Canada’s Yamana Gold (TSE:YRI) (NYSE:AUY) announced on Monday it would sell shares and warrants in smaller producer Equinox Gold for Cdn$201 million (about $144m).
The Toronto-based gold miner said it planned to sell 12 million
units, at Cdn$10 each, with the help of Stifel GMP and Cormark Securities.
Each unit consists of one common share of Equinox Gold
(NYSEMKT:EQX) owned by Yamana and one-half of a purchase warrant of Yamana.
Stifel and Cormark have committed to purchase from Yamana
any unsold units for C$10 each on closing, subject to customary conditions for
“bought deal” financings.
Prior to the sale, Yamana held 19.2 million Equinox shares,
or an 8.9% stake, and warrants to acquire 8.3 million Equinox shares, or 3.8%
of outstanding shares.
The announcement comes a month after the mid-tier gold and
silver miner revealed that measures to stop spread of the novel
coronavirus were having a negative impact on production.
The government of Argentina ordered in March to shut down all non-essential mining activities, a blow to Yamana as it had started to ramp down operations at the highly profitable Cerro Moro mine.
A few days later, the country declared mining an essential business and the company was able to restart the mine, located in the Santa Cruz province. .
Yamana has also been hit by the Canadian province of Quebec’s orders to shut down another lucrative operation, the Canadian Malartic mine, which it owns as part of a 50/50 joint venture (JV) with Agnico Eagle Mines.
The open-pit mine, one of Canada’s largest, is expected to remain
closed until May 4.