Tudor Gold Corp. press release

Equinox Gold Reports Strong Operating Cash Flow of $321 Million in 2021, Achieves 26% Production Growth with 602,668 Ounces of Gold Sold

2022-02-25

TSXV - TSX Venture Exchange · Gold · Copper · Silver · Lead · Zinc · Arsenic · Barium · Molybdenum · Canada

Canada NewsWire

all financial figures are in US dollars, unless otherwise indicated

VANCOUVER, BC , Feb. 24, 2022 /CNW/ - Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold" or the "Company") is pleased to announce its unaudited financial and operating results for the fourth quarter and fiscal year ended December 31, 2021 . These results are preliminary and could change based on final audited results. Equinox Gold's 2021 audited consolidated financial statements and accompanying management's discussion and analysis for the three months and year ended December 31, 2021 will be released in mid-March.

Christian Milau , CEO of Equinox Gold, commented: "Equinox Gold's 2021 results demonstrate consistent year-on-year production and cash flow growth as the Company advances toward its target of achieving more than one million ounces of annual gold production. During 2021, our seven operating mines produced 602,110 ounces of gold and generated operating cash flow of $256 million , compared to 2020 production of 477,200 ounces of gold and $321 million in operating cash flow. We realized more than $1 billion in revenue for the year, and produced our millionth ounce of gold, both important milestones for our growing company.

"We achieved significant reserve and resource growth, adding more than three million ounces of gold reserves to our portfolio through the acquisition of Premier Gold and its Greenstone project. We also increased mineral reserves and demonstrated mine life extension at Aurizona and Castle Mountain, and drilled more than 219,000 metres across the portfolio. The next few years will be focused on delivering organic growth from our pipeline of development and expansion projects, which will collectively add more than 600,000 ounces of annual production to the Company at reduced costs."

2021 HI GHLIG HTS

Operational

Realized 26% production growth compared to 2020 Achieved 2021 guidance with total production of 602,110 ounces ("oz") of gold Sold 602,668 ounces of gold at an average realized gold price of $1,791 per oz Total cash costs of $1,087 per oz and all-in sustaining costs ("AISC") of $1,350 per oz (1) Produced the Company's millionth ounce of gold and realized over $1 billion in revenue Achieved a total recordable injury frequency rate (2) of 3.05, 17% better than 2020, with 13 lost-time injuries Achieved a significant environmental incident frequency rate (2) of 0.68, 60% better than 2020 Continued proactive COVID-19 health and safety protocols with no production days lost due to COVID-19; supported community health with donations of supplies and support for education, medical staffing and vaccination programs

Earnings

Earnings from mine operations of $230.6 million Net income of $556.8 million or $1.95 per share Adjusted net income (1) of $73.8 million or $0.26 per share (1) , after adjusting for the non-cash expense items noted above (3)

Financial

Cash flow from operations before changes in non-cash working capital of $264.1 million ( $320.8 million after changes in non-cash working capital) Adjusted EBITDA of $303.1 million (1)(3) Expenditures of $144.7 million in sustaining capital and $238.7 million in non-sustaining capital (1) Cash and cash equivalents (unrestricted) of $305.5 million at December 31, 2021 Net debt (1) of $235.2 million at December 31, 2021 , including $139.7 million of in-the-money convertible notes

Corporate

Completed acquisition of Premier, increasing diversification and scale with a 50% interest in the low-cost, long-life Greenstone gold project in Canada and a 100% interest in the operating gold-silver Mercedes mine in Mexico Increased Greenstone ownership interest to 60% Sold ten million shares of Solaris for total cash proceeds of $66.7 million Sold the Pilar Mine for $38.0 million , a 1% net smelter return royalty and 11.6 million shares of Pilar Gold Inc. Invested C$51 million in i-80 Gold Corp. to maintain an approximate 25% interest on a fully diluted basis Announced agreement to sell the Mercedes Mine for $100 million , a 2% net smelter return and 24.73 million shares of Bear Creek Mining Corporation ("Bear Creek") (4)

