Equinox Gold Acquires Additional 10% of Hardrock Project in Ontario, Canada, Increasing Stake to 60%
Equinox Gold Corp. (EQX) announced an agreement with Orion Mine Finance Group to acquire an additional 10% stake in the Hardrock Mine Project for $51 million, increasing its interest to 60%. The Hardrock Project, a fully permitted gold mine in Ontario, is expected to yield over 240,000 gold ounces annually. The transaction includes payment terms allowing for up to $41 million to be settled in shares and certain contingent payments linked to production milestones. The acquisition is contingent upon the completion of Equinox's acquisition of Premier Gold Mines, expected in March 2021.
- Increased interest in Hardrock Project to 60%, enhancing asset portfolio.
- Projected annual production of over 240,000 ounces of gold, boosting revenue potential.
- Strategic acquisition solidifies position in a top mining jurisdiction, Ontario.
- Dependence on the successful completion of Premier acquisition could pose risks.
- Contingent payment obligations could strain future cash flow.
all financial figures in US dollars, unless otherwise indicated
VANCOUVER, BC, March 1, 2021 /PRNewswire/ - Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold" or the "Company") is pleased to announce that the Company has entered into an agreement with an affiliate of the Orion Mine Finance Group ("Orion") to acquire
The Hardrock Project is a multi-million-ounce, fully permitted, construction-ready gold project located in Ontario, Canada and currently owned
Christian Milau, CEO of Equinox Gold, stated: "We are extremely pleased to increase our stake in this world-class Canadian gold deposit located in one of the world's top mining jurisdictions. Hardrock will be a low-cost, long-life gold mine, bringing more than 240,000 attributable ounces of annual gold production to Equinox Gold when in production, with significant upside potential from near-mine exploration and underground development. We look forward to working with Orion to advance Hardrock to production, bringing long-term benefits to all stakeholders of the Hardrock Project and particularly First Nations and other communities in the Greenstone region of Ontario."
Terms of the Hardrock Transaction include:
- Payment on closing of
$51 million , of which up to$41 million can be paid in shares of Equinox Gold, at Equinox Gold's option; and - Assumption of certain contingent payment obligations comprising:
$5 million in cash 24 months after a positive mine construction decision for the Hardrock Project; and- delivery of approximately 2,200 ounces of refined gold, the cash equivalent value of such refined gold, or a combination thereof, after production milestones of 250,000 ounces, 500,000 ounces and 700,000 ounces from the Hardrock Project.
The Hardrock Transaction is subject to closing of Equinox Gold's acquisition of Premier, which was approved by Premier shareholders on February 23, 2021 and is expected to close in March 2021, subject to regulatory and court approvals and customary closing conditions.
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 relate to, among other things: the Company's ability to obtain the required approvals and complete its acquisition of Premier and the additional
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; increased competition in the mining industry; and those factors identified in the Company's MD&A dated February 28, 2020 and its Annual Information Form dated May 13, 2020, both for the year-ended December 31, 2019, and the Company's MD&A dated November 5, 2020 for the three and nine months ended September 30, 2020, 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.
FAQ
What is the financial structure of Equinox Gold's acquisition of Hardrock Project?
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What are the expected production benefits of the Hardrock Project for Equinox Gold?