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Questions and Answers
Our primary focus for early 2019 is achieving production at the Aurizona Gold Mine in Brazil. Construction is well advanced and we are on track to achieve commercial production around the end of Q1-2019. We expect to undertake additional drilling at the Tatajuba target in 2019 with the objective of extending mineralization along strike to the west, and are also examining the potential to develop Aurizona's underground resources.
Our newly-acquired Mesquite Gold Mine in California is operating well. In 2019 we will continue to investigate opportunities to optimize the asset and extend the mine life.
At our Castle Mountain Gold Mine in California, we are completing detailed engineering for Phase 1 production with the objective of commissioning Phase 1 of the mine in late 2019 and will also complete a full feasibility study for Phase 2 production. We are also looking at operational and administrative synergies between Castle Mountain and Mesquite and will incorporate those into the plans for Phase 1 and Phase 2 operations.
From this existing asset base we see a clear path to be producing more than 475,000 ounces of gold by 2023 (subject to Castle Mountain permitting). To expedite growth, however, we will continue to evaluate opportunities to bring additional producing mines to our portfolio, with the objective of having four or five gold mines in production.
On July 26, 2018, Equinox Gold shareholders voted to reorganize the business of Equinox Gold into two companies by way of a plan of arrangement whereby Equinox Gold’s copper assets were transferred into a newly incorporated company called Solaris Copper Inc. The transaction was completed on August 3, 2018 (the “Effective Time”).
For every Equinox Gold share held on August 2 (the day before the Effective Time), you continue to hold one EQX share and were issued 1/10th of a Solaris Copper share. For example, if you held 1,000 EQX shares on August 2, you now hold 1,000 EQX shares and 100 Solaris Copper shares.
Every Equinox Gold warrant held on August 2, when exercised, will exercise into one EQX share and 1/10th of a Solaris Copper share.
Solaris Copper shares are not currently listed on any stock exchange. Solaris Copper is a “reporting issuer” under Canadian securities legislation and, as such, will comply with its continuous disclosure obligations including press releases and financial reporting.
Solaris Copper is considering a potential stock exchange listing, but at the moment there is no firm date for listing the company. When the shares ARE listed, your account will automatically update to show the ticker symbol and market value.
Other frequently asked questions about the Solaris Copper transaction can be found in this downloadable Q&A.
Equinox Gold shares are a “qualified investment” for a trust governed by an RRSP, an RRIF, a deferred profit sharing plan, an RESP, an RDSP or a TFSA as those terms are defined in the Canadian Tax Act as long as Equinox Gold is listed on a “designated stock exchange” or is a “public corporation” as defined in the Canadian Tax Act.
Solaris Copper shares will be a qualified investment as long as the Solaris Copper shares are listed on a designated stock exchange on or before the filing due date for its first taxation year. While Solaris Copper will evaluate all strategic opportunities available to enhance shareholder value, including a potential stock exchange listing, there can be no assurance that Solaris Copper shares will be listed on a designated stock exchange in time for the shares to become a qualified investment.
Shareholders should consult with their own tax advisors in this regard.
If you have deposited your Equinox Gold shares electronically in an online account, you won’t need to do anything. The conversion will happen automatically but can take a few days or, in some cases, a few weeks to take effect depending on the brokerage firm you use. Since Solaris Copper is not listed, your Solaris Copper shares will not show a ticker symbol or a market value, but you should see them in your account. While the majority of brokerage firms should be willing to hold private company shares, it is possible that some discount brokerage firms will not offer this service. If your brokerage firm is not willing to hold private company shares, you can contact Equinox Gold’s transfer agent, Computershare, and ask to be issued a DRS advice for your Solaris Copper shares.
If you still hold physical share certificates or DRS advice for your Equinox Gold shares you need to mail them to Computershare within six years to effect the conversion to new Equinox Gold shares and Solaris Copper shares. Shareholders who fail to submit a duly completed Letter of Transmittal and all other documents required by Computershare within six years of the Effective Time will no longer have the right to receive Solaris Copper shares and will not receive any compensation in lieu thereof.
You should have received a Letter of Transmittal and instructions by mail. If you do not have a Letter of Transmittal, you can request one by emailing firstname.lastname@example.org.
