137,144 Ounces of Gold Sold, on Track to
Achieve 2021 Guidance
All dollar figures in US dollars, unless
otherwise indicated
VANCOUVER, BC, Nov. 3, 2021 /CNW/ - Equinox Gold Corp. (TSX:
EQX) (NYSE American: EQX) ("Equinox Gold" or the "Company") is
pleased to announce its third quarter 2021 summary financial and
operating results. The Company's unaudited condensed consolidated
interim financial statements and related management's discussion
and analysis for the three and nine months ended September 30, 2021 will be available for download
on SEDAR, on EDGAR and on the Company's website. The Company will
host a conference call and webcast on November 4, 2021
commencing at 7:00 am Pacific time to
discuss the Company's third quarter results and activities underway
at the Company's projects. Further details are provided at the end
of this news release.
Christian Milau, CEO of Equinox
Gold, commented: "Production continues to increase as we see the
benefits of investment at the mine sites during the first half of
the year. While increased production from Los Filos and the
Brazil mines anchored a strong
third quarter for Equinox Gold, approximately one-third of 2021
production will come in the fourth quarter, with more than 65,000
ounces of gold already produced during the month of October.
"During the quarter we made significant progress at our growth
and expansion projects. Santa Luz construction is on budget and 70%
complete; we started mining ore from the new Guadalupe open pit and
Bermejal underground deposits at Los Filos; and our study to expand
the Aurizona Mine demonstrated that developing the underground and
satellite open-pit deposits will nearly double the mine life and
increase annual production. We also recently celebrated
groundbreaking at our Greenstone Mine in Ontario, Canada. The groundbreaking event was
attended by the Ontario Minister
of Mines, the Chiefs of our Indigenous partners, the Mayor of the
Municipality of Greenstone and community members. We appreciate
their support and enthusiasm for the project and look forward to
working with Orion Mine Finance and all of our partners to develop
what will be a transformative project for local communities and a
cornerstone asset for Equinox Gold.
"Looking ahead, Equinox Gold is on track to achieve its 2021
guidance and expects to realize significant production growth in
2022 as we continue to access higher-grade ore at Los Filos and
commence production at Santa Luz, which will be our eighth
operating mine. We remain focused on our growth strategy to produce
more than one million ounces of gold per year and become the
industry's premier Americas gold producer."
HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021
Operational
- Lost-time injury frequency rate of 1.29, which is a measure of
the number of injuries per million hours worked
- Produced 139,758 ounces ("oz") of gold during the quarter; sold
137,144 oz of gold at an average realized gold price of
$1,780 per oz
- Total cash costs of $1,109 per oz
and mine all-in sustaining costs ("AISC") of $1,327 per oz for the quarter(1)
- Produced 391,678 oz of gold for the nine months ended
September 30, 2021, with cash costs
and mine AISC of $1,113 per oz and
$1,396 per oz,
respectively(1)
- Los Filos has operated continuously since July 26, 2021, following the resolution of
blockades
- The Company remains on track to achieve 2021 production and
cost guidance
Earnings
- Earnings from mine operations of $49.2 million
- Net loss of $5.2 million or
$0.02 per share
- Adjusted net income of $6.7
million or $0.02 per share,
after adjusting for certain non-cash expense
items(1)(2)
Financial
- Cash flow from operations before changes in non-cash working
capital of $48.3 million
($64.8 million after changes in
non-cash working capital)
- Adjusted EBITDA of $62.0
million(1)(2)
- Expenditures of $26.9 million in sustaining capital and
$65.4 million in non-sustaining
capital(1)
- Cash and cash equivalents (unrestricted) of $300.3 million at September 30,
2021
- Net debt of $244.8 million at
September 30, 2021 (including $139.7 million of in-the-money convertible
notes)(1)
Construction, development and exploration
- Announced positive pre-feasibility study for Aurizona expansion
incorporating the Aurizona underground and satellite open-pit
deposits into the mine plan
-
- Extends the mine life to 11 years with total life-of-mine
("LOM") production of 1.5 million oz of gold
- Average annual production of 137,000 oz of gold
- Peak annual production in years 2026 to 2029, averaging more
than 160,000 oz of gold
- $944/oz average AISC from 2024
onward and $1,058/oz average AISC
LOM
- Updated Mineral Reserve and Mineral Resource estimates for
Aurizona, Mesquite, Fazenda and RDM
- Completed more than 60,000 metres of drilling across the
Company's portfolio of assets
- Greenstone early works focused on roadworks, tree clearing and
construction of the temporary effluent water treatment, temporary
lodging facility and construction administrative offices
- Santa Luz construction 70% complete as of the date of this news
release and on schedule for first gold pour in Q1 2022
POST QUARTER END HIGHLIGHTS
- Announced groundbreaking for full-scale construction at
Greenstone with a construction budget of C$1.53 billion (100% basis) ($1.23 billion at a rate of USD:CAD 1.25), including more than $50 million spent to date and a $177 million contingency(3)
-
- Initial cash spend could be reduced by approximately
$100 million through lease financing
for mobile equipment and offset economically by up to $70 million of pre-commercial production revenues
(at a gold price of $1,750 per
oz)
- Equinox Gold will fund its 60% portion from the Company's
existing treasury, cash flow from producing mines and a revolving
credit facility from which the Company has $200 million available to draw. Equinox Gold also
has a portfolio of investments with a current market value of
approximately $450 million
- First gold pour targeted for first half of 2024 ("H1
2024")
_________________________
1.
