Equinox Gold Releases First Quarter Financial Results (all dollar figures in US dollars
TSX-V: EQX
OTC: EQXGF
Suite 730 – 800 West Pender St., Vancouver, BC Canada V6C 2V6
[email protected] +1 604.558.0560 www.equinoxgold.com
NEWS RELEASE
Equinox Gold Releases First Quarter Financial Results
(all dollar figures in US dollars, unless otherwise indicated)
May 3, 2018 – Vancouver, BC – 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:
o Budget of $146 million
o Project-to-date capital expenditures (“capex”) of $43.5 million
o Commitments made of $75.5 million (includes project-to-date capex)
o 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
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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. The se
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 mate rial. 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 t echnical 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.
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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 an d 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 [email protected].
Equinox Gold Contacts
Christian Milau, CEO
Rhylin Bailie, Vice President Investor Relations
Tel: +1 604-558-0560
Email: [email protected]
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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 e vents 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 recomme nce
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 do es 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.