Equinox Gold’s Q1 2025: A Golden Performance, But Clouded by Costs

Equinox Gold’s first-quarter 2025 results present a paradox: soaring revenues defied expectations, yet earnings per share (EPS) fell sharply, deepening questions about the company’s ability to balance growth with profitability. While the rise of the Greenstone Mine and surging gold prices fueled a 76% revenue jump, rising debt, operational setbacks, and accounting headwinds cast a shadow over what should have been a celebratory quarter.

Revenue Soars on Price and Production

The company’s revenue surged to $423.7 million in Q1 2025, a striking improvement from $241.3 million in the same period last year. Two factors drove this growth: a 38% rise in the average realized gold price—jumping from $2,066 to $2,858 per ounce—and a 27% increase in ounces sold, to 147,920 ounces. The newly operational Greenstone Mine, which began commercial production in late 2024, contributed significantly, adding $24.4 million to mine operations.

EPS Stumbles: Costs and Accounting Headwinds

Despite the revenue boom, Equinox reported a net loss of $75.5 million, or -$0.17 per share, compared to a loss of $42.8 million, or -$0.11, in Q1 2024. Adjusted EPS also deteriorated, falling to -$0.08 from -$0.04. The primary culprits were:
- Higher Finance Costs: Interest expenses rose due to increased debt and the end of interest capitalization at Greenstone after it achieved commercial production.
- Fair Value Adjustments: Unfavorable changes in the valuation of gold contracts and contingent consideration for Greenstone, amplified by rising forward gold prices.
- Los Filos Suspension: Care-and-maintenance costs after the mine’s indefinite closure in April 1, 2025, following land-access disputes.
- Currency Pressures: Weakness in the Brazilian real, which inflated costs at Equinox’s Brazilian operations.

Operational Crosscurrents

While Greenstone performed well—surpassing production targets despite winter challenges—the indefinite suspension of Los Filos, which accounted for 25% of 2024 production, is a critical blow. The mine’s closure led to a $28.6 million write-down of heap leach inventories to net realizable value. Yet, Equinox insists Los Filos itself isn’t impaired, leaving open the possibility of a future restart.

Meanwhile, cost metrics worsened. Cash costs per ounce rose 13% to $1,769, and AISC climbed 6% to $2,065, driven by Brazil’s operational and currency hurdles. The company’s guidance for 2025 AISC ($1,455–$1,550 per ounce) suggests costs could stabilize, but investors will watch closely for execution.

The Merger Advantage?

Equinox’s pending merger with Calibre Mining, expected to close in Q2 2025, adds a layer of optimism. The combined entity would control nine mines across four countries, diversifying production and potentially lowering costs through synergies. The merger’s success could offset near-term challenges, but it remains unproven.

Conclusion: A Company at a Crossroads

Equinox Gold’s Q1 results are a mixed bag. The revenue surge underscores the power of its assets when prices and operations align, while the EPS stumble highlights vulnerabilities in its financial structure and operational execution. The adjusted EBITDA of $137.9 million—a near-tripling from 2024—suggests core operations remain robust, but the path to consistent profitability requires managing debt, stabilizing costs, and navigating regulatory risks like those at Los Filos.

With gold prices near decade highs and the Calibre merger in sight, Equinox has tailwinds to leverage. However, its ability to convert revenue growth into sustained earnings will determine whether it becomes a leader in the gold sector or a cautionary tale of overextension. For now, investors may see value in its assets, but patience—and a watchful eye on costs—are prerequisites.

In a sector where gold prices can swing fortunes, Equinox’s story is far from over. The next chapter will hinge on execution, not just the price of gold.