Equinox Gold sells massive stake in Solaris Resources

Equinox Gold (TSX: EQX; NYSE-AM: EQX) has sold 11 million common shares in Solaris Resources (TSX: SLS) for aggregate gross proceeds of $70.4 million, cutting its ownership to less than 10% of the Ecuador-focused junior explorer’s issued and common outstanding shares.

Equinox had previously owned 15.545 million common shares and warrants, entitling it to purchase 7.5 million common shares representing about 17.88% of Solaris on a partially diluted basis.

In a statement, Equinox said it “remains a supportive shareholder of Solaris and does not currently plan to make any additional changes to its interest,” adding that under the terms of the transaction, it has “agreed not to sell any of its remaining Solaris securities for 120 days.”

Equinox is developing its 60%-owned Greenstone project in Ontario and in a recent corporate presentation noted that it is on track to start production there with its first gold pour in the first half of 2024.

Orion owns the remaining 40% of Greenstone.

As of October 21, construction at Greenstone was 47% complete, Equinox noted. Construction began in the fourth quarter of 2021.

According to Equinox, Greenstone will be one of the largest gold mines in Canada and estimates it will produce more than 5 million oz. gold over an initial mine life of 14 years. (During the first five years it is projected to churn out more than 400,000 oz. gold annually.)

In addition to the Greenstone project, Equinox has operating mines in the United States (Mesquite, Castle Mountain), Mexico (Los Filos) and Brazil (Aurizona, Fazenda, RDM, and Santa Luz).

Equinox’s shareholders include company builder Ross Beaty, who as of November owned about 7.7% of the company.

Solaris Resources’ flagship asset is its 100%-owned Warintza project in Ecuador.

“We are not overly surprised by the sale given the large amount of capital currently being deployed at Greenstone,” mining analyst Ryan Thompson of BMO Capital Markets commented in a research note to clients.