VANCOUVER, BC, May 26, 2022
/PRNewswire/ - Equinox Gold Corp. ("Equinox Gold")
(TSX: EQX), (NYSE: EQX) and Sandstorm Gold Ltd. ("Sandstorm Gold
Royalties" or "Sandstorm") (NYSE: SAND) (TSX: SSL) are pleased to
announce the creation of Sandbox Royalties Corp. ("Sandbox
Royalties" or "Sandbox"), a new diversified metals royalty company.
Equinox Gold and Sandstorm have each entered into definitive
purchase and sale agreements (the "Definitive Agreements") with
Rosedale Resources Ltd. ("Rosedale") whereby Rosedale will acquire a portfolio of royalties
from Equinox Gold for consideration of $28.4
million in common shares of Rosedale and from Sandstorm for
consideration of $65 million
comprising $32.1 million in common
shares of Rosedale and $32.9 million
in a promissory note convertible into common shares of Rosedale
(collectively, the "Transaction"). Upon closing, Rosedale intends to change its corporate name
to Sandbox Royalties Corp. In this press release, Rosedale is used to refer to the company
before closing and Sandbox is used to refer to the company after
closing. All dollar figures are in US dollars unless otherwise
stated.
SANDBOX HIGHLIGHTS
- A new, well-funded and diversified metals royalty
company: Sandbox will have exposure to a range of resource
royalties including gold, silver, copper, zinc, graphite and
uranium, immediate cash flow from producing royalties, a strong
treasury and significant leverage to strengthening metal prices and
resource growth.
- Top mining jurisdictions: Sandbox's royalty portfolio
assets are primarily located in mining-friendly jurisdictions in
the Americas and Europe.
- Experienced management: Sandbox will be led by
Greg Smith as President and Chief
Executive Officer, Marcel de Groot
as Chair of the board, Victoria
McMillan as Chief Financial Officer, and Craig Rollins as General Counsel.
- Supportive shareholders: Sandstorm and Equinox Gold will
hold a 34% and 30% basic interest, respectively, in Sandbox,
providing the opportunity to participate in and facilitate future
growth of Sandbox.
Christian Milau, CEO of Equinox
Gold, commented: "Equinox Gold has surfaced tremendous value as a
significant and supportive shareholder of Solaris Resources and
i-80 Gold, our previous spin-out companies, and intends to continue
that track record with Sandbox Royalties. Greg Smith will be an exceptional leader for
Sandbox Royalties. His industry knowledge and corporate development
skills have been integral to Equinox Gold's growth and success over
the last five years. Greg will continue to represent Equinox Gold
on the boards of Solaris Resources and i-80 Gold and will
transition from President of Equinox Gold to assume the new role of
President and CEO of Sandbox Royalties. We look forward to working
closely with him as a supportive partner in this new venture."
Ross Beaty, Chairman of Equinox
Gold, commented: "Sandbox Royalties will create immediate and
future value for Equinox Gold from our portfolio of royalties and
will continue our close relationship with Sandstorm. Greg Smith will focus on building Sandbox
Royalties while Equinox Gold slows its M&A activities to focus
on developing our peer-leading internal growth pipeline including
our new Santa Luz gold mine in
Brazil, which is ramping up to
commercial production, our large expansion projects at Los Filos,
Aurizona and Castle Mountain, and our major in-construction gold
mine at Greenstone."
Nolan Watson, President & CEO
of Sandstorm, commented: "Over the last several months, Sandstorm
has been actively working on finding unique and strategic ways to
unlock value for our shareholders. With the creation of Sandbox, a
diversified royalty company, we are taking royalties that don't
currently receive their warranted value within Sandstorm's existing
portfolio and surfacing their value so that our shareholders can
benefit now. Sandbox Royalties will join our growing list of
strategic partners, with which we can team up on future
transactions and garner the most value across a broad spectrum of
royalties in terms of size and metal type."
SANDBOX PORTFOLIO
On closing of the Transaction, Sandbox will hold a portfolio of
23 metals royalties across a range of assets and jurisdictions,
including the existing royalties held by Rosedale. The royalties acquired from
Sandstorm and Equinox Gold will contribute meaningful portfolio
diversification through several producing and development stage
assets.