|
Cash costs per oz
sold, mine AISC per oz sold, adjusted net loss, adjusted EBITDA,
adjusted EPS, sustaining capital, non-sustaining capital and net
debt are non-IFRS measures. See Non-IFRS
Measures and Cautionary Notes.
|
2.
|
Primary adjustments
for the three months ended September 30, 2021 were $11.0 million
unrealized gain on change in fair value of gold contracts, $8.9
million unrealized loss on change in fair value of foreign exchange
contracts, $7.0 million unrealized loss on change in fair value of
streaming arrangements, and $5.3 million loss from investment in
associate.
|
3.
|
A formal construction
decision is subject to receiving consent of Equinox Gold's lenders
and the closing of financing by Orion, both of which are expected
within the next several weeks.
|
CONSOLIDATED
OPERATIONAL AND FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
Operating
data
|
Unit
|
September 30,
2021
|
|
June 30,
2021(1)
|
|
September 30,
2020
|
|
|
September 30,
2021(1)
|
|
September 30,
2020(2)
|
|
Gold
produced
|
oz
|
139,758
|
|
122,656
|
|
124,867
|
|
|
391,678
|
|
340,834
|
|
Gold sold
|
oz
|
137,144
|
|
124,712
|
|
128,437
|
|
|
390,412
|
|
336,891
|
|
Average realized gold
price
|
$/oz
|
1,780
|
|
1,806
|
|
1,899
|
|
|
1,790
|
|
1,748
|
|
Total cash cost per
oz sold(4)
|
$/oz
|
1,109
|
|
1,089
|
|
876
|
|
|
1,113
|
|
849
|
|
Mine AISC per oz
sold(3)(4)
|
$/oz
|
1,327
|
|
1,382
|
|
1,077
|
|
|
1,396
|
|
1,001
|
|
Financial
data
|
|
|
|
|
|
|
|
Revenue
|
M$
|
245.1
|
|
226.2
|
|
244.5
|
|
|
701.1
|
|
589.9
|
|
Earnings from mine
operations
|
M$
|
49.2
|
|
45.6
|
|
88.7
|
|
|
139.0
|
|
192.5
|
|
Net (loss)
income
|
M$
|
(5.2)
|
|
325.7
|
|
3.2
|
|
|
370.8
|
|
(69.0)
|
|
(Loss) earnings per
share
|
$/share
|
(0.02)
|
|
1.10
|
|
0.01
|
|
|
1.33
|
|
(0.34)
|
|
Adjusted
EBITDA(4)
|
M$
|
62.0
|
|
52.4
|
|
89.2
|
|
|
174.9
|
|
194.4
|
|
Adjusted net
income(4)
|
M$
|
6.7
|
|
3.1
|
|
30.8
|
|
|
6.2
|
|
46.9
|
|
Adjusted
EPS(4)
|
$/share
|
0.02
|
|
0.01
|
|
0.13
|
|
|
0.02
|
|
0.23
|
|
Balance sheet
and cash flow data
|
|
|
|
|
|
|
Cash and cash
equivalents (unrestricted)
|
M$
|
300.3
|
|
333.9
|
|
310.7
|
|
|
300.3
|
|
310.7
|
|
Net
debt(4)
|
M$
|
244.8
|
|
215.6
|
|
219.1
|
|
|
244.8
|
|
219.1
|
|
Operating cash flow
before changes in non-cash working capital
|
M$
|
48.3
|
|
31.6
|
|
86.2
|
|
|
141.9
|
|
177.0
|
|
1.
|
Operational and
financial results of the assets acquired as part of the acquisition
of Premier Gold Mines Limited ("Premier", and the "Premier
Transaction") are included from April 7, 2021, onward.
|
2.
|
Operational and
financial results of the assets acquired as part of the acquisition
of Leagold Mining Corporation ("Leagold", and the "Leagold Merger")
are included from March 10, 2020, onward.
|
3.
|
Consolidated mine
AISC per oz sold excludes corporate general and administration
expenses.
|
4.
|
Cash cost per oz
sold, mine AISC per oz sold, adjusted EBITDA, adjusted net income,
adjusted EPS and net debt are non-IFRS measures.
