Equinox Gold Reports Strong Operating Cash Flow of $321 Million in 2021, Achieves 26% Production Growth with 602,668 Ounces of Gold Sold

<br /> Equinox Gold Reports Strong Operating Cash Flow of $321 Million in 2021, Achieves 26% Production Growth with 602,668 Ounces of Gold Sold<br />

PR Newswire


all financial figures are in US dollars, unless otherwise indicated


VANCOUVER, BC

,

Feb. 24, 2022

/PRNewswire/ – Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) (“Equinox Gold” or the “Company”) is pleased to announce its unaudited financial and operating results for the fourth quarter and fiscal year ended

December 31, 2021

. These results are preliminary and could change based on final audited results. Equinox Gold’s 2021 audited consolidated financial statements and accompanying management’s discussion and analysis for the three months and year ended

December 31, 2021

will be released in mid-March.


Christian Milau

, CEO of Equinox Gold, commented: “Equinox Gold’s 2021 results demonstrate consistent year-on-year production and cash flow growth as the Company advances toward its target of achieving more than one million ounces of annual gold production. During 2021, our seven operating mines produced 602,110 ounces of gold and generated operating cash flow of

$256 million

, compared to 2020 production of 477,200 ounces of gold and

$321 million

in operating cash flow. We realized more than

$1 billion

in revenue for the year, and produced our millionth ounce of gold, both important milestones for our growing company.

“We achieved significant reserve and resource growth, adding more than three million ounces of gold reserves to our portfolio through the acquisition of Premier Gold and its

Greenstone

project. We also increased mineral reserves and demonstrated mine life extension at Aurizona and Castle Mountain, and drilled more than 219,000 metres across the portfolio. The next few years will be focused on delivering organic growth from our pipeline of development and expansion projects, which will collectively add more than 600,000 ounces of annual production to the Company at reduced costs.”


2021 HI


GHLIG


HTS


Operational

  • Realized 26% production growth compared to 2020
  • Achieved 2021 guidance with total production of 602,110 ounces (“oz”) of gold
  • Sold 602,668 ounces of gold at an average realized gold price of

    $1,791

    per oz
  • Total cash costs of

    $1,087

    per oz and all-in sustaining costs (“AISC”) of

    $1,350

    per oz

    (1)
  • Produced the Company’s millionth ounce of gold and realized over

    $1 billion

    in revenue
  • Achieved a total recordable injury frequency rate

    (2)

    of 3.05, 17% better than 2020, with 13 lost-time injuries
  • Achieved a significant environmental incident frequency rate

    (2)

    of 0.68, 60% better than 2020
  • Continued proactive COVID-19 health and safety protocols with no production days lost due to COVID-19; supported community health with donations of supplies and support for education, medical staffing and vaccination programs


Earnings

  • Earnings from mine operations of

    $230.6 million
  • Net income of

    $556.8 million

    or

    $1.95

    per share
    • Includes

      $85.8 million

      unrealized gain on change in fair value of warrants,

      $58.1 million

      unrealized gain on change in fair value of gold contracts,

      $186.1 million

      gain on reclassification of investment in Solaris Resources Inc. (“Solaris”) from fair value to cost accounting,

      $50.3 million

      gain on sale of partial interest in Solaris,

      $45.4 million

      gain on sale of Pilar Mine and

      $81.4 million

      gain on acquisition of Premier Gold
  • Adjusted net income

    (1)

    of

    $73.8 million

    or

    $0.26

    per share

    (1)

    , after adjusting for the non-cash expense items noted above

    (3)


Financial

  • Cash flow from operations before changes in non-cash working capital of

    $264.1 million

    (

    $320.8 million

    after changes in non-cash working capital)
  • Adjusted EBITDA of

    $303.1 million


    (1)(3)
  • Expenditures of

    $144.7 million

    in sustaining capital and

    $238.7 million

    in non-sustaining capital

    (1)
  • Cash and cash equivalents (unrestricted) of

    $305.5 million

    at

    December 31, 2021
  • Net debt

    (1)

    of

    $235.2 million

    at

    December 31, 2021

    , including

    $139.7 million

    of in-the-money convertible notes


Corporate

  • Completed acquisition of Premier, increasing diversification and scale with a 50% interest in the low-cost, long-life

    Greenstone

    gold project in

    Canada

    and a 100% interest in the operating gold-silver Mercedes mine in

    Mexico
  • Increased

    Greenstone

    ownership interest to 60%
  • Sold ten million shares of Solaris for total cash proceeds of

    $66.7 million
  • Sold the Pilar Mine for

    $38.0 million

    , a 1% net smelter return royalty and 11.6 million shares of Pilar Gold Inc.
  • Invested

    C$51 million

    in i-80 Gold Corp. to maintain an approximate 25% interest on a fully diluted basis
  • Announced agreement to sell the Mercedes Mine for

    $100 million

    , a 2% net smelter return and 24.73 million shares of Bear Creek Mining Corporation (“Bear Creek”)

    (4)


Construction, development and exploration

  • Commenced

    Greenstone

    construction in Q4 2021 with first gold pour targeted for the first half of 2024 (“H1 2024”)
  • Advanced Santa Luz construction with first gold pour targeted for late Q1 2022
  • Increased Aurizona Mineral Reserves by 73% and completed a positive pre-feasibility study for an expansion that would extend the mine life to 11 years and increase annual production by concurrently mining new underground and satellite open-pit deposits with the existing open-pit mine
  • Increased Castle Mountain Mineral Reserves by 17% and completed a positive feasibility study for a Phase 2 expansion that would extend the Castle Mountain mine life to 21 years and increase gold production to more than 200,000 ounces per year
  • Commenced mining the new Guadalupe open-pit deposit and Bermejal underground deposit at Los Filos
  • Drilled 219,000 metres across the portfolio with a focus on Mineral Reserve growth and mine life extension
  • Added 3.3 million ounces of Proven and Probable Mineral Reserves through the Premier Acquisition


Responsible mining

  • Published inaugural Environmental, Social and Governance (ESG) Report
  • Published first Tailings Management Report
  • Started implementing Towards Sustainable Mining Protocols and Responsible Gold Mining Principles at all mine sites
  • Established a Social Responsibility & Human Rights Policy, conducted human rights assessments at two mine sites
  • Set and achieved short-term energy and greenhouse gas emission targets for 2021, submitted data to the Carbon Disclosure Project, commenced reporting using the Task Force on Climate-related Financial Disclosures framework


HIGHLIGHTS FOR THE THREE MONTHS ENDED

DECEMBER 31, 2021


Operational

  • Total recordable injury frequency rate of 2.92 with 3 lost-time injuries
  • Produced 210,432 ounces of gold during the quarter; sold 212,255 ounces of gold at an average realized gold price of

    $1,792

    per oz
  • Total cash costs of

    $1,040

    per oz and AISC of

    $1,266

    per oz


Earnings

  • Earnings from mine operations of

    $99.4 million
  • Net income of

    $110.9 million

    or

    $0

    .37per share
    • Includes

      $27.5 million

      unrealized gain on change in fair value of share purchase warrants,

      $9.4 million

      dilution gain on investment in associate and

      $8.0 million

      loss on disposal of plant and equipment
  • Adjusted net income of

    $75.6 million

    or

    $0.25

    per share, after adjusting for the non-cash expense items noted above

    (5)


Financial

  • Cash flow from operations before changes in non-cash working capital of

    $122.2 million

    (

    $155.4 million

    after changes in non-cash working capital)
  • Adjusted EBITDA of

    $130.0 million


    (5)
  • Expenditures of

    $42.4 million

    in sustaining capital and

    $84.6 million

    in non-sustaining capital


Construction, development and exploration

  • Commenced full-scale construction at

    Greenstone

    with a construction budget on a 100% basis (of which Equinox Gold will fund 60%) of