Do not send your share certificates to Equinox Gold. They must be submitted to Computershare at:
Computershare Investor Services
9th Floor, North Tower, 100 University Ave
Toronto, ON, Canada M5J 2Y1
If you have questions about the Solaris Copper spin-out or the long-term strategy for Equinox Gold or Solaris Copper, please do not hesitate to contact us at +1 604.558.0560 or by email at email@example.com.
Frequently asked questions are summarized in this downloadable Q&A.
Equinox Gold's common shares trade in Canada on the TSX-V under the symbol "EQX" and in the United States on the OTC under the symbol "EQXFF".
Equinox Gold's warrants trade in Canada on the TSX-V under the symbol "EQX.WT" and in the United States on the OTC under the symbol "EQXWF".
Equinox Gold has 80.5 million warrants that trade on the TSX-V under symbol "EQX.WT" and on the OTC under symbol "EQXWF". The warrants have an exercise price of C$3.00 and expire on October 6, 2021.
Following completion of the spin-out to form Solaris Copper Inc. on August 3, 2018, Equinox Gold warrantholders of record on August 2, 2018 are eligible to receive Solaris Copper shares. As such, warrants that were held on August 2, 2018, when exercised, will exercise into one EQX share and 1/10th of a Solaris Copper share. There is no change to the exercise price or expiry date, only to the shares that are issued upon exercise.
Information for Equinox Gold's United States investors
Equinox Gold is a "reporting issuer" in Canada and our common shares are currently listed for trading on the TSX Venture Exchange under the symbol "EQX". At this time, Equinox Gold is not registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and therefore our shares cannot be offered, sold, pledged or otherwise transferred within the U.S. or to a U.S. person without registration under the 1933 Act and the securities laws of all applicable states of the United States, unless an exemption from registration is available.
Shares purchased by U.S. investors are “legended” and must have the legend/restriction removed before they can be deposited. Depending on which brokerage firm you use they may not be able to work with your DRS Advice and you may need to ask Computershare to issue certificates, which will then need to have the legend removed before they can be deposited.
Ideally your brokerage firm will have a Canadian intermediary that can facilitate this process. Some U.S. brokerage firms find the legend removal process complicated.
We advise shareholders seeking to remove such restrictive legends to contact their securities broker to obtain further instructions and the paperwork necessary to complete such removal, including the form of declaration to be provided to your securities broker. If you obtained your shares through a private placement, in your subscription agreement paperwork there is an "Appendix 1 to Schedule C" form that is the Form of Declaration for Removal of U.S. Legend. This form needs to be filled out, medallion guaranteed and mailed to Computershare Investor Services as per the instructions below. If you cannot find this form or your broker does not understand the process, please email firstname.lastname@example.org and we will assist you with the process.
Exemption to allow the sale of Equinox Gold shares
One exemption potentially available to our U.S. resident shareholders, is Rule 904 of Regulation S under the 1933 Act ("Rule 904"), which serves as a resale safe harbor allowing persons (other than the Company, a distributor, any of their respective affiliates, or any person acting on their behalf) to offer and resell shares, provided, however, that the offer to sell the shares is not made to a person in the U.S. and either:
- at the time the buy order is originated, the buyer is outside the U.S., or the seller and any person acting on its behalf reasonably believe that the buyer is outside the U.S.; or
- the transaction is executed in, on or through the facilities of a designated offshore securities market (i.e. the TSX Venture Exchange), and neither the seller nor any person acting on its behalf knows that the transaction has been pre-arranged with a buyer in the U.S.
In addition to meeting other requirements under Rule 904, no "directed selling efforts" in or into the U.S. may be used to resell the shares.
A shareholder wishing to resell shares in accordance with Rule 904 must request that the U.S. restrictive legend be removed from the certificates representing such shares, prior to such shares being sold.
