All dollar amounts are in United States dollars unless otherwise
indicated
VANCOUVER, BC and
THUNDER BAY, ON, Dec. 16, 2020 /PRNewswire/ - Equinox Gold
Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold") and
Premier Gold Mines Limited (TSX: PG) (OTCPK: PIRGF)
("Premier") are pleased to announce that the companies have entered
into a definitive agreement (the "Agreement") whereby Equinox Gold
will acquire all of the outstanding shares of Premier.
Concurrently, Premier will spin-out to its shareholders shares of a
newly created US-focused gold production and development company to
be called i-80 Gold Corp. ("i-80 Gold", and together with
the Agreement, the "Transaction") that will own the South-Arturo
and McCoy-Cove properties and will complete Premier's previously
announced acquisition of the Getchell Project, all in Nevada. Equinox Gold will retain Premier's
interest in the world-class Hardrock Project in Ontario, the Mercedes Mine in Mexico, and the Hasaga and Rahill-Bonanza
properties in Red Lake, Ontario.
On closing of the Transaction, existing Equinox Gold and Premier
shareholders will own approximately 84% and 16% of
Equinox Gold, and Equinox Gold and existing shareholders of
Premier will own 30% and 70% of i-80 Gold, respectively, on an
issued share basis.
Transaction Highlights
- Equinox Gold to acquire a 50% interest in the permitted,
development-ready, multi-million-ounce Hardrock Project through a
joint venture between Equinox Gold and Orion Mine Finance
("Orion")
-
- 5.54 million ounces of Proven and Probable Mineral Reserves
grading 1.27 grams per tonne ("g/t") gold1,2
- 414,000 ounces average annual gold production with average head
grade of 1.45 g/t gold for the first five years; 358,000 ounces
average annual gold production over the initial 14-year mine
life1
- Maintains Premier shareholders' exposure to Premier's
current asset base and adds exposure to a larger, diversified gold
producer – Equinox Gold has seven operating gold mines with
construction underway at an eighth site, a peer-leading growth
pipeline and the financial capacity to fund development of
Hardrock
- Reinforces Equinox Gold's position as the Premier Americas
Gold Producer – Hardrock bolsters Equinox Gold's robust
pipeline of growth projects and will add approximately 200,000
attributable ounces of long-term, low-cost annual gold production,
when in operations, in Ontario,
Canada, one of the world's top mining jurisdictions
- Enhances Equinox Gold's existing portfolio of operating gold
mines in the Americas with the addition of the producing Mercedes
Mine in Sonora, Mexico –
Mercedes adds approximately 50,000 ounces of gold per year (with
expansion potential to 80,000 to 90,000 ounces of gold annually) to
the estimated 700,000 ounces of gold production expected in 2021
from Equinox Gold, based on consensus estimates
- Delivers longer-term growth and exploration potential –
Expansion and exploration potential at Hardrock and the Mercedes
Mine and exploration potential from the Hasaga and Rahill-Bonanza
properties, both located in the heart of the prolific Red Lake gold camp
- Provides exposure to i-80 Gold, a new high-growth US-focused
gold company – High-quality portfolio of producing and
development properties to be owned 70% by Premier shareholders and
30% by Equinox Gold
- Equinox Gold to undertake a C$75
million equity financing fully underwritten by its Chairman,
Ross Beaty
______________________
|
1
|
Highlights from the
Hardrock Feasibility Study, shown on a 100% basis. See Premier news
release dated December 16, 2020.
|
2
|
At a 0.35 g/t cut-off
grade. A breakdown of Mineral Reserves is provided at the end of
this news release.
|
Transaction Details
Pursuant to the Transaction, Premier shareholders will
receive:
- 0.1967 of an Equinox Gold share for each Premier share held
(the "Exchange Ratio"), representing an at-market acquisition based
on the 10-day volume-weighted average closing prices for both
Equinox Gold and Premier shares on the Toronto Stock Exchange;
and
- 0.4 of a share of i-80 Gold for each Premier share held,
providing a meaningful opportunity to participate in a new
high-growth, US-focused gold company
Ross Beaty, Chairman of Equinox
Gold, stated: "This transaction is exactly the kind of accretive
Americas-focused growth we promised shareholders when we started
Equinox Gold at the beginning of 2018. The addition of a top-tier,
low-risk mining jurisdiction in Ontario,
Canada creates a lower risk profile, with greater asset and
country diversification. Hardrock will be an excellent, low-cost,
long-life gold mine with significant exploration upside, further
enhancing our existing peer-leading growth profile without
stretching our financial capacity. The Mercedes Mine also brings an
immediate increase to our production and cash flow, and our
investment in i-80 Gold brings us significant real value and
optionality with exposure to several high-potential US gold assets.
