Equinox Gold Corp. (TSX-V:EQX) (OTC:EQXGF) (“Equinox Gold” or the
“Company”) today announces plans to transfer all of its copper
assets into a newly incorporated company named Solaris Copper Inc.
(“Solaris Copper”). Equinox Gold will continue to focus on
advancing the Aurizona Gold Mine and the Castle Mountain Gold Mine
to production while Solaris Copper explores and develops the copper
projects to unlock the value of the copper portfolio.
Sixty percent of Solaris Copper shares will be
distributed to Equinox Gold shareholders with the remainder to be
held by Equinox Gold. Solaris Copper will not initially be listed
on a public stock exchange but will operate as a reporting issuer.
In addition to advancing its copper assets, Solaris Copper will
evaluate all strategic opportunities available to the company to
enhance value including mergers, acquisitions and a potential stock
exchange listing. Additional information about Solaris Copper is
available at www.solariscopper.com.
“Solaris Copper will control a portfolio of very
promising exploration-stage projects located in world-class copper
districts,” said Ross Beaty, Chairman of Equinox Gold. “Creating a
standalone copper-focused company should give these projects the
visibility and attention they deserve. With large copper deposits
already identified, exceptional exploration upside and optionality
from multiple properties, Solaris Copper represents an exciting
growth-focused copper story.”
“Creating Solaris Copper to hold and advance
Equinox Gold’s copper assets achieves another milestone in the
business strategy we communicated to shareholders when we created
Equinox Gold last year,” said Christian Milau, CEO and a Director
of Equinox Gold. “We are creating value for Equinox Gold
shareholders on two fronts now, with Solaris Copper providing
exposure to rising copper prices while Equinox Gold offers
substantial leverage to gold as we advance Aurizona and Castle
Mountain to production.”
Solaris Copper Assets
Solaris Copper will hold a 100% interest in the
resource-bearing Warintza copper-molybdenum project in Ecuador, a
60% interest in the La Verde preliminary economic assessment stage
copper-silver-gold project in Mexico, a 100% interest in the
Ricardo early-stage copper property in Chile, has negotiated
earn-in agreements for two early-stage copper prospects in Peru,
and is continuing to evaluate additional properties that fit the
portfolio. Collectively, the projects host 3.7 billion pounds of
copper in the measured and indicated category with an additional
4.6 billion pounds of copper in the inferred category, with
significant exploration potential at all of the projects.1
Warintza is a porphyry copper-molybdenum project
located in southeastern Ecuador in a corridor of mineralization
that is known to host numerous exploration- and development-stage
projects with copper, copper-gold, copper-molybdenum and high-grade
gold mineralization. Warintza covers four known copper-molybdenum
target areas that exhibit classic porphyry mineralization, with
low-grade copper and molybdenite mineralization distributed widely
across the property, yet only a small portion of the property has
been tested to date. The current mineral resource estimate outlines
195.0 million tonnes of inferred resources grading 0.42% copper and
0.03% molybdenum, for 1.808 billion pounds of copper and
132.3 million pounds of molybdenum, and a copper-equivalent
grade of 0.61%.1
Solaris Copper will indirectly hold a 60%
interest in the La Verde project, with the remaining 40% held by
Teck Resources Limited. The project is located in the State of
Michoacán, Mexico, 320 km west of Mexico City, is accessible
year-round by paved roads and is strategically located next to key
infrastructure with easy access to water, power and rail. The
current mineral resource estimate outlines measured mineral
resources of 57.5 million tonnes grading 0.45% copper and
indicated mineral resources of 350.4 million tonnes grading 0.40%
copper for total contained metal in the measured and indicated
category of 3.7 billion pounds of copper, with additional inferred
mineral resources of 337.8 million tonnes grading 0.37% copper.1
A preliminary economic assessment (“PEA”) completed for the
project in 2012 outlined the potential to produce more than 200
million pounds of copper per year in concentrates over a 20-year
mine life.2 Equinox Gold has engaged the authors of the PEA to
prepare an updated report that will be filed on SEDAR in
conjunction with the mailing of the Circular.