    C$1.53 billion

    (

    $1.23 billion

    at a rate of USD:

    CAD 1.25

    ), including a

    $177 million

    contingency
    • Initial capital estimate updated in

      October 2021

      to reflect firm supplier quotes following detailed engineering, a review and update of capital costs, and an increased contingency including a provision for future inflation and potential COVID-19 impacts
    • Initial cash spend could be reduced by approximately

      $100 million

      through lease financing for mobile equipment and offset economically by up to

      $70 million

      of pre-commercial production revenues (at

      $1,750

      per oz gold price)


POST QUARTER END HIGHLIGHTS

  • Provided 2022 production and cost guidance of 625,000 to 710,000 ounces of gold at cash costs of

    $1,080

    to

    $1,140

    per oz and AISC of

    $1,330

    to

    $1,415

    per oz
  • Provided 2022 capital expenditure guidance of

    $682 million

    • $195 million

      of sustaining capital

    • $487 million

      of non-sustaining capital, including

      $27 million

      to complete Santa Luz construction and

      $326 million

      to advance

      Greenstone

      construction

    • $36 million

      of exploration expenditures, including sustaining (

      $6 million

      ) and non-sustaining (

      $30 million

      ) capital expenditure guidance
  • Commenced commissioning of the Santa Luz gold plant, including leach circuit, SAG mill, ball mill and secondary grinding; construction more than 95% complete and on track for first gold pour by late Q1 2022

  • Greenstone

    construction progressing well
    • Engineering approximately 85% complete
    • Tailings management facility ahead of schedule
    • Highway relocation underway
    • Site civil works and concrete foundation work underway
  • New Brazil Federal legislation announced

    February 16, 2022

    changed minimum freeboard

    (6)

    guidelines for all tailings storage facilities (“TSFs”), effective immediately
    • As the result of heavy rains that began in November, the RDM TSF freeboard is currently outside of the new guidelines, requiring a temporary suspension of plant operations for an estimated two to three weeks until the water level is reduced, at which point plant operations will resume
    • Mining and stockpiling of ore will continue during the suspension of plant operations; the Company does not anticipate a material impact on production for the year


____________________________________



(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

and

Cautionary Notes

.



(2)


Total recordable injury frequency rate and significant environmental incident frequency rate are both reported per million hours worked. Total recordable injury frequency rate is the total number of injuries excluding those requiring simple first aid treatment.



(3)


Primary adjustments for the year ended December 31, 2021 were $85.8 million unrealized gain on change in fair value of warrants, $58.1 million unrealized gain on change in fair value of gold contracts, $186.1 million gain on reclassification of investment in Solaris from fair value to cost accounting, $50.3 million gain on sale of partial interest in Solaris, $45.4 million gain on sale of Pilar and $81.4 million gain on acquisition of Premier Gold



(4)


The sale is expected to close around the end of Q1 2022, subject to completion of customary closing conditions and regulatory approvals



(5)


Primary adjustments for the three months ended December 31, 2021 were $27.5 million unrealized gain on change in fair value of share purchase warrants, $9.4 million dilution gain on investment in associate and $8.0 million loss on disposal of plant and equipment.



(6)


Freeboard is the height from the crest of the TSF embankment to the surface of tailings and water in the TSF.


CONFERENCE CALL AND WEBCAST

Equinox Gold will host a conference call and webcast on

Friday, February 25, 2022

commencing at

7:30 am


Vancouver

time to discuss the Company’s financial and operating results for the fourth quarter and fiscal year ended

December 31, 2021

and activities underway at the Company’s projects. All participants will have the opportunity to ask questions of Equinox Gold’s CEO and executive team. The webcast will be archived on Equinox Gold’s website until

August 25, 2022

.


Conference call


Toll-free in U.S. and

Canada

: 1-800-319-4610

International callers: +1 604-638-5340


Webcast



www.equinoxgold.com


CONSOLIDATED RESULTS


Basic weighted average shares during period


284,932,357


212,487,729


Shares outstanding end of period


301,324,604


242,354,406


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30, 2021


December 31,

2020


December 31, 2021

(1)


December 31, 2020

(2)


Gold produced


oz


210,432


139,758


136,352


602,110


477,186


Gold sold


oz


212,255


137,144


136,418


602,668


473,309


Average realized gold price


$/oz


1,792


1,780


1,871


1,791


1,783


Cash costs per oz sold

(4)


$/oz


1,040


1,109


844


1,087


847


AISC per oz sold

(3)(4)


$/oz


1,266


1,327


1,086


1,350


1,025




Financial data



Revenue


M$


381.2


245.1


255.5


1,082.3


845.4


Earnings from mine operations


M$


99.4


45.7


97.7


230.6


290.2


Net income (loss)


M$


110.9


(8.1)


91.2


556.8


22.3


Earnings (loss) per share


$/share


0.37


(0.03)


0.38


1.95


0.10


Adjusted EBITDA

(4)


M$


130.0


67.3


85.3


303.1


282.3


Adjusted net income

(4)


M$


75.6


9.2


38.9


73.8


88.4


Adjusted EPS

(4)


$/share


0.25


0.03


0.16


0.26


0.42




Balance sheet and cash flow data



Cash and cash equivalents (unrestricted)


M$


305.5


300.3


344.9


305.5


344.9


Net debt

(4)


M$


235.2


244.8


200.3


235.2


200.3


Operating cash flow before changes in non-cash working capital


M$


122.2


48.3


94.0


264.1


271.0



(1)


Operational and financial results of the assets acquired as part of the Premier Acquisition are included from April 7, 2021, onward.



(2)


Operational and financial results of the assets acquired as part of the Leagold Acquisition are included from March 10, 2020, onward.



(3


Consolidated AISC per oz sold excludes corporate general and administration expenses.



(4)


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

and

Cautionary Notes

.


CONSOLIDATED 2021 RESULTS COMPARED TO 2021 FORECAST



2021 Actuals



Guidance Range


Gold Production (oz)


602,110


560,000 – 625,000


Cash costs ($/oz)

(1)


$1,087


$1,025 – $1,075


AISC ($/oz)

(1)


$1,350


$1,300 – $1,375


Sustaining capital (M$)

(1)


$146


$186


Non-sustaining capital ($M)

(1)


$239


$251



(1)

Cash costs per oz, AISC per oz, sustaining capital and non-sustaining capital are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.


2022 OUTLOOK

For 2022, the Company expects to achieve its fourth consecutive year of production growth with guidance of 625,000 to 710,000 ounces of gold, which is an increase of 11% compared to 2021 production (using the mid-point of 2022 guidance). Cash costs for 2022 are estimated at

$1,080

to

$1,140

per oz, with AISC of

$1,330

to

$1,415

per oz. Production and cost guidance excludes Mercedes as the previously announced sale to Bear Creek is expected to close around the end of Q1 2022, although ounces produced and capital spent prior to closing will be attributable to Equinox Gold. The Company may revise guidance during the year to reflect changes to expected results.

Production is expected to increase quarter over quarter, with 60% of gold production and more than 85% of operating cash flow anticipated in the second half of the year. As production increases, AISC is expected to decrease. Cash costs and AISC are expected to be approximately

$1,210

and

$1,540

per oz in H1 2022 and

$1,025

and

$1,295

per oz in H2 2022, respectively. The weighting of production and cash flow into the second half of the year is primarily due to Santa Luz transitioning from construction and commissioning to operations starting in Q2 2022.

Cash costs for 2022 reflect inflationary pressures across all operations, with approximately 15% cost escalation for fuel and other major consumables. AISC for 2022 includes

$195 million

of sustaining capital investment focused primarily on stripping campaigns at Mesquite, Aurizona and Santa Luz to open up new ore sources, and both open-pit stripping and underground development work at Los Filos that was in part delayed during 2021. The Company is also completing TSF expansions or lifts at Aurizona, RDM and Santa Luz and completing a leach pad expansion at Castle Mountain. Sustaining capital guidance includes

$6 million

for exploration, which is almost all capitalized.

