Calibre Mining’s top shareholder Van Eck has come out against Equinox Gold’s US$1.8 billion (A$2.83 billion) bid for the Canadian gold miner, throwing a spanner into what would be the biggest M&A deal for the commodity so far this year.
Fellow Canadian goldie Equinox, which has mines in Canada, Mexico and Brasil, lobbed the all-stock bid for Calibre and its US and Nicaraguan operations three weeks ago, aiming to enhance production and consolidate gold assets across the Americas.
Equinox Gold is hoping to mint itself into the +1Moz club, with the potential to churn out 1.2Mozpa once all operations in the proposed merger hit full production rates.
Investment fund Van Eck currently owns 8.69% of Calibre (as of March 17) and is the second-largest investor in Equinox Gold and says the maneuver “dilutes the quality and potential” of Calibre, according to Bloomberg.
“We are not supportive of this transaction. We don’t see any synergies between any of the companies’ operations, ”Van Eck gold portfolio manager Imaru Casanova wrote in an email.
“Both operate in the Americas, but in vastly different locations,” Casanova said.
She said Van Eck expected Calibre's stock to climb as it completed its flagship Valentine gold mine.
“Calibre was on the cusp of a rerate as it advanced Valentine to production.”
The deal is dependent on two-thirds shareholder votes from both companies for the deal to proceed.
Equinox shares were down 0.72% to trade at US$6.94 per share, while Calibre Mining stocks broke even for C$3.12 a share.
