Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) is pleased to report its unaudited financial and operating results for the fourth quarter and fiscal year ended December 31, 2020.  These results are preliminary and could change based on final audited results.Equinox Gold’s 2020 audited consolidated financial statements and accompanying management’s discussion and analysis for the three months and year ended December 31, 2020, will be released later this month.

“Equinox Gold’s 2020 results reflect delivery on the Company’s growth and diversification strategy. Our seven operating mines generated 477,200 ounces of gold and operating cash flow of $217 million in the year, compared to our 2019 production of 201,000 ounces of gold and $60 million in operating cash flow,” said Christian Milau, Chief Executive Officer. “Our acquisition of Premier Gold Mines will bring further scale and diversification with the addition of a producing mine in Mexico and a 60% interest in the construction-ready, world-class Hardrock project in Ontario, Canada. With strong cash flow from our operating mines and a healthy balance sheet, Equinox Gold is an excellent position to achieve ambitious goals in 2021 and beyond in terms of gold production and cash flow as we continue to develop our extraordinary pipeline of development and expansion projects.”

HIGHLIGHTS FOR THE FULL YEAR 2020

Operational and financial

• Completed more than 13 million work hours with nine lost-time injuries across all sites
• Implemented proactive COVID-19 testing and safety protocols to keep the mines operating effectively while protecting the health, safety and economic wellbeing of our workforce and local communities
• Exceeded revised production guidance with total production of 477,186 ounces (“oz”) of gold
• Mine cash costs of $849 per oz with mine all-in-sustaining costs (“AISC”) of $1,027 per oz sold^1,2
• Sold 471,786 oz of gold at average realized gold price of $1,783 per oz, generating revenue of $842.5 million
• Earnings from mine operations of $287.7 million
• Net income of $22.3 million or $0.10 per share
• Adjusted net income of $82.7 million or $0.39 per share, after adjusting for non-cash expenses^1,3
• Cash flow from operations before changes in working capital of $231.7 million ($216.6 million after changes in working capital)
• Adjusted EBITDA of $273.8 million^1,3
• Expenditures of $76.3 million in sustaining capital and $92.8 million in non-sustaining capital¹
• Refinanced debt with low-cost $500 million corporate credit facility
• Cash and cash equivalents (unrestricted) of $344.9 million at December 31, 2020
• Net debt of $200.3 million at December 31, 2020 (including $278.9 million of in-the-money convertible notes)¹

Corporate

• Completed at-market merger with Leagold Mining, expanding the Company’s asset portfolio with four new mines in Mexico and Brazil and a development-stage project in Brazil
• Announced acquisition of Premier Gold Mines (TSX: PG), which will further increase diversification and scale with the addition of a producing mine in Mexico and a construction-ready project in Ontario, Canada
• Increased average daily share trading liquidity from C$3 million in 2019 to more than C$40 million in 2020
• Achieved inclusion in global indices including the GDX, GDXJ, FTSE and S&P/TSX Composites
• Invested C$10.4 million in Solaris Resources (TSX: SLS) to maintain an approximate 26% interest on a fully diluted basis; current market value of Equinox Gold’s basic interest is approximately C$195 million
• Commenced online Environmental, Social and Governance (“ESG”) quarterly reporting
• Increased technical expertise, governance oversight and diversity with Board and management appointments

Construction, development and exploration

• Completed construction and commissioning of Castle Mountain Phase 1 Mine with no lost-time incidents and achieved commercial production on November 21, 2020
• Increased Mesquite Mineral Reserves by 28% and Measured & Indicated Mineral Resources by 94%
• Extended mine life at Mesquite, Aurizona and Fazenda with exploration success
• Completed maiden Indicated Resource for Tatajuba deposit at Aurizona
• Completed a positive PEA⁴ for potential Aurizona underground development showing 740,500 oz of gold production over a 10-year mine life, an after-tax NPV_5% of $288 million and an IRR of 38% at $1,620/oz gold
• Completed 23,916 metres of deep drilling and advanced technical studies to support a prefeasibility study for potential Aurizona underground development
• Completed a positive feasibility study for Santa Luz showing 903,000 oz of gold production over an initial 9.5-year mine life, an after-tax NPV_5% of $362 million and an IRR of 67% at $1,600/oz gold
• Commenced construction at Santa Luz in Q4 2020
• Advanced Los Filos optimization study for new carbon-in-leach plant, heap leach expansion, updated mine planning and a Mineral Reserve and Mineral Resource update; targeted for completion in H1 2021

