Equinox Gold Corp. (TSX-V:EQX) (OTC:EQXGF) (“Equinox Gold” or the
“Company”) is pleased to announce that the Company has released its
unaudited condensed consolidated interim financial statements (“Q1
Financial Statements”) and related management’s discussion and
analysis (“Q1 MD&A”) for the three months ended March 31, 2018
(“Q1 2018” or the “Quarter”).
Equinox Gold’s principal assets are its
wholly-owned, past-producing Aurizona gold mine in Maranhão, Brazil
(“Aurizona”) and its wholly-owned, past-producing Castle Mountain
gold mine in California, USA (“Castle Mountain”). The Company’s
primary focus is completing construction and achieving production
at Aurizona, which is on track to pour gold before the end of 2018.
The Company is also completing a prefeasibility study for Castle
Mountain, targeted for completion in mid-2018, with the objective
of recommencing production in 2020.
First Quarter 2018 Financial Highlights
and Recent Developments
- Full-scale construction of Aurizona approved in early January
- Construction fully funded, on budget and on schedule
- Mining contract signed and activities underway, currently
focused on removing waste from the Piaba pit and developing access
roads
- Aurizona construction project-to-date financial highlights
(includes project construction activities from Q4 2017) as of March
31, 2018:
- Budget of $146 million
- Project-to-date capital expenditures (“capex”) of $43.5
million
- Commitments made of $75.5 million (includes project-to-date
capex)
- Undrawn portion of construction debt facility of $70.0
million
- Aurizona construction capex of $21.3 million during Q1
2018
- Total Q1 2018 exploration spend of $3.0 million
- Spent $1.7 million on Castle Mountain prefeasibility study
preparation
- Retired $15.0 million of debenture purchased by Ross Beaty via
conversion into common shares
- Received $14.8 million (C$18.4 million) cash, net of financing
costs, pursuant to shareholder’s exercise of non-dilution
rights
- Received milestone payment of $4.7 million in April 2018
related to December 2017 sale of Coringa project
- Q1 2018 net loss of $4.4 million
- Working capital of $59.4 million at March 31, 2018, including
cash and marketable securities of $52.2 million
- Koricancha operation generated $6.1 million in revenue and
recorded a $0.9 million loss
- Collected $1.6 million of value-added tax refund in April
2018
Aurizona
Equinox Gold’s Board of Directors approved
full-scale construction at Aurizona in early January 2018. During
the Quarter the Company expended $21.3 million on Aurizona
construction activities which, when added to the amount expended on
early project works during Q4 2017, brings the total construction
expenditures at March 31, 2018 to $43.5 million.
With a construction budget of $146 million and
$43.5 million in project expenditures to date, the remaining
project capital will be funded by cash and marketable securities of
$52.2 million and $70.0 million of undrawn construction debt
financing.
Construction is proceeding on schedule to
achieve first gold pour by year-end 2018. The overall project was
44% complete at the end of March and plant construction was 27%
complete. Mining activities commenced in mid-April and are
currently focused on removing waste from two locations in the Piaba
pit and developing access roads in preparation for ore mining in Q3
2018.
While the Aurizona operations team is focused on
achieving production, Equinox Gold’s exploration team is focused on
mine life extension and district-scale opportunities. During the
Quarter the Company announced the results from exploration at six
targets east and north-east of the reserve pit, where drilling
discovered broad intervals of economic grade gold mineralization
and several new mineralized structures. These discoveries,
approximately four kilometres of western strike extension and other
district-scale targets will be tested with upcoming exploration
programs, and a study is underway examining opportunities to
develop the underground potential of the Aurizona gold deposit. In
addition, drill results from more than 11,000 metres of
drilling in 2017 at the Piaba and Piaba West targets are being
incorporated into a resource update that is targeted for completion
in mid-2018.
Castle Mountain
Activities at Castle Mountain during the Quarter
focused on the exploration and related technical activities
required to complete a prefeasibility study for the Castle Mountain
Project with the objective of restarting production. The
prefeasibility study is examining a production restart in a phased
ramp-up scenario, starting with Phase 1 run-of-mine (“ROM”) heap
leaching of backfill material from previous operations and ramping
up to a full restart in Phase 2 that will include milling of a
limited stream of higher-grade material and ROM leaching of the
balance. While the base case plan for Phase 2 operations had
originally contemplated three processing streams — ROM heap
leaching for low-grade material, crushing and heap leaching of
medium-grade material and milling for a limited stream of
higher-grade material — metallurgical studies have shown higher
than expected recoveries using ROM heap leach processing. As a
result, the Company is advancing an alternative Phase 2 flow sheet
employing ROM heap leach of low and medium-grade material and
milling of high-grade material. This simplified flow sheet reduces
operating complexity and also brings significant economic benefits
to the project, reducing both up-front capital costs and long-term
operating costs.
