Equinox Gold (TSX: EQX) became on Monday the latest Canadian gold miner to acquire a smaller rival and consolidate portfolios after announcing the acquisition of Leagold Mining (TSX: LMC) for C$769.3 million (about $578 million).
The offer, which implies a no-premium consideration of C$2.70 per share, will add Leagold’s four mines in Mexico and Brazil to Equinox’s portfolio, consisting of two mines in California, US, and one in Brazil.
As part of the transaction, Leagold shareholders will get 0.331 of an Equinox share for each share they own and will hold 45% of the combined entity.
Deal adds Leagold’s four mines in Mexico and Brazil to Equinox’s two mines in California, US, and one in Brazil.
The Vancouver-based company moved from developer to producer status in July, when it kicked off commercial production at its second gold mine, Aurizona, in northeastern Brazil.
Equinox is also advancing construction at the previously-mined Castle Mountain, located about 320km north of its Mesquite operation, with the target of pouring first gold in the second half of 2020.
Last year, the firm spun-out its
copper assets into a new company, Solaris Copper, and sold its 83% stake in the Koricancha gold mill in Peru
to Inca One, as part of its ongoing plan to become a mid-tier gold producer.
The Equinox-Leagold business combination, expected to close in the first quarter of 2020, is just one of the many mergers and acquisitions that have swept the gold sector this year, with deals worth $30.5 billion so far.
The announcement comes on the same day that Canada’s Endeavour Mining (TSX:EDV) and Egypt-focused miner Centamin (LON:CEY) (TSX:CEE) agreed to assess the merits of a merger that would create a strong mid-tier gold company with a market value of almost $4 billion and annual output of more than 1.2 million ounces