Equinox Gold’s dreams of becoming a significant global +1 million ounce per annum (Mozpa) gold producer could soon be a reality after its takeover of Calibre Mining was approved in a deal worth C$2.6 billion ($A2.87 billion).
The terms of the merger would see Calibre shareholders receive 0.31 Equinox shares for each Calibre share held, equating to existing Equinox shareholders and former Calibre shareholders owning ~65% and ~35% of the newly formed C$7.7 billion ($A8.5 billion) company respectively.
However, the buyout proposal of Calibre is not set at any premium to the share price, leaving the deal open for other parties to submit improved bids for the company.
Should the deal go through without any hiccups, the new Equinox Gold will soon be able to mint itself into the +1Moz club, with the potential to churn out 1.2Mozpa once the new Greenstone and Valentine gold operations run at capacity.
The new company would then have a total of nine producing mines and one under construction.
“Additionally, the combined company will have a large gold endowment of Mineral Reserves and Mineral Resources, and a highly prospective pipeline of development, expansion and exploration projects for low-risk sustainable growth,” Equinox said in a statement.
Last year, Equinox produced a record 621,870oz of gold from seven operating mines in Canada, the US, Mexico, and Brazil.
With gold prices at all-time highs and currently hovering around the US$3,000/oz mark, the deal follows in the footsteps of other recent gold M&A activity.
South Africa’s Gold Fields purchased Osisko Mining and AngloGold Ashanti bought out Centamin to take advantage of the high prices last year.
Shares in the US$3.1 billion market-capped Equinox were down 0.29% to close at $6.80 on the news, while the C$2.5 billion Calibre stocks retreated 3.88% to C$2.97 per share by the end of trade.
