Equinox Gold Corp. (TSX-V:EQX) (OTC:EQXGF) (Equinox Gold or the Company) today announces plans to transfer all of its copper assets into a newly incorporated company named Solaris Copper Inc. (Solaris Copper). Equinox Gold will continue to focus on advancing the Aurizona Gold Mine and the Castle Mountain Gold Mine to production while Solaris Copper explores and develops the copper projects to unlock the value of the copper portfolio.
Sixty percent of Solaris Copper shares will be distributed to Equinox Gold shareholders with the remainder to be held by Equinox Gold. Solaris Copper will not initially be listed on a public stock exchange but will operate as a reporting issuer. In addition to advancing its copper assets, Solaris Copper will evaluate all strategic opportunities available to the company to enhance value including mergers, acquisitions and a potential stock exchange listing. Additional information about Solaris Copper is available at www.solariscopper.com.
Solaris Copper will control a portfolio of very promising exploration-stage projects located in world-class copper districts, said Ross Beaty, Chairman of Equinox Gold. Creating a standalone copper-focused company should give these projects the visibility and attention they deserve. With large copper deposits already identified, exceptional exploration upside and optionality from multiple properties, Solaris Copper represents an exciting growth-focused copper story.
Creating Solaris Copper to hold and advance Equinox Golds copper assets achieves another milestone in the business strategy we communicated to shareholders when we created Equinox Gold last year, said Christian Milau, CEO and a Director of Equinox Gold. We are creating value for Equinox Gold shareholders on two fronts now, with Solaris Copper providing exposure to rising copper prices while Equinox Gold offers substantial leverage to gold as we advance Aurizona and Castle Mountain to production.
Solaris Copper Assets
Solaris Copper will hold a 100% interest in the resource-bearing Warintza copper-molybdenum project in Ecuador, a 60% interest in the La Verde preliminary economic assessment stage copper-silver-gold project in Mexico, a 100% interest in the Ricardo early-stage copper property in Chile, has negotiated earn-in agreements for two early-stage copper prospects in Peru, and is continuing to evaluate additional properties that fit the portfolio. Collectively, the projects host 3.7 billion pounds of copper in the measured and indicated category with an additional 4.6 billion pounds of copper in the inferred category, with significant exploration potential at all of the projects.1
Warintza is a porphyry copper-molybdenum project located in southeastern Ecuador in a corridor of mineralization that is known to host numerous exploration- and development-stage projects with copper, copper-gold, copper-molybdenum and high-grade gold mineralization. Warintza covers four known copper-molybdenum target areas that exhibit classic porphyry mineralization, with low-grade copper and molybdenite mineralization distributed widely across the property, yet only a small portion of the property has been tested to date. The current mineral resource estimate outlines 195.0 million tonnes of inferred resources grading 0.42% copper and 0.03% molybdenum, for 1.808 billion pounds of copper and 132.3million pounds of molybdenum, and a copper-equivalent grade of 0.61%.1
Solaris Copper will indirectly hold a 60% interest in the La Verde project, with the remaining 40% held by Teck Resources Limited. The project is located in the State of Michoacn, Mexico, 320 km west of Mexico City, is accessible year-round by paved roads and is strategically located next to key infrastructure with easy access to water, power and rail. The current mineral resource estimate outlines measured mineral resources of 57.5million tonnes grading 0.45% copper and indicated mineral resources of 350.4 million tonnes grading 0.40% copper for total contained metal in the measured and indicated category of 3.7 billion pounds of copper, with additional inferred mineral resources of 337.8 million tonnes grading 0.37% copper.1 Apreliminary economic assessment (PEA) completed for the project in 2012 outlined the potential to produce more than 200 million pounds of copper per year in concentrates over a 20-year mine life.2 Equinox Gold has engaged the authors of the PEA to prepare an updated report that will be filed on SEDAR in conjunction with the mailing of the Circular.
Ricardo is an early-stage copper exploration project located in Northern Chile in one of the worlds most prolific copper mining districts. The project is strategically located along the West Fissure Fault, a structure that hosts numerous world-class porphyry copper deposits including Escondida and Chuquicamata. Solaris Copper hopes to explore this promising property with a senior partner, allowing Solaris Copper shareholders to participate in exploration upside at the property while minimizing exploration costs.
1 See Mineral Resource Estimates at the end of this news release.2 See La Verde Preliminary Economic Assessment at the end of this news release.
Terms of the Arrangement
Equinox Gold has executed an arrangement agreement whereby the business of Equinox Gold will be reorganized into two companies by way of a plan of arrangement (the Arrangement) under the Business Corporations Act (British Columbia). Equinox Gold has received an interim order from the Supreme Court of British Columbia authorizing the Company to call a shareholder meeting to approve the Arrangement. Equinox Gold shareholders will vote on the Arrangement at the annual and special meeting of shareholders (Meeting) to be held on July 26, 2018 at 1:00 p.m. at 595 Burrard Street, Suite 2600, Vancouver, BC. To be effective, the Arrangement must be approved by a special resolution passed by at least 66% of the votes cast by Equinox Gold shareholders present in person or represented by proxy at the Meeting, which shareholders are entitled to one vote for each Equinox Gold share held.
The Arrangement involves, among other things, the distribution of common shares of Solaris Copper (the Solaris Copper Shares) to Equinox Gold shareholders such that each shareholder will hold: (i)one new common share of Equinox Gold for each common share of Equinox Gold held on the effective date of the Arrangement; and (ii) one-tenth of a Solaris Copper Share for each common share of Equinox Gold held on the effective date of the Arrangement. Immediately following completion of the Arrangement, which is expected to occur in early August, Equinox Golds shareholders, other than any dissenting shareholders, would be issued shares in Solaris Copper so that collectively they would own 60%, with the remaining 40% interest held by Equinox Gold. Equinox Gold warrants, options and restricted share units will also be adjusted pursuant to the Arrangement as described in more detail in the information circular (Circular) that will be mailed to shareholders in the last week of June.
After careful consideration, the Board of Directors has unanimously determined that the Arrangement is fair to shareholders and is in the best interests of the Company. A description of the various factors considered by the Board of Directors in arriving at this determination will be provided in the Circular.
After closing of the Arrangement, new Equinox Gold shares and certain of Equinox Golds warrants will continue trading on the TSX Venture Exchange in Canada under the symbols EQX and EQX.WT, respectively, and on the OTC Market in the United States under the symbols EQXGF and EQXWF, respectively. Solaris Copper Shares will not be listed on any stock exchange after closing of the Arrangement, but the company will be a reporting issuer and will comply with its continuous disclosure obligations including press releases and financial reporting.
Solaris Coppers day-to-day activities will be managed by Greg Smith as CEO, Kylie Dickson as CFO and Pamela Kinsman as Corporate Secretary, each of whom will also continue with their Equinox Gold responsibilities.
Mineral Resource Estimates
MeasuredIndicatedTotal Measured & Indicated
Tonnes(M)Cu(%)Ag(g/t)Au(g/t)ContainedCu (M lbs)Tonnes(M)Cu(%)Ag(g/t)Au(g/t)ContainedCu (M lbs)Tonnes(M)Cu(%)Ag(g/t)Au(g/t)ContainedCu (M lbs)
La Verde 57.5270.452.940.05570.7350.40.402.330.033,098.1408.00.412.420.033,668.8
Tonnes(M)Cu(%)Ag(g/t)Au(g/t)Mb(%)Contained Cu(M lbs)Contained Mb(M lbs)Copper Equivalent(M lbs)
The La Verde Mineral Resource was reported in the La Verde Copper Project, Michoacn State, Mexico, Technical Report prepared by AMC Mining Consultants (Canada) Ltd. for Catalyst Copper Corp. with an effective date of September 30, 2012. The report is available for download on SEDAR at www.sedar.com. The resource is reported using a base-case cut-off grade of 0.2% copper. The cut-off grade of 0.2% copper is based on experience for similar open-pit projects and a mining conceptual study which used a metal price of $2.50/lb copper and copper metal recovery of 92%. This Resource estimate is not constrained by a pit shell.
The Warintza Mineral Resource estimate was reported in the Technical Report, Warintza Project, Ecuador completed by Peter Ronning, P.Eng. and Steven Ristorcelli, C.P.G. with an effective date of December 21, 2012 and a completion date of March 27, 2013.
This article provided by NewsEdge.