Equinox sells B.C. gold property for $10 million

Equinox Gold Corp. [EQX-TSXV; EQXFF-OTC] has sold its Elk Gold property in British Columbia to privately-owned Bayshore Minerals Inc. for $10 million.

Equinox said it expects to receive $1 million in cash upon closing the sale. The balance consists of a $9 million promissory note that is payable in annual installments of $3 million commencing two years from closing.

Equinox said the total amount due under the promissory note may be adjusted in such a way that if Bayshore pays a total of $8 million within two years from closing, that amount will represent full and final payment. However, if Bayshore pays a total of $9.5 million within three years from closing, that will represent full and final payment.

Bayshore is a private, B.C.-based mineral exploration company, which plans to grow its portfolio of gold properties as opportunities arise. The company’s founder and president is Grant Carlson, a consultant specializing in mining with SRK Canada’s mining division. His specialization includes pit optimization, detailed pit design, production modelling, operating and capital cost estimation.

Gerry Carlson, the company’s vice-president, exploration, has over 40 years of international experience in managing mineral exploration and mining development companies. He is a past President of AMEBC (formerly the British Columbia and Yukon Chamber of Mines) and President of the Society of Economic Geologists Canada Foundation.

The sale of the Elk gold property was completed by way of a purchase by Bayshore of shares of Equinox’s wholly-owned subsidiary, Gold Mountain Mining Corp.

Led by financier Ross Beaty, Equinox Gold is a well-funded, multi-asset company with three wholly-owned gold mines: the producing Mesquite gold mine in California, the Aurizona gold mine in Brazil which poured first gold in May 2019, and the development-stage past-producing Castle Mountain gold mine in California.

On Thursday, Equinox shares were down 0.92% or $0.01 to $1.08. The shares are trading in a 52-week range of 85 cents and $1.37.

On May 14, Equinox announced first gold pour at its Aurizona mine in Brazil. The company is focused now on ramping up to commercial production at Aurizona, where average annual production is forecast to be over 136,000 ounces. When coupled with production from Mesquite, which the company acquired in October 2018 from New Gold, Equinox Gold has provided guidance of producing more than 235,000 ounces of gold in 2019. The company expects to have three mines in production by mid-2020 with the objective of commencing Phase 1 construction for Castle Mountain in the third quarter of 2019.

The company produced 25,310 ounces of gold at Mesquite in the first quarter of 2019 and had cash and cash equivalents of US$24 million at the end of March. The company also recently announced a strategic investment by Mubadala Investment Company, the government of Abu Dhabi’s sovereign fund, which purchased US$130 million in convertible notes.