Equinox’s Castle Mountain gets rare Southwest FAST-41 boost

[Ben Graham]

Equinox Gold’s (TSX, NYSE-A: EQX) Castle Mountain stage two expansion in California has joined the US FAST-41 program, setting a solid federal permitting timeline that could reduce the development time by years.

Its FAST-41 status now puts the project on track to complete federal approvals in 16 months, clearing the way for a construction decision by the end of next year, Equinox said Monday.

“Castle Mountain is a high-quality growth opportunity for Equinox Gold in a tier-one jurisdiction,” CEO Darren Hall said in a release. “With FAST-41 status in place, we’ve commenced study updates and optimization work to align with the schedule and fast-track our construction decision.”

FAST-41, managed by the Federal Permitting Improvement Steering Council aims to speed up environmental reviews, boost coordination between agencies and enhance public transparency. Mining analysts say that permitting uncertainty is slowing down new US mine builds. Timelines can take five to eight years, or even longer, due to the National Environmental Policy Act (NEPA) and state reviews.

At C$9.09 apiece in Toronto on Monday, Equinox shares were up C$0.20 or 2.25%, giving it a market capitalization of C$6.8 billion. The stock has gained 32% over the past 12 months.

Rare feat

Castle Mountain’s inclusion is rare for FAST-41 projects in the US Southwest, where the lists are dominated by renewable energy, transmission and infrastructure projects. Few active mining developments in California or neighbouring states are in the program.

Notably, South32’s (LSE, ASX: S32) Hermosa zinc-manganese project in Arizona, the first US mine added to the FAST-41 program in 2023, is the country’s only advanced project for both federally designated critical minerals. The US Forest Service started the environmental review under NEPA in 2022.

FAST-41 status offers Equinox greater certainty in a growth pipeline that includes the Valentine mine in Newfoundland and the long-suspended Los Filos mine in Mexico.

On a macro level, the move signals a potential shift in US permitting priorities – one that could encourage other developers to pursue FAST-41 designation to speed up approvals.

Mine expansion

The Castle Mountain expansion would increase production to an average of 218,000 gold oz. annually at all-in sustaining costs of $858 per oz. for 14 years, followed by rinsing of the leach pad to recover remaining gold.

Based on $1,500 per oz. gold price, the expansion’s after-tax net present value stands at $640 million (at a 5% discount rate), with an 18% internal rate of return, according to the 2021 feasibility study. Initial capital costs are estimated at $510 million, which includes the purchase of a mining fleet. Construction would take about two years.

The company ran a smaller heap-leach mine at the site from late 2020 until the third quarter of last year. It is now re-leaching while also working on expansion engineering and optimization.