Ricardo is an early-stage copper exploration
project located in Northern Chile in one of the world’s most
prolific copper mining districts. The project is strategically
located along the West Fissure Fault, a structure that hosts
numerous world-class porphyry copper deposits including Escondida
and Chuquicamata. Solaris Copper hopes to explore this promising
property with a senior partner, allowing Solaris Copper
shareholders to participate in exploration upside at the property
while minimizing exploration costs.
1 See “Mineral Resource Estimates” at the end of
this news release.2 See “La Verde Preliminary Economic Assessment”
at the end of this news release.
Terms of the Arrangement
Equinox Gold has executed an arrangement
agreement whereby the business of Equinox Gold will be reorganized
into two companies by way of a plan of arrangement (the
“Arrangement”) under the Business Corporations Act (British
Columbia). Equinox Gold has received an interim order from the
Supreme Court of British Columbia authorizing the Company to call a
shareholder meeting to approve the Arrangement. Equinox Gold
shareholders will vote on the Arrangement at the annual and special
meeting of shareholders (“Meeting”) to be held on July 26, 2018 at
1:00 p.m. at 595 Burrard Street, Suite 2600, Vancouver, BC. To be
effective, the Arrangement must be approved by a special resolution
passed by at least 66⅔% of the votes cast by Equinox Gold
shareholders present in person or represented by proxy at the
Meeting, which shareholders are entitled to one vote for each
Equinox Gold share held.
The Arrangement involves, among other things,
the distribution of common shares of Solaris Copper (the “Solaris
Copper Shares”) to Equinox Gold shareholders such that each
shareholder will hold: (i) one new common share of Equinox
Gold for each common share of Equinox Gold held on the effective
date of the Arrangement; and (ii) one-tenth of a Solaris Copper
Share for each common share of Equinox Gold held on the effective
date of the Arrangement. Immediately following completion of the
Arrangement, which is expected to occur in early August, Equinox
Gold’s shareholders, other than any dissenting shareholders, would
be issued shares in Solaris Copper so that collectively they would
own 60%, with the remaining 40% interest held by Equinox Gold.
Equinox Gold warrants, options and restricted share units will also
be adjusted pursuant to the Arrangement as described in more detail
in the information circular (“Circular”) that will be mailed to
shareholders in the last week of June.
After careful consideration, the Board of
Directors has unanimously determined that the Arrangement is fair
to shareholders and is in the best interests of the Company. A
description of the various factors considered by the Board of
Directors in arriving at this determination will be provided in the
Circular.
After closing of the Arrangement, new Equinox
Gold shares and certain of Equinox Gold’s warrants will continue
trading on the TSX Venture Exchange in Canada under the symbols EQX
and EQX.WT, respectively, and on the OTC Market in the United
States under the symbols EQXGF and EQXWF, respectively. Solaris
Copper Shares will not be listed on any stock exchange after
closing of the Arrangement, but the company will be a reporting
issuer and will comply with its continuous disclosure obligations
including press releases and financial reporting.
Solaris Copper’s day-to-day activities will be
managed by Greg Smith as CEO, Kylie Dickson as CFO and Pamela
Kinsman as Corporate Secretary, each of whom will also continue
with their Equinox Gold responsibilities.
On Behalf of the Board of Equinox Gold
Corp.