FINANCIAL & OPERATING HIGHLIGHTS FOR Q4 2020

• Completed more than 2.9 million work hours with one lost-time injury across all sites
• Produced 136,352 oz of gold and sold 134,895 oz of gold, generating revenue of $252.6 million
• Mine cash costs of $848 per oz and AISC of $1,093 per oz^1,2
• Earnings from mine operations of $95.3 million
• Net income of $89.4 million or $0.37 per share
• Adjusted net income of $33.9 million or $0.14 per share, after adjusting for non-cash expenses^1,5
• Cash flow from operations before changes in working capital of $86.7 million ($83.0 million after changes in working capital)
• Adjusted EBITDA of $79.4 million^1,5
• Expenditures of $31.5 million in sustaining capital and $17.3 million in non-sustaining capital¹

RECENT DEVELOPMENTS

• Provided 2021 production and cost guidance of 600,000 to 665,000 oz of gold at mine cash costs of $940 to $1,000 per oz and AISC of $1,190 to $1,275 per oz
  • Gold production is expected to increase (and AISC decrease) each quarter during the year, with approximately 30% of production occurring in Q4 2021
• Announced positive drill results from Piaba Underground and Genipapo targets at Aurizona
• Santa Luz construction more than 25% complete and on schedule for first gold pour in Q1 2022
• Announced agreement with Orion Mine Finance Group to acquire an additional 10% of the Hardrock Project in Ontario, Canada, bringing the Company’s total interest to 60% following completion of the Premier acquisition (through which the Company will acquire Premier’s 50% interest in Hardrock)
• Premier acquisition expected to close in March 2021, and the additional 10% of Hardrock shortly thereafter
  • Premier securityholders approved the acquisition on February 23, 2021
  • Require Mexican Comisión Federal de Comptetencia Económica anti-trust clearance decision and other regulatory approvals

Further to the Company’s news release on December 16, 2020, Equinox Gold plans to complete a non-brokered private placement of subscription receipts at a price of C$10.00 per subscription receipt for gross proceeds of C$75 million. The private placement is fully underwritten by the Company’s Chairman, Ross Beaty, and other insiders of Equinox Gold will also be participating in the financing. Each subscription receipt will entitle the holder to receive one common share of Equinox Gold on satisfaction of certain conditions, including completing the Premier Gold acquisition. The financing is subject to completion of definitive documentation, customary closing conditions and regulatory approvals, including the approval of the Toronto Stock Exchange for the pricing and other terms of the financing.

CONSOLIDATED 2020 RESULTS COMPARED TO 2020 FORECAST

Guidance was updated on August 10 primarily to reflect the effect of government-mandated temporary suspensions related to COVID-19 and revised on November 9 to reflect the effect of the Los Filos blockade, which was removed in December.

Capital expenditures were lower than planned for the year, primarily due to the suspension of mining and development activities at Los Filos as the result of a community blockade and the deferral of certain expenditures as the result of COVID-19 restrictions.

2021 OUTLOOK

On February 9, 2021, the Company announced 2021 production guidance of 600,000 to 665,000 oz of gold, an approximate 33% increase over the Company’s 2020 full-year production. Cost guidance includes cash costs of $940 to $1,000 per oz of gold sold and AISC of $1,190 to $1,275 per oz of gold sold. The Company may revise guidance during the year to reflect changes to expected results.

Consolidated gold production is expected to increase quarter-over-quarter during the year, with the fourth quarter benefiting from higher-grade ore at both Los Filos and Mesquite. Cash costs for 2021 reflect the lower grades mined at Los Filos for the first half of the year until the Guadalupe stripping program and Bermejal underground development are complete, providing access to higher-grade ore. Bermejal underground development will not commence, however, until successful resolution of an amended community support agreement with the Carizalillo community. AISC in 2021 reflect significant development and stripping campaigns at Los Filos, Mesquite and Aurizona to access higher-grade ore, which will boost production and reduce costs in the second half of the year.

The Company is investing significantly in its projects in 2021, setting the foundation for lower-cost, longer-life mines and substantial production growth going forward. The Company has budgeted $178 million in sustaining capital for 2021 (including some capital carried over from 2020), compared to the total spend in 2020 of $76.3 million. The Company is also undertaking meaningful growth projects in 2021, including construction of the Santa Luz mine, advancing expansion projects at the Los Filos mine, completing a pit expansion at the RDM mine and significant exploration programs focused on mine life extension. The Company has budgeted $249 million in non-sustaining growth capital for 2021, compared to $92.8 million in 2020.

