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Equinox Gold Reports First Quarter 2022 Financial and Operating Results

Press Release

May 3, 2022 – Vancouver, BC – Equinox Gold Corp. (TSX: EQX, NYSE American: EQX) (“Equinox Gold” or the “Company”) is pleased to announce its first quarter 2022 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, 2022 will be available for download on SEDAR, on EDGAR and on the Company’s website. The Company will host a conference call and webcast on May 4, 2022 commencing at 7:30 am Pacific Time to discuss the Company’s 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: “Over the first few months of 2022 we poured first gold at our new Santa Luz mine in Brazil, strengthened our balance sheet and investment portfolio with the sale of our non-core Mercedes mine, and made good progress with construction at our Greenstone project. We expect gold production to increase and costs to come down over the next three quarters with new production from Santa Luz, increased production from our other Brazil mines as the rainy season ends, and growing production at Mesquite. We are on track to achieve guidance for 2022, with 60% of production and more than 85% of cash flow forecast to come in the second half of the year. We look forward to achieving commercial production at Santa Luz and reporting on construction milestones at Greenstone as we ramp up activity heading into the summer season.”

HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2022

Operational

  • Produced 117,452 oz of gold during the quarter; sold 119,324 oz of gold at an average realized gold price of $1,862 per oz
  • Total cash costs of $1,238 per oz and AISC (all-in sustaining costs) of $1,578 per oz(1)
  • Recommenced plant operations at RDM on March 14 following a temporary suspension on February 26 to reduce water levels in the tailings storage facility; mining and stockpiling of ore continued during the suspension
  • Total recordable injury frequency rate of 3.76 for the quarter with five lost-time injuries, and 3.01 on a rolling 12-month basis

Earnings

  • Earnings from mine operations of $28.5 million
  • Net loss of $19.8 million or $(0.07) per share
  • Adjusted net loss of $23.9 million(1) or $(0.08) per share(1), after adjusting for certain non-cash expense items(2)

Financial

  • Cash flow from operations before changes in non-cash working capital of $33.5 million ($16.4 million cash flow used in operations after changes in non-cash working capital)
  • Adjusted EBITDA of $43.4 million(1)(2)
  • Expenditures of $37.1 million in sustaining capital and $90.7 million in non-sustaining capital(1)
  • Cash and cash equivalents (unrestricted) of $151.2 million at March 31, 2022
    • In April 2022, received $75 million on closing of the sale of Mercedes and $40 million on exercise of Solaris warrants issued by the Company
  • Net debt(1) of $385.1 million at March 31, 2022 (including $278.9 million of in-the-money convertible notes)
  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.
  2. Primary adjustments for the three months ended March 31, 2022 were $18.7 million unrealized loss on change in fair value of share purchase warrants, $10.5 million unrealized foreign exchange loss, $18.1 million unrealized gain on foreign exchange contracts and $5.4 million unrealized gain on gold contracts.

Suite 1501 – 700 West Pender St., Vancouver, BC              Canada   V6C 1G8

[email protected]            +1 604.558.0560     www.equinoxgold.com

Construction, development and exploration

  • Poured first gold at Santa Luz on March 30, 2022; commissioning and ramp up continuing towards achieving commercial production
  • Advanced Greenstone construction
    • Overall project 20% complete and tracking on schedule and within budget
    • Detailed engineering 91% complete
    • Tailings management facility construction ahead of schedule
    • Highway relocation on schedule
    • Site civil works and concrete foundation work well advanced
    • Plant earthworks 75% complete

POST QUARTER HIGHLIGHTS

  • Sold Mercedes on April 21, 2022 to Bear Creek Mining Corporation for aggregate consideration of:
    • $100 million in cash, with $75 million paid on closing and $25 million payable within six months of closing;
    • 24,730,000 common shares of Bear Creek Mining (TSXV: BCM); and
    • A 2% net smelter return payable on production from Mercedes
  • Exploration drilling in 70-km-long greenstone belt that hosts Fazenda and Santa Luz identified multiple near-mine and regional discoveries that highlight growth potential
  • Received $40 million (C$50 million) and transferred five million shares of the Company’s investment in Solaris Resources Inc. following the exercise of warrants the Company granted on April 28, 2021
  • Acquired 1 million shares of Solaris at C$6.75 per share on exercise of share purchase warrants. Following the exercise of the share purchase warrants, the Company owns 13,826,737 shares, representing approximately 12.71% of Solaris

CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS

Three months ended
March 31, December 31, March 31,
Operating data Unit 2022 2021 2021
Gold produced oz 117,452 210,432 129,233
Gold sold oz 119,324 212,255 128,555
Average realized gold price $/oz 1,862 1,792 1,786
Cash costs per oz sold(1) $/oz 1,238 1,039 1,141
AISC per oz sold(1)(2) $/oz 1,578 1,265 1,482
Financial data
Revenue M$ 223.2 381.2 229.7
Earnings from mine operations M$ 28.5 99.4 44.2
Net (loss) income M$ (19.8) 109.0 50.3
(Loss) earnings per share $/share (0.07) 0.37 0.21
Adjusted EBITDA(1) M$ 43.4 130.0 60.9
Adjusted net (loss) income(1) M$ (23.9) 72.2 (3.2)
Adjusted EPS(1) $/share (0.08) 0.24 (0.01)
Balance sheet and cash flow data
Cash and cash equivalents (unrestricted) M$ 151.2 305.5 317.5
Net debt(1) M$ 385.1 235.2 229.8
Operating cash flow before changes in non-cash working capital M$ 33.5 122.2 62.0
  • 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.
  • Consolidated AISC per oz sold excludes corporate general and administration expenses.

During Q1 2022, the Company recognized revenue of $223.2 million on sales of 119,324 ounces of gold, compared to revenue for the three months ended December 31, 2021 (“Q4 2021”) of $381.2 million on sales of 212,255 ounces of gold. Gold ounces sold and revenues are comparable to Q1 2021. The decrease in ounces sold from Q4 2021 to Q1 2022 was mainly due to decreased production at Los Filos, Aurizona, Mesquite and RDM. In accordance with the sites’ mine plans, waste stripping occurs early in the calendar year, resulting in the majority of ore tonnes being mined later in the year. In addition to this, Q1 2022 production for RDM and Aurizona was lower than Q4 2021 due to higher levels of rainfall impeding production.

In Q1 2022, earnings from mine operations were $28.5 million, a decrease compared to $99.4 million in Q4 2021. Earnings from mine operations was impacted by lower gold production and higher operating costs due to oil prices, supply chain constraints and inflationary pressures. Net loss in Q1 2022 was $19.8 million compared to net income of $ 109.0 million in Q4 2021, driven by the decrease in earnings from mine operations and a $18.7 million loss on the change in fair value of share purchase warrants in Q1 2022 compared to a gain of $27.5 million in Q4 2021.

Adjusted EBITDA for Q1 2022 of $43.4 million decreased from $130.0 million in Q4 2021 driven by lower earnings from mine operations in Q1 2022. Adjusted net loss was $23.9 million for Q1 2022 compared to adjusted net income of $72.2 million in Q4 2021.

SELECTED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

Three months ended

$ amounts in millions, except per share amounts

March 31,            March 31,

2022                     2021

Revenue $ 223.2 $ 229.7
Cost of sales
Operating expense (152.4) (146.8)
Depreciation and depletion (42.3) (38.7)
Earnings from mine operations 28.5 44.2
Care and maintenance expense (0.4) (2.0)
Exploration expense (3.2) (3.0)
General and administration expense (11.8) (7.4)
Income from operations 13.1 31.9
Finance expense (9.4) (8.7)
Finance income 0.8 0.4
Share of net loss in associate (1.6) (2.7)
Other (expense) income (19.0) 49.3
Net (loss) income before taxes (16.1) 70.3
Income tax expense (3.7) (20.0)
Net (loss) income $ (19.8) $ 50.3
Net (loss) income per share attributable to Equinox Gold shareholders
Basic $ (0.07) $ 0.21
Diluted $ (0.07) $ 0.14

Additional information regarding the Company’s financial results and activities underway at the Company’s projects is available in the Company’s Q1 2022 Financial Statements and accompanying management’s discussion and analysis for the three months ended March 31, 2022, which will be 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.

RECENT DEVELOPMENTS

Due to a reversal of previous decisions by SUPRAM (State Environmental Agency – Minas Gerais), permitting the next TSF raise at RDM is delayed. Discussions with regulatory authorities are ongoing. If the Company is not able to achieve satisfactory resolution prior to the need to start the next raise in Q2 2022, operations at the mine may be temporarily suspended commencing in Q2 or Q3 2022.

The RDM TSF is raised on an intermittent basis throughout the mine life to store additional tailings produced from ongoing operations. The TSF has been designed and is operated to industry best practices and is regularly inspected and audited by independent parties. A design alteration was filed with SUPRAM in 2017 to change from a centreline to a downstream design, which is considered the safest construction method, and since 2018 each raise has been completed using a downstream design. Permits to raise the TSF using a downstream design were granted in 2019 and 2020. In 2020, the Company requested a raise method formalization as an addendum to the license to operate, confirming the change to a downstream design, and in early 2021 SUPRAM granted the permit to raise the TSF to its current level. In 2021, the Company applied for a permit for the next TSF raise, which has not been granted to date.

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