Trident reports Equinox expansion plans for Los Filos

The AIM-traded firm holds an offtake agreement for 50% of all refined gold production up to a cap of 1,100,000 ounces from Los Filos, with around 770,000 ounces remaining.

It said the feasibility study contemplated the construction of a carbon-in-leach processing plant beginning in the second half of 2023, to process higher-grade ore from Los Filos' six mines, starting in mid-2024.

Trident noted that, while the feasibility study estimates were predicated on that timeline, Equinox had not yet approved the expansion.

With construction of the carbon-in-leach processing plant and continued development of the Bermejal underground mine, the feasibility study outlined “peak gold production” averaging 360,000 ounces per year from 2025 to 2030, including production in excess of 400,000 ounces in 2025.

By comparison, Equinox's latest guidance for 2022 production at Los Filos was 155,000 to 170,000 ounces.

The board said the expansion would extend the Los Filos mine life to 14.5 years at an all-in sustaining cost of $1,081 per ounce of gold.

It said the study calculated a 5%-discounted net present value of $625m, and an after-tax internal rate of return of 26% at a gold price of $1,675 per ounce.

“Equinox continues to deliver on its growth plans with the release of this updated feasibility study, which highlights the tremendous potential at Los Filos,” said Trident chief executive officer Adam Davidson.

“The potential expansion at Los Filos underscores the organic growth within Trident's gold offtakes portfolio; which includes underlying assets such as Equinox's Santa Luz mine, Blyvoor Gold, and i-80 Gold Corp's Ruby Hill and Granite Creek projects.

“In addition to this organic growth, delivered at no incremental cost to Trident, we have an attractive pipeline of potential transactions which will deliver further significant value to shareholders.”

At 1400 BST, shares in Trident Royalties were up 0.55% at 46p.

Reporting by Josh White at Sharecast.com.