Equinox Gold (TSX: EQX)
Announced that it has entered into a binding share purchase agreement with certain funds managed by Orion Mine Finance Management LP to acquire Orion’s 40% interest in Greenstone Gold Mine GP Inc., giving Equinox Gold 100% ownership of the Greenstone Mine in Ontario, Canada.
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Comment
This follows the confirmation yesterday that Gold Road Resources have withdrawn from the negotiations to buy 40% of Greenstone Gold Mines of Canada.
It clarifies the ambiguous statement by Gold Road yesterday where they stated that they had withdrawn from the current negotiations, implying they may re-enter in the future.
At least this clears that up.
I hope Gold Road stay in their own jurisdiction in the future, as I have stated, I don’t like to see ASX companies working in Canada, nor the opposite way around.
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Equinox Gold Consolidates Ownership of the Greenstone Gold Mine, Arranges Term Loan and Bought Deal Equity Financing
All dollar amounts shown in United States dollars, unless otherwise indicated.
Equinox Gold (TSX: EQX, NYSE American: EQX) is pleased to announce that it has entered into a binding share purchase agreement (the “SPA”) with certain funds managed by Orion Mine Finance Management LP (“Orion”) to acquire Orion’s 40% interest in Greenstone Gold Mine GP Inc., giving Equinox Gold 100% ownership of the Greenstone Mine (“Greenstone”) in Ontario, Canada (the “Transaction”).
Under the terms of the SPA, Equinox Gold will pay $995 million to acquire Orion’s 40% interest in Greenstone, payable as follows:
- 42.0 million common shares of Equinox Gold valued at $250 million;
- $705 million in cash payable on closing; and
- $40 million in cash payable by December 31, 2024.
Equinox Gold will fund the cash consideration with net proceeds from both a new $500 million three-year term loan and a bought deal equity financing of common shares of Equinox Gold for approximately $260 million.
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Anticipated Benefits to Equinox Gold Shareholders
- Rare opportunity to consolidate a world-class gold mine– Consolidates 100% ownership of Greenstone, one of the largest and highest-grade open pit gold mines in Canada, a top mining jurisdiction, at the beginning of its expected 14+ year mine life and into a historically strong gold price environment.
- Increases production and is significantly accretive to near-term EBITDA and cash flow– Increases the Company’s annual gold production by an expected 160,000 low-cost ounces per year with significant near-term EBITDA and cash flow per share accretion. Consolidated Greenstone will be Equinox Gold’s largest mine, producing an expected average of 400,000 ounces of gold per year over the first five years, and is expected to be one of the world’s lowest-cost open-pit gold mines, with cash costs in the industry’s lower quartile.
- Delivers substantial growth and exploration potential – Consolidates the Greenstone underground deposit, a key expansion opportunity at Greenstone, as well as multiple gold deposits in a highly prospective land package over a 100-km trend to the west of Greenstone, enhancing the Company’s long-term growth profile with both expansion and exploration potential.
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Ross Beaty, Chairman of Equinox Gold, stated:
“When we acquired our 60% interest in Greenstone in 2021, our goal was to ultimately own the whole mine.
“Consolidating 100% of Greenstone into Equinox Gold delivers our shareholders full exposure to a mine of outstanding scale and quality, in one of the best mining jurisdictions in the world, while meaningfully growing our expected production, cash flow and reserves.”
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To read the full news release, please clink HERE
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The live gold price can be found HERE
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If you need clarification of any information contained in this note, or have any questions, I will be delighted to assist – Please email andrew@city-investors-circle.com
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Disclosure
At the time of writing the author holds no shares in Equinox Gold
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