This transaction creates value for both Equinox Gold and Premier
Gold shareholders, and further solidifies Equinox Gold's position
as the premier Americas-focused gold producer."
Christian Milau, CEO of Equinox
Gold, stated: "Combining a 50% interest in the permitted,
development-ready Hardrock Project with our strong balance sheet
and operating cash flow provides a clear path to production for
Hardrock that I believe will unlock substantial value for both
Equinox Gold and Premier Gold shareholders. We look forward to
developing Hardrock with Orion as our partner, integrating the
Mercedes Mine into our portfolio of producing gold mines, and being
a substantial and supportive shareholder of i-80 Gold. We also
expect to welcome Ewan Downie to our
Board of Directors upon closing of the Transaction. Ewan is a
well-respected company builder who will bring additional expertise
for the exploration and management of our properties in
Mexico, the United States and now Canada."
Ewan Downie, CEO of Premier,
stated: "Premier has delivered on its commitment to create value
for our shareholders through the disciplined approach of prudently
managing our operating assets while advancing our peer-leading
development portfolio. This transaction builds on that commitment,
bringing increased value and optionality to our shareholders from
meaningful ownership in two companies: a diversified intermediate
gold producer with a portfolio of high-quality assets, and
ownership in an exciting new Nevada-focused gold company.
Importantly, our shareholders will maintain exposure to the
Hardrock Project, which we believe is the most attractive
advanced-staged development project in North America, and which will be developed by
a proven management team that shares our commitment to creating
long-term sustainable value."
i-80 Gold Corp.
i-80 Gold will be a well-financed, growth-focused gold company
with a high-quality portfolio of production and development
properties in Nevada, including
the producing South Arturo joint venture with the Barrick
Gold/Newmont-affiliated Nevada Gold
Mines, the McCoy Cove Property and the Getchell Project (on
closing of the previously announced acquisition, see Premier news
release dated August 10, 2020). i-80
Gold will be led by Ewan Downie and
will work to rapidly grow and develop its asset base with the
objective of becoming a leading mid-tier, US-focused gold miner. In
connection with a planned public listing3 prior to or
concurrent with closing of the Transaction, i-80 Gold intends to
conduct a financing of up to $75
million. Equinox Gold has committed to subscribe for 30% of
the aggregate amount of the financing up to a maximum subscription
amount of $22.5 million. Pursuant to
the Transaction, it is expected that i-80 Gold's initial working
capital will include approximately $15
million in cash, pre-financing.
In connection with the Transaction, Equinox Gold plans to
complete a C$75 million equity
financing, fully underwritten by Ross
Beaty, at a price per share to be set in the context of the
Transaction and the market after at least five clear trading days.
The financing is subject to completion of definitive documentation,
customary closing conditions and regulatory approvals, including
the approval of the Toronto Stock Exchange for the pricing and
other terms of the financing.
Officers, directors and certain shareholders of Premier, who
collectively hold approximately 17% of Premier's outstanding common
shares, have entered into voting support agreements in favour of
the Transaction.
The Directors of Equinox Gold and the Directors of Premier have
unanimously approved the Transaction, and the Board of Directors of
Premier recommend that Premier shareholders and optionholders vote
in favour of the Transaction. CIBC World Markets Inc. has
provided a fairness opinion to the Board of Directors of Premier
stating that, as of the date of such opinion and based upon and
subject to the assumptions, limitations and qualifications stated
in such opinion, the Equinox Gold share consideration to be
received by shareholders of Premier pursuant to the Transaction is
fair, from a financial point of view, to shareholders of Premier.
RBC Capital Markets has provided an independent fairness opinion to
the Special Committee of the Board of Directors of Premier stating
that, as of the date of such opinion and based upon and subject to
the assumptions, limitations and qualifications stated in such
opinion, the Equinox Gold share consideration to be received by
shareholders of Premier pursuant to the Transaction is fair, from a
financial point of view, to shareholders of Premier.
The Transaction is subject to court approval and approval of
Premier shareholders and optionholders (including minority
shareholder approval under Part 8 of Multilateral Instrument 61-101
– Protection of Minority Security Holders in Special
Transactions). A special meeting of Premier shareholders and
optionholders to consider the Transaction is expected to be held in
February 2021. An Information
Circular detailing the terms and conditions of the Transaction will
be filed with regulatory authorities and mailed to Premier
shareholders and optionholders in accordance with applicable
securities laws.
The Agreement provides for, among other things, customary
representations, warranties and covenants including
non-solicitation and rights to match superior proposals in favour
of Equinox Gold, as well as a C$35 million termination fee
payable to Equinox Gold under certain circumstances. The
Transaction is further subject to certain regulatory approvals,
including the approvals of the Mexican Comisión Federal de
Competencia Económica, the Toronto Stock Exchange and the NYSE
American Stock Exchange, and other customary closing conditions.
