Equinox Gold Corp.

Decision

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – National Instrument 51-102 Continuous Disclosure Obligations – Information Circular – An issuer wants relief from the requirement to include prospectus-level disclosure in an information circular to be circulated in connection with an arrangement, reorganization, acquisition or amalgamation – the issuer is required to include historical financial statements for a business it is acquiring; it would be extremely difficult, if not impossible, to prepare certain of the historical financial statements because information to support an audit cannot be obtained and personnel with the historical information are not available; alternate financial information that is available will be provided about the business; information will be provided about the parties to the transaction sufficient for shareholders to assess the transaction as a whole.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, ss. 13.1.
Form 51-102F5 Information Circular, Item 14.2.

June 21, 2018

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA AND ONTARIO
(the Jurisdictions)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
EQUINOX GOLD CORP.
(the Filer)

DECISION

Background

1              The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) that the Filer is exempt from the requirement in item 14.2 of Form 51-102F5 Information Circular to include the La Verde Statements (as defined below) in an information circular (Circular) to be sent to holders of common shares of the Filer (Equinox Shareholders) in connection with an annual general and special meeting of the Shareholders (the Equinox Meeting) expected to be held for the purposes of considering a plan of arrangement (the Arrangement) under the Business Corporations Act (British Columbia) (the BCBCA) (the Requested Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a)           the British Columbia Securities Commission is the principal regulator for this Application;

(b)           the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; and

(c)           the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

2              Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

3              This decision is based on the following facts represented by the Filer:

Filer

1.             the Filer is a corporation existing under the BCBCA and its head office is located in Vancouver, British Columbia;

2.             the Filer is a reporting issuer or the equivalent under the securities legislation of each of the provinces of Canada, other than Québec;

3.             the Filer is not in default of securities legislation in any jurisdiction of Canada;

4.             the Filer's financial year end is December 31;

5.             the common shares of the Filer are listed on the TSX Venture Exchange (TSXV);

6.             the Filer is presently engaged in mineral exploration and development, with its material properties located in the United States and Brazil; the Filer also holds a 60% interest in the La Verde copper-silver-gold deposit in Mexico (the La Verde Project) and owns a ranch property in Guatemala (the Guatemala Property and, together with the La Verde Project, the Spinoff Assets);

7.             the Spinoff Assets are currently in the exploration stage and have not generated any operating revenue within either of the fiscal years ended December 31, 2017 or 2016 or for the three months ended March 31, 2018; there have been no exploration expenditures on the Spinoff Assets since September 2013, other than expenditures related to care and maintenance; as a result, the Filer submits that the Spinoff Assets should be considered as "dormant";

8.             the La Verde Project does not have proven or probable reserves; a resource estimate for the La Verde Project was reported in the technical report titled “La Verde Copper Project Michoacán State, Mexico, Technical Report” prepared by AMC Mining Consultants (Canada) Ltd. with an effective date of September 30, 2012, which is available on the SEDAR profile of Catalyst Copper Corp. (Catalyst), a wholly-owned subsidiary of the Filer;

Lowell

9.             Lowell Copper Holdings Inc. (Lowell) is a corporation existing under the BCBCA and its head office is located in Vancouver, British Columbia;

10.          Lowell’s financial year end is December 31;

11.          the Filer directly holds all of the outstanding common shares of Lowell (Lowell Shares);

12.          Lowell is not a reporting issuer in any jurisdiction and is not in default of securities legislation in any jurisdiction of Canada;

13.          the Lowell Shares are not traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;

14.          Lowell owns a 100% interest in the Warintza copper-molybdenum exploration property in Ecuador (the Warintza Project), a 100% interest in the Ricardo copper-molybdenum exploration project in Chile (the Ricardo Project), both of which are currently in the exploration stage and have not generated any operating revenue within either of the fiscal years ended December 31, 2017 or 2016 or for the three months ended March 31, 2018; there have been no exploration expenditures on the Warintza Project since June 2006 or the Ricardo Project since June 2015, other than expenditures related to care and maintenance;

Spinco

15.          Solaris Copper Inc. (Spinco) is a corporation existing under the BCBCA and its head office is located in Vancouver, British Columbia;

16.          the Filer directly holds all of the outstanding common shares of Spinco (Spinco Shares);

17.          Spinco is not a reporting issuer in any jurisdiction and is not in default of securities legislation in any jurisdiction of Canada;

Arrangement

18.          the Filer entered into an arrangement agreement pursuant to which:

(a)           through a series of transactions with affiliates, the Spinoff Assets will be transferred to Lowell;

(b)           the Filer will transfer all of the issued and outstanding shares of Lowell to Spinco;

(c)           holders of common shares of the Filer will receive one new common share of the Filer and one-tenth of one Spinco Share in exchange for each common share of the Filer held immediately prior to the closing of the Arrangement;

19.          following the completion of the Arrangement:

(a)           the La Verde Project and the Warintza Project will become the principal assets of Spinco, which will also hold the Ricardo Project and the Guatemala Property;

(b)           Spinco will become a reporting issuer in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, Prince Edward Island, Newfoundland and New Brunswick;

(c)           the Spinco Shares will not be listed and posted for trading on any exchange;

20.          pursuant to the Filer’s constating documents, the BCBCA and applicable securities laws, the Equinox Shareholders will be required to approve the Arrangement at the Equinox Meeting;

21.          the Arrangement must be approved by a special resolution passed by (i) at least two-thirds of the votes cast by Shareholders present in person or represented by proxy at the Equinox Meeting, and (ii) if required, a majority of the votes cast by the Equinox Shareholders other than those required to be excluded pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions;