The Company is undertaking several growth projects during 2022 including completing construction and commissioning of Santa Luz, advancing construction at

Greenstone

, and conducting exploration focused on mine life extension at Mesquite, Aurizona, Fazenda, Santa Luz and RDM. The Company’s primary development focus for 2022 is construction at

Greenstone

, with Equinox Gold’s 60% share of construction capital forecast at

$326 million

. Non-sustaining capital expenditures also include underground development at Los Filos in part carried over from 2021, a pit expansion at RDM and permitting for the Castle Mountain expansion, with total non-sustaining capital for 2022 forecast at

$487 million

. Non-sustaining capital guidance includes

$30 million

for exploration, of which approximately

$19 million

is expensed with the rest capitalized.


OPERATING & FINANCIAL RESULTS BY MINE


Mesquite Gold Mine,

California, USA


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020


December 31,

2021


December 31,

2020


Ore mined and stacked on leach pad


kt


3,175


3,835


3,498


9,740


17,351


Waste mined


kt


11,679


10,807


8,487


49,863


30,782


Open pit strip ratio


w:o


3.68


2.82


2.43


5.12


1.77


Average gold grade stacked to leach pad


g/t


0.44


0.45


0.72


0.42


0.48


Gold produced


oz


66,870


23,264


33,717


137,467


141,270


Gold sold


oz


68,377


22,333


33,032


138,289


139,872




Financial data



Revenue


M$


122.8


40.1


61.5


249.0


245.9


Cash costs

(1)


M$


65.7


22.1


29.5


134.7


125.8


Sustaining capital

(1)


M$


3.2


8.7


10.5


46.3


24.1


Reclamation expenses


M$


1.2


0.6


0.4


2.6


2.8


Total AISC

(1)


M$


70.1


31.4


40.4


183.6


152.7


AISC contribution margin

(1)


M$


52.8


8.7


21.0


65.5


93.3


Non-sustaining expenditures

(1)


M$


6.2


5.1


0.6


19.4


9.2


Mine free cash flow

(1)


M$


46.6


3.6


20.4


46.1


84.1




Unit analysis



Realized gold price per oz sold


$/oz


1,795


1,793


1,861


1,801


1,758


Cash costs per oz sold

(1)


$/oz


960


988


894


974


899


AISC per oz sold

(1)


$/oz


1,023


1,402


1,225


1,327


1,091


Mining cost per tonne mined


$/t


1.53


1.53


1.57


1.47


1.42


Processing cost per tonne processed


$/t


3.75


2.86


3.36


4.32


2.81


G&A cost per tonne processed


$/t


1.43


0.96


1.19


1.61


0.85



(1)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

Mesquite production for 2022 is estimated at 120,000 to 130,000 ounces of gold, with approximately 60% of production expected in the second half of the year. Cash costs are estimated at

$1,050

to

$1,100

per oz and AISC at

$1,450

to

$1,500

per oz. The increase in AISC compared to 2021 reflects lower gold production as well as costs associated with stripping programs.

Ore from the Brownie pit is expected to be the primary source of production during 2022. Completion of the Brownie strip campaign provided full access to oxide ore at the bottom of the Phase 1 Brownie pit, and stripping of the Brownie Phase 2 pit commenced in Q4 2021. Forecast AISC at Mesquite in 2022 includes estimated sustaining capital of

$52 million

related primarily to a

$44 million

stripping program commencing in Q1 2022 to open up a new phase of the VE pit, which is expected to be the primary source of ore in Q4 2022 and into 2023. Non-sustaining growth capital of

$20 million

includes

$5 million

for exploration with the objective of converting resources to reserves in the Brownie, VE and Rainbow pits. The Company is also permitting and planning the construction of extensions to the leach pad and expects to make

$12 million

in lease payments for the truck fleet.


Castle Mountain Gold Mine,

California, USA


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020

(1)


December 31,

2021


December 31,

2020

(1)


Ore mined and stacked to leach pad


kt


987


1,331


1,197


4,710


1,197


Waste mined


kt


408


143


130


1,149


130


Open pit strip ratio


w:o


0.41


0.11


0.11


0.24


0.11


Average gold grade stacked to leach pad


g/t


0.28


0.30


0.33


0.36


0.33


Gold produced


oz


8,357


7,873


5,338


25,270


5,338


Gold sold


oz


8,947


7,378


4,862


25,671


4,862




Financial data



Revenue


M$


16.1


13.1


9.1


46.0


9.1


Cash costs

(2)


M$


8.2


6.1


4.5


22.7


4.5


Sustaining capital

(2)


M$


8.6


1.8




13.9




Reclamation expenses


M$


0.0


0.0


0.0


0.1


0.0


Total AISC

(2)


M$


16.8


7.9


4.5


36.7


4.5


AISC contribution margin

(2)


M$


(0.8)


5.2


4.6


9.3


4.6


Non-sustaining expenditures

(2)


M$


2.0


0.8


7.4


7.8


51.9


Mine free cash flow

(2)


M$


(2.8)


4.4


(2.8)


1.5


(47.3)




Unit analysis



Realized gold price per oz sold


$/oz


1,795


1,778


1,875


1,793


1,875


Cash costs per oz sold

(2)


$/oz


918


822


921


883


921


AISC per oz sold

(2)


$/oz


1,881


1,067


921


1,429


921


Mining cost per tonne mined


$/t


3.31


3.24


3.30


3.15


4.12


Processing cost per tonne processed


$/t


2.89


1.99


1.79


1.95


2.14


G&A cost per tonne processed


$/t


2.28


1.35


1.87


1.39


2.28



(1)


Castle Mountain commenced commercial production on November 21, 2020.



(2)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

Castle Mountain production for 2022 is estimated at 25,000 to 35,000 ounces of gold with cash costs of

$1,150

to

$1,200

per oz and AISC of

$1,475

to

$1,525

per oz.

Costs at Castle Mountain are expected to increase primarily as the result of the decision to crush and agglomerate ore to increase ore permeability and gold production. AISC for 2022 includes

$11 million

of sustaining capital, with

$3 million

allocated for plant modifications and

$7 million

for the current leach pad expansion that is expected to accommodate the entirety of Phase 1 operations.

Non-sustaining growth capital of

$9 million

at Castle Mountain in 2022 includes

$7 million

for Phase 2 permitting, optimization studies and metallurgical test work, and nearly

$2 million

for exploration. The Company expects to submit Phase 2 permit applications in Q1 2022.


Los Filos Gold Mine,

Guerrero, Mexico


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020


December 31,

2021


December 31,

2020

(1)


Ore mined – open pit


kt


3,423


1,754




7,090


496


Waste mined – open pit


kt


11,036


7,871


399


38,027


7,065


Open pit strip ratio


w:o


3.22


4.49




5.36


14.25


Average open pit gold grade


g/t


0.77


0.85




0.71


0.34


Ore mined – underground


kt


162


107


0.3


519


191


Average underground gold grade


g/t


3.11


3.11


1.83


3.23


4.00


Ore re-handled for secondary leaching


kt






403


2,312


4,547


Gold produced


oz


54,733


32,837


13,615


144,096


58,453


Gold sold


oz


55,144


32,112


13,740


143,809


59,135




Financial data



Revenue


M$


98.8


57.1


26.4


257.2


105.9


Cash costs

(2)


M$


72.3


48.8


14.2


226.6


57.8


Sustaining capital

(2)


M$


5.3


3.1


3.2


21.5


11.2


Reclamation expenses


M$


1.4


1.0


0.1


4.0


0.4


Total AISC

(2)


M$


79.0


52.9


17.5


252.1


69.4


AISC contribution margin

(2)


M$


19.7


4.2


8.9


5.1


36.4


Care and maintenance


M$




4.8


16.7


12.6


42.1


Non-sustaining expenditures

(2)


M$


10.2


18.9


3.0


59.6


16.7


Mine free cash flow

(2)


M$


9.5


(19.5)


(10.8)


(67.1)


(22.4)




Unit analysis



Realized gold price per oz sold


$/oz


1,787


1,769


1,932


1,783


1,786


Cash costs per oz sold

(2)


$/oz


1,311


1,520


1,035


1,575


978


AISC per oz sold

(2)


$/oz


1,433


1,647


1,276


1,753


1,174


Mining cost per tonne mined – open pit


$/t


1.50


1.52


1.85


1.45


1.65


Mining cost per tonne mined – underground


$/t


82.07


84.79


168.60


86.73


68.36


Processing cost per tonne processed


$/t


6.05


8.86


n/a


7.02


5.90


G&A cost per tonne processed


$/t


1.70


2.20


n/a


1.97


1.00



(1)


Los Filos was acquired as part of the Leagold Acquisition. Operational and financial results are included from March 10, 2020, onward.