Sandstorm Portfolio
Royalties to be acquired from Sandstorm (the "Sandstorm
Portfolio") include:
- Hackett River: 2.0% net smelter return ("NSR") royalty
on the Hackett River silver-zinc-copper development project in
Nunavut, Canada owned by Glencore
plc;
- Prairie Creek: 1.2% NSR royalty on the Prairie Creek
zinc-silver-lead development project in the Northwest Territories, Canada owned by NorZinc
Ltd.;
- Vittangi: 1.0% NSR royalty on the Vittangi graphite
development project in Sweden
owned by Talga Group Ltd.;
- Mason: 0.4% NSR royalty on the Mason copper-gold
development project in Nevada, USA
owned by Hudbay Minerals Inc.; and
- Converse: 1.0% NSR royalty on the Converse gold
development project in Nevada, USA
owned by Waterton Global Resource Management LP.
The Sandstorm Portfolio also includes 1.0% NSR royalties on a
portion of the Ajax copper-gold
project in British Columbia, the
Buffelsfontein gold project in South
Africa and the Cuiu Cuiu gold project in Brazil, and a 2.0% NSR royalty on the Wiluna
uranium project in Australia.
Equinox Gold Portfolio
Royalties to be acquired from Equinox Gold (the "Equinox Gold
Portfolio") include:
- Mercedes: 2.0% NSR royalty on the producing Mercedes
gold mine in Sonora, Mexico owned
by Bear Creek Mining Corporation;
- Pilar: 1.0% NSR royalty on the producing Pilar gold mine
in Goiás, Brazil owned by Pilar
Gold Inc.; and
- Cuiu Cuiu: 0.5% NSR royalty on the Cuiu Cuiu gold
project in Pará, Brazil owned by
Cabral Gold Inc.
In addition, the Equinox Gold Portfolio includes a note
receivable from a subsidiary of Gold Mountain Mining Corp. with a
face value of C$3 million due in full
in May 2023, and C$3 million in cash.
TRANSACTION DETAILS
Under the terms of the Definitive Agreements, Rosedale will acquire (a) the Sandstorm
Portfolio for $65 million comprising
58.9 million common shares of Rosedale at a price of C$0.70 per share and a $32.9 million 10-year secured convertible
promissory note, and (b) the Equinox Gold Portfolio for
$28.4 million payable in 51.9 million
common shares of Rosedale at a price of C$0.70 per share.
Post-completion of the Transaction, Sandbox intends to seek a
public listing on a Canadian stock exchange. Listing of Sandbox is
subject to approval of the applicable stock exchange. There is no
guarantee that Sandbox will receive approval for such listing.
In connection with the Transaction, Rosedale will undertake a non-brokered private
placement financing of common shares of Rosedale at C$0.70 per share for minimum gross proceeds of
C$5 million (the "Financing") with
such Financing expected to close concurrently with the Transaction.
Proceeds from the Financing will be used for the acquisition of
additional royalties and streams and for general corporate
purposes.
Before considering the Financing, on closing of the Transaction,
Sandbox will have 173.1 million shares outstanding with Sandstorm
holding a 34% basic interest in Sandbox and Equinox Gold holding a
30% basic interest in Sandbox. Each of Sandstorm and Equinox Gold
will enter into an investor rights agreement with Sandbox providing
for, among other things, customary anti-dilution provisions and
board representation rights. The Transaction and the Financing
are expected to be completed by the end of June 2022 or such other date as the parties may
agree, and closing will be subject to customary approvals and
closing conditions.
ABOUT EQUINOX GOLD
Equinox Gold is a Canadian mining company operating entirely in
the Americas, with six operating gold mines, a mine in
commissioning, and a clear path to achieve more than one million
ounces of annual gold production from a pipeline of development and
expansion projects. 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 SANDSTORM GOLD
ROYALTIES
Sandstorm is a gold royalty company that provides upfront
financing to gold mining companies that are looking for capital and
in return, receives the right to a percentage of the gold produced
from a mine, for the life of the mine. After the transactions
announced on May 2, 2022 close,
Sandstorm will have acquired a portfolio of more than 250
royalties, of which 39 of the underlying mines are producing.
