Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) is pleased to report its third quarter 2020 summary financial and operating results. The Company’s unaudited condensed consolidated interim financial statements and related management’s discussion and analysis for the three and nine months ended September 30, 2020 are available for download on SEDAR, on EDGAR and on the Company’s website.
The Company will host a conference call and webcast today commencing at 8:00 am PT (11:00 am ET) to discuss third quarter results and upcoming milestones. Further details are provided at the end of this news release.
“Equinox Gold again delivered record results with more than 128,000 ounces of gold sold, $98 million in earnings from mine operations and adjusted net income of $39 million,” said Christian Milau, Chief Executive Officer. “Proactive COVID-19 testing and enhanced health and safety protocols have allowed us to safely operate our mines while protecting both the health and economic wellbeing of our workforce and local communities. Unfortunately, a community blockade has temporarily suspended operations at Los Filos. We have been meeting with the community to understand and discuss their concerns and continue to seek a long-term solution so Los Filos can resume normal operations and continue to provide benefits to all stakeholders.
“We continue to deliver on our organic growth projects, which will bring additional production and cash flow to the Company. We commenced production at our seventh gold mine in October with first gold pour at Castle Mountain, and advanced the Castle Mountain Phase 2 expansion study with results expected in Q1 2021. We have also commenced full construction of the Santa Luz project in Brazil, which will add 100,000 ounces of annual gold production for an initial 9.5-year mine life.”
HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020
Operational and financial
Construction and development
|1||Mine cash cost per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net income, adjusted earnings per share and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.|
|2||Primary adjustments were $8.6 million loss on the change in fair value of share purchase warrants and $10.2 million unrealized loss on the change in fair value of gold hedge contracts.|
|3||Consolidated AISC per oz sold excludes corporate general and administration expenses.|
|4||Based on closing share price on October 30, 2020 of C$4.90 per share.|
Equinox Gold continues to proactively manage issues related to the COVID-19 pandemic to help protect the health, safety and economic wellbeing of its workforce and local communities. Designated site teams continue to respond to daily changes, circumstances and directives of government and health authorities, and maintain open communication with the Company’s workforce, community leaders and local health providers to develop and share strategies to manage COVID-19. The Company has initiated routine COVID-19 testing at all of its sites with the objective of identifying carriers early so they can self-isolate before inadvertently spreading the virus to others. Additional information regarding Equinox Gold’s COVID-19 response plan, preventive measures taken to date and the potential impact on operations is available in the Q3 2020 management’s discussion and analysis and on the Company’s website at www.equinoxgold.com.
OPERATING AND FINANCIAL RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
|Three months ended||Nine
|Operating data||Unit||Sep 30,
|Realized gold price||$/oz||1,899||1,712||1,574||1,748|
|AISC per oz sold(3,4)||$/oz||1,035||950||994||993|
|Earnings from mine operations||M$||97.7||78.0||41.7||217.4|
|Net income (loss)||M$||11.8||(66.9)||10.5||(44.5)|
|Earnings (loss) per share||$/share||0.05||(0.29)||0.08||(0.22)|
|Adjusted net income(4)||M$||39.3||19.1||13.4||71.9|
|Adjusted earnings per share(4)||$/share||0.16||0.08||0.09||0.35|
|Balance sheet and cash flow data|
|Cash and cash equivalents (unrestricted)||M$||310.7||494.1||303.1||310.7|
|Operating cash flow before changes in|
|(1)||Results for the three and the nine months ended September 30, 2019 are not presented as they are not readily comparable. During the three and nine months ended September 30, 2019, the Company had only the Mesquite and Aurizona mines in operation, with the Aurizona mine commencing commercial production on July 1, 2019. On March 10, 2020, the Company added four additional operating mines acquired through the Leagold Merger.|
