cost of US$800 per ounce (US$800/oz) versus Haywood’s projected 65,000 ounces (65 Koz) at an average cash cost of $895/oz.
Another achievement during the quarter, Smith pointed out, was commercial production from Aurizona, which began July 1. Subsequently, Aurizona delivered 29,350 ounces in Q3/19 at an average cash cost of US$781/oz. Production was just below Haywood’s 30 Koz estimate; average cash cost was well below its US$910/oz forecast. “The mine exceeded our expectations,” Smith commented. Accordingly, Haywood boosted its 2019 production projection for Aurizona to 75 Koz from 68 Koz.
As for Mesquite, it continued to do well, noted Smith, “delivering good cash flow with US$11.7 million in Q3/19.” This resulted from 33,306 ounces of production at an average cash cost of US$819/oz. This result compares to Haywood’s 34.9 Koz and US$945/oz cash cost projections. Haywood models 2019 production from Mesquite at 125 Koz.
At the end of Q3/19, Equinox had US$45.5 million in cash, restricted and unrestricted, an increase over that of Q2/19 of US$33 million.
Smith indicated that in other news, Equinox’s board of directors approved phase one construction at the miner’s Castle open-pit leach gold mine and a US$58 million budget for it. The company aims to pour first gold in Q3/20 at Castle for phase one. Phase two would be an expansion.
Along with first gold at Castle, other near-term catalysts are an initial mineral estimate for Tatajuba, expected in Q1/20, and a phase 2 feasibility study for Castle, anticipated in H2/20.
Haywood has a Buy rating and a CA$13.75 per share target price on Equinox. This represents a 61% projected return as the company’s current share price is around CA$7.95.
Sign up for our FREE newsletter at: www.streetwisereports.com/get-news
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from Haywood Securities, Equinox Gold Corp., November 1, 2019
Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
Important Disclosures
Important Disclosures:
▪The Analyst(s) preparing this report (or a member of the Analysts’ households) have a financial interest in Equinox Gold Corp. (EQX-V).
▪ As of the end of the month immediately preceding this publication either Haywood Securities, Inc., one of its subsidiaries, its officers or directors beneficially owned 1% or more of Equinox Gold Corp. (EQX-V).
▪ Haywood Securities, Inc. has reviewed lead projects of Equinox Gold Corp. (EQX-V), Harte Gold Corp. (HRT-V) and a portion of the expenses for this travel have been reimbursed by the issuer.
▪ Haywood Securities, Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Equinox Gold Corp. (EQX-V) in the last 12 months.
▪ Haywood Securities Inc. or an Affiliate has received compensation for investment banking services from Equinox Gold Corp. (EQX-V) in the past 12 months.
Other material conflict of interest of the research analyst of which the research analyst or Haywood Securities Inc. knows or has reason to know at the time of publication or at the time of public appearance: n/a.
Research policy is available here.
( Companies Mentioned: EQX:TSX.V,
)