Sandstorm plans to grow and diversify its low-cost production
profile through the acquisition of additional gold royalties. For
more information visit www.sandstormgold.com or email
info@sandstormgold.com.
ABOUT ROSEDALE RESOURCES
Rosedale Resources is a private Canadian metals royalty company
holding a diverse portfolio of 11 exploration and development stage
royalties on assets in Peru,
Africa and Asia, a portfolio of public company shares in
exploration-stage Canadian mining companies and a treasury of
C$7.4 million.
CAUTIONARY NOTES AND
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking
information and forward-looking statements within the meaning of
applicable securities legislation. Forward-looking statements and
forward-looking information in this news release relate to, among
other things: the consummation and timing of the Transaction;
the closing of the Transaction including obtaining necessary
approvals and satisfaction of the conditions precedent to the
Transaction; the strategic vision for Equinox Gold and expectations
regarding future financial or operating performance; Equinox Gold's
ability to successful advance its growth and development projects,
including the construction of Greenstone and the expansions at Los
Filos, Castle Mountain and Aurizona; and the expectations for
Equinox Gold's investments in Sandbox, Solaris and i-80 Gold.
Forward-looking statements or information are generally identified
by the use of the words "opportunity", "potential", "continue",
"intend" and similar expressions and phrases or statements that
certain actions, events or results "could", "would" or "should", or
the negative connotation of such terms, are intended to identify
forward-looking statements and information. As well, forward
looking statements may relate to anticipated events, such as the
timing regarding the listing and trading of Sandbox's shares, the
completion of the Financing and the strategic vision for
Sandbox.
Although Equinox Gold believes that the expectations
reflected in such forward-looking statements and information are
reasonable, undue reliance should not be placed on forward-looking
statements since Equinox Gold can give no assurance that such
expectations will prove to be correct. Equinox Gold has based these
forward-looking statements and information on its current
expectations and projections about future events and these
assumptions include: the anticipated benefits of the Transaction,
including Sandbox's anticipated cash flow from the relevant
royalties; Sandbox's ability to achieve its objectives, including
the acquisition of additional royalties or streams; Equinox Gold's
ability to achieve the exploration, production, cost and
development expectations for its respective operations and
projects; prices for gold remaining as estimated; currency exchange
rates remaining as estimated; the construction of Greenstone being
completed and performed in accordance with current expectations;
the expansion projects at Los Filos, Castle Mountain and Aurizona
being completed and performed in accordance with current
expectations; and the availability of funds for Equinox Gold's
projects and future cash requirements. While Equinox
Gold considers 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.
Equinox Gold cautions 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 Equinox Gold has made assumptions and estimates based
on or related to many of these factors. Such factors include,
without limitation: fluctuations in metal prices; fluctuations in
currency markets; operational risks and hazards inherent with the
business of mining that could disrupt cash flow from producing
royalties; the ability of Equinox Gold to work productively with
Sandstorm and Sandbox; the successful completion of the Financing;
the ability of Sandbox to obtain listing approval; Equinox Gold's
ability to realize a benefit from its investment in Sandbox; and
those factors identified in the section titled "Risks and
Uncertainties" in Equinox Gold's MD&A dated May 3, 2022 for the three months ended
March 31, 2022, the section titled
"Risks and Uncertainties" in Equinox Gold's MD&A dated
March 23, 2022 for the year ended
December 31, 2021, and in the section
titled "Risks Related to the Business" in Equinox Gold's Annual
Information Form dated March 24, 2022
for the year ended December 31, 2021,
all of which are available on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov/edgar.
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, Equinox Gold assumes no
obligation to publicly announce the results of any change to any
forward-looking statement or information contained or incorporated
by reference to reflect actual results, future events or
developments, changes in assumptions or changes in other factors
affecting the forward-looking statements and information. If
Equinox Gold updates any one or more forward-looking statements, no
inference should be drawn that they will make additional updates
with respect to those or other forward-looking statements. All
forward-looking statements and information contained in this news
release are expressly qualified in their entirety by this
cautionary statement.
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SOURCE Equinox Gold Corp.