Canada’s Equinox Gold (TSX: EQX)
and Leagold Mining (TSX: LMC) said on Wednesday that shareholders in both
companies have
approved their merger, creating an America-focused gold miner with a market
capitalization of about $1.75 billion.
The deal, announced
in December, adds 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 C$769.3 million-transaction
(about $578m), Leagold shareholders will receive 0.331 of an Equinox share for
each share they own and will hold 45% of the combined entity, which will keep
the Equinox name.
The new gold miner will be led by
mining veteran Ross Beaty, current chairman of Equinox and Pan American Silver
(TSX: PAAS), who believes the merged company will have better liquidity and risk
diversification.
“This merger will create one of the
world’s largest gold companies operating entirely in the Americas,” Beaty said
in December. “Our large scale will provide improved liquidity, greater
asset and country diversification and a lower risk profile for all
shareholders. This is the kind of gold company investors want today.”
Thanks to the business combination,
Equinox will be able it to hit one million ounces of gold production by late
2021 — two years ahead of schedule.
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.
The announcement comes a day after Kirkland
Lake Gold’s C$4.4 billion ($3.35 billion) takeover bid for rival Detour Gold
Corp won
shareholders’ support at both companies.