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Equinox Gold to acquire gold mine in California for $158 million
Equinox Gold announces that it has entered into a definitive purchase agreement to acquire the Mesquite Gold Mine in California from New Gold Inc. for cash consideration of $158 million. All amounts are in United States dollars unless otherwise indicated
The Acquisition immediately establishes Equinox Gold as a gold producer and accelerates growth. Mesquite is on track to achieve New Gold’s production guidance of 140,000-150,000 ounces of gold in 2018 and has produced on average 135,000 ounces of gold annually over the previous ten years. This production will be bolstered by near-term production from the Company’s 136,000 ounce per year construction-stage Aurizona gold mine in Brazil and its development-stage Castle Mountain gold mine in California.
Mesquite’s gold deposit at December 31, 2017 was estimated at 1.13 million ounces of Proven & Probable Reserves and an additional 1.18 million ounces of Measured and Indicated Resources (exclusive of reserves), representing a 25% and 40% increase, respectively, to Equinox Gold’s current reserve and resource base.
Operational synergies: Mesquite is located 200 miles south of Castle Mountain, strengthening Equinox Gold’s regional presence and providing opportunities for regulatory, social, permitting, operating and administrative synergies. Further, the development of Castle Mountain will benefit from Mesquite’s highly qualified open-pit heap leach operations team with extensive experience operating in California.
“The Mesquite Gold Mine will bring immediate production and cash flow to Equinox Gold from a well-established operation in an attractive mining jurisdiction,” said Christian Milau, CEO of Equinox Gold. “Mesquite is the perfect fit for our portfolio of gold assets at this stage of growth and advances our strategy of becoming a major gold producer over the next few years. In 2019, Equinox Gold will own and operate both the Mesquite and Aurizona gold mines and have substantial near-term growth from development of Castle Mountain. We thank our key shareholders and our lenders, Sprott and Scotiabank, for their support and for sharing our vision of building a company that is focused on creating and returning value to its stakeholders.”
Equinox Gold is a Canadian mining company with a multi-million-ounce gold reserve base and near-term and growing gold production from two past-producing mines.