Only Computershare Investor Services Inc. ("Computershare"), the Company's registrar and transfer agent, may remove restrictive legends from certificates representing shares of the Company. Computershare can be contacted at the following numbers:
Shareholder Services (if the securityholder is calling Computershare)
Broker Services (if the broker is calling Computershare)
Mail your declaration form to:
Computershare Investor Services
Attn: Stock Transfer Department – For certificate issuance from DRS
Attn: Securities Transfer – For Legend Removal Requests
9th Floor, North Tower, 100 University Avenue
Toronto, ON, Canada M5J 2Y1
The paperwork to remove the restrictive legends requires a medallion signature guarantee. This is a guarantee by the transferring financial institution that the signature is genuine and the financial institution accepts liability for any forgery. Signature guarantees protect shareholders by preventing unauthorized transfers. They also limit the liability of the transfer agent who accepts the certificates. Different institutions have different policies as to what type of identification they require to provide the guarantee and whether they charge a fee for such service (usually nominal if any). Most institutions will not guarantee a signature of someone who has not already been their customer. Some institutions do not provide this service in which case you may need to open an account with a different institution. Financial institutions outside of the United States that have a correspondence relationship with a U.S. bank may be able to offer a medallion signature guarantee to existing customers.
The rules and procedures concerning offshore securities transactions including, but not limited to, sales under Regulation S under the 1933 Act are technical, complex and subject to various restrictions and conditions. The foregoing does not constitute legal advice and if you have any questions or concerns regarding your ability to rely upon Regulation S to sell your shares of the Company, we strongly recommend that you seek independent legal advice before selling any such shares. Furthermore, Regulation S requires that we are a "foreign issuer" within the meaning of applicable securities laws at the time of sale of your shares of the Company. However, we are under no obligation to remain a "foreign issuer" and there are no assurances that we will be a "foreign issuer" at the time you propose to sell your shares of the Company. If we are not a "foreign issuer" at the time of sale, the exemption provided by Regulation S will not be available and the restrictive legend will remain on your share certificate(s).
Trek Mining shares and warrants converted into Equinox Gold shares and warrants on a 1:1 ratio, with no change to the number of securities and no change to the warrant exercise price and date. If your shares and warrants are deposited in a trading account, the conversion will have happened automatically. If your shares and warrants are NOT deposited in a trading account and you want updated Equinox Gold certificates or DRS Advice, then you will need to exchange your share and warrant certificates or DRS Advice with Computershare. There is no requirement to change your certificates or DRS Advice, however, as the securities are only subject to a name change and remain valid.
NewCastle shares and warrants converted into Equinox Gold shares and warrants on a 1:0.873 ratio. If you held 1,000 NewCastle shares before the merger, you held 873 Equinox Gold shares after the merger. The shares issuable upon exercise of warrants also converted at the exchange ratio, so 1000 NewCastle warrants became exercisable for 873 Equinox Gold common shares, and the exercise price was likewise converted so that the old exercise price was divided by the 0.873 ratio to get the new exercise price (warrants with a $0.64 exercise price now have a $0.73 exercise price, etc.), but there was no change to the expiry date.
Anfield shares converted into Equinox Gold shares on a 1:0.407 ratio. If you held 1,000 Anfield shares before the merger, you held 407 Equinox Gold shares after the merger.
Shares and warrants that are held in an online trading account would have converted automatically into Equinox Gold shares and warrants.
If you hold your NewCastle or Anfield shares as physical share certificates or DRS statements, those documents remain valid for a period of up to six years and do not need to be replaced immediately. NewCastle warrants will be exercisable for Equinox shares until their date of expiry and will not need to be exchanged. Letters of Transmittal were mailed out to NewCastle and Anfield shareholders to explain how to exchange your physical certificates or DRS Advice. These are also available by contacting us at email@example.com.
If you hold your Trek Mining shares or warrants as physical certificates or DRS statements, there is no requirement to have them re-issued as Equinox Gold. Even though they say Trek Mining, they remain valid and will be honoured as Equinox Gold shares/warrants when you are ready to deposit them into an account to trade them. If you DO want to have them re-issued as Equinox Gold certificates or DRS statements, you need to contact Computershare at 1-800-564-6253 and they can provide instructions on what forms you need to fill out, where to send your certificates, etc.
If you hold your NewCastle or Anfield shares as physical share certificates or DRS statements, those documents remain valid for a period of up to six years and do not need to be replaced immediately. NewCastle warrants will be exercisable for Equinox shares until their date of expiry and will not need to be exchanged. Letters of Transmittal will be mailed out to NewCastle and Anfield shareholders to explain how to exchange your physical certificates or DRS Advice. These will also be available by contacting us at firstname.lastname@example.org.