The Transaction is expected to close in the first quarter of
2021.
Blake, Cassels & Graydon LLP is acting as legal advisor to
Equinox Gold.
CIBC World Markets Inc. is acting as financial advisor to
Premier and RBC Capital Markets is acting as financial advisor to
the Special Committee of Premier. Bennett Jones LLP is acting as
legal advisor to Premier and its Special Committee.
The securities to be offered by i-80 Gold have not been, nor
will they be, registered under the United States Securities Act of
1933, as amended, or any state securities law, and may not be
offered, sold or delivered, directly or indirectly, within
the United States, or to or for
the account or benefit of U.S. persons, absent registration or an
exemption from such registration requirements. This news release
does not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of securities in any state
in the United States in which such
offer, solicitation or sale would be unlawful.
______________________
|
3
|
Listing of i-80 Gold
is subject to approval of the applicable stock exchange(s). There
is no guarantee that i-80 Gold will receive approval for such
listing(s).
|
Conference Call and Webcast
Equinox Gold and Premier will hold a joint conference call and
webcast on December 16, 2020 at
7:00 am PT (10:00 am ET) to discuss the
Transaction.
Toll-free Canada/US: 1-800-319-4610
International: +1-604-638-5340
Login to the webcast
The webcast will be archived on both the Equinox Gold and
Premier websites until the Transaction closes.
About Equinox Gold
Equinox Gold is a Canadian mining company with seven operating
gold mines, construction underway at an eighth site, a
multi-million-ounce gold reserve base and a clear path to achieve
one million ounces of annual gold production from its pipeline of
growth projects. Equinox Gold operates entirely in the Americas,
with two properties in the United
States, one in Mexico and
five in Brazil. Equinox Gold's
common shares are listed on the TSX and the NYSE American under the
trading symbol EQX. Further information about Equinox Gold's
portfolio of assets and long-term growth strategy is available at
www.equinoxgold.com or by email at ir@equinoxgold.com.
About Premier
Premier is a gold producer and respected exploration and
development company with a high-quality pipeline of precious metals
projects in proven, accessible and safe mining jurisdictions in
Canada, the United States and Mexico. For more information please visit
www.premiergoldmines.com or by email at
info@premiergoldmines.com.
Hardrock Mineral Reserve Estimate (100% basis)
Proven
Reserves
|
Probable
Reserves
|
P&P
Reserves
|
Tonnes
(Mt)
|
Grade (g/t
Gold)
|
Contained
Gold (koz)
|
Tonnes
(Mt)
|
Grade (g/t
Gold)
|
Contained
Gold (koz)
|
Tonnes
(Mt)
|
Grade (g/t
Gold)
|
Contained
Gold (koz)
|
5.62
|
1.28
|
232
|
129.70
|
1.27
|
5,307
|
135.32
|
1.27
|
5,539
|
Notes: Canadian Institute of Mining,
Metallurgy and Petroleum Definition Standards on Mineral Resources
and Mineral Reserves adopted by the CIM Council on May 10, 2014,
were followed for Mineral Reserves. Effective date of the estimate
is August 8th, 2019. Mineral Reserves are estimated at a cut-off
grade of 0.35 g Au/t. Mineral Reserves are estimated using a
long-term gold price of $1,250/oz and an exchange rate of C$/US$ of
1.30. A minimum mining width of 5 m was used. Bulk density of ore
is variable but averages 2.78 t/m3. The average strip
ratio is 5.10:1. Dilution factor is 17.2%. Numbers may not add due
to rounding.
|
Hardrock Qualified Person
GMining Services Inc., under the supervision of Louis-Pierre Gignac, P.Eng., Réjean Sirois,
P.Eng., and James Purchase, P.Geo.,
each of whom are Qualified Persons within the meaning of National
Instrument 43-101 ("NI 43-101"), was the lead consultant for the
Hardrock Feasibility Study update. An NI 43-101 technical report
detailing the update will be filed with Canadian Securities
regulators within 45 days.
Technical Information
Stephen McGibbon, P. Geo.,
Executive Vice President, Corporate and Project Development, for
Premier, is the Qualified Person for the information contained in
this news release regarding Hardrock, is a Qualified Person within
the meaning of NI 43-101, and has approved the technical content of
this document as it relates to Hardrock.
Cautionary Note to U.S. Readers Concerning Estimates of
Mineral Reserves
Information regarding Mineral Reserve estimates has been
prepared in accordance with Canadian standards under applicable
Canadian securities laws and may not be comparable to similar
information for United States
companies. Under United States
standards, mineralization may not be classified as a "Reserve"
unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time
the reserve calculation is made. As such, certain information
contained in this news release concerning descriptions of
mineralization under Canadian standards, including the definition
of "Proven Mineral Reserves" and "Probable Mineral Reserves", is
not comparable to similar information made public by United States companies subject to the
reporting and disclosure requirements of the United States
Securities and Exchange Commission.