(2)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures and Cautionary Notes.



Outlook

Los Filos production for 2022 is estimated at 160,000 to 180,000 ounces of gold. While Los Filos’ costs are expected to be lower in the second half of the year, waste stripping campaigns in the Los Filos and Guadalupe open pits and underground development for Bermejal are expected to impact AISC and free cash flow for the year. Los Filos’ cost guidance for 2022 is estimated at cash costs of

$1,400

to

$1,475

per oz with AISC of

$1,625

to

$1,700

per oz.

The Company continues to review the potential to construct a new carbon-in-leach plant to operate concurrently with the existing heap leach operation, which could increase production and lower costs, but does not expect to make a construction decision until the majority of

Greenstone

expenditures are complete and the current stability with local communities allows operations to continue without interruption.

Capital investments at Los Filos during 2022 are expected to focus primarily on open-pit stripping and underground development, with almost

$30 million

of expenditures carried over from 2021. AISC at Los Filos in 2022 includes

$38 million

of sustaining capital, with

$13 million

allocated for capitalized stripping of the Guadalupe open pit,

$7 million

for development of the Los Filos underground mine,

$10 million

for fleet refurbishment and processing equipment and

$4 million

for exploration.

Non-sustaining growth capital of

$62 million

includes

$23 million

for stripping of the Los Filos open pit,

$24 million

for Bermejal underground development and

$14 million

for fleet rebuilds and new equipment.


Aurizona Gold Mine, Maranhão,

Brazil


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020


December 31,

2021


December 31,

2020


Ore mined


kt


1,029


1,047


1,231


3,180


3,267


Waste mined


kt


7,727


5,077


7,301


20,442


19,901


Open pit strip ratio


w:o


7.51


4.85


5.93


6.43


6.09


Tonnes processed


kt


922


832


846


3,383


3,227


Average gold grade processed


g/t


1.51


1.42


1.59


1.35


1.41


Recovery


%


91.9


91.2


90.6


91.2


89.8


Gold produced


oz


41,258


34,583


37,438


134,961


130,237


Gold sold


oz


41,819


33,200


38,213


135,061


129,004




Financial data



Revenue


M$


75.1


59.4


71.6


242.6


229.6


Cash costs

(1)


M$


31.0


26.8


23.3


105.9


92.4


Sustaining capital

(1)


M$


12.3


4.7


10.6


26.7


24.4


Reclamation expenses


M$


0.3


0.3


0.5


1.3


2.7


Total AISC

(1)


M$


43.6


31.8


34.4


133.9


119.5


AISC contribution margin

(1)


M$


31.5


27.6


37.2


108.8


110.1


Non-sustaining expenditures

(1)


M$


5.3


3.0


1.1


9.3


4.7


Mine free cash flow

(1)


M$


26.2


24.6


36.1


99.5


105.4




Unit analysis



Realized gold price per oz sold


$/oz


1,797


1,790


1,874


1,796


1,780


Cash costs per oz sold

(1)


$/oz


742


806


610


784


716


AISC per oz sold

(1)


$/oz


1,044


957


901


991


926


Mining cost per tonne mined


$/t


2.04


1.91


1.78


2.09


1.87


Processing cost per tonne processed


$/t


9.19


12.04


8.18


9.65


8.44


G&A cost per tonne processed


$/t


4.06


4.90


4.14


4.12


4.10



(1)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

Aurizona production for 2022 is estimated at 120,000 to 130,000 ounces of gold with cash costs of

$800

to

$850

per oz and AISC of

$1,175

to

$1,225

per oz sold. Production during 2022 is expected to come from multiple ore sources, including Piaba East and the new Boa Esperança pit, which was opened up with a small stripping campaign during 2021.

Forecast AISC at Aurizona in 2022 includes

$50 million

of sustaining capital allocated primarily to

$19 million

in capitalized waste stripping,

$18 million

to construct a new TSF and increase capacity of the existing TSF and

$8 million

for infrastructure including installation of a new pebble crusher. With fresh rock feed expected to increase to 30% in 2022, the pebble crusher is expected to help to maintain processing capacity. Non-sustaining growth capital at Aurizona of

$8 million

is allocated almost entirely to exploration.

The Company expects to continue to advance the Aurizona expansion during 2022, with plans to initiate permitting for an exploration portal, undertake some underground-focused exploration and continue internal studies. Development work to access the underground deposit could begin in late 2022.



Fazenda Gold Mine

, Bahia,

Brazil


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020


December 31,

2021


December 31,

2020

(1)


Ore mined – underground


kt


283


286


302


1,177


1,014


Tonnes processed


kt


351


348


332


1,367


1,087


Average gold grade processed


g/t


1.43


1.54


1.91


1.52


1.63


Recovery


%


90.9


89.7


89.9


90.5


90.6


Gold produced


oz


14,499


15,598


18,196


60,401


51,611


Gold sold


oz


14,279


15,727


18,237


60,269


51,056




Financial data



Revenue


M$


25.6


28.0


34.0


107.9


92.4


Cash costs

(2)


M$


13.8


13.9


13.3


52.7


37.6


Sustaining capital

(2)


M$


4.7


3.1


2.7


14.5


4.8


Reclamation expenses


M$


1.8


0.3


0.1


2.6


0.7


Total AISC

(2)


M$


20.3


17.3


16.1


69.8


43.1


AISC contribution margin

(2)


M$


5.3


10.7


17.9


38.1


49.3


Non-sustaining expenditures

(2)


M$


0.8


1.3


2.1


5.5


4.6


Mine free cash flow

(2)


M$


4.5


9.4


15.8


32.6


44.7




Unit analysis



Realized gold price per oz sold


$/oz


1,792


1,777


1,862


1,791


1,810


Cash costs per oz sold

(2)


$/oz


963


884


728


875


737


AISC per oz sold

(2)


$/oz


1,419


1,098


881


1,159


844


Mining cost per tonne mined


$/t


20.35


21.86


20.84


19.95


17.60


Processing cost per tonne processed


$/t


11.34


11.44


12.66


11.25


10.86


G&A cost per tonne processed


$/t


5.17


5.19


5.59


4.97


4.57



(1)


Fazenda was acquired as part of the Leagold Acquisition. Operational and financial results are included from March 10, 2020, onward.



(2)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

Fazenda’s production for 2022 is estimated at 60,000 to 65,000 ounces of gold, with cash costs estimated at

$975

to

$1,025

per oz and AISC estimated at

$1,200

to

$1,250

per oz.

Of the

$14 million

sustaining capital investment planned for 2022,

$6 million

is allocated for underground development,

$3 million

for open-pit waste stripping,

$2 million

for exploration to upgrade inferred Mineral Resources and

$2 million

for engineering, plant maintenance and equipment. Non-sustaining growth capital of

$11 million

includes

$4 million

for underground development and

$3 million

for exploration.

