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News Article

Operations at Equinox Gold’s Los Filos Suspended

By Alejandro Ehrenberg | Tue, 09/08/2020 - 15:05

Equinox Gold reported that mining activities at its Los Filos mine complex in Guerrero have been suspended since Sept. 3, 2020 due to a road blockade by members of the nearby Carrizalillo community. The individuals allege non-compliance with the community social collaboration agreement signed in 2019, the company stated.

In a press release, community members confirmed the company’s statement that the cause of the conflict is non-compliance with the collaboration agreement. However, the press release states that roads are not blockaded, citing the uninterrupted supply of cyanide and explosives to the mine as evidence. The Carrizalillo community did confirm that it had taken measures to stop operations at Los Filos but did not clarify through which means.

In his daily press briefing, President López Obrador declared that his government will seek mediation between Equinox Gold and the Carrizalillo community. “We are working on conciliating the interests of mining communities, workers, unions and companies. We need to simultaneously protect the environment, safeguard the communities and create quality jobs. There are modern mining practices that allow for such conciliation.” President López Obrador reiterated that his administration is interested in finding a solution at Los Filos but noted that there are other pressing matters to look into first. 

In an open letter to President López Obrador, the Carrizalillo community thanked the government for taking interest in the Los Filos conflict. Nonetheless, the community remarked that it is not interested in conciliation but in having the company fulfill the collaboration agreement. The open letter states that for the time being, the federal government’s intervention is not necessary, as the negotiations concern only the company and the community.

At the time of writing, Equinox Gold’s shares traded at US$11.63 on the TSX, down from US$12.21 on Sept. 4, when the company announced the blockade. As described by the company, the Los Filos mine complex began commercial production in 2008 and was acquired by Leagold in 2017. Equinox Gold and Leagold merged in Jan. 2020. The operation consists of two open pit mines — Los Filos and Bermejal — and an underground mine at Los Filos. Los Filos is located 180km south of Mexico City in the municipality of Eduardo Neri, Guerrero. The property includes 39 concessions covering 148,908ha. For 2020, Equinox Gold expects Los Filos to produce between 170,000-190,000 oz of gold at an all-in sustaining cost of US$1,000/oz - US$1,050/oz of gold sold.

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Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst