Mr. Christian Milau reports
EQUINOX GOLD ANNOUNCES $130 MILLION STRATEGIC INVESTMENT BY MUBADALA INVESTMENT COMPANY
Equinox Gold Corp.has entered into a definitive agreement with Mubadala Investment Company whereby Mubadala has agreed to purchase $130-million in convertible notes from Equinox Gold. All amounts are in U.S. dollars unless otherwise indicated. Proceeds from the investment will be used to refinance a portion of existing corporate and project debt, for general and working capital purposes, and toward construction of phase 1 at Castle Mountain.
Investment highlights:
Investment of $130-million in five-year convertible notes with a 5-per-cent-interest rate convertible at $1.05($1.38 (Canadian)) per share, a 25-per-cent premium to the 10-day volume-weighted average share price (VWAP);Significantly reduces the company's borrowing costs and increases near-term financial flexibility by deferring principal payments up to five years;Establishes Mubadala, which actively manages its diversified portfolio to deliver sustainable returns to its shareholder, the government of Abu Dhabi, as a cornerstone and long-term financial partner to Equinox Gold as the company executes on its growth strategy.
"Mubadala's investment underscores the value and upside of Equinox Gold's existing asset base and significantly enhances our near-term financial capacity as we prepare for phase 1 construction at the Castle Mountain project," said Christian Milau, chief executive officer of Equinox Gold.
Ross Beaty, Equinox Gold's chairman, added: "Mubadala has an excellent reputation for being a long-term supportive shareholder. I warmly welcome them as partners in our mission to build a great gold mining company."
"Equinox Gold combines experienced leadership with a strong suite of assets and a clear value creation strategy," said Mohamed Al Suwaidi, director of metals and mining, at Mubadala. "We see a great opportunity to develop our partnership with the business over the years ahead."
Investment terms
The notes will have a five-year term and bear interest at 5 per cent per year payable quarterly in arrears. The notes will be convertible at the holder's option into common shares of the company at a conversion price of $1.05 ($1.38 (Canadian)), representing a 25-per-cent premium to the 10-day VWAP of the shares on the TSX Venture Exchange. Assuming full conversion of the notes, the holder would be entitled to receive approximately 123.8 million shares of the company, representing approximately 18 per cent of Equinox Gold's outstanding shares on a partially diluted basis.
The notes will be secured against all assets of the company and subordinate to existing senior credit facilities. The company and the holder of the notes will have certain early redemption and other rights, subject to the provisions of the notes.
In connection with the investment, Equinox Gold and Mubadala will enter into an investor rights agreement providing Mubadala, among certain other rights, the right to a nominee on the company's board of directors and standard anti-dilution rights.
Closing of the investment is subject to receipt of all necessary regulatory and stock exchange approvals, as well as satisfaction of customary closing conditions, the consent of certain lenders to the company, execution of intercreditor agreements and execution of definitive documentation.
About Equinox GoldCorp.
Equinox Gold is a Canadian mining company with a multimillion-ounce-gold reserve base, gold production from its Mesquite gold mine in California, and near-term production growth from two past-producing mines in Brazil and California. Commissioning is under way at the company's Aurizona gold mine in Brazil, with the objective of achieving commercial production around the end of first quarter 2019, and the company is advancing its Castle Mountain gold mine in California with the objective of ramping up phase 1 operations in early 2020.
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