“Christian Milau”
CEO & Director
Equinox Gold Contacts
Christian Milau, CEORhylin Bailie, Vice
President Investor RelationsTel: +1 604-558-0560Email:
ir@equinoxgold.com
Mineral Resource Estimates
|
Measured |
Indicated |
Total Measured & Indicated |
|
Tonnes(M) |
Cu(%) |
Ag(g/t) |
Au(g/t) |
Contained Cu (M lbs) |
Tonnes(M) |
Cu(%) |
Ag(g/t) |
Au(g/t) |
ContainedCu (M lbs) |
Tonnes(M) |
Cu(%) |
Ag(g/t) |
Au(g/t) |
ContainedCu (M lbs) |
La Verde |
57.527 |
0.45 |
2.94 |
0.05 |
570.7 |
350.4 |
0.40 |
2.33 |
0.03 |
3,098.1 |
408.0 |
0.41 |
2.42 |
0.03 |
3,668.8 |
|
Inferred |
|
Tonnes(M) |
Cu(%) |
Ag(g/t) |
Au(g/t) |
Mb(%) |
Contained Cu(M lbs) |
Contained Mb(M lbs) |
Copper Equivalent(M lbs) |
La Verde |
337.8 |
0.37 |
1.94 |
0.02 |
|
2,748.3 |
|
|
Warintza |
195.0 |
0.42 |
|
|
0.03 |
1,807.0 |
132.0 |
2,072.0 |
Total |
532.8 |
0.39 |
1.94 |
0.02 |
0.03 |
4,555.3 |
132.0 |
4,874.3 |
The La Verde Mineral Resource was reported in
the “La Verde Copper Project, Michoacán State, Mexico, Technical
Report” prepared by AMC Mining Consultants (Canada) Ltd. for
Catalyst Copper Corp. with an effective date of September 30, 2012.
The report is available for download on SEDAR at www.sedar.com. The
resource is reported using a base-case cut-off grade of 0.2%
copper. The cut-off grade of 0.2% copper is based on experience for
similar open-pit projects and a mining conceptual study which used
a metal price of $2.50/lb copper and copper metal recovery of 92%.
This Resource estimate is not constrained by a pit shell.
The Warintza Mineral Resource estimate was
reported in the “Technical Report, Warintza Project, Ecuador”
completed by Peter Ronning, P.Eng. and Steven Ristorcelli, C.P.G.
with an effective date of December 21, 2012 and a completion date
of March 27, 2013. The report is available for download on SEDAR at
www.sedar.com. The Mineral Resource calculation was completed under
the supervision of Peter Ronning, P.Eng. and Steven Ristorcelli,
C.P.G., who are Qualified Persons as defined under NI 43-101. The
reported resource is at a cut-off of 0.3 CuEq. Copper equivalent
calculations were made for reporting purposes. The copper
equivalent grade for copper plus molybdenum was calculated as
CuEq(%) = Cu(%) = (6*Mo(ppm)/10000). Copper-equivalent calculations
reflect gross metal content and have not been adjusted for
metallurgical recoveries or relative processing and smelting costs.
The copper equivalent grades were used only for establishing
cut-off grades for reporting. Equinox Gold has engaged the authors
of the Warintza technical report to prepare an updated report that
will be filed on SEDAR in conjunction with the mailing of the
Circular.
La Verde Preliminary Economic
Assessment
The La Verde Preliminary Economic Assessment was
completed by AMC Mining Consultants (Canada) Ltd. for Catalyst
Copper Corp. in accordance with the requirements of National
Instrument 43-101 “Standards of Disclosure for Mineral Projects” of
the Canadian Securities Administrators. The report has an effective
date of September 30, 2012, is titled “La Verde Copper Project,
Michoacán State, Mexico, Technical Report” and is available for
download on SEDAR at www.sedar.com. The PEA is preliminary in
nature and includes inferred mineral resources that are considered
too speculative geologically to have the economic considerations
applied that would enable them to be categorized as mineral
reserves. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. There is no certainty that
the PEA will be realized. Equinox Gold has engaged the authors of
the PEA to prepare an updated report that will be filed on SEDAR in
conjunction with the mailing of the Circular.
Cautionary Notes
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.
Qualified Person and Disclosure
Statement
David Laing, B.Sc., MIMMM, Equinox Gold’s Chief
Operating Officer and a Qualified Person under National Instrument
43-101, has reviewed and verified that the technical information
contained in this news release is accurate and approves the written
disclosure of the same.
Cautionary Note to United States
Investors Concerning Resource Estimates
This document uses the terms “measured”,
“indicated” and “inferred” resources. United States investors are
advised that while such terms are recognized and required by
Canadian regulations, the United States Securities and Exchange
Commission does not recognize them. “Inferred mineral resources”
have a great amount of uncertainty as to their existence, and as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category or that mineral resources will ever be
upgraded to mineral reserves. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or
other economic studies. United States investors are cautioned not
to assume that all or any part of measured or indicated mineral
resources will ever be converted into mineral reserves. United
States investors are also cautioned not to assume that all or any
part of an inferred mineral resource exists or is economically or
legally mineable.