In addition, the Company has planned a significant regional exploration program in the Fazenda-Santa Luz district, a 70-km-long greenstone belt that hosts both the Fazenda and Santa Luz mines. The 2022 regional exploration program includes a

$1.5 million

airborne geophysical survey that will cover the entire belt and is expected to greatly aid in the development of new targets and more than 50,000 metres of drilling targeting high priority near-mine and regional targets. Of the total

$9 million

non-sustaining capital spend,

$4 million

has been budgeted to Fazenda with the remainder budgeted to Santa Luz.


RDM Gold Mine, Minas Gerais,

Brazil


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


December 31,

2020


December 31,

2021


December 31,

2020

(1)


Ore mined


kt


346


682


680


1,768


1,981


Waste mined


kt


3,829


6,082


6,310


22,837


18,218


Open pit strip ratio


w:o


11.06


8.92


9.28


12.92


9.19


Tonnes processed


kt


713


755


714


2,835


2,218


Average gold grade processed


g/t


0.68


0.69


0.92


0.74


0.97


Recovery


%


87.6


86.2


86.4


86.7


85.6


Gold produced


oz


13,362


15,880


18,068


58,829


59,354


Gold sold


oz


13,424


16,140


18,263


59,074


58,723




Financial data



Revenue


M$


24.0


28.7


34.1


105.8


106.6


Cash costs

(2)


M$


18.6


24.5


19.2


72.2


51.8


Sustaining capital

(2)


M$


3.6


3.3


3.7


10.1


8.8


Reclamation expenses


M$


0.5


0.2


0.1


1.1


0.5


Total AISC

(2)


M$


22.7


28.0


23.0


83.4


61.1


AISC contribution margin

(2)


M$


1.3


0.7


11.1


22.5


45.5


Care and maintenance


M$










0.5


Non-sustaining expenditures

(2)


M$


4.7


2.5




21.9


0.6


Mine free cash flow

(2)


M$


(3.4)


(1.8)


11.1


0.6


44.4




Unit analysis



Realized gold price per oz sold


$/oz


1,789


1,779


1,857


1,791


1,805


Cash costs per oz sold

(2)


$/oz


1,386


1,518


1,050


1,222


882


AISC per oz sold

(2)


$/oz


1,689


1,733


1,261


1,410


1,041


Mining cost per tonne mined


$/t


2.73


2.18


1.58


2.04


1.64


Processing cost per tonne processed


$/t


10.65


10.05


9.03


10.04


8.52


G&A cost per tonne processed


$/t


3.12


2.46


2.37


2.68


1.98



(1)


RDM was acquired as part of the Leagold Acquisition. Operational and financial results are included from March 10, 2020, onward.



(2)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

RDM production is expected to increase almost 30% compared to 2021 as the result of modifications to the pit design based on a new geotechnical model. Production for 2022 is estimated at 70,000 to 80,000 ounces of gold. Cash costs are estimated at

$1,200

to

$1,250

per oz and AISC is estimated at

$1,350

to

$1,400

per oz.

AISC at RDM in 2022 includes

$11 million

of sustaining capital, of which

$9 million

relates to increasing capacity of the TSF and installing a tailings thickener to reduce water consumption. Non-sustaining growth capital of

$18 million

relates primarily to capitalized stripping for a pushback of the open pit to provide better access to the ore body. In addition, the Company has allocated

$3 million

for exploration to undertake the first exploration campaign at RDM in several years, with a focus on potential extensions along strike and down dip.



Mercedes Gold Mine

,

Sonora, Mexico


Three months ended


Year ended




Operating data



Unit


December 31,

2021


September 30,

2021


June 30,

2021

(1)


December 31,

2021

(1)


Ore mined – underground


kt


125


105


118


348


Tonnes processed


kt


161


109


128


398


Average gold grade processed


g/t


2.30


2.89


2.71


2.59


Recovery


%


95.4


95.7


96.2


95.8


Gold produced


oz


11,353


9,722


10,708


31,782


Gold sold


oz


10,266


10,253


10,416


30,935




Financial data



Revenue


M$


18.9


18.8


19.3


56.9


Cash costs

(2)


M$


11.2


9.9


8.7


29.9


Sustaining capital

(2)


M$


4.7


2.3


3.6


10.6


Reclamation expenses


M$


0.4


0.6


0.5


1.5


Total AISC

(2)


M$


16.3


12.8


12.8


42.0


AISC contribution margin

(2)


M$


2.6


5.8


6.5


15.0


Non-sustaining expenditures

(2)


M$


0.5


0.3


0.2


0.9


Mine free cash flow

(2)


M$


2.1


5.5


6.3


14.1




Unit analysis



Realized gold price per oz sold


$/oz


1,775


1,761


1,779


1,772


Cash costs per oz sold

(2)


$/oz


1,091


970


839


966


AISC per oz sold

(2)


$/oz


1,584


1,261


1,226


1,357


Mining cost per tonne mined – underground


$/t


33.38


38.67


34.91


35.38


Processing cost per tonne processed


$/t


18.56


21.23


20.58


19.94


G&A cost per tonne processed


$/t


14.19


17.39


14.54


15.18



(1)


Mercedes was acquired as part of the Premier Acquisition. Operational and financial results are included from April 7, 2021, onward.



(2)


Cash costs, sustaining capital, non-sustaining expenditures, AISC, AISC contribution margin, mine free cash flow, cash costs per oz sold, and AISC per oz sold are non-IFRS measures. See

Non-IFRS Measures

and

Cautionary Notes

.



Outlook

On

December 16, 2021

, the Company entered into an agreement to sell Mercedes to Bear Creek (the “Transaction”). The Transaction is expected to close around the end of Q1 2022. As such, 2022 guidance does not include Mercedes, although ounces produced and capital spent prior to closing will be attributable to Equinox Gold.


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


(Unaudited in thousands of US dollars)



2021


2020



Assets



Current assets


Cash and cash equivalents



$



305,498


$


344,926


Marketable securities



240,530


3,120


Trade and other receivables



50,260


55,872


Inventories



201,622


208,290


Derivative assets



124,234




Prepaid expenses and other current assets



33,549


33,816


Assets held for sale



207,538





1,163,231


646,024



Non-current assets


Restricted cash



20,444


2,004


Inventories



124,265


130,888


Mineral properties, plant and equipment



2,497,919


1,858,723


Investment in associate



123,858


22,287


Deferred tax assets



10,576




Other non-current assets



25,613


13,474



Total assets



$



3,965,906


$


2,673,400



Liabilities and Equity



Current liabilities


Accounts payable and accrued liabilities



$



190,116


$


130,543


Current portion of loans and borrowings



26,667


13,333


Derivative liabilities



77,699


63,993


Other current liabilities



22,339


14,795


Liabilities relating to assets held for sale



85,745





402,566


222,664



Non-current liabilities


Loans and borrowings



514,015


531,908


Reclamation and closure cost provisions



95,565


117,103


Derivative liabilities



7,158


90,573


Deferred tax liabilities



309,715


229,860


Other non-current liabilities



50,514


32,769



Total liabilities



1,379,533


1,224,877



Shareholders’ equity


Common shares



2,006,777


1,518,042


Reserves



47,038


38,779


Accumulated other comprehensive income (“AOCI”)



84,011




Retained earnings (deficit)



448,547


(108,298)


Total equity



2,586,373


1,448,523



Total liabilities and equity



$



3,965,906


$


2,673,400


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited, in thousands of US dollars, except share and per share amounts)


For the years ended December 31



2021


2020

(1)



Revenue



$



1,082,286


$


845,388



Cost of sales


Operating expense



(654,804)