|(2)||As at September 30, 2020, the Company adjusted the fair values of heap leach inventory, mineral properties, plant and equipment and deferred tax liabilities in the Leagold purchase price allocation to reflect an updated estimate of conversion costs for heap leach inventory and useful lives of certain plant and equipment at Los Filos as of the acquisition date. The Company has updated financial results for the periods impacted. Net loss for Q2 2020 increased by $8.2 million and net income for Q1 2020 decreased by $0.4 million from previously reported figures. AISC per oz sold in Q2 2020 and Q1 2020 increased by $50 and $26, respectively, from previously reported figures.|
|(3)||Consolidated AISC per oz sold excludes corporate general and administration expenses.|
|(4)||AISC per oz sold, adjusted EBITDA, adjusted net income, adjusted earnings per share and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.|
SELECTED FINANCIAL RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
|$ amounts in millions, except per share amounts||Three months ended||Nine months ended|
|Revenue||$ 244.5||$ 91.9||$ 589.9||$ 162.7|
|Depreciation and depletion||(36.4)||(11.2)||(88.1)||(19.2)|
|Earnings from mine operations||97.7||30.8||217.4||45.4|
|Care and maintenance||(12.1)||–||(31.2)||–|
|General and administration||(8.1)||(3.3)||(24.7)||(10.1)|
|Income from operations||74.6||26.5||152.0||28.2|
|Net income (loss) before taxes||22.9||11.6||4.2||(7.5)|
|Net income (loss) and comprehensive income (loss)||11.8||8.1||(44.5)||(11.8)|
|Net income (loss) per share attributable to Equinox|
|Gold shareholders, basic and diluted||0.05||0.07||(0.22)||(0.09)|
|(1)||During the three and nine months ended September 30, 2019, the Company had only the Mesquite and Aurizona mines in operation, with the Aurizona mine commencing commercial production on July 1, 2019. During the nine months ended September 30, 2020, it had the Mesquite and Aurizona mines in operation and, on March 10, 2020, added four additional operating mines acquired through the Leagold Merger.|
Increased revenue and earnings are due primarily to an increase in realized gold price and also increased gold ounces sold as the result of acquiring the Leagold mines in March 2020. Sales from the acquired sites contributed 139,260 oz for the period from acquisition on March 10, 2020 to September 30, 2020, generating revenue of $247.4 million. The Company’s realized gold price also increased to $1,899 per oz in Q3 2020 from $1,475 per oz in Q3 2019. For the nine months ended September 30, 2020, the increase in revenue is also partly attributed to a full nine months of production from Aurizona, which commenced operations on July 1, 2019. Care and maintenance is comprised primarily of expenditures associated with the temporary suspension and subsequent ramp-up costs at Los Filos, RDM and Pilar during Q2 2020 due to the COVID-19 pandemic, and with the temporary suspension of operations at Los Filos during Q3 2020 as the result of a community blockade. Also included in care and maintenance is $5.4 million of costs associated with mine development activities that would otherwise have been capitalized had development activities not been suspended due to COVID-19 and to the community blockade.
Other expense for Q3 2020 was largely driven by non-cash losses of $10.2 million on the change in fair value of gold hedge contracts that were acquired as part of the Leagold Merger as the result of an increase in the gold price, and by non-cash losses of $8.6 million on the change in fair value of share purchase warrants as the result of an increase in the Company’s share price. The Company’s share purchase warrants are considered derivatives for accounting purposes as they are to be settled in Canadian dollars, which differs from the Company’s US dollar functional currency. Accordingly, the Company’s share purchase warrants are recorded at fair value with changes in fair value recognized through profit or loss.
Additional information regarding the Company’s financial results and activities underway at the Company’s projects are available in the Company’s Q3 2020 Financial Statements and accompanying management’s discussion and analysis for the three and nine months ended September 30, 2020, which are available for download on the Company’s website at www.equinoxgold.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
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. Equinox Gold’s common shares are listed on the TSX and the NYSE American.
More than 38% of eligible UEX securities have already been tender... READ MORE
Infinitum Copper Corp. (TSX-V: INFI) (OTCQB: INUMF) is pleased ... READ MORE
Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR) reported its financial ... READ MORE
Libero Copper & Gold Corporation (TSX-V: LBC) (OTCQB: LBCMF) ... READ MORE
Fosterville South Exploration Ltd. (TSX-V: FSX) (OTCQX: FSXLF) (G... READ MORE
We acknowledge the [financial] support of the Government of Canada.