Forward-looking Statements
This document contains forward-looking
statements within the meaning of applicable securities legislation.
The use of the words “will”, “proposes”, “potential”, “advanced”,
“to be”, “continue”, “should”, “creating”, “offers”, “earn-in”,
“continuing”, “being”, “updated”, “expects”, “must be”, “would be”,
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements include, but are not limited
to, statements concerning the completion and proposed terms of, and
matters relating to, the Arrangement and the expected timing
related thereto; the satisfaction of the conditions required to
complete the Arrangement; the anticipated effects and expected
benefits of the Arrangement; Solaris Copper’s future objectives and
strategies to achieve those objectives, including the future
prospects of Solaris Copper as an independent company; and the
future potential of both Solaris Copper and Equinox Gold.
Forward-looking statements reflect management’s current beliefs,
expectations and assumptions and are based on information currently
available to management, management’s historical experience,
perception of trends and current business conditions, expected
future developments and other factors which management considers
appropriate. Equinox Gold has made certain assumptions with respect
to, among other things, the anticipated approval of the Arrangement
by shareholders and the Supreme Court of British Columbia; the
anticipated receipt of any required regulatory approvals and
consents; the expectation that each of Equinox Gold and Solaris
Copper will comply with the terms and conditions of the
Arrangement; the expectation that no event, change or other
circumstance will occur that could give rise to the termination of
the Agreement; that Solaris Copper will meet its future objectives
and priorities; that Solaris Copper will have access to adequate
capital to fund its future projects and plans; that Solaris
Copper’s future projects and plans will proceed as anticipated; as
well as assumptions concerning general economic and industry growth
rates, commodity prices, currency exchange and interest rates, and
competitive intensity. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the future circumstances, outcomes or results
anticipated or implied by such forward-looking statements will
occur or that plans, intentions or expectations upon which the
forward-looking statements are based will occur. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties and other factors that could cause actual results to
differ materially from those contemplated by such statements.
Factors that could cause such differences include, but are not
limited to: conditions precedent or approvals required for the
Arrangement not being obtained; the potential benefits of the
Arrangement not being realized; the potential for the trading price
of New Equinox Shares (if any) after the Arrangement being less
than the trading price of Equinox Shares immediately prior to the
Arrangement; there being no current plan to list Solaris Copper
Shares on any stock exchange; there being no established market for
the Solaris Copper Shares; the potential inability or unwillingness
of current Shareholders to hold New Equinox Shares and/or Solaris
Copper Shares following the Arrangement; Equinox Gold’s ability to
delay or amend the implementation of all or part of the Arrangement
or to proceed with the Arrangement even if certain consents and
approvals are not obtained on a timely basis; future factors that
may arise making it inadvisable to proceed with, or advisable to
delay, all or part of the Arrangement; the reduced diversity of
Equinox Gold and Solaris Copper as separate companies; the costs
related to the Arrangement that must be paid even if the
Arrangement is not completed; general business and economic
uncertainties and adverse market conditions; risks related to
Solaris Copper’s status as an independent reporting issuer
following the Arrangement; and risks related to the achievement of
Solaris Copper’s business objectives. For a further description of
these and other factors that could cause actual results to differ
materially from the forward-looking statements included in this
news release, see the risks outlined in the Circular that will be
mailed to shareholders as well as the risk factors included in
Equinox Gold’s management’s discussion and analysis for the year
ended December 31, 2017 and as described from time to time in the
reports and disclosure documents filed by Equinox Gold with the
Canadian securities regulatory agencies and commissions. This list
is not exhaustive of the factors that may impact Solaris Copper’s
future activities and prospects. These and other factors should be
considered carefully and readers should not place undue reliance on
these forward-looking statements. As a result of the foregoing and
other factors, there can be no assurance that actual results will
be consistent with these forward-looking statements.
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