The Company expended $1.7 million on exploration
and related technical activities during the Quarter to support the
Castle Mountain prefeasibility study. Completion of the
prefeasibility study is targeted for mid-2018 with the potential to
commence Phase 1 production in 2020.
During the Quarter the Company announced that
exploration has identified a new zone of significant mineralization
at the East Ridge target, peripheral to the current resource pit,
with grades significantly higher than the current resource grade.
Additional drilling to examine East Ridge and other Castle Mountain
targets is planned for later in 2018. Exploration at Castle
Mountain in 2017 focused on upgrading material previously
classified as waste or inferred resources within and adjacent to
the pit shells with the objective of incorporating this material
into the prefeasibility study.
Corporate and Other
In February 2018, Equinox Gold received $14.8
million (C$18.4 million), net of finance costs, in cash from
Pacific Road Resources Funds (“Pacific Road”) and issued 21 million
Equinox Gold common shares pursuant to Pacific Road’s exercise of
non-dilution rights.
Ross Beaty, Chairman of Equinox Gold, has
invested approximately $30 million since October 2017 to become the
Company’s largest shareholder and currently holds approximately 12%
of Equinox Gold’s common shares. Of these share purchases, Mr.
Beaty acquired approximately 22.5 million common shares in January
2018 pursuant to a share and debenture purchase agreement between
Equinox Gold, Mr. Beaty and Sandstorm Gold Ltd. (“Sandstorm”),
whereby Sandstorm sold to Mr. Beaty 4.0 million common shares of
Equinox Gold and $15.0 million principal of the debenture payable
by Equinox Gold to Sandstorm at a combined purchase price of
approximately $18.2 million. The debenture sold to Mr. Beaty was
retired through the issuance of approximately 18.5 million common
shares.
The Company’s Koricancha processing facility
processes ore purchased from small scale and artisanal miners
throughout Peru. During the Quarter Koricancha processed 10,992
tonnes of ore and sold 4,777 ounces of gold for revenue of
$6.1 million. Cost of sales was $7.0 million, which includes
$5.2 million of ore purchasing costs and $1.8 million of other
production costs, resulting in a net loss at the operation of $0.9
million for the Quarter.
Additional information regarding the Company’s
financial results, activities underway at Aurizona and Castle
Mountain and the Company’s long-term business strategy is available
in the Q1 Financial Statements and accompanying Q1 MD&A, which
are available for download on the Company’s website at
www.equinoxgold.com and on SEDAR at www.sedar.com.
On Behalf of the Board of Equinox Gold
Corp.
“Christian Milau”
CEO & Director
About Equinox Gold
Equinox Gold is a Canadian mining company with a
multi-million-ounce gold resource base, near-term and growing gold
production from two past-producing mines in Brazil and California,
and a long-term growth platform with a diverse portfolio of gold
and copper assets in North and South America. Construction is
underway at the Company’s Aurizona project in Brazil with the
objective of pouring gold by late 2018, and a prefeasibility study
is underway at the Company’s Castle Mountain project in California
with the objective of restarting production. Further information
about Equinox Gold’s current portfolio of assets and long-term
growth strategy is available at www.equinoxgold.com or by email at
ir@equinoxgold.com.
Equinox Gold Contacts
Christian Milau, CEORhylin Bailie, Vice
President Investor RelationsTel: +1 604-558-0560Email:
ir@equinoxgold.com
Cautionary Notes and Forward-Looking
Statements
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as such term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
This document contains certain forward-looking
information and forward-looking statements within the meaning of
applicable securities legislation (collectively “forward-looking
statements”). The use of the words “will”, “expected”, “objective”,
“anticipated”, “underway”, “targeted”, “expectation”, “scheduled”
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements contained in this news
release include, but are not limited to, statements regarding
construction activities underway at Aurizona, the Castle Mountain
prefeasibility study, the potential for other assets of the
Company, and the growth potential of the Company. Although the
Company believes that the expectations reflected in such
forward-looking statements and/or information are reasonable, undue
reliance should not be placed on forward-looking statements since
the Company can give no assurance that such expectations will prove
to be correct. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements, including the risks, uncertainties and
other factors identified in the Company’s periodic filings with
Canadian securities regulators, and assumptions made with regard to
the Company’s ability to complete construction at Aurizona on
budget or at all, and the timing to achieve production; the
Company’s ability to complete the Castle Mountain prefeasibility
study and the results of the study; the Company’s ability to
recommence production at Castle Mountain; and the Company’s ability
to achieve its expected growth and production potential.
Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and the
Company does not undertake any obligations to publicly update
and/or revise any of the included forward-looking statements,
whether as a result of additional information, future events and/or
otherwise, except as may be required by applicable securities
laws.
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