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Home > Premier Gold Mines Ltd. > News > Equinox Gold Reports...
Premier Gold Mines Ltd.

Equinox Gold Reports 128,555 Ounces of Gold Sold in First Quarter 2021 On Track for Significant Production Growth from Development and Expansion Projects

May 5, 2021
Equinox Gold Corp. (TSX: EQX, NYSE American: EQX) (“Equinox Gold” or the “Company”) is pleased to announce its first quarter 2021 summary financial and operating results. The Company’s unaudited condensed consolidated interim financial statements and related management’s discussion and analysis for the three months ended March 31, 2021 will be available for download shortly on SEDAR, on EDGAR and on the Company’s website. The Company will host a conference call and webcast today commencing at 2:00 pm Vancouver time to discuss the Company’s business strategy and objectives, first quarter results and activities underway at the Company’s projects. Further details are provided at the end of this news release.
 
Christian Milau, CEO of Equinox Gold, commented: “It’s certainly been a busy start to the year with closing of the Premier Gold acquisition, subsequent integration of the Mercedes Mine and Greenstone Project into our portfolio, and increasing our interest in Greenstone to 60%. We also commenced early works construction at Greenstone, Santa Luz construction is 30% complete and on track for first gold early next year, the Los Filos expansion is underway and we are making good progress opening up the higher-grade Brownie deposit at Mesquite.
 
“As guided, these key investments result in lower production and higher costs in the first half of the year, but we will see the benefits of this work in the third and fourth quarters as we access higher grade ore and will deliver significant growth in 2022 and future years as these new projects achieve production. We also strengthened our balance sheet with a C$75 million private placement and the sales of our small Pilar mine and a portion of our investment in Solaris Resources.”
 
HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2021
 
Operational and financial
 
  • Completed more than four million work hours with three lost-time injuries across all sites
  • Produced 129,233 ounces (“oz”) of gold
  • Sold 128,555 oz of gold at an average realized gold price of $1,786 per oz
  • Total mine cash costs of $1,141 per oz and mine AISC of $1,482 per oz, which includes $70 and $22 per oz related to a write-down of inventory during higher-cost ramp up after resuming operations at Los Filos and a write-down of inventory at Pilar, respectively(1)
  • Earnings from mine operations of $44.2 million
  • Net income of $50.3 million or $0.21 per share
  • Adjusted net loss of $3.6 million or $(0.02) per share, after adjusting for non-cash expenses(1,2)
  • Cash flow from operations before changes in non-cash working capital of $62.0 million ($79.4 million after changes in non-cash working capital)
  • Adjusted EBITDA of $60.5 million(1,2)
  • Expenditures of $41.3 million in sustaining capital and $38.8 million in non-sustaining capital(1)
  • Net debt of $229.8 million at March 31, 2021 (including $278.9 million of in-the-money convertible notes)(1)
  • Cash and cash equivalents (unrestricted) of $317.5 million at March 31, 2021
 
Corporate
 
  • Reiterated 2021 production and cost guidance of 600,000 to 665,000 oz of gold with mine cash costs of $940 to $1,000 per oz of gold sold and mine AISC of $1,190 to $1,275 per oz of gold, after accounting for acquisition of the Mercedes Mine and sale of the Pilar Mine after quarter end (as described in Recent 2021 Highlights)
 
Construction and development
 
  • Completed feasibility study for Castle Mountain Phase 2 expansion showing an increase in gold production to an average of 218,000 oz per year for 14 years at an AISC of $858 per oz
  • Announced positive drill results from the Piaba underground and Genipapo targets at Aurizona
  • Santa Luz construction more than 30% complete and on schedule for first gold pour in Q1 2022
 
RECENT 2021 HIGHLIGHTS
 
  • Cash and cash equivalents (unrestricted) of approximately $350 million at April 30, 2021
  • Completed acquisition of Premier Gold Mines Limited (“Premier”) on April 7, 2021
  • Acquired 100% interest in the producing Mercedes Mine in Mexico and 50% interest in the construction-ready Greenstone Project (“Greenstone”) in Ontario, Canada
  • Invested C$24.1 million to maintain an approximately 30% basic interest in i-80 Gold Corp., a new spin-out company advancing Premier’s Nevada assets
  • Acquired an additional 10% interest in the Greenstone Project on April 16, 2021 from Orion Mine Finance Group for $51.0 million in cash plus other contingent consideration, bringing the Company’s total interest in Greenstone to 60%
  • Completed a non-brokered private placement for C$75.0 million of common shares at a price of C$10.00 per share in conjunction with closing of the Premier acquisition
  • Signed an updated social collaboration agreement with the Carrizalillo community at Los Filos with a term to April 2025
  • Commenced development of the Bermejal underground mine at Los Filos, one of three planned expansion projects that will contribute to increasing production starting in late 2021
  • Sold the Pilar Mine in Brazil for $38.0 million(3) plus a 1% net smelter returns royalty on the mine and a 9.9% equity interest in the buyer, Pilar Gold Inc.
  • Completed the sale of ten million shares in Solaris Resources Inc. (“Solaris”) and warrants for the buyers to acquire up to five million additional shares of Solaris for a period of 12 months with a C$10.00 exercise price, for total cash proceeds of C$82.5 million. In the event all warrants are exercised, the Company would receive an additional C$50.0 million for total proceeds of up to C$132.5 million
  • Published the Company’s inaugural environmental, social and governance (“ESG”) report, which summarizes Equinox Gold’s approach to material ESG topics, the Company’s ESG performance during 2020 and its targets for 2021
_______________
 
  1. Mine cash cost per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net income, adjusted EPS, sustaining capital, non-sustaining capital and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
  2. Primary adjustments were $42.1 million non-cash gain on the change in fair value of gold contracts, $33.3 million non-cash gain on the change in fair value of warrants and $11.3 million non-cash loss on the change in fair value of foreign exchange contracts.
  3. Total of $10.5M received at closing with the additional $27.5M to come by July 31, 2021, as described in a news release dated April 19, 2021.
 
CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS
 
 
  1. Operational and financial results of the assets acquired in the merger with Leagold are included from March 10, 2020 onward.
  2. The Company early-adopted the amendment to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use on January 1, 2021. The amendment applies retrospectively. For the three months ended December 31, 2020, the Company reclassified $1.6 million of pre-commercial production net income at Castle Mountain from property, plant and equipment to the income statement, comprising $2.9 million in revenue, $1.0 million in production costs and $0.3 million in depreciation. Operating and financial data for the periods affected have been updated to reflect application of this change in accounting policy. 
  3. Consolidated mine AISC per oz sold excludes corporate general and administration expenses.
  4. Cash cost per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net income, adjusted EPS and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
 
The Company realized revenue of $229.7 million on sales of 128,555 oz of gold during the Quarter, compared to revenue for the three months ended December 31, 2020 (“Q4 2020”) of $255.5 million on sales of 136,418 oz of gold. The decrease in ounces sold from Q4 2020 to Q1 2021 is mainly due to lower production at Mesquite as the result of planned limited stacking of ore during Q1 2021 as the site focuses on a major stripping campaign at the higher-grade Brownie pit, as well as heavy rains in Brazil during the Quarter which resulted in some of the mines processing a portion of lower-grade stockpiles instead of run-of-mine ore. The quarter-on-quarter decrease in revenue is also partly attributable to a decrease in average realized gold price per oz from $1,871 for Q4 2020 to $1,786 for Q1 2021.
 
Earnings from mine operations in Q1 2021 of $44.2 million decreased from $97.7 million in Q4 2020, and net income in Q1 2021 was $50.3 million compared to $91.2 million in Q4 2020.  The decrease in earnings from mine operations and net income was largely driven by the decrease in revenue as described above and higher operating costs at Los Filos as it recommenced operations in the Quarter after resolution of the community blockade. 
 
Adjusted EBITDA for Q1 2021 of $60.5 million decreased from $82.1 million in Q4 2020 and adjusted net loss of $3.6 million for Q1 2021 decreased from adjusted net income of $35.7 million in Q4 2020. Decreases in adjusted EBITDA and adjusted net income (loss) were largely due to lower realized gold prices and higher operating costs, as described above.
 
2021 GUIDANCE
 
Following the acquisition of Premier and sale of Pilar in April 2021, the Company maintains its 2021 production guidance of 600,000 to 665,000 oz of gold and cost guidance for 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. Full-year sustaining capital guidance has been increased to $187 million and full-year non-sustaining capital guidance has been increased to $291 million to reflect the Company’s acquisition of the Mercedes mine and the Company’s 60% share of early construction works at Greenstone.
 
 
  1. Cash costs per oz sold, AISC per oz sold, sustaining capital and non-sustaining capital are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
  2. Consolidated mine AISC per oz sold excludes corporate general and administration expenses.
  3. Production and capital attributable to Equinox Gold from April 7, 2021, the date of acquisition.
  4. Actuals attributable to Equinox Gold prior to the sale of Pilar as announced on April 19, 2021.
 
SELECTED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 and 2020
 
 
  1. Financial results for the three months ended March 31, 2020 include the results of operations for mines acquired through the Leagold Merger for the period of March 10 to March 31, 2020.
 
Additional information regarding the Company’s financial results and activities underway at the Company’s projects are available in the Company’s Q1 2021 Financial Statements and accompanying management’s discussion and analysis for the three months ended March 31, 2021, which will be available for download shortly on the Company’s website at www.equinoxgold.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
 
CONFERENCE CALL AND WEBCAST
 
Equinox Gold will host a conference call and webcast on May 5 commencing at 2:00 pm Vancouver time to discuss the Company’s business strategy and objectives, first quarter results and activities underway at the Company’s projects. All participants will have the opportunity to ask questions of Equinox Gold’s Chairman, CEO and executive team. The webcast will be archived on Equinox Gold’s website until November 5, 2021.
 
Corporate update commencing at 2:00 pm Vancouver time
 
Conference call Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
Webcast www.equinoxgold.com
 
ABOUT EQUINOX GOLD
 
Equinox Gold is a Canadian mining company operating entirely in the Americas, with seven operating gold mines and a clear path to achieve more than one million ounces of annual gold production from a pipeline of development and expansion projects. Equinox Gold’s common shares are listed on the TSX and the NYSE American under the trading symbol EQX. 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.
 
EQUINOX GOLD CONTACTS
 
Christian Milau, Chief Executive Officer
Rhylin Bailie, Vice President, Investor Relations
Tel: +1 604-558-0560
Email: ir@equinoxgold.com
 

Source: https://www.equinoxgold.com/news/equinox-gold-reports-128555-ounces-of-gold-sold-in-first-quarter-2021-on-track-for-significant-production-growth-from-development-and-expansion-projects