Construction, development and exploration

Commenced Greenstone construction in Q4 2021 with first gold pour targeted for the first half of 2024 ("H1 2024") Advanced Santa Luz construction with first gold pour targeted for late Q1 2022 Increased Aurizona Mineral Reserves by 73% and completed a positive pre-feasibility study for an expansion that would extend the mine life to 11 years and increase annual production by concurrently mining new underground and satellite open-pit deposits with the existing open-pit mine Increased Castle Mountain Mineral Reserves by 17% and completed a positive feasibility study for a Phase 2 expansion that would extend the Castle Mountain mine life to 21 years and increase gold production to more than 200,000 ounces per year Commenced mining the new Guadalupe open-pit deposit and Bermejal underground deposit at Los Filos Drilled 219,000 metres across the portfolio with a focus on Mineral Reserve growth and mine life extension Added 3.3 million ounces of Proven and Probable Mineral Reserves through the Premier Acquisition

Responsible mining

Published inaugural Environmental, Social and Governance (ESG) Report Published first Tailings Management Report Started implementing Towards Sustainable Mining Protocols and Responsible Gold Mining Principles at all mine sites Established a Social Responsibility & Human Rights Policy, conducted human rights assessments at two mine sites Set and achieved short-term energy and greenhouse gas emission targets for 2021, submitted data to the Carbon Disclosure Project, commenced reporting using the Task Force on Climate-related Financial Disclosures framework

HIGHLIGHTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2021

Operational

Total recordable injury frequency rate of 2.92 with 3 lost-time injuries Produced 210,432 ounces of gold during the quarter; sold 212,255 ounces of gold at an average realized gold price of $1,792 per oz Total cash costs of $1,040 per oz and AISC of $1,266 per oz

Earnings

Earnings from mine operations of $99.4 million Net income of $110.9 million or $0 .37per share Adjusted net income of $75.6 million or $0.25 per share, after adjusting for the non-cash expense items noted above (5)

Financial

Cash flow from operations before changes in non-cash working capital of $122.2 million ( $155.4 million after changes in non-cash working capital) Adjusted EBITDA of $130.0 million (5) Expenditures of $42.4 million in sustaining capital and $84.6 million in non-sustaining capital

Construction, development and exploration

Commenced full-scale construction at Greenstone with a construction budget on a 100% basis (of which Equinox Gold will fund 60%) of C$1.53 billion ( $1.23 billion at a rate of USD: CAD 1.25 ), including a $177 million contingency

POST QUARTER END HIGHLIGHTS

Provided 2022 production and cost guidance of 625,000 to 710,000 ounces of gold at cash costs of $1,080 to $1,140 per oz and AISC of $1,330 to $1,415 per oz Provided 2022 capital expenditure guidance of $682 million Commenced commissioning of the Santa Luz gold plant, including leach circuit, SAG mill, ball mill and secondary grinding; construction more than 95% complete and on track for first gold pour by late Q1 2022 Greenstone construction progressing well New Brazil Federal legislation announced February 16, 2022 changed minimum freeboard (6) guidelines for all tailings storage facilities ("TSFs"), effective immediately

| | | | (1) | Cash costs per oz sold, AISC per oz sold, adjusted net income, adjusted EBITDA, adjusted EPS, sustaining capital, non-sustaining capital and net debt are non-IFRS measures. See _Non-IFRS Measures _and Cautionary Notes . | | (2) | Total recordable injury frequency rate and significant environmental incident frequency rate are both reported per million hours worked. Total recordable injury frequency rate is the total number of injuries excluding those requiring simple first aid treatment. | | (3) | Primary adjustments for the year ended December 31, 2021 were $85.8 million unrealized gain on change in fair value of warrants, $58.1 million unrealized gain on change in fair value of gold contracts, $186.1 million gain on reclassification of investment in Solaris from fair value to cost accounting, $50.3 million gain on sale of partial interest in Solaris, $45.4 million gain on sale of Pilar and $81.4 million gain on acquisition of Premier Gold | | (4) | The sale is expected to close around the end of Q1 2022, subject to completion of customary closing conditions and regulatory approvals | | (5) | Primary adjustments for the three months ended December 31, 2021 were $27.5 million unrealized gain on change in fair value of share purchase warrants, $9.4 million dilution gain on investment in associate and $8.0 million loss on disposal of plant and equipment. | | (6) | Freeboard is the height from the crest of the TSF embankment to the surface of tailings and water in the TSF. |

CONFERENCE CALL AND WEBCAST

Equinox Gold will host a conference call and webcast on Friday, February 25, 2022 commencing at 7:30 am Vancouver time to discuss the Company's financial and operating results for the fourth quarter and fiscal year ended December 31, 2021 and activities underway at the Company's projects. All participants will have the opportunity to ask questions of Equinox Gold's CEO and executive team. The webcast will be archived on Equinox Gold's website until August 25, 2022 .

