Equinox Gold reports 4Q adjusted profit, nears merger with Leagold
(Kitco News) - Equinox Gold Corp. (TSX, NYSE American: EQX) Monday reported an adjusted profit for the fourth quarter and moved another step closer to a takeover of Leagold Mining Corp. by getting approval from the Mexican government.
The company listed adjusted net income of $20.9 million for the October-December period, a turnaround from a $4.2 million adjusted loss in the fourth quarter of 2018.
Equinox reported fourth-quarter production of 80,176 ounces of gold, a quarterly record and up sharply from 25,601 in the same period of 2018. The average realized gold price rose to $1,482 an ounce from $1,237.
For full-year 2019, Equinox said it achieved production guidance with just over 201,000 ounces of gold (including pre-commercial operations) at all-in sustaining costs of $931 per ounce sold. Guidance had been 200,000 to 235,000 ounces at AISC of $940 to $990 per ounce sold.
Meanwhile, officials said Mexico’s Comisión Federal de Competencia Económica has approved the pending merger with Leagold. COFECE approval was the final government agency approval required before completing the merger, which is anticipated to occur in the second week of March, the companies said.
Shareholders of the two companies voted in favor of the transaction in January. Equinox has agreed to buy Leagold in an all-stock deal that would create a mining company expected to produce 1 million ounces of gold within two years.
“Equinox Gold achieved its growth objectives in 2019 and had a strong fourth quarter of production from both Aurizona and Mesquite, with lower costs and improved cash flows,” said Christian Milau, chief executive officer. “The strategic merger with Leagold Mining, which is expected to close next week, will significantly increase annual gold production and provide shareholders with exceptional leverage to gold from six producing gold mines, two development projects and two growth projects, all located in the Americas.”
At completion, the six mines that Equinox Gold will operate include Los Filos in Mexico, Mesquite in California, and Aurizona, Fazenda, RDM and Pilar in Brazil.
Upon closing, existing Equinox Gold and Leagold shareholders will own approximately 55% and 45% of the merged company, respectively. The merged company will continue as Equinox Gold with the ticker symbol EQX on both the Toronto Stock Exchange and the NYSE American Stock Exchange.