22.          the Arrangement will be a "restructuring transaction" under NI 51-102 in respect of the Filer and therefore the Circular is subject to the requirements of item 14.2 of Form 51-102F5 Information Circular (Form 51-102F5);

23.          the Filer is relying on the prospectus exemption in section 2.11(b)(i) of National Instrument 45-106 Prospectus Exemptions for the distribution of Spinco Shares under the Arrangement;

Disclosure Requirements

24.          item 14.2 of Form 51-102F5 requires, among other items, that the Circular contain the disclosure (including financial statements) prescribed under securities legislation and described in the form of prospectus that Spinco would be eligible to use immediately prior to the filing and sending of the Circular to Equinox Shareholders for a distribution of Spinco Shares; therefore, the Circular must contain the disclosure in respect of Spinco prescribed by National Instrument 41-101 General Prospectus Requirements (NI 41-101) and Form 41-101F1 Information Required in a Prospectus (Form 41-101F1);

25.          the La Verde Project has been the subject of two acquisitions; Newcastle Gold Ltd. (Newcastle) acquired the project by acquiring Catalyst on May 26, 2016, and the Filer acquired the project by acquiring Newcastle on December 22, 2017;

26.          item 32 of Form 41-101F1 requires a prospectus of a venture issuer to include financial statements of a business acquired by an issuer within two years before the date of the prospectus if a reasonable investor reading the prospectus would regard the primary business of the issuer to be the business acquired;

27.          a reasonable investor would regard the La Verde Project to be part of the primary business of Spinco upon completion of the Arrangement;

28.          the Filer is required under Form 41-101F1 to include in the Circular the following financial statements:

(a)           audited combined annual financial statements for Spinco, including Lowell and the Spinoff Assets, for each of the years ended December 31, 2017 and 2016; such statements will include Lowell’s results of operations for the years presented, as well as the results of operations of the Spinoff Assets for the period from December 22, 2017 to December 31, 2017, as this is the period that Lowell and the Spinoff Assets were under the common control of the Filer;

(b)           interim combined financial statements for Spinco, including Lowell and the Spinoff Assets, for the interim periods ended March 31, 2018 and 2017; such statements will include Lowell’s results of operations for the periods presented and the results of operations for the Spinoff Assets for the three months ended March 31, 2018 as this is the period that Lowell and the Spinoff Assets were under the common control of the Filer;

(together, the Combined Spinco Statements)

(c)           audited financial statements for Catalyst, whose primary asset is the La Verde Project, for:

(i)            the period from January 1, 2017 to December 21, 2017, being the date immediately prior to the acquisition by the Filer, and

(ii)           the year ended December 31, 2016,

(the La Verde Statements);

29.          the combination of the following would render the audit of the La Verde Statements for the year ended December 31, 2016 extremely difficult if not impossible to conduct:

(a)           the accounting records for the period prior to May 26, 2016 are not complete; although the Filer has basic source documents, it would be extremely difficult if not impossible to conduct an audit related to the period prior to May 26, 2016 due to the inability to:

(i)            ensure proper cut-off procedures,

(ii)           ensure the accurate allocation of shared costs by the parent company,

(iii)           verify the completeness of transactions with the parent company holding the La Verde project including any return of capital, cash and non-cash contributions, and

(iv)          verify the completeness non-controlling interest contributions; and

(b)           none of the management and staff who were employed by the company holding the La Verde Project during the period prior to May 26, 2016 are currently employed by or available to the Filer; no one is available to answer audit questions or help reconstruct supporting information related to the financial period;

Alternative Disclosure

30.          in lieu of the La Verde Statements, the Filer will include in the Circular audited carve-out financial statements of Catalyst for the following periods:

(a)           January 1, 2017 to December 21, 2017, being the date immediately prior to the acquisition by the Filer, and

(b)           May 26, 2016 to December 31, 2016,

(together, the Alternative Statements and, collectively with the Combined Spinco Statements, the Financial Statement Disclosure);

31.          the Circular will also include the following:

(a)           the technical information prescribed by item 5.4 of the Form 41-101F1 in respect of the La Verde Project, which information will be derived from a NI 43-101 compliant technical report that is currently being prepared for the Filer and Spinco by AMC Mining Consultants (Canada) Ltd. and that will be filed on Spinco’s SEDAR profile;

(b)           the technical information prescribed by item 5.4 of the Form 41-101F1 in respect of the Warintza Project, which information will be derived from a NI 43-101 compliant technical report that is currently being prepared for the Filer and Spinco by Mine Development Associates and that will be filed on Spinco’s SEDAR profile;

(c)           disclosure of the fact there has been no production or exploration expenditures (other than expenditures related to care and maintenance) at the La Verde Project, the Warintza Project, the Ricardo Project and the Guatemala Property for the relevant financial periods covered in the Alternative Financial Statements;

(d)           disclosure regarding Lowell, Spinco and the Spin-Off Assets that otherwise complies with Form 41-101F1;

(e)           a summary of how the working capital amount to be transferred to Spinco will be calculated and the intentions of Spinco as to the uses of its working capital for 12 months,

(collectively, the Supplemental Disclosure); and

32.          the Financial Statement Disclosure and the Supplemental Disclosure will together provide Equinox Shareholders with sufficient information to enable them to make an informed investment decision regarding the Arrangement.

Decision

4              Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted, provided that the Circular:

(a)           is filed and mailed to Equinox Shareholders by August 14, 2018;

(b)           includes the Financial Statement Disclosure and the Supplemental Disclosure; and

(c)           otherwise complies with the Legislation.

“Michael L. Moretto”
Acting Director, Corporate Finance
British Columbia Securities Commission