Conference call Toll-free in U.S. and Canada : 1-800-319-4610 International callers: +1 604-638-5340

Webcast www.equinoxgold.com

CONSOLIDATED RESULTS

| | | | | | | | | | | | Basic weighted average shares during period | 284,932,357 | 212,487,729 | | | | | | | | | Shares outstanding end of period | 301,324,604 | 242,354,406 | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Year ended | | | | | | | Operating data | Unit | December 31, 2021 | September 30, 2021 | December 31, 2020 | | December 31, 2021 (1) | December 31, 2020 (2) | | | | Gold produced | oz | 210,432 | 139,758 | 136,352 | | 602,110 | 477,186 | | | | Gold sold | oz | 212,255 | 137,144 | 136,418 | | 602,668 | 473,309 | | | | Average realized gold price | $/oz | 1,792 | 1,780 | 1,871 | | 1,791 | 1,783 | | | | Cash costs per oz sold (4) | $/oz | 1,040 | 1,109 | 844 | | 1,087 | 847 | | | | AISC per oz sold (3)(4) | $/oz | 1,266 | 1,327 | 1,086 | | 1,350 | 1,025 | | | | Financial data | | | | | | | | | | | Revenue | M$ | 381.2 | 245.1 | 255.5 | | 1,082.3 | 845.4 | | | | Earnings from mine operations | M$ | 99.4 | 45.7 | 97.7 | | 230.6 | 290.2 | | | | Net income (loss) | M$ | 110.9 | (8.1) | 91.2 | | 556.8 | 22.3 | | | | Earnings (loss) per share | $/share | 0.37 | (0.03) | 0.38 | | 1.95 | 0.10 | | | | Adjusted EBITDA (4) | M$ | 130.0 | 67.3 | 85.3 | | 303.1 | 282.3 | | | | Adjusted net income (4) | M$ | 75.6 | 9.2 | 38.9 | | 73.8 | 88.4 | | | | Adjusted EPS (4) | $/share | 0.25 | 0.03 | 0.16 | | 0.26 | 0.42 | | | | Balance sheet and cash flow data | | | | | | | | | | | Cash and cash equivalents (unrestricted) | M$ | 305.5 | 300.3 | 344.9 | | 305.5 | 344.9 | | | | Net debt (4) | M$ | 235.2 | 244.8 | 200.3 | | 235.2 | 200.3 | | | | Operating cash flow before changes in non-cash working capital | M$ | 122.2 | 48.3 | 94.0 | | 264.1 | 271.0 | | | | | | | | | | | | | |

| (1) | Operational and financial results of the assets acquired as part of the Premier Acquisition are included from April 7, 2021, onward. | | (2) | Operational and financial results of the assets acquired as part of the Leagold Acquisition are included from March 10, 2020, onward. | | (3 | Consolidated AISC per oz sold excludes corporate general and administration expenses. | | (4) | Cash costs 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 . |

CONSOLIDATED 2021 RESULTS COMPARED TO 2021 FORECAST

| | 2021 Actuals | Guidance Range | | Gold Production (oz) | 602,110 | 560,000 - 625,000 | | Cash costs ($/oz) (1) | $1,087 | $1,025 - $1,075 | | AISC ($/oz) (1) | $1,350 | $1,300 - $1,375 | | Sustaining capital (M$) (1) | $146 | $186 | | Non-sustaining capital ($M) (1) | $239 | $251 |

| (1) Cash costs per oz, AISC per oz, sustaining capital and non-sustaining capital are non-IFRS measures. See _Non-IFRS Measures _and Cautionary Notes . |

2022 OUTLOOK

For 2022, the Company expects to achieve its fourth consecutive year of production growth with guidance of 625,000 to 710,000 ounces of gold, which is an increase of 11% compared to 2021 production (using the mid-point of 2022 guidance). Cash costs for 2022 are estimated at $1,080 to $1,140 per oz, with AISC of $1,330 to $1,415 per oz. Production and cost guidance excludes Mercedes as the previously announced sale to Bear Creek is expected to close around the end of Q1 2022, although ounces produced and capital spent prior to closing will be attributable to Equinox Gold. The Company may revise guidance during the year to reflect changes to expected results.