The Company expects to complete the Premier Gold acquisition in March 2021. Guidance will be updated following completion of the acquisition to include the producing Mercedes Mine in Mexico and to reflect expenditures associated with construction of the Hardrock Mine in Ontario, Canada, which is expected to commence in Q4 2021 as Santa Luz construction is nearing completion.

OPERATING & FINANCIAL RESULTS BY MINE

Outlook

• 2021 reflects a year of significant investment at Mesquite with a focus on mine life extension
• This will result in higher per ounce costs in the earlier part of the year as compared to H2 2021
• 2021 production estimated at 130,000 to 140,000 oz of gold
• 2021 cash costs of $925 to $975 per oz and AISC of $1,275 to $1,325 per oz
• AISC includes sustaining capital of $48 million, of which $30 million relates to a stripping program to access the higher-grade oxide Brownie deposit, which will contribute significantly to production beginning in H2 2021
  • Ore stacking activity in H1 2021 will be significantly lower than in H2 2021 due to Brownie stripping
• Sustaining capital includes $10 million for leach pad expansion and $6 million for equipment
• Non-sustaining capital of $9 million is allocated entirely to exploration with a focus on resource growth and reserve replacement in the Brownie, Vista East and Rainbow deposits

Outlook

• 2021 production estimated at 120,000 to 130,000 oz of gold
• 2021 cash costs of $720 to $770 per oz and AISC of $1,075 to $1,125 per oz
• AISC includes $46 million budgeted for sustaining capital, allocated primarily to $27 million in capitalized waste stripping and $15 million for the next planned tailings storage facility (“TSF”) raise
• Non-sustaining capital of $4 million is directed to exploration and completion of the Piaba underground prefeasibility study

Outlook

• 2021 production estimated at 60,000 to 65,000 oz of gold
• 2021 cash costs of $820 to $870 per oz and AISC of $1,075 to $1,125 per oz
• AISC includes $15 million of sustaining capital allocated primarily to $8 million for underground development and equipment and $4 million in open-pit waste stripping
• Non-sustaining capital of $2 million relates entirely to exploration

Outlook

• 2021 production estimated at 55,000 to 60,000 ounces of gold
• 2021 cash costs of $1,000 to $1,050 per oz and AISC of $1,175 to $1,225 per oz
• AISC includes sustaining capital of $10 million to increase capacity of the TSF
• Non-sustaining capital of $35 million relates entirely to capitalized stripping for a major expansion pushback of the main open pit, providing improved access to the ore body in future years

Outlook

• 2021 production estimated at 35,000 to 40,000 oz of gold
• 2021 cash costs of $1,200 to $1,300 per oz and AISC of $1,400 to $1,500 per oz
• AISC includes sustaining capital of $7 million for underground development
• No non-sustaining capital budgeted for 2021

Outlook

• 2021 production estimated at 30,000 to 40,000 ounces of gold
• 2021 cash costs of $725 to $775 per ounce and AISC of $1,100 to $1,150 per ounce
• AISC includes sustaining capital of $14 million allocated primarily to $9 million for a leach pad expansion that will accommodate the entirety of Phase 1 operations and $3 million for plant optimization
• Non-sustaining capital of $10 million includes $7 million to complete the feasibility study in Q1 2021 and commence permitting for the Phase 2 expansion, and $2 million to construct an assay lab on site

Outlook

Representatives from Los Filos continue to meet regularly with community leaders to reach consensus on the remaining items related to benefits provided under the community’s social collaboration agreement.

• 2021 production weighted into H2 2021 and estimated at 170,000 to 190,000 oz of gold
• 2021 cash costs of $1,125 to $1,200 per oz sold and AISC of $1,330 to $1,390 per oz sold
• Cash costs and AISC are expected to be higher at the start of the year and lower in H2 2021 as grade and production increases
• Production to gradually increase during Q1 2021 as mining activities and leaching ramp up following the December restart
• Production to also increase quarter-over-quarter as development activities provide access to higher-grade ore from the Guadalupe open pit
  • Additional ore will be sourced from the Bermejal underground deposit upon commencement of development, which is on hold pending finalization of the community social collaboration agreement
• $133 million of capital investments at Los Filos during 2021 will set the stage for production growth and mine life extension
  • AISC includes $38 million of sustaining capital:
    • $13 million allocated for fleet refurbishment and processing equipment
    • $9 million for development at the Los Filos underground mine
    • $13 million for capitalized stripping of the Los Filos and Guadalupe open pits
  • Non-sustaining capital of $95 million relates to the expansion project (in part deferred from 2020):
    • $25 million for fleet rebuilds and new equipment
    • $9 million for exploration and Los Filos underground development
    • $10 million for pre-stripping of the Guadalupe open pit
    • $48 million for Bermejal underground development, which is on hold pending finalization of the community social collaboration agreement