Forward-looking Statements
This news release includes certain statements that constitute
"forward-looking statements" and "forward-looking information"
within the meaning of applicable securities laws, collectively
"forward-looking statements". These include statements regarding
the intent of Equinox Gold and Premier Gold (the "Companies"), or
the beliefs or current expectations of the officers and directors
of the Companies for Equinox Gold or i-80 Gold post closing of the
Transaction. When used in this news release, words such as "will",
"expect", "potential", "objective", "becoming", "subject to",
"expected", "to be", "look forward", "intends", "plans", and
similar expressions are intended to identify these forward-looking
statements as well as phrases or statements that certain actions,
events or results "may", "could", "would", "should", "occur" or "be
achieved" or the negative connotation of such terms. As well,
forward-looking statements may relate to future outlook and
anticipated events, such as the consummation and timing of the
Transaction; the satisfaction of the conditions precedent to the
Transaction; the strengths, characteristics and potential of
Equinox Gold post Transaction; the strategic vision for
Equinox Gold and expectations regarding production capabilities and
the ability of Equinox Gold to successfully advance its respective
projects; Equinox Gold's ability to achieve the production, cost
and development expectations outlined in the Hardrock Feasibility
Study; Hardrock Mineral Reserve estimates and
the assumptions on which they are based; the strengths,
characteristics and potential of i-80 Gold; the strategic
vision for i-80 Gold; the ability of i-80 Gold to successfully
advance its projects; the ability to complete the i-80 Gold
financing as contemplated; the ability and timing for i-80 Gold to
be publicly listed; availability of funds and future cash
requirements for the projects of both Equinox Gold and i-80
Gold; the Equinox Gold equity financing underwritten by
Ross Beaty; and discussion of future
plans, projections, objectives, estimates and forecasts and the
timing related thereto.
Although the Companies believe that the expectations
reflected in such forward-looking statements and information are
reasonable, undue reliance should not be placed on forward-looking
statements since the Companies can give no assurance that such
expectations will prove to be correct. The Companies caution that
forward-looking statements and information involve known and
unknown risks, uncertainties and other factors that may cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements and
information contained in this news release and the Companies have
made assumptions and estimates based on or related to many of these
factors. Such factors include, without limitation: fluctuations in
gold prices; fluctuations in prices for energy inputs, labour,
materials, supplies and services; fluctuations in currency markets;
the potential for labour-related disruptions and unplanned delays
or interruptions in scheduled construction, development and
production, including by blockade; operational risks and hazards
inherent with the business of mining (including environmental
accidents and hazards, industrial accidents, equipment breakdown,
unusual or unexpected geological or structural formations,
cave-ins, flooding and severe weather); inadequate insurance, or
inability to obtain insurance to cover these risks and hazards;
employee relations; relationships with, and claims by, local
communities and indigenous populations; Equinox Gold and i-80
Gold's respective abilities to obtain all necessary permits,
licenses and regulatory approvals in a timely manner or at all;
changes in laws, regulations and government practices, including
environmental, export and import laws and regulations; capital,
decommissioning and reclamation estimates; the potential for legal
restrictions relating to mining including those imposed in
connection with COVID-19; the potential impact of COVID-19 on
operations; risks relating to expropriation; and increased
competition in the mining industry; and the ability of Equinox Gold
and i-80 Gold to work productively with their respective joint
venture partners. Additional factors are identified in Equinox
Gold's MD&A dated February 28,
2020 and in its Annual Information Form dated May 13, 2020, both for the year ended
December 31, 2019, and in its
MD&A dated November 5, 2020 for
the three and nine months ended September
30, 2020, all of which are available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov/edgar; and in
Premier's MD&A dated March 4,
2020 and its Annual Information Form dated March 30, 2020, both for the year ended
December 31, 2019. While the
Companies consider these assumptions to be reasonable based on
information currently available, they may prove to be incorrect.
Accordingly, readers are cautioned not to put undue reliance on the
forward-looking statements or information contained in this news
release.
Forward-looking statements and information are designed to
help readers understand management's views as of that time with
respect to future events and speak only as of the date they are
made. Except as required by applicable law, the
Companies assume no obligation to update or to publicly announce
the results of any change to any forward-looking statement
contained or incorporated by reference herein to reflect actual
results, future events or developments, changes in assumptions or
changes in other factors affecting the forward-looking statements.
If either Equinox Gold or Premier updates any one or more
forward-looking statements, no inference should be drawn that the
company will make additional updates with respect to those or other
forward-looking statements. All forward-looking statements
contained in this news release are expressly qualified in their
entirety by this cautionary statement.
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SOURCE Equinox Gold Corp.