Canada-based Equinox Gold has agreed to acquire rival Leagold Mining for C$2.70 ($2.05) per common share or combined amount of C$769.3m ($578.38m).
Under the terms of the agreement, Leagold shareholders will get 0.331 of an Equinox share for each share they own and will hold 45% of the combined entity.
Headquartered in Vancouver, Canada, the combined company will continue as Equinox Gold.
The deal includes a concurrent $670m financing package
The transaction includes a concurrent $670m financing package that comprises an at-market $40m equity investment from Equinox Gold chairman Ross Beaty, a new $130m convertible debenture issued to Mubadala Investment and $500m in underwritten commitments from a syndicate of lenders to refinance existing credit facilities.
Equinox Gold chairman Ross Beaty said: “This merger will create one of the world’s largest gold companies operating entirely in the Americas.
“In addition to having strong financial and operating metrics, our large scale will provide improved liquidity, greater asset and country diversification and a lower risk profile for all shareholders.”
A joint announcement outlining the merger stated that the gold production is projected at 700,000 ounces in 2020, increasing to 1 million ounces in 2021 and beyond, based on analyst consensus estimates. The company entity will have six operating mines in the US, Mexico and Brazil.
Leagold chairman Frank Giustra said: “The combination of Leagold and Equinox Gold will deliver on a promise we made to our shareholders when we launched Leagold three years ago: to create a major gold producer in a short time frame in anticipation of a new phase to the gold bull market that started in 2001.
“I will be stepping down as Chairman and Director to focus on my global philanthropic work but will remain an enthusiastic shareholder as I believe that together, Ross Beaty, Neil Woodyer and their management team will continue to grow Equinox Gold and deliver value to our shareholders.”
The deal is expected to be completed in the first quarter of 2020.
In September, Equinox Gold had agreed to acquire the producing Mesquite gold mine in California, US from New Gold for $158m in an all-cash deal.