See Non-IFRS Measures and Cautionary
Notes.
|
The Company recognized revenue of $245.1 million on sales of 137,144 oz of
gold during the three months ended September
30, 2021 (the "Quarter" or "Q3 2021"), compared to revenue
for the three months ended June 30, 2021 ("Q2 2021") of
$226.2 million on sales of
124,712 oz of gold. The increase in ounces sold from Q2 2021 to Q3
2021 is mainly due to increased production at Aurizona as the
change to dry season conditions allowed for increased material
movement and access to higher grade material deeper in the pit, and
increased production at Los Filos as full operations resumed in
late July following the resolution of two blockades.
In Q3 2021, earnings from mine operations were $49.2 million, in-line with $45.6 million in Q2 2021, while net loss in
Q3 2021 of $5.2 million compared
to net income of $325.7 million
in Q2 2021, driven by a $50.3 million
gain on sale of Solaris shares, a $186.1
million gain on reclassification of the Company's Solaris
investment from cost to fair value accounting, and a $45.4 million gain on the sale of the Pilar mine
in Q2 2021. Q3 2021 net loss was also impacted by smaller increases
in the fair value of share purchase warrants and gold contracts as
gold prices declined as compared to Q2 2021.
Adjusted EBITDA for Q3 2021 of $62.0
million increased from $52.4
million in Q2 2021, partially due to a decrease in care and
maintenance costs, which are expensed directly, at Los Filos as
operations resumed following the resolution of blockades. Adjusted
net income was $6.7 million for Q3
2021 compared to adjusted net income of $3.1
million in Q2 2021.
SELECTED FINANCIAL RESULTS FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2021 AND
2020
$ amounts in
millions, except per share amounts
|
Three months
ended
|
|
Nine months
ended
|
September 30,
2021
|
|
September 30,
2020
|
|
|
September 30,
2021(1)
|
|
September 30,
2020(2)
|
|
Revenue
|
$
|
245.1
|
|
$
|
244.5
|
|
|
$
|
701.1
|
|
$
|
589.9
|
|
Operating
expenses
|
(152.7)
|
|
(119.7)
|
|
|
(439.3)
|
|
(309.2)
|
|
Depreciation and
depletion
|
(43.3)
|
|
(36.1)
|
|
|
(122.7)
|
|
(88.2)
|
|
Earnings from mine
operations
|
49.2
|
|
88.7
|
|
|
139.0
|
|
192.5
|
|
Care and
maintenance
|
(6.0)
|
|
(13.1)
|
|
|
(15.2)
|
|
(35.6)
|
|
Exploration
|
(5.6)
|
|
(2.9)
|
|
|
(13.3)
|
|
(9.5)
|
|
General and
administration
|
(12.4)
|
|
(8.1)
|
|
|
(35.3)
|
|
(24.3)
|
|
Income from
operations
|
25.1
|
|
64.6
|
|
|
75.2
|
|
123.1
|
|
Finance
expense
|
(10.7)
|
|
(12.8)
|
|
|
(31.2)
|
|
(31.1)
|
|
Finance
income
|
1.1
|
|
0.6
|
|
|
1.7
|
|
1.3
|
|
Other (expense)
income
|
(23.3)
|
|
(39.5)
|
|
|
327.5
|
|
(117.4)
|
|
Net (loss) income
before taxes
|
(7.8)
|
|
13.0
|
|
|
373.2
|
|
(24.1)
|
|
Current tax
expense
|
(5.1)
|
|
(9.3)
|
|
|
(20.3)
|
|
(25.4)
|
|
Deferred tax recovery
(expense)
|
7.7
|
|
(0.4)
|
|
|
17.9
|
|
(19.4)
|
|
Net (loss)
income
|
$
|
(5.2)
|
|
$
|
3.2
|
|
|
$
|
370.8
|
|
$
|
(69.0)
|
|
Net (loss) income per
share attributable
to Equinox Gold
shareholders
|
|
|
|
|
|
Basic
|
$
|
(0.02)
|
|
$
|
0.01
|
|
|
$
|
1.33
|
|
$
|
(0.34)
|
|
Diluted
|
$
|
(0.02)
|
|
$
|
0.01
|
|
|
$
|
1.15
|
|
$
|
(0.34)
|
|
1.
