Equinox Gold has agreed to acquire Canadian miner Premier Gold Mines in an all-stock deal worth C$611.7m ($479.9m) in a move to consolidate its position as a major gold producer in the Americas.
Concurrently, Premier Gold Mines’ Nevada assets in the US will be separated and bundled into a new US-focused gold miner called i-80 Gold.
The new company will own the South-Arturo and McCoy-Cove properties. i-80 Gold will also add the Getchell Project in Nevada, which is being acquired by Premier Gold Mines, as per a deal signed in August 2020 with affiliates of Waterton Global Resource Management.
I-80 Gold will be owned 70% by Premier Gold Mines’ existing shareholders, while the remaining 30% stake will be held by the present shareholders of Equinox Gold.
Equinox Gold will retain Premier Gold Mines’ stakes in the Hardrock Project and the Hasaga and Rahill-Bonanza exploration assets in Ontario, Canada, and the producing Mercedes Mine in Mexico.
In the Hardrock Project, Equinox Gold will get a 50% stake following the acquisition. The company will be partnering Orion Mine Finance in the permitted, development-ready, multi-million-ounce project in Canada.
Equinox Gold CEO Christian Milau said: “Combining a 50% interest in the permitted, development-ready Hardrock Project with our strong balance sheet and operating cash flow provides a clear path to production for Hardrock that I believe will unlock substantial value for both Equinox Gold and Premier Gold shareholders.
“We look forward to developing Hardrock with Orion as our partner, integrating the Mercedes Mine into our portfolio of producing gold mines, and being a substantial and supportive shareholder of i-80 Gold.”
As per the terms of the deal, Equinox Gold will issue 0.1967 of its shares for each of the shares of Premier Gold Mines. Upon completion of the deal, Equinox Gold’s existing shareholders will own nearly 84% in the enlarged company, while Premier Gold Mines’ existing shareholders will own a 16% stake.
Premier Gold Mines CEO Ewan Downie said: “This transaction builds on that commitment, bringing increased value and optionality to our shareholders from meaningful ownership in two companies: a diversified intermediate gold producer with a portfolio of high-quality assets, and ownership in an exciting new Nevada-focused gold company.
“Importantly, our shareholders will maintain exposure to the Hardrock Project, which we believe is the most attractive advanced-staged development project in North America, and which will be developed by a proven management team that shares our commitment to creating long-term sustainable value.”
The deal, which is subject to regulatory approvals in the US, Mexico, and Canada along with other conditions, is expected to be completed in Q1 2021.
In 2019, Equinox Gold agreed to acquire Canadian miner Leagold Mining for $578m.
