Vancouver’s Equinox Gold completes acquisition of the Mesquite Gold Mine in California
The Mesquite Gold Mine. — Photo courtesy Equinox Gold
Equinox Gold Corp. (TSX-V: EQX, OTC: EQXFF) (“Equinox Gold” or “the Company”) is pleased to announce that it has closed the previously announced acquisition (“Acquisition”) of the Mesquite gold mine (“Mesquite”) from New Gold Inc. (TSX: NGD, NYSE American: NGD) (“New Gold”), bringing immediate production and cash flow to Equinox Gold.
“The Mesquite acquisition immediately transforms Equinox Gold from a developer to a producer, bringing meaningful gold production from a well-established operation,” said Christian Milau, CEO of Equinox Gold. “We welcome the Mesquite team to Equinox Gold and look forward to leveraging their operations expertise as we expand our presence in California with development of the Castle Mountain gold mine.”
Acquisition Summary
Equinox Gold acquired all of the outstanding shares of New Gold’s subsidiary New Gold Mesquite Inc., which indirectly holds a 100% interest in Mesquite, for cash consideration to New Gold of $158 million, subject to certain post-closing adjustments. Equinox Gold will also assume bonding obligations with the applicable environmental regulatory authorities with respect to Mesquite’s long-term reclamation obligations. The Acquisition was funded from a combination of debt and equity including:
- Brokered and non-brokered private placement of subscription receipts (“Subscription Receipts”) for aggregate gross proceeds of approximately $75 million (C$97.5 million);
- A $100 million acquisition credit facility with a syndicate of lenders led by the Bank of Nova Scotia (“Scotia”); and
- A $20 million credit facility from Sprott Private Resource Lending (Collector), L.P. (“Sprott”).
The terms of the private placements were previously detailed in Equinox Gold’s press release dated October 12, 2018. On closing of the Acquisition, the 102,541,603 Subscription Receipts were, in accordance with their terms, automatically settled on a one-for-one basis for common shares (“Common Shares”) of Equinox Gold, which are subject to a hold period expiring February 12, 2019. The details of the credit facilities with each of Scotia and Sprott and an amendment to the Aurizona credit facility were also previously outlined in Equinox Gold’s press releases dated September 19 and October 12, 2018. Under the agreements with Sprott, it was issued 1.75 million Common Shares and 875,000 warrants with each warrant entitling it to purchase one Common Share for 4.25 years at an exercise price of C$1.14 per Common Share. The Common Shares and warrants issued to Sprott are subject to a hold period expiring February 29, 2019.
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 reserve base, gold production from its Mesquite Gold Mine in California, and near-term production growth from two past-producing mines in Brazil and California. Construction is well advanced at the Company’s Aurizona Gold Mine in Brazil with the objective of achieving commercial production around the end of Q1-2019, and the Company is advancing its Castle Mountain Gold Mine in California with the objective of ramping-up Stage 1 operations in 2020. Further information about Equinox Gold’s portfolio of assets and long-term growth strategy is available at www.equinoxgold.com or by email at [email protected].
Forward-looking Statements Apply: Neither the TSX-V nor its Regulation Services Provider (as such term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release
