All amounts are in United States dollars unless otherwise
indicated
VANCOUVER, Feb. 25, 2019
/CNW/ - Equinox Gold Corp. (TSX-V: EQX, OTC:
EQXFF) ("Equinox Gold" or the "Company") is pleased to announce it
has entered into a definitive agreement with Mubadala Investment
Company ("Mubadala") whereby Mubadala has agreed to purchase
$130 million in convertible notes (the "Notes") from Equinox
Gold (the "Investment"). Proceeds from the Investment will be used
to refinance a portion of existing corporate and project debt, for
general and working capital purposes and toward construction of
Phase 1 at Castle Mountain.
Investment Highlights
- Investment of $130 million in
5-year convertible notes with a 5% interest rate convertible at
$1.05 (C$1.38) per share, a 25% premium to the 10-day
volume weighted average share price ("VWAP").
- Significantly reduces the Company's borrowing costs and
increases near-term financial flexibility by deferring principal
payments up to five years.
- Establishes Mubadala, which actively manages its diversified
portfolio to deliver sustainable returns to its shareholder, the
Government of Abu Dhabi, as a
cornerstone and long-term financial partner to Equinox Gold as the
Company executes on its growth strategy.
"Mubadala's investment underscores the value and upside of
Equinox Gold's existing asset base and significantly enhances our
near-term financial capacity as we prepare for Phase 1 construction
at the Castle Mountain project," said Christian Milau, CEO of Equinox Gold.
Ross Beaty, Equinox Gold's
Chairman, added, "Mubadala has an excellent reputation for being a
long-term supportive shareholder. I warmly welcome them as partners
in our mission to build a great gold mining company."
"Equinox Gold combines experienced leadership with a strong
suite of assets and a clear value creation strategy," said
Mohamed Al Suwaidi, Director of
Metals and Mining at Mubadala. "We see a great opportunity to
develop our partnership with the business over the years
ahead."
Investment Terms
The Notes will have a 5-year term and bear interest at 5% per
year payable quarterly in arrears. The Notes will be convertible at
the holder's option into common shares of the Company (the
"Shares") at a conversion price of $1.05 (C$1.38), representing a 25% premium to the
10-day VWAP of the Shares on the TSX Venture Exchange. Assuming
full conversion of the Notes, the holder would be entitled to
receive approximately 123.8 million Shares of the Company,
representing approximately 18% of Equinox Gold's outstanding Shares
on a partially diluted basis.
The Notes will be secured against all assets of the Company and
subordinate to existing senior credit facilities. The Company and
the holder of the Notes will have certain early redemption and
other rights subject to the provisions of the Notes.
In connection with the Investment, Equinox Gold and Mubadala
will enter into an investor rights agreement providing Mubadala,
among certain other rights, the right to a nominee on the Company's
board of directors and standard anti-dilution rights.
Closing of the Investment is subject to receipt of all necessary
regulatory and stock exchange approvals, as well as satisfaction of
customary closing conditions, the consent of certain lenders to the
Company, execution of intercreditor agreements and execution of
definitive documentation.
The Notes, and the Shares into which the Notes are convertible,
have not been and will not be registered under the U.S. Securities
Act of 1933, as amended or qualified by a prospectus in
Canada. This news release is
neither an offer to sell nor the solicitation of an offer to buy
the Notes or any other securities and shall not constitute an offer
to sell or solicitation of an offer to buy, or a sale of, the Notes
or any other securities in any jurisdiction in which such offer,
solicitation or sale is unlawful.
About Mubadala
Mubadala invests globally and actively manages a diversified
portfolio to deliver sustainable returns to its shareholder, the
Government of Abu Dhabi.
Mubadala's $225 billion portfolio
spans four continents with priority sectors including aerospace,
ICT, semiconductors, metals and mining, renewable energy, oil and
gas, petrochemicals, utilities, healthcare, real estate, defense
services, pharma and medtech, agribusiness and a global portfolio
of financial holdings. Mubadala is a trusted partner, an engaged
shareholder and a responsible global company that is committed to
ethics and world-class standards. For more information about
Mubadala please visit www.mubadala.com.
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. Commissioning is underway 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 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 document contains certain forward-looking information
and forward-looking statements within the meaning of applicable
securities legislation (collectively "forward-looking statements").
The use of the words "will", "objective", "advancing", "strategy",
"transitions" and similar expressions are intended to identify
forward-looking statements. Forward-looking statements contained in
this news release include, but are not limited to, statements
regarding closing of the Investment, inability to complete the
Investment on the proposed terms or at all, delays in obtaining or
inability to obtain consent of lenders or to execute intercreditor
agreements or obtain required regulatory and exchange approvals,
construction activities and the planned restart of production at
Aurizona; planned development and anticipated production at Castle
Mountain; and the growth potential of the Company. Although the
Company believes that the expectations reflected in such
forward-looking statements and/or 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. These forward-looking statements may relate to the
Company's future outlook and anticipated events, such as the
Company's ability to successfully close the Investment,
successfully operate Mesquite Mine, the Company's ability to
achieve the results anticipated in the Aurizona feasibility study,
the Company's ability to complete Aurizona construction activities
on time and on budget, the Company's ability to restart production
at Aurizona and timing of the anticipated restart of production,
the Company's ability to achieve the annual production estimated
for Aurizona, the Company's ability to restart production at Castle
Mountain and timing of the anticipated restart of production, the
Company's ability to achieve the results anticipated in the Castle
Mountain prefeasibility study, and statements regarding the
Company's assets, business strategy, plans and objectives. The
Company has based these forward-looking statements largely on the
Company's current expectations and projections about future events
and financial trends affecting the financial condition of the
Company's business. These forward-looking statements were derived
using numerous assumptions regarding expected growth, results of
operations, performance and business prospects and opportunities
that could cause the Company's actual results to differ materially
from those in the forward-looking statements. While the Company
considers these assumptions to be reasonable based on information
currently available, they may prove to be incorrect. Accordingly,
readers are cautioned not to put undue reliance on these
forward-looking statements. Forward-looking statements should not
be read as a guarantee of future performance or results.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Forward-looking
statements speak only as of the date those statements are made.
Except as required by applicable law, the Company assumes no
obligation to update or to publicly announce the results of any
change to any forward-looking statement contained or incorporated
by reference herein to reflect actual results, future events or
developments, changes in assumptions or changes in other factors
affecting the forward-looking statements. 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 contained in this press release are expressly qualified
in their entirety by this cautionary statement.
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SOURCE Equinox Gold Corp.
