Mr. Christian Milau reports
EQUINOX GOLD REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS
Equinox Gold Corp. has released its third quarter 2019 summary financial and operating results. The company will file its unaudited condensed consolidated interim financial statements and related management's discussion and analysis (MD&A) for the three and nine months ended Sept. 30, 2019, later today and will host a conference call and live webcast to discuss the results at 8 a.m. PT (11 a.m. ET) on Oct. 31, 2019. Dial-in and log-in details are provided at the end of this news release.
All dollar figures are in U.S. dollars, unless otherwise indicated.
"Equinox Gold continues to deliver on its growth strategy, increasing production at Mesquite and Aurizona, and announcing the start of phase 1 construction at Castle Mountain, which will be our third producing gold mine. After a quick ramp-up at Aurizona, the third quarter demonstrated strong earnings and cash flow from our two operating mines, resulting in an increased cash balance and our first quarter of consolidated net income."
Highlights for the three months ended Sept. 30, 2019
Operational and financial highlights:
-
Achieved commercial production at Aurizona;
- No lost-time injuries;
- Produced 62,656 ounces (oz) of gold;
- Mine cash costs (1) of $800 per oz sold and all-in sustaining costs (AISCs) (1) of $953 per oz sold;
- Sold 62,379 oz of gold, generating revenue of $91.9-million;
- Earnings from mine operations of $30.8-million;
- Adjusted EBITDA (1) (earnings before interest, taxes, depreciation and amortization) of $38.2-million;
- Cash from operations of $38.0-million;
-
Cash and cash equivalents (unrestricted) increased to $45.5-million from $33.0-million in Q2;
- Repaid in full the $20-million short-term loan from the company's chairman.
Development highlights:
- Commenced early works phase 1 construction activity at Castle Mountain;
- Initiated phase 2 Castle Mountain feasibility study;
-
Recommenced drilling of the Tatajuba target at Aurizona.
Corporate highlights:
- Commenced trading on the NYSE American under symbol EQX:
-
Completed a 1:5 share consolidation to pursue the U.S. stock exchange listing.
Recent developments:
- Commenced full-scale phase 1 construction at Castle Mountain with an approved $58-million budget:
-
Expect first gold pour in Q3 2020;
- Receipt of $1.0-million cash from Koricancha sale.
(1) Cash cost per ounce sold, AISCs per ounce sold and adjusted EBITDA are non-IFRS (international financial reporting standards) measures.
2019 outlook:
- Maintaining 2019 production guidance of 200,000 to 235,000 oz of gold at AISCs of $940 to $990 per oz of gold sold:
-
125,000 to 145,000 oz of gold from Mesquite at AISCs of $930 to $980 per oz of gold sold;
-
75,000 to 90,000 oz of gold from Aurizona at AISCs of $950 to $1,025 per oz of gold sold;
- Updating 2019 non-sustaining capital expenditure guidance:
- Total 2019 non-sustaining capital expenditure of $75.6-million comprising expenditures at Mesquite ($8.0-million), Aurizona ($39.6-million) and Castle Mountain ($28.0-million) with $47.8-million spent through Sept. 30, 2019, including:
- Aurizona: $37.6-million on initial capital for construction;
- Mesquite: $6.7-million on reserve expansion;
- Castle Mountain: $3.5-million on early works phase 1 construction;
- Advancing Tatajuba exploration and underground studies at Aurizona;
- Advancing phase 2 feasibility study at Castle Mountain.
QUARTERLY AND YEAR-TO-DATE (YTD) HIGHLIGHTS FROM ALL OPERATIONS
Three months ended Nine months ended
Sept. 30, 2019 June 30, 2019 March 31, 2019 Sept. 30, 2019
Operating data
Gold produced (oz) 62,656 26,799 25,310 114,765
Gold sold (oz) 62,379 26,856 27,238 116,473
Realized gold price ($/oz) 1,473 1,318 1,299 1,397
Mine AISCs per ounce ($/oz) 953 1,017 1,017 983
Profit (loss) data
Revenues 91.9 35.4 35.4 162.7
Earnings from mine operations 30.8 7.6 7.0 45.4
Net income (loss) 8.1 (11.5) (8.3) (11.8)
Adjusted EBITDA 38.2 5.6 6.4 50.2
Balance sheet and cash flow data
Cash 45.5 33.0 24.0 45.5
Operating cash flow before
non-cash changes in
working capital 37.6 (1.1) 3.5 40.0
As at Sept. 30, 2019, the company adjusted the fair values of heap leach inventory and
mineral properties in the Mesquite purchase price allocation to reflect an updated estimate
of recoverable ounces in the heaps at the acquisition date. This adjustment results in a
decrease in the average cost per ounce of gold in the heap leach inventory as of the
acquisition date. Approximately one-third of production during Q3 2019 was from lower-cost,
preacquisition heap leach ounces. Production for Q1 and Q2 was primarily from ounces stacked
and leached subsequent to acquisition. As a result, all-in sustaining costs per ounce are
higher for the first two quarters of 2019 compared with Q3 2019.
OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPT. 30, 2019
Mesquite Aurizona
Operating data
Ore mined (Kt) 6,925 574
Waste mined (Kt) 7,708 4,843
Ratio of waste to ore 1.11 8.44
Average gold grade stacked/processed (g/t) 0.29 1.30
Gold produced (oz) 33,306 29,350
Gold sold (oz) 31,313 31,066
Unit analysis
Realized gold price ($/oz) 1,475 1,471
Cash cost per ounce sold ($/oz) 819 781
AISCs per ounce sold ($/oz) 855 1,053
SELECTED CONSOLIDATED FINANCIAL RESULTS
(in millions of dollars, except per-share amounts)
Three months ended Sept. 30, Nine months ended Sept. 30,
2019 2018 2019 2018
Revenue (1) $ 91.9 $ - $ 162.7 $ -
Operating expenses (1) (49.9) - (98.1) -
Depreciation and depletion (1) (11.2) - (19.2) -
Earnings from mine operations (1) 30.8 - 45.4 -
Exploration (0.9) (2.6) (7.0) (8.3)
General and administration (3.3) (3.0) (10.1) (9.7)
Income (loss) from operations 26.5 (5.6) 28.2 (18.0)
Other income (expense) (14.9) (2.2) (35.7) 6.2
Net income (loss) before taxes 11.6 (7.8) (7.5) (11.8)
Tax expense (3.5) (0.3) (4.3) (1.7)
Net income (loss) from
continuing operations 8.1 (8.1) (11.8) (13.5)
(Loss) from discontinued operation - (0.9) - (27.5)
Net income (loss) and
comprehensive income (loss) 8.1 (9.0) (11.8) (41.0)
Net income (loss) per share
from continuing operations
attributable to Equinox Gold
shareholders, basic and diluted $ 0.07 $ (0.09) $ (0.09) $ (0.15)
(1) Mesquite was acquired on Oct. 30, 2018, and Aurizona commenced commercial
production on July 1, 2019, hence there are no prior-period comparatives for certain
balances.
Additional information regarding the company's financial results, activities under way at Mesquite, Aurizona and Castle Mountain, and the company's long-term business strategy will be available in the company's Q3 financial statements and accompanying Q3 MD&A, which will be available for download later today on the company's website, on SEDAR and on EDGAR.
Conference call and webcast
Equinox Gold will host a live conference call and webcast on Oct. 31, 2019, commencing at 8 a.m. PT (11 a.m. ET), providing the opportunity for participants to ask questions of Equinox Gold's executive team.
Conference call
Toll-free in the United States and Canada: 1-800-319-4610
International callers: 1-604-638-5340
Webcast: at the company's website
The webcast will be archived on Equinox Gold's website until Jan. 31, 2020.
New lead director
On the recommendation of the compensation, nomination and governance committee, the company's board of directors has created the position of lead independent director and unanimously appointed with immediate effect Lenard Boggio to fulfill the role. Mr. Boggio has been an independent director on Equinox Gold's board of directors since December, 2017, and is chair of the company's audit committee and a member of the company's compensation, nomination and governance committee.
About Equinox Gold
Corp.
Equinox Gold is a Canadian mining company with a multimillion-ounce gold reserve base and growth potential from three wholly owned gold mines. The company is producing gold from its Mesquite gold mine in California and its Aurizona gold mine in Brazil, and is constructing its Castle Mountain old mine in California, with the target of achieving production in 2020.
Non-IFRS measures
This news release refers to cash costs, cash costs per ounce sold, AISCs, AISCs per ounce sold, adjusted EBITDA, and sustaining and non-sustaining capital expenditures that are measures with no standardized meaning under IFRS; they are non-IFRS measures and may not be comparable with similar measures presented by other companies. Their measurement and presentation are 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.
Technical information
James (Jim) Currie, PEng, Equinox Gold's chief operating officer, and Scott Heffernan, MSc, PGeo, Equinox Gold's executive vice-president of exploration, are the qualified persons under National Instrument 43-101 for Equinox Gold and have reviewed, approved and verified the technical content of this document.
We seek Safe Harbor.
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