(423,291)


Depreciation and depletion



(196,892)


(131,914)



(851,696)


(555,205)



Income from mine operations



230,590


290,183


Care and maintenance expense



(15,274)


(64,995)


Exploration expense



(16,253)


(11,840)


General and administration expense



(52,590)


(40,392)



Income from operations



146,473


172,956


Finance expense



(41,551)


(39,751)


Finance income



2,816


1,819


Other income (expense)



425,841


(91,925)



Income before taxes



533,579


43,099


Income tax expense



23,266


(20,811)



Net income



$



556,845


$


22,288



Net income per share


Basic



$



1.95


$


0.10


Diluted



$



1.69


$


0.10



Weighted average shares outstanding


Basic



284,932,357


212,487,729


Diluted



333,734,701


218,411,971



(1)


The Company applied the amendments to IAS 16,

Property, Plant and Equipment – Proceeds before Intended Use

, in its consolidated financial statements for the annual period beginning on January 1, 2021. The amendments prohibit deducting from the cost of property, plant and equipment any proceeds from selling items produced while preparing the asset for its intended use. Instead, proceeds from selling such items and the cost of producing such items shall be recognized in net income or loss. On application of the amendments, the Company reclassified $1.6 million of pre-commercial production net proceeds from mineral properties, plant and equipment as at December 31, 2020 to net income for the year ended December 31, 2020, comprising $2.9 million in revenue, $1.0 million in operating expense and $0.3 million in depreciation and depletion.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(Unaudited in thousands of US dollars)



2021


2020



Net income



$



556,845


$


22,288



Other comprehensive income (“OCI”)


Items that may be reclassified subsequently to net income:


Foreign currency translation



(2,273)




Items that will not be reclassified subsequently to net income:


Net increase in fair value of marketable securities and other


investments in equity instruments



100,144




Income tax expense relating to change in fair value of marketable


securities and other investments in equity instruments



(13,860)





Total OCI



84,011





Total comprehensive income



$



640,856


$


22,288


CONSOLIDATED STATEMENTS OF CASH FLOW


(Unaudited, in thousands of US dollars)



2021


2020

(1)



Cash provided by (used in):



Operating activities


Net income for the year



$



556,845


$


22,288


Adjustments for:


Depreciation and depletion



198,134


152,185


Finance expense



41,551


39,751


Mark-to-market (gain) loss on derivatives



(90,643)


92,684


Settlements of derivatives



(46,308)


(35,809)


Gain on bargain purchase of Premier Gold Mines Limited



(81,432)




(Gain) loss on disposal of assets



(81,970)


1,679


Gain on reclassification of investment in Solaris Resources Inc



(186,067)




Unrealized foreign exchange gain



(2,963)


(4,818)


Share-based compensation expense



7,327


8,140


Income tax expense



(23,266)


20,811


Income taxes paid



(24,934)


(32,788)


Other



(2,152)


6,848


Operating cash flow before non-cash changes in working capital



264,122


270,971


Non-cash changes in working capital



56,656


(15,193)



320,778


255,778



Investing activities


Expenditures on mineral properties, plant and equipment



(344,224)


(174,753)


Acquisition of Premier Gold Mines Limited



8,267




Investment in Greenstone Gold Mines LP



(50,905)




Investment in i-80 Gold Corp



(40,860)




Net proceeds on disposal of assets



90,478


6,500


Acquisition of Leagold Mining Corporation






55,252


Investment in Solaris Resources Inc






(12,480)


Other



(10,323)


(5,691)



(347,567)


(131,172)



Financing activities


Draw down on Credit Facility






379,680


Proceeds from issuance of Convertible Notes






139,278


Transaction costs






(10,622)


Repayment of loans and borrowings



(30,983)


(546,274)


Interest paid



(22,112)


(26,536)


Lease payments



(24,309)


(6,667)


Net proceeds from issuance of shares



59,498


42,793


Proceeds from exercise of warrants and stock options



17,655


171,530


Other



(1,344)


9,483



(1,595)


152,665


Effect of foreign exchange on cash and cash equivalents



(6,469)


(61)



(Decrease) increase in cash and cash equivalents



(34,853)


277,210



Cash and cash equivalents – beginning of year



344,926


67,716



Cash and cash equivalents – end of year



$


310,073


$


344,926


Cash and cash equivalents reclassified as held for sale



(4,575)





Cash and cash equivalents, excluding amounts classified as held for sale – end of year



$


305,498


$


344,926



(1)


Effective January 1, 2021, the Company made an accounting policy change to classify finance fees paid (which includes interest paid) within the consolidated statement of cash flows for the year ended December 31, 2021 as a financing activity rather than an operating activity, which more appropriately reflects the nature of these cash flows. Interest paid has been disclosed separately as a financing cash flow. Comparative figures for the year ended December 31, 2020 have been reclassified to conform with the change in accounting policy.


NON-IFRS MEASURES

This news release refers to cash costs, cash costs per oz sold, AISC, AISC per oz sold, AISC contribution margin, adjusted net income, adjusted EPS, mine-site free cash flow, adjusted EBITDA, net debt, and sustaining and non-sustaining capital expenditures that are measures with no standardized meaning under IFRS, i.e. they are non-IFRS measures, and may not be comparable to similar measures presented by other companies. Their measurement and presentation is consistently prepared and is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Numbers presented in the tables below may not sum due to rounding.


Cash costs and cash costs per oz sold

Cash costs is a common financial performance measure in the gold mining industry; however, it has no standard meaning under IFRS. The Company reports total cash costs on a per oz sold basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate operating income and cash flow from mining operations. Cash costs include mine site operating costs plus lease principal payments, but are exclusive of depreciation and depletion, reclamation, capital and exploration costs and net of by-product sales and then divided by ounces sold to arrive at cash costs per oz sold. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.


AISC per oz sold

The Company is reporting AISC per oz of gold sold. The methodology for calculating AISC was developed internally and is calculated below. Readers should be aware that this measure does not have a standardized meaning. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. The Company believes the AISC measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value.

The following table provides a reconciliation of cash costs per oz of gold sold and AISC per oz of gold sold to the most directly comparable IFRS measure on an aggregate basis.



$’s in millions, except ounce and per oz figures


Three months ended


Year ended



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Gold ounces sold



212,255


137,144


136,418



602,668


473,309


Operating expenses



$



215.5


$


152.7


$


114.1



$



654.8


$


423.3


Lease payments



3.8


2.8


2.2



9.2


4.3


Non-recurring charges recognized in operating expenses

(1)



(0.4)


(1.7)





(2.1)




Fair value adjustment on acquired inventories



1.8


(1.7)


(1.1)



(6.6)


(26.6)


Total cash costs



$



220.7


$


152.1


$


115.2



$



655.3


$


401.0


Cash costs per gold oz sold



$



1,040


$


1,109


$


844



$



1,087


$


847


Total cash costs



$



220.7


$


152.1


$


115.2



$



655.3


$


401.0


Sustaining capital



42.4


26.9


31.5



144.7


76.3


Reclamation expenses



5.5


2.4


1.1



13.1


6.3


Sustaining exploration expensed






0.6


0.4



0.6


1.6


Total AISC



268.7


182.0


148.1



813.7


485.1


AISC per oz sold



$



1,266


$


1,327


$


1,086



$



1,350


$


1,025



(1)


Non-recurring charges recognized in operating expenses relates to an impairment charge on replacement parts at Mesquite.


Sustaining and non-sustaining capital reconciliation

Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a mine site and excludes all expenditures at the Company’s projects and certain expenditures at the Company’s operating sites which are deemed expansionary. Sustaining capital expenditures can include, but are not limited to, capitalized stripping costs at open pit mines, underground mine development, mining and milling equipment and tailings dam raises.

The following table provides a reconciliation of sustaining capital expenditures to the Company’s total capital expenditures for continuing operations.


