All amounts are in United States dollars unless otherwise
indicated
VANCOUVER, April 11, 2019
/CNW/ - Equinox Gold Corp. (TSX-V: EQX, OTC:
EQXFF) ("Equinox Gold" or the "Company") is pleased to announce it
has:
- Closed the strategic investment by Mubadala Investment Company
("Mubadala") whereby Mubadala has purchased $130 million in convertible notes from Equinox
Gold;
- Converted the $100 million
Mesquite acquisition facility into a new $130 million corporate revolving credit facility;
and
- Re-paid in full the $85 million
Aurizona construction facility and the $20
million Mesquite acquisition facility provided by Sprott
Private Resource Lending (Collector), L.P. ("Sprott").
"These transactions simplify our balance sheet, reduce interest
costs, defer principal payments and increase capital available to
the Company as we move into production at our Aurizona Mine and
prepare for Phase 1 construction at our Castle Mountain Project,"
commented Christian Milau, CEO of
Equinox Gold. "We welcome Mubadala as a cornerstone and long-term
financial partner to Equinox Gold and thank the Bank of
Nova Scotia and its syndicate
partners for their continued support as we grow the Company."
Mubadala Investment
The Company has closed its previously announced sale of
$130 million of convertible notes
(the "Notes") to Mubadala. The Notes have a 5-year term, bear
interest at a fixed rate of 5% per year and are convertible at the
holder's option into common shares of the Company at a conversion
price of $1.05 (C$1.38) per
share.
Of the total gross proceeds of $130
million, $120 million was
immediately available at closing and used to re-pay in full the
$85 million Aurizona construction
facility and the $20 million Mesquite
acquisition facility provided by Sprott, terminate the associated
Aurizona production-linked payment obligation to Sprott and for
certain other transaction fees and expenses. Remaining proceeds
from the Notes will be restricted until the submission for
registration of certain security documents, the completion of
certain additional post-closing documentation and the satisfaction
of customary conditions.
Equinox Gold and Mubadala have also entered into an agreement
providing Mubadala, among certain other rights, standard
non-dilution rights and the right to a nominee on the Company's
board of directors. Equinox Gold expects to appoint a Mubadala
nominee to the Company's board of directors subsequent to the
Company's annual general meeting on May 1,
2019.
Pacific Road Resources Funds ("Pacific Road") holds a
pre-existing non-dilution right pursuant to an investment agreement
dated May 7, 2015. Pacific Road has indicated it intends to
exercise its non-dilution right, subject to agreement with respect
to terms of the issuance. If exercised, the Company will issue up
to approximately $9.7 million in
additional convertible notes to Pacific Road on the same basis as
the Notes.
Revolving Credit Facility
The Company has converted its $100
million Mesquite acquisition facility into a senior secured
$130 million corporate revolving
credit facility (the "Revolving Credit Facility") with the existing
syndicate of lenders led by the Bank of Nova Scotia. The Revolving Credit Facility
matures on October 30, 2022, at which
date it must be repaid in full, and incurs interest at an annual
rate of LIBOR plus 2.5% to 4%, subject to certain leverage
ratios.
Under the terms of the Revolving Credit Facility, $100 million was immediately available at
closing. An additional $30 million
will be made available on registration of certain security
documents, the achievement of commercial production at the
Company's Aurizona Mine in Brazil
and the satisfaction of customary conditions.
Equinox Gold has also arranged a one-year, unsecured
$20 million revolving credit facility
with the Company's Chairman, Ross
Beaty, that the Company may draw to provide short-term
bridge financing for general corporate and working capital
purposes, including initial Castle Mountain Phase 1 development
activities, until the full $130
million Revolving Credit Facility is available and the
remaining proceeds from the Notes are unrestricted.
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 from two past-producing mines in
Brazil and
California. Commissioning is underway at the Company's
Aurizona Gold Mine in Brazil and
the Company is advancing its Castle Mountain Gold Mine in
California with the objective of
ramping-up Phase 1 operations in early 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
ir@equinoxgold.com.
Cautionary Notes and Forward-Looking Statements
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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. All statements, other than statements of
historical fact, are forward-looking statements.
Forward-looking statements or information in this news release
relate to, among other things: the ability of the Company to
successfully complete construction and commissioning activities and
the planned restart of production at Aurizona; the ability of the
Company to successfully operate Mesquite, development and timing of
anticipated production at Castle Mountain; the growth potential of
the Company; the intended use of proceeds from the Notes and the
Revolving Credit Facility; the potential investment from Pacific
Road; the future availability of the restricted funds from the
Notes; and the appointment of the Mubadala nominee to the Company's
Board of Directors. Forward-looking statements or information
generally identified by the use of the words "will", "should",
"move toward", "prepare", "subject to", "look forward",
"advancing", "objective", "strategy" and similar expressions
and phrases or statements that certain actions, events or
results "may", "should", or "be achieved", 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:
tonnage of ore to be mined and processed; ore grades and
recoveries; prices for gold remaining as estimated; the
construction and planned production at Aurizona and Castle Mountain
being completed and performed in accordance with current
expectations; currency exchange rates remaining as estimated;
availability of funds for the Company's projects and future cash
requirements; capital, decommissioning and reclamation estimates;
the Company's mineral reserve and 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
development and production; all necessary permits, licenses and
regulatory approvals are received in a timely manner; and the
Company's ability to comply with environmental, health and safety
laws. While the Company considers these assumptions to be
reasonable based on information currently available, they may prove
to be incorrect. 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 or 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,
usual 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; changes in laws, regulations and government practices,
including environmental, export and import laws and regulations;
legal restrictions relating to mining; risks relating to
expropriation; increased competition in the mining industry; and
those factors identified in the Company's management information
circular dated June 20, 2018 and in
its MD&A dated December 31, 2018,
which are available on SEDAR at www.sedar.com. 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 and does not
intend to update or 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.