Camino Rojo Underground (PEA) PEA: $1.30B NPV, 30% IRR
Equinox Gold Corp.'s Camino Rojo Underground (PEA) in Mexico has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $1.30B, an after-tax IRR of 30%, and initial capital of $608M. The mine plan runs 17 years at about 215000 oz Au per year.
Equinox Gold Corp.'s Camino Rojo Underground (PEA) has reported Preliminary Economic Assessment (PEA) results for the gold project in Mexico. The study headlines an after-tax net present value of $1.30B at a 5% discount rate. It reflects Equinox Gold Corp.'s (EQX.TO) latest disclosed economics for the asset.
Economics. The after-tax NPV is $1.30B using a 5% discount rate. After-tax IRR is 30%. Initial capital expenditure is estimated at $608M. The study models a payback period of 3.16667 years. All-in sustaining costs are pegged at 1304 USD/oz. Economics are based on $3,100/oz gold.
Production and mine plan. The project envisions an underground operation. Life of mine is 17 years. Average annual production is approximately 215000 oz Au. Metallurgical recovery averages 87%.
These figures are extracted from Equinox Gold Corp.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Our Analysis
- IRR after-tax
- 30%
higher than 33% of 99 projects we track
- NPV after-tax
- $1.30B
higher than 83% of 134 projects we track
- Initial capex
- $608M
47% of NPV
costlier than 83% of 125 projects we track
- Payback
- 3.2yrs
slower than 82% of 76 projects we track
- Mine life
- 17yrs
- Discount rate
- 5%
- Study price assumption
- $3,100/oz gold
- Spot gold today
- $4,107.00/oz
The project sits squarely in the middle of the pack on returns: a 30% after-tax IRR ranks it above only a third of the 99 gold projects we track, while its $1.30B NPV ranks it above 83% of 134 peers. That split is the first thing an investor should register. The NPV is a function of a 5% discount rate, the low end of reporting convention, which flatters the headline figure; the IRR, which is not flattered by that rate, is merely adequate. It clears the roughly 15% hurdle developers need to attract project finance, but it does not clear it by a margin that rewards construction risk.
The capital comes back fast enough, 3.2 years, which is better than most, but the real constraint is not the payback, it is the scale of the build relative to the balance sheet. Initial capex of $608M is only 47% of NPV and, more importantly, small relative to the company's US$7.24B market cap. This is a diversified producer with 36 projects in our tracked universe, so funding a $608M build is a manageable line item, not a bet-the-company event. That is the sharpest funding-risk signal here: the project is capital-light enough that financing should not be the reason it fails.
What could fail it is the study stage. This is a PEA, scoping-level, with a capital estimate that typically carries a plus or minus 50% band, and a 17-year mine life in Mexico, a jurisdiction with a mixed record on permitting. The study assumes $3,100/oz gold while spot sits at $4,107.00/oz, so the economics are not dependent on a heroic price deck; there is upside if prices hold. The question that decides this project is whether the PEA's cost and recovery assumptions survive the transition to a feasibility study, because at a 30% IRR there is no margin for a 50% capex overrun.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.