Equinox Gold Announces Q1 Net Income of $17.4M and 5% y-o-y Increase in Gold Production to 123 Koz

Equinox Gold, a Vancouver-based gold producer with numerous operating mines, released its Q1 output figures on May 1, showing an impressive increase in gold production and net income. In the first quarter of 2023, the company produced 122,746 ounces of gold, depicting a 5% increase from Q1 2022, which yielded just 117,452 ounces. With this production, the company earned an impressive net income of $17.4 million, keeping it on track toward its expansion and development goals.

The all-in sustaining costs for Q1’s production came to $1,658 per ounce, while last year’s costs rang in a bit lower at $1,577 per ounce. This spike should be expected, given the tightening in labor costs, material shortages, contract renewals, and other complications.

Equinox Gold sold 123,295 ounces of gold in Q1 2023, showing a 3% increase in sales compared to the same period last year. Santa Luz, the company’s newest and most successful gold mine located in Brazil, is likely one of the largest contributing factors to the rise in production and sales. By Q3 2022, Santa Luz reached the commercial production phase, allowing Equinox Gold to finally reap its rewards.

The Aurizona mining property also increased production in Q1. The Brazil-based open-pit mine dates back to the 17th century, though Equinox Gold continually introduces new efforts to amplify reserve mineralization quality and quantity.

Q1 earnings from mine operations totaled $14.5 million compared to last year’s $28.5 million. This decrease in earnings primarily came from the drop in production from the Mercedes mine operations. Lower earnings from Mesquite and Castle Mountain from the drop in production, plus higher spending and focus on other projects, like Aurizona, all contributed to the earnings reduction.

Despite this drop in earnings, Equinox Gold’s net income still rose substantially this quarter compared to the same period last year. In Q1 2022, the company suffered a net loss of $19.8 million, even with the large earnings figure. This year, Equinox Gold pulled off a net win of $17.8 million with more strategic spending.

The company explained in the report that the high net income in Q1 2023 primarily came from the increased inflow of $31.9 million compared to Q1 2022’s $19 million expenses, with lower earnings and mine operations further offsetting the difference. An additional income source for Q1 2023 included a $34.5 million sale on the company’s interest and reclassification in the i-80 Gold partial investment.

In the first quarter of 2023, Equinox Gold’s earnings before interest, tax, and depreciation (EBITDA) totaled $57 million compared to 2022’s figure of $43.1 million. The adjusted net loss came to just $8.2 million compared to last year’s $24.2 million.

Equinox Gold highlighted how in 2023, the adjusted EBITDA rose while the loss figure decreased compared to the results from Q1 2022. A few reasons the company noted behind these beneficial changes included losses on gold projects last year compared to realized gains for those projects this year, only partially offset by lower earnings from a few mining operations.

In the Q1 report, the company also stated its production and cost guidance plans moving through 2023 with figures set at 555,000 to 625,000 gold ounces, with cash costs of $1,355 to $1,460 per ounce and all-in sustaining costs of $1,575 to $1,695 per ounce.

“Equinox Gold had a good start to the year in terms of both development and operations. Greenstone construction continues to progress on time and on budget for first gold pour in the first half of 2024. We successfully strengthened our balance sheet, substantially increasing our cash position and ending Q1 2023 with over $410 million in available cash and credit. Permitting for the expansion of our Castle Mountain mine is progressing well and the feasibility study for the addition of an underground mine at Aurizona is nearing completion for release mid-year,” the CEO and president of Equinox Gold, Greg Smith, explained in the report.

“Further, we have continued to achieve strong performance on our safety and environmental targets, and gold production and costs during the quarter have us well positioned to achieve our 2023 guidance,” he continued.

Equinox Gold currently controls seven mining projects, with an eighth underway. The company hopes to achieve over 1 million ounces of gold production annually through its expansion and development efforts in the near future.

With the rising demand in the gold industry, it only makes sense that major miners are responding with rapid plans to hike production and capitalize on the opportunity.

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