Mr. Ross Beaty reports
EQUINOX GOLD ANNOUNCES SPIN-OUT OF COPPER ASSETS TO CREATE SOLARIS COPPER
Equinox Gold Corp. plans to transfer all of its copper assets into a newly incorporated company named Solaris Copper Inc. 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 per cent 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 its website.
"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 stand-alone 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 Gold's copper assets achieves another milestone in the business strategy we communicated to shareholders when we created Equinox Gold last year," said Christian Milau, chief executive officer 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-per-cent interest in the resource-bearing Warintza copper-molybdenum project in Ecuador, a 60-per-cent interest in the La Verde preliminary economic assessment stage copper-silver-gold project in Mexico, a 100-per-cent 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.
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 per cent copper and 0.03 per cent molybdenum for 1,808 million pounds of copper and 132.3 million pounds of molybdenum, and a copper-equivalent grade of 0.61 per cent.
Solaris Copper will indirectly hold a 60-per-cent interest in the La Verde project, with the remaining 40 per cent held by Teck Resources Ltd. The project is located in the state of Michoacan, Mexico, 320 kilometres 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 57.5 million tonnes grading 0.45 per cent copper and indicated mineral resources of 350.4 million tonnes grading 0.40 per cent 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 per cent copper. A preliminary economic assessment 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. 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 world's 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.
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 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 to be held on July 26, 2018, at 1 p.m. at 595 Burrard St., Suite 2600, Vancouver, B.C. To be effective, the arrangement must be approved by a special resolution passed by at least 66-2/3rds per cent 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 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-10th 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 Gold's shareholders, other than any dissenting shareholders, would be issued shares in Solaris Copper so that collectively they would own 60 per cent, with the remaining 40-per-cent 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 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 Gold's 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 Copper's day-to-day activities will be managed by Greg Smith as chief executive officer, Kylie Dickson as chief financial officer and Pamela Kinsman as corporate secretary, each of whom will also continue with their Equinox Gold responsibilities.
Qualified person and disclosure statement
David Laing, BSc, MIMMM, Equinox Gold's chief operating officer and a qualified person under National Instrument 43-101, has reviewed and verified that the technical information contained in this news release is accurate and approves the written disclosure of the same.
We seek Safe Harbor.
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