All dollar amounts are expressed in
US$
VANCOUVER, BC, Dec. 17, 2021 /CNW/ - Equinox Gold
Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold" or the
"Company") is pleased to announce that it has entered into a
definitive agreement to sell its Mercedes
Gold-Silver Mine in Mexico
("Mercedes") to Bear Creek Mining Corporation (TSXV: BCM)
("Bear Creek") (the "Transaction") for aggregate consideration
of:
- $100 million in cash, payable as
follows:
-
- $75 million on closing of the
Transaction; and
- $25 million payable within six
months of closing of the Transaction.
- 24,730,000 common shares of Bear Creek valued at approximately
$25 million based on current trading
prices; and a
- 2% net smelter return payable on production from Mercedes.
Christian Milau, CEO of Equinox
Gold, commented: "We acquired Mercedes in April this year as part
of our acquisition of Premier Gold Mines and the large-scale
Greenstone Gold Project. Mercedes is non-core to Equinox Gold,
representing 5% of our 2021 production guidance and 2% of our
resources. The sale of Mercedes strengthens our balance sheet with
$100 million as we focus on growth
through expansion and development of our larger gold projects,
including Greenstone. Equinox Gold will also become a significant
shareholder in Bear Creek, continuing to participate in the success
of Mercedes and in the future development of Bear Creek's Corani
silver-lead-zinc deposit, one of the largest, fully-permitted
silver deposits in the world."
The Transaction is subject to certain regulatory approvals
including approval of the Mexican Comisión Federal de Competencia
Económica and other customary closing conditions. The Transaction
is expected to close in the first quarter of 2022.
About Equinox Gold
Equinox Gold is a growth-focused Canadian mining company
operating entirely in the Americas, with seven operating gold mines
(including Mercedes) and a clear path to achieving 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.
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 and may include future-oriented
financial information. Forward-looking statements and
forward-looking information in this news release relates to, among
other things: the consummation and timing of the Transaction;
the satisfaction of the conditions precedent to the Transaction;
Equinox Gold and Bear Creek's abilities to obtain all necessary
permits, licenses and regulatory approvals in a timely manner or at
all, including the approval of the Mexican Comisión Federal de
Competencia Económica; the anticipated receipt of future cash
payments to complete the Mercedes Gold Mine sale and from the net
smelter return; the Company's equity ownership in Bear Creek; the
strategic vision for the Company and expectations regarding
exploration potential, production capabilities and future financial
or operating performance post-Transaction, including expectations
for the Company's investment in Bear Creek; the strategic vision
for Bear Creek and its ability to achieve its growth objectives,
including those objectives relating to the Corani silver-lead-zinc
deposit; and the Company's ability to successfully advance its
growth and development projects. Forward-looking statements or
information generally identified by the use of the words "clear
path", "strengthen", "future" 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.
Although the Company 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 the Company can give no assurance that such expectations will
prove to be correct. The Company has based these forward-looking
statements and information on the Company's current expectations
and projections about future events and these assumptions
include: prices for gold remaining as estimated;
currency exchange rates remaining as estimated; the successful
transition in the operation of the Mercedes Gold Mine; the expected
operational benefits to the Company post-Transaction; the Company's
ability to achieve its production, cost and development
expectations for its operations and projects; tonnage of ore to be
mined and processed; ore grades and recoveries; availability of
funds for the Company's projects and future cash requirements;
capital, decommissioning and reclamation estimates; Mineral Reserve
and Mineral Resource estimates and the assumptions on which they
are based; prices for energy inputs, labour, materials, supplies
and services; no labour-related disruptions and no unplanned delays
or interruptions in scheduled construction, development and
production, including by blockade; all necessary permits, licenses
and regulatory approvals are received in a timely manner; the
Company's ability to comply with environmental, health and safety
laws; the strategic vision and expectations for Bear Creek ; and
the ability of Bear Creek to achieve its production, cost and
development expectations for the Mercedes Gold Mine. While the
Company 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.
The Company 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 the Company has 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; 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; the Company's ability 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; legal restrictions relating to mining
including those imposed in connection with COVID-19; risks relating
to expropriation; increased competition in the mining industry; and
those factors identified in the Company's MD&A dated
March 19, 2021 and its Annual
Information Form dated March 24,
2021, both for the year ended December 31, 2020, and in the Company's
MD&A dated November 3, 2021 for
the three and six months ended September 30,
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,
the Company 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 the Company 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 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.