Three months ended


Year ended



$’s in millions



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Capital additions to mineral properties, plant and equipment

(1)



$



135.4


$


99.7


$


50.8



$



455.3


$


179.1


Less: Non-sustaining capital at operating sites



(23.4)


(25.6)


(6.0)



(101.3)


(32.4)


Less: Non-sustaining capital at development


projects



(62.4)


(39.0)


(10.8)



(137.7)


(51.1)


Less: Capital expenditures – corporate



(0.1)


(0.2)


(0.1)



(1.0)


(0.4)


Less: Other non-cash additions

(2)



(7.1)


(8.0)


(2.4)



(70.6)


(18.9)


Sustaining capital expenditures



$



42.4


$


26.8


$


31.5



$



144.7


$


76.3



(1)


Capital additions are exclusive of non-cash changes to reclamation assets arising from changes in discount rate and inflation rate assumptions in the reclamation provision.



(2)


Non-cash additions include right-of-use assets associated with leases recognized in the period, capitalized depreciation for deferred stripping activities, and the mineral interest recognized relating to the Pilar royalty.


Total mine-site free cash flow

Mine-site free cash flow is a non-IFRS financial performance measure. The Company believes this to be a useful indicator of its ability to operate without reliance on additional borrowing or usage of existing cash. Mine-site free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other mining companies. Mine-site free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

The following table provides a reconciliation of mine-site free cash flow to the most directly comparable IFRS measure on an aggregate basis:


Three months ended


Year ended



$’s in millions



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Operating cash flow before non-cash changes


in working capital



$



122.2


$


48.3


$


94.0



$



264.1


$


271.0


Add: Operating cash flow used by non-mine


site activity

(1)



32.7


36.9


36.3



136.4


130.2


Cash flow from operating mine sites



$



154.9


$


85.2


$


130.3



$



400.5


$


401.2


Mineral property, plant and equipment additions



$



135.4


99.7


50.8



$



455.3


179.1


Less: Capital expenditures relating to


development projects and corporate and


other non-cash additions



(69.6)


(47.3)


(13.3)



(209.4)


(70.4)


Capital expenditure from operating mine sites



65.8


52.4


37.5



245.9


108.7


Lease payments related to non-sustaining


capital items



3.5


4.1





13.7




Non-sustaining exploration expensed



3.0


2.1


1.2



9.9


3.8


Total mine site free cash flow



$



82.7


$


26.6


$


91.6



$



131.0


$


288.7



(1)


Includes taxes paid that are not factored into mine site free cash flow and are included in operating cash flow before non-cash changes in working capital in the statement of cash flows.


EBITDA, adjusted EBITDA and AISC contribution margin

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use adjusted EBITDA and AISC contribution margin to evaluate the Company’s performance and ability to generate cash flows and service debt. EBITDA is defined as earnings before interest, tax, depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortization, adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes in the value of warrants, foreign exchange contracts and gold contracts, unrealized foreign exchange gains and losses, and share-based compensation expense. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets. AISC contribution margin is defined as revenue less AISC.

Previously, adjusted EBITDA was calculated excluding the Company’s share of net income or loss on investment in associate as an adjusting item. The Company has adjusted for its share of net income or loss on investment in associate in the current period as this item is not considered representative of core operating performance. The comparative periods have been adjusted to confirm with the current methodology and are different from those previously reported.

The following tables provide the calculation of AISC contribution margin, EBITDA and adjusted EBITDA, as calculated by the Company:


AISC Contribution Margin


Three months ended


Year ended



$’s in millions



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Revenue



$



381.2


$


245.1


$


255.5



$



1,082.3


$


845.4


Less: AISC



(268.7)


(182.0)


(148.1)



(813.7)


(485.1)


AISC contribution margin



$



112.6


$


63.1


$


107.4



$



268.6


$


360.2


EBITDA and Adjusted EBITDA


Three months ended


Year ended



$’s in millions



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Net income (loss) before tax



$



86.7


(11.3)


67.2



$



533.6


43.1


Depreciation and depletion



66.7


47.2


43.8



198.1


132.6


Finance expense



10.3


10.7


8.6



41.6


39.8


Finance income



(1.1)


(1.1)


(0.6)



(2.8)


(1.8)


EBITDA



$



162.7


$


45.5


$


119.1



$



770.4


$


213.6


Non-cash share-based compensation expense



0.8


1.6


1.4



6.1


6.8


Unrealized (gain) loss on change in fair value of warrants



(27.5)


(1.0)


(17.5)



(85.8)


29.9


Unrealized (gain) loss on gold contracts



(4.3)


(11.0)


(11.2)



(58.1)


12.9


Unrealized (gain) loss on foreign exchange contracts



(1.7)


8.9


(11.1)



(0.4)


14.1


Unrealized foreign exchange (gain) loss



(10.8)


3.8


1.3



(5.9)


(12.1)


Non-recurring charges recognized in operating expense

(1)



0.4


1.7





2.1




Transaction costs



0.5




3.2



2.4


5.8


Other expense (income)

(2)



9.9


17.9





(327.7)


11.3


Adjusted EBITDA



$



130.0


$


67.3


$


85.3



$



303.1


$


282.3



(1)


Non-recurring charges recognized in operating expenses relates to an impairment charge on replacement parts at Mesquite.



(2)


Other expense for the three months ended December 31, 2021 includes $8.0 million loss on disposal of mineral properties, plant and equipment, $6.0 million expected credit loss and $9.4 million dilution gain on investment in associate. Other income for the year ended December 31, 2021 includes $186.1 million gain on reclassification of Solaris investment from cost to fair value accounting, $50.3 million gain on sale of Solaris shares, $45.4 million gain on sale of Pilar, $81.4 million bargain purchase gain on Premier Acquisition, $9.4 million dilution gain on investment in associate, $12.4 million loss on disposal of mineral properties, plant and equipment and $7.0 million expected credit loss.


Adjusted net income and adjusted EPS

Adjusted net income and adjusted EPS are used by management and investors to measure the underlying operating performance of the Company. Adjusted net income is defined as net income adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes in the value of warrants, foreign exchange contracts and gold contracts, unrealized foreign exchange gains and losses, and non-cash share-based compensation expense. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets. Adjusted net income per share amounts are calculated using the weighted average number of shares outstanding on a basic and diluted basis as determined by IFRS.

Previously, adjusted net income was calculated excluding the Company’s share of net income or loss on investment in associate as an adjusting item. The Company has adjusted for its share of net income or loss on investment in associate in the current period as this item is not considered representative of core operating performance. The comparative periods have been adjusted to confirm with the current methodology and are different from those previously reported.

The following table provides the calculation of adjusted net income and adjusted EPS, as adjusted and calculated by the Company:


Three months ended


Year ended



$’s in millions



December 31,

2021


September 30,

2021


December 31,

2020



December 31,

2021


December 31,

2020


Basic weighted average shares outstanding



300,790,672


300,513,742


242,118,375



284,932,357


212,487,729


Diluted weighted average shares outstanding



348,996,674


300,513,742


290,888,147



333,734,701


218,411,971


Net income (loss) attributable to Equinox Gold shareholders



$



110.9


$


(8.1)


$


91.2



$



556.8


$


22.3


Add (deduct):


Non-cash share-based compensation expense



0.8


1.6


1.4



6.1


6.8


Unrealized (gain) loss on change in fair value of warrants



(27.5)


(1.0)


(17.5)



(85.8)


29.9


Unrealized (gain) loss on gold contracts



(4.3)


(11.0)


(11.2)



(58.1)


12.9


Unrealized loss (gain) on foreign exchange contracts



(1.7)


8.9


(11.1)



(0.4)


14.1


Unrealized foreign exchange loss (gain)



(10.8)


3.8


1.3



(5.9)


(12.1)


Non-recurring charges recognized in operating expense

(1)



0.4


1.7





2.1




Transaction costs



0.5




3.2



2.4


5.8


Other expense (income)

(2)



9.9


17.9





(327.7)


11.3


Unrealized foreign exchange (gain) loss recognized in deferred tax expense



(2.7)


(4.5)


(18.5)



(15.8)


(2.5)


Adjusted net income


$



75.6


$


9.2


$


38.9



$



73.8


$


88.4


Adjusted income per share – basic ($/share)



$0.25


$0.03


$0.16



$0.26


$0.42


Adjusted income per share – diluted ($/share)



$0.22


$0.03


$0.13



$0.22


$0.40



(1)


Non-recurring charges recognized in operating expense relates to an impairment charge on replacement parts at Mesquite.