Production is expected to increase quarter over quarter, with 60% of gold production and more than 85% of operating cash flow anticipated in the second half of the year. As production increases, AISC is expected to decrease. Cash costs and AISC are expected to be approximately $1,210 and $1,540 per oz in H1 2022 and $1,025 and $1,295 per oz in H2 2022, respectively. The weighting of production and cash flow into the second half of the year is primarily due to Santa Luz transitioning from construction and commissioning to operations starting in Q2 2022.

Cash costs for 2022 reflect inflationary pressures across all operations, with approximately 15% cost escalation for fuel and other major consumables. AISC for 2022 includes $195 million of sustaining capital investment focused primarily on stripping campaigns at Mesquite, Aurizona and Santa Luz to open up new ore sources, and both open-pit stripping and underground development work at Los Filos that was in part delayed during 2021. The Company is also completing TSF expansions or lifts at Aurizona, RDM and Santa Luz and completing a leach pad expansion at Castle Mountain. Sustaining capital guidance includes $6 million for exploration, which is almost all capitalized.

The Company is undertaking several growth projects during 2022 including completing construction and commissioning of Santa Luz, advancing construction at Greenstone , and conducting exploration focused on mine life extension at Mesquite, Aurizona, Fazenda, Santa Luz and RDM. The Company's primary development focus for 2022 is construction at Greenstone , with Equinox Gold's 60% share of construction capital forecast at $326 million . Non-sustaining capital expenditures also include underground development at Los Filos in part carried over from 2021, a pit expansion at RDM and permitting for the Castle Mountain expansion, with total non-sustaining capital for 2022 forecast at $487 million . Non-sustaining capital guidance includes $30 million for exploration, of which approximately $19 million is expensed with the rest capitalized.

OPERATING & FINANCIAL RESULTS BY MINE

Mesquite Gold Mine, California, USA

| | | Three months ended | | Year ended | | | | | Operating data | Unit | December 31, 2021 | September 30, 2021 | December 31, 2020 | | December 31, 2021 | December 31, 2020 | | Ore mined and stacked on leach pad | kt | 3,175 | 3,835 | 3,498 | | 9,740 | 17,351 | | Waste mined | kt | 11,679 | 10,807 | 8,487 | | 49,863 | 30,782 | | Open pit strip ratio | w:o | 3.68 | 2.82 | 2.43 | | 5.12 | 1.77 | | Average gold grade stacked to leach pad | g/t | 0.44 | 0.45 | 0.72 | | 0.42 | 0.48 | | Gold produced | oz | 66,870 | 23,264 | 33,717 | | 137,467 | 141,270 | | Gold sold | oz | 68,377 | 22,333 | 33,032 | | 138,289 | 139,872 | | Financial data | | | | | | | | | Revenue | M$ | 122.8 | 40.1 | 61.5 | | 249.0 | 245.9 | | Cash costs (1) | M$ | 65.7 | 22.1 | 29.5 | | 134.7 | 125.8 | | Sustaining capital (1) | M$ | 3.2 | 8.7 | 10.5 | | 46.3 | 24.1 | | Reclamation expenses | M$ | 1.2 | 0.6 | 0.4 | | 2.6 | 2.8 | | Total AISC (1) | M$ | 70.1 | 31.4 | 40.4 | | 183.6 | 152.7 | | AISC contribution margin (1) | M$ | 52.8 | 8.7 | 21.0 | | 65.5 | 93.3 | | Non-sustaining expenditures (1) | M$ | 6.2 | 5.1 | 0.6 | | 19.4 | 9.2 | | Mine free cash flow (1) | M$ | 46.6 | 3.6 | 20.4 | | 46.1 | 84.1 | | Unit analysis | | | | | | | | | Realized gold price per oz sold | $/oz | 1,795 | 1,793 | 1,861 | | 1,801 | 1,758 | | Cash costs per oz sold (1) | $/oz | 960 | 988 | 894 | | 974 | 899 | | AISC per oz sold (1) | $/oz | 1,023 | 1,402 | 1,225 | | 1,327 | 1,091 | | Mining cost per tonne mined | $/t | 1.53 | 1.53 | 1.57 | | 1.47 | 1.42 | | Processing cost per tonne processed | $/t | 3.75 | 2.86 | 3.36 | | 4.32 | 2.81 | | G&A cost per tonne processed | $/t | 1.43 | 0.96 | 1.19 | | 1.61 | 0.85 |

| (1) | Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See _Non-IFRS Measures _and Cautionary Notes . |