|
Financial results for
the nine months ended September 30, 2021 include the results of
operations for the mines acquired through the Premier Acquisition
for the period of April 7 to September 30, 2021.
|
2.
|
Financial results for
the nine months ended September 30, 2020 include the results of
operations for mines acquired through the Leagold Merger for the
period of March 10 to September 30, 2020.
|
Additional information regarding the Company's financial results
and activities underway at the Company's projects is available in
the Company's Q3 2021 Financial Statements and accompanying
management's discussion and analysis for the three and nine months
ended September 30, 2021, which will
be available for download on the Company's website at
www.equinoxgold.com, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.
CONFERENCE CALL AND WEBCAST
Equinox Gold will host a conference call and webcast on
Thursday, November 4, 2021 commencing
at 7:00 am Pacific time to discuss
the Company's third quarter results and activities underway at the
Company's projects. All participants will have the opportunity to
ask questions of Equinox Gold's CEO and executive team. The webcast
will be archived on Equinox Gold's website until February 5, 2022.
Conference call
Toll-free in U.S. and
Canada: 1-800-319-4610
International callers: +1 604-638-5340
Webcast
www.equinoxgold.com
ABOUT EQUINOX GOLD
Equinox Gold is a Canadian mining company operating entirely in
the Americas, with seven operating gold mines 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.
CAUTIONARY NOTES
Technical Information
Doug Reddy, Msc, P.Geo.,
Equinox Gold's COO, is the Qualified Person under National
Instrument 43-101 for this Equinox Gold press release and has
reviewed and approved the technical information in this
document.
Non-IFRS Measures
This news release refers to all-in sustaining costs ("AISC")
per ounce sold, which is a measure with no standardized meaning
under International Financial Reporting Standards ("IFRS") and may
not be comparable to similar measures presented by other companies.
Its measurement and presentation is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Non-IFRS measures are widely used in the mining industry as
measurements of performance and the Company believes that they
provide further transparency into costs associated with producing
gold and will assist analysts, investors and other stakeholders of
the Company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. Refer to the "Non-IFRS Measures" section of the Company's
Management's Discussion and Analysis for the period ended
September 30, 2021, for a more
detailed discussion of this non-IFRS measure and its
calculation.
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 relate to, among
other things: the strategic vision for the Company and expectations
regarding exploration potential, production capabilities and future
financial or operating performance; the Company's ability to
successfully advance its growth and development projects, including
the construction of Santa Luz and Greenstone and the expansions at
Los Filos and Aurizona; the implications of blockades at Los Filos;
the expectations for the Company's investments in Solaris, i-80
Gold Corp ("i-80 Gold") and Pilar Gold Inc. ("Pilar Gold"); the
duration, extent and other implications of the novel coronavirus
(COVID-19); and the Company's production and cost guidance.
Forward-looking statements or information generally identified by
the use of the words "will", "achieve", "strong", "on track",
"clear path", "underway", 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:
the anticipated receipt of required consents for Greenstone
construction from the Company's lenders and the expectation that
Orion Mine Finance Group will finalize its financing arrangements
in the next several weeks; the strengths, characteristics and
potential of Equinox Gold following the Premier Acquisition;
Equinox Gold's ability to achieve the production, cost and
development expectations for its respective operations and
projects; prices for gold remaining as estimated; currency exchange
rates remaining as estimated; construction and development at Santa
Luz, Los Filos, Castle Mountain, Greenstone and Aurizona being
completed and performed in accordance with current expectations;
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;
the Company's working history with the workers, unions and
communities at Los Filos; 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 for i-80 Gold and its ability to successfully
advance its projects; the strategic vision for Solaris and its
ability to successfully advance its projects; the exercise of the
Solaris warrants; and the ability of Pilar
Gold to successfully operate the Pilar mine and to meet its
payment commitments to the Company. 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; a
successful relationship between the Company and Orion; the failure
by Pilar Gold to meet one or more of
its payment commitments to the Company; and those factors
identified in the Company's MD&A dated March 19, 2021 and its Annual Information Form
dated March 24, 2021, both of which
relate to the year-ended December 31,
2020, and in the Company's MD&A dated November 3, 2021 for the three and nine 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.