EQX's AISC Spike Signals Pressure, But H2 Offers Path to Cost Relief

Equinox Gold Corp.’s EQX first-quarter results reveal a sharp increase in a critical metric — all-in-sustaining costs (AISC) — a key indicator of cost efficiency in mining. AISC climbed to $2,065 per ounce, up roughly 6% from $1,950 per ounce in the year-ago quarter. While revenues soared 76%, driven by a 38% increase in realized gold prices and a 27% surge in ounces sold, higher unit costs, especially in Brazil, partly offset the benefits. 

Excluding the results from the Los Filos mine in Mexico, which has been indefinitely suspended after the expiry of its land access agreement, AISC still climbed 9% to $1,979 per ounce, underscoring operational cost inflation that threatens margins. This upside reflects higher unit costs in Brazil, and higher costs and unplanned maintenance due to winter challenges at the Greenstone mine in Canada. 

Higher operational costs, partly due to the suspension of Los Filos mine operations, may continue to act as headwinds in the second quarter. Equinox Gold expects roughly $35 million in mine suspension and care and maintenance charges at Los Filos in the second quarter. Nevertheless, there is a silver lining as the company envisions costs whittling down with rising production in the second half of 2025. With continued production ramp-up at Greenstone, reduced costs related to Los Filos and merger synergies with Calibre Mining Corp., Equinox has a clear path to attain cost efficiency. 

Among its peers, B2Gold Corp. BTG also saw higher costs in the first quarter. B2Gold’s consolidated all-in sustaining costs of $1,533 per ounce were roughly 14% higher than the prior-year quarter. B2Gold is seeing cost inflation pressure across all sites, which is impacting input costs, including reagents, fuel and consumables.

Agnico Eagle Mines Limited’s AEM AISC declined 0.6% in the first quarter due to the deferral of certain sustaining capital expenditures. However, Agnico Eagle projects the same to increase in the remainder of 2025. Agnico Eagle forecasts total cash costs per ounce in the range of $915 to $965 and AISC per ounce between $1,250 and $1,300 for 2025, suggesting a year-over-year increase at the midpoint of the respective ranges.

EQX’s Price Performance, Valuation & Estimates

Equinox Gold has gained 37.6% year to date against the Zacks Mining – Gold industry’s rise of 50.5%.

From a valuation standpoint, EQX is currently trading at a forward 12-month earnings multiple of 6.51, a roughly 52.2% discount to the industry average of 13.62X. It carries a Value Score of A.

The Zacks Consensus Estimate for EQX’s 2025 and 2026 earnings implies a year-over-year rise of 230% and 106%, respectively. The EPS estimates for 2025 and 2026 have been trending lower over the past 30 days.

EQX stock currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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