Outlook

Mesquite production for 2022 is estimated at 120,000 to 130,000 ounces of gold, with approximately 60% of production expected in the second half of the year. Cash costs are estimated at $1,050 to $1,100 per oz and AISC at $1,450 to $1,500 per oz. The increase in AISC compared to 2021 reflects lower gold production as well as costs associated with stripping programs.

Ore from the Brownie pit is expected to be the primary source of production during 2022. Completion of the Brownie strip campaign provided full access to oxide ore at the bottom of the Phase 1 Brownie pit, and stripping of the Brownie Phase 2 pit commenced in Q4 2021. Forecast AISC at Mesquite in 2022 includes estimated sustaining capital of $52 million related primarily to a $44 million stripping program commencing in Q1 2022 to open up a new phase of the VE pit, which is expected to be the primary source of ore in Q4 2022 and into 2023. Non-sustaining growth capital of $20 million includes $5 million for exploration with the objective of converting resources to reserves in the Brownie, VE and Rainbow pits. The Company is also permitting and planning the construction of extensions to the leach pad and expects to make $12 million in lease payments for the truck fleet.

Castle Mountain Gold Mine, California, USA

| | | Three months ended | | Year ended | | | | | Operating data | Unit | December 31, 2021 | September 30, 2021 | December 31, 2020 (1) | | December 31, 2021 | December 31, 2020 (1) | | Ore mined and stacked to leach pad | kt | 987 | 1,331 | 1,197 | | 4,710 | 1,197 | | Waste mined | kt | 408 | 143 | 130 | | 1,149 | 130 | | Open pit strip ratio | w:o | 0.41 | 0.11 | 0.11 | | 0.24 | 0.11 | | Average gold grade stacked to leach pad | g/t | 0.28 | 0.30 | 0.33 | | 0.36 | 0.33 | | Gold produced | oz | 8,357 | 7,873 | 5,338 | | 25,270 | 5,338 | | Gold sold | oz | 8,947 | 7,378 | 4,862 | | 25,671 | 4,862 | | Financial data | | | | | | | | | Revenue | M$ | 16.1 | 13.1 | 9.1 | | 46.0 | 9.1 | | Cash costs (2) | M$ | 8.2 | 6.1 | 4.5 | | 22.7 | 4.5 | | Sustaining capital (2) | M$ | 8.6 | 1.8 | — | | 13.9 | — | | Reclamation expenses | M$ | 0.0 | 0.0 | 0.0 | | 0.1 | 0.0 | | Total AISC (2) | M$ | 16.8 | 7.9 | 4.5 | | 36.7 | 4.5 | | AISC contribution margin (2) | M$ | (0.8) | 5.2 | 4.6 | | 9.3 | 4.6 | | Non-sustaining expenditures (2) | M$ | 2.0 | 0.8 | 7.4 | | 7.8 | 51.9 | | Mine free cash flow (2) | M$ | (2.8) | 4.4 | (2.8) | | 1.5 | (47.3) | | Unit analysis | | | | | | | | | Realized gold price per oz sold | $/oz | 1,795 | 1,778 | 1,875 | | 1,793 | 1,875 | | Cash costs per oz sold (2) | $/oz | 918 | 822 | 921 | | 883 | 921 | | AISC per oz sold (2) | $/oz | 1,881 | 1,067 | 921 | | 1,429 | 921 | | Mining cost per tonne mined | $/t | 3.31 | 3.24 | 3.30 | | 3.15 | 4.12 | | Processing cost per tonne processed | $/t | 2.89 | 1.99 | 1.79 | | 1.95 | 2.14 | | G&A cost per tonne processed | $/t | 2.28 | 1.35 | 1.87 | | 1.39 | 2.28 |