(2)


Other expense for the three months ended December 31, 2021 includes $8.0 million loss on disposal of mineral properties, plant and equipment, $6.0 million expected credit loss and $9.4 million dilution gain on investment in associate. Other income for the year ended December 31, 2021 includes $186.1 million gain on reclassification of Solaris investment from cost to fair value accounting, $50.3 million gain on sale of Solaris shares, $45.4 million gain on sale of Pilar, $81.4 million bargain purchase gain on Premier Acquisition, $12.4 million loss on disposal of mineral properties, $9.4 million dilution gain on investment in associate plant and equipment and $7.0 million expected credit loss.


Net debt

The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use net debt to evaluate the Company’s performance. Net debt does not have any standardized meaning prescribed under IFRS, and therefore it may not be comparable to similar measures employed by other companies. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performances prepared in accordance with IFRS. Net debt is calculated as the sum of the current and non-current portions of long-term debt, net of the cash and cash equivalent balance as at the balance sheet date. A reconciliation of net debt is provided below.



December 31,

2021


September 30,

2021


December 31,

2020


Current portion of loans and borrowings



$



26.7


$


26.7


$


13.3


Non-current portion of loans and borrowings



514.0


518.4


531.9


Total debt



540.7


545.1


545.2


Less: Cash and cash equivalents (unrestricted)



(305.5)


(300.3)


(344.9)


Net debt



$



235.2


$


244.8


$


200.3


ABOUT EQUINOX GOLD

Equinox Gold is a Canadian mining company operating entirely in the Americas, with seven operating gold mines and a clear path to achieve more than one million ounces of annual gold production from a pipeline of development and expansion projects. Equinox Gold’s common shares are listed on the TSX and the NYSE American under the trading symbol EQX. Further information about Equinox Gold’s portfolio of assets and long-term growth strategy is available at

www.equinoxgold.com

or by email at

[email protected]

.


CAUTIONARY NOTES



Technical Information



Doug Reddy

, Msc, P.Geo., Equinox Gold’s COO, is the Qualified Person under National Instrument 43-101 for this Equinox Gold press release and has reviewed and approved the technical information in this document.



Non-IFRS Measures


This news release refers to cash costs, mine cash costs per ounce sold, all-in sustaining costs (“AISC”), AISC per ounce sold, AISC contribution margin, adjusted EBITDA, adjusted net income, adjusted earnings per share, net debt, mine-site free cash flow and sustaining and non-sustaining capital expenditures, all of which are measures with no standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures presented by other companies. Their measurement and presentation is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Non-IFRS measures are widely used in the mining industry as measurements of performance and the Company believes that they provide further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value. Refer to the “Non-IFRS measures” section of this news release and in the Company’s Management’s Discussion and Analysis for the period ended

September 30,2021

, for a more detailed discussion of these non-IFRS measures and their calculation.



Cautionary Note to U.S. Readers Concerning Estimates of Mineral Reserves and Mineral Resources


Disclosure regarding the Company’s mineral properties, including with respect to mineral reserve and mineral resource estimates included in this news release, was prepared in accordance with National Instrument 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. NI 43-101 differs significantly from the disclosure requirements of the Securities and Exchange Commission (the “SEC”) generally applicable to U.S. companies. Accordingly, information contained in this news release is not comparable to similar information made public by U.S. companies reporting pursuant to SEC disclosure requirements.



Forward-looking Statements


This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation and may include future-oriented financial information. Forward-looking statements and forward-looking information in this news release relate to, among other things: the strategic vision for the Company and expectations regarding exploration potential, production capabilities and future financial or operational performance; the Company’s ability to successfully advance its growth and development projects, including the construction of Santa Luz and

Greenstone

and the expansions at Los Filos, Aurizona and Castle Mountain; the expectations for the Company’s investments in Solaris, i-80 Gold and

Pilar Gold

; completion of the sale of the Mercedes mine; the Company’s production and cost guidance; and conversion of Mineral Resources to Mineral Reserves. Forward-looking statements or information generally identified by the use of the words “believe”, “will”, “advancing”, “strategy”, “plans”, “budget”, “anticipated”, “expected”, “estimated”, “on track”, “target”, “objective” and similar expressions and phrases or statements that certain actions, events or results “may”, “could”, or “should”, or the negative connotation of such terms, are intended to identify forward-looking statements and information. Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, undue reliance should not be placed on forward-looking statements since the Company can give no assurance that such expectations will prove to be correct. The Company has based these forward-looking statements and information on the Company’s current expectations and projections about future events and these assumptions include: Equinox Gold’s ability to achieve the exploration, production, cost and development expectations for its respective operations and projects; prices for gold remaining as estimated; currency exchange rates remaining as estimated; construction of Santa Luz and

Greenstone

being completed and performed in accordance with current expectations; expansion projects at Los Filos, Castle Mountain and Aurizona being completed and performed in accordance with current expectations; tonnage of ore to be mined and processed; ore grades and recoveries; availability of funds for the Company’s projects and future cash requirements; capital, decommissioning and reclamation estimates; Mineral Reserve and Mineral Resource estimates and the assumptions on which they are based; prices for energy inputs, labour, materials, supplies and services; no labour-related disruptions and no unplanned delays or interruptions in scheduled construction, development and production, including by blockade or industrial action; the Company’s working history with the workers, unions and communities at Los Filos; all necessary permits, licenses and regulatory approvals are received in a timely manner; the Company’s ability to comply with environmental, health and safety laws and other regulatory requirements; the strategic vision for i-80 Gold and its ability to successfully advance its projects; the strategic vision for Solaris Resources and its ability to successfully advance its projects; the exercise of the Solaris Resources warrants; and the ability of

Pilar Gold

to successfully operate the Pilar mine and to meet its payment commitments to the Company. While the Company considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Accordingly, readers are cautioned not to put undue reliance on the forward-looking statements or information contained in this news release


The Company cautions that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements and information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in gold prices; fluctuations in prices for energy inputs, labour, materials, supplies and services; fluctuations in currency markets; operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); inadequate insurance, or inability to obtain insurance to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; the Company’s ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner or at all; changes in laws, regulations and government practices, including environmental, export and import laws and regulations; legal restrictions relating to mining including those imposed in connection with COVID-19; risks relating to expropriation; increased competition in the mining industry; a successful relationship between the Company and Orion; the failure by

Pilar Gold

to meet one or more of its commitments to the Company and those factors identified in the section titled “Risks Related to the Business” in the Company’s Annual Information Form dated

March 24, 2021

, for the year ended

December 31, 2020

, which is available on SEDAR at

www.sedar.com

and on EDGAR at

www.sec.gov/edgar

. Forward-looking statements and information are designed to help readers understand management’s views as of that time with respect to future events and speak only as of the date they are made. Except as required by applicable law, the Company assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement or information contained or incorporated by reference to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements and information. If the Company updates any one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. All forward-looking statements and information contained in this news release are expressly qualified in their entirety by this cautionary statement.

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SOURCE Equinox Gold Corp.