BMO Capital Markets has maintained its Outperform rating on Equinox Gold Corp (NYSE:: CN) (NYSE: EQX), with a price target of Cdn$11.00.
The affirmation follows a site visit to Equinox’s Greenstone project, which revealed some operational updates. The company reported modest ramp-up delays and lowered its guidance for 2024.
The visit to the Greenstone site occurred on Sunday, after the company provided an operational update. BMO’s analyst noted that the delays in ramp-up were due to a variety of minor issues, but emphasized that the core investment thesis for the Greenstone project and Equinox Gold remains unaltered.
Despite the challenges faced, there has been considerable improvement since the beginning of October. The analyst anticipates that mining and processing rates will continue to climb throughout the fourth quarter. The target is to achieve 80% of the project’s throughput capacity by the end of the year.
The analyst’s statement highlighted that many of the issues impacting the ramp-up have been addressed and are showing signs of progress. This underpins the expectation that the project will soon be operating at a more optimal level.
In other recent news, Equinox Gold Corp. has seen significant developments in its operations and financial performance. The company’s Q2 2024 financial results reported a revenue of $269 million from the sale of 115,000 ounces of gold, a net income of $204 million, and an adjusted net loss of $6 million. Additionally, the company updated its 2024 guidance to 655,000-750,000 ounces of gold, with cash costs of $1,305-$1,405 per ounce and all-in sustaining costs of $1,635-$1,735 per ounce.
Equinox Gold also announced its acquisition of the remaining 40% stake in the Greenstone mine, which is expected to reach commercial production by the end of Q3. However, operations at the Arizona Piaba open pit were suspended due to geotechnical issues, affecting the production forecast. The company also transitioned Castle Mountain Phase one to residual leach operations, focusing on the phase two expansion.
Furthermore, BMO Capital Markets maintained an Outperform rating on Equinox Gold’s shares, despite a slight recalibration in the net asset value of the Greenstone project due to higher projected costs.
InvestingPro Insights
To complement BMO Capital Markets’ analysis of Equinox Gold Corp (EQX), recent data from InvestingPro offers additional context to the company’s financial position and market performance. Despite the reported ramp-up delays at the Greenstone project, InvestingPro data shows that Equinox Gold’s revenue grew by 8.24% over the last twelve months, reaching $1.09 billion. This growth aligns with an InvestingPro Tip indicating that analysts anticipate sales growth in the current year, supporting BMO’s maintained Outperform rating.
The company’s market capitalization stands at $2.6 billion, with a price-to-book ratio of 0.81, suggesting the stock may be undervalued relative to its assets. This could provide potential upside, in line with BMO’s Cdn$11.00 price target. Another InvestingPro Tip notes that Equinox Gold is expected to be profitable this year, which may help offset concerns about the project delays.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Equinox Gold, providing deeper insights into the company’s financial health and market position.
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