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, in thousands of US dollars)

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited, in thousands of US dollars, except share and per share amounts)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands of US dollars)

NON-IFRS MEASURES

This document refers to cash costs, cash costs per oz sold, AISC, AISC per oz sold, AISC contribution margin, adjusted net income, adjusted EPS, mine-site free cash flow, adjusted EBITDA, net debt, and sustaining and non-sustaining capital expenditures that are measures with no standardized meaning under International Financial Reporting Standards (“IFRS”), i.e. they are non-IFRS measures, and may not be comparable to similar measures presented by other companies. Their measurement and presentation is consistently prepared and is 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.

Cash Costs and AISC

Cash costs is a common financial performance measure in the gold mining industry; however, it has no standard meaning under IFRS. The Company reports total cast costs on a per oz of gold sold basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate operating income and cash flow from mining operations. Cash costs include mine site operating costs, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product sales and then divided by ounces sold to arrive at cash costs per oz. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.

The Company also reports AISC per oz of gold sold. The methodology for calculating AISC was developed internally as calculated below, and readers should be aware that this measure does not have a standardized meaning. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. The Company believes the AISC measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value.

Previously, cash cost per oz sold and AISC per oz sold were calculated including purchase price allocation adjustments for the fair values of inventory as the fair values approximated the Company’s actual production costs.  Due to the significant increase in gold prices during the year, the fair values attributed to acquired inventory in the Leagold Merger do not approximate actual production costs; as such, cash cost per oz sold and AISC per oz sold have been normalized for the purchase price allocation adjustments to inventory. Comparative periods have also been adjusted to conform with the current methodology and are different from those previously reported.

The following table provides a reconciliation of cash costs per oz of gold sold and AISC per oz of gold sold to the most directly comparable IFRS measure on an aggregate basis. 

Sustaining and Non-sustaining Capital

The following table provides a reconciliation of sustaining and non-sustaining capital to the most directly comparable IFRS measure on an aggregate basis. 

Mine-site Free Cash Flow

Mine-site free cash flow is a non-IFRS financial performance measure. The Company believes this to be a useful indicator of its ability to operate without reliance on additional borrowing or usage of existing cash. Mine-site free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other mining companies. Mine-site free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

The following table provides a reconciliation of mine-site free cash flow to the most directly comparable IFRS measure on an aggregate basis.

EBITDA, Adjusted EBITDA and AISC Contribution Margin

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use adjusted EBITDA and all-in sustaining contribution margin to evaluate the Company’s performance and ability to generate cash flows and service debt. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortization, adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes in the value of warrants, foreign exchange contracts and gold contracts, unrealized foreign exchange gains and losses, and share-based compensation. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets.

The following tables provides the calculation of AISC contribution margin (revenue less AISC), EBITDA and adjusted EBITDA, as calculated by the Company for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, and the years ended December 31, 2020 and 2019.

Adjusted Net Income and Adjusted EPS

Adjusted net income and adjusted EPS are used by management and investors to measure the underlying operating performance of the Company. Adjusted net income is defined as net income adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes in the value of warrants, foreign exchange contracts and gold contracts, unrealized foreign exchange gains and losses, share-based compensation. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets. Adjusted net income per share amounts are calculated using the weighted average number of shares outstanding on a basic and diluted basis as determined by IFRS.

The following table provides the calculation of adjusted net income and adjusted EPS, as adjusted and calculated by the Company for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, and the years ended December 31, 2020 and 2019.

Net Debt

The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use net debt to evaluate the Company’s performance. Net debt does not have any standardized meaning prescribed under IFRS, and therefore it may not be comparable to similar measures employed by other companies. The data are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performances prepared in accordance with IFRS. Net debt is calculated as the sum of the current and non-current portions of long-term debt net of the cash and cash equivalent balance as at the balance sheet date. A reconciliation of net debt is provided below.

ABOUT EQUINOX GOLD

Equinox Gold is a Canadian mining company with seven operating gold mines, construction underway at an eighth site, a multi-million-ounce gold reserve base and a clear path to achieve one million ounces of annual gold production from its pipeline of growth projects. Equinox Gold operates entirely in the Americas, with two properties in the United States, one in Mexico and five in Brazil. On December 16, 2020, Equinox Gold announced its friendly acquisition of Premier Gold Mines, which will bring further diversification and scale with the addition of a producing mine in Mexico and a construction-ready project in Ontario, Canada. Equinox Gold’s common shares are listed on the TSX and the NYSE American