Canada鈥檚 Equinox Gold (TSX, NYSE: EQX) (TSX: PG), which will spin out its Nevada assets in a new US-focused gold miner to be called i-80 Gold Corp.
The all-stock deal, valued at C$612 million ($480m) hands Equinox Gold Premier鈥檚 50% interest in the Hardrock project in Ontario, the Mercedes Mine in Mexico and the Hasaga and Rahill-Bonanza properties in Red Lake, Ontario.
Centerra Gold (TSX: CG) to sell its 50% shareholding in the Hardrock聽project聽to Orion Mine Finance for $225-million plus contingencies of about $75-million.
One of Premier鈥檚 most valuable assets is its 50% stake in the Hardrock gold project in Ontario, expected to produce more than 400,000 ounces of gold over a 14-year mine life
Once built, the mine is expected to produce more than 400,000 ounces of gold over a 14-year mine life.
Premier鈥檚 South-Arturo and McCoy-Cove properties will be held by i-80 Gold, which will also complete Premier鈥檚 previously announced acquisition of the Getchell project, all in Nevada.
Equinox said that it would undertake a C$75 million equity financing fully underwritten by its chairman, Ross Beaty, to help fund the deal.
The proposal will see Premier shareholders receive 0.1967 of an Equinox Gold share and 0.4 of a share of i-80 Gold for each Premier share held. Equinox shares closed at $13.10 on the Toronto Stock Exchange on Tuesday, while Premier shares closed at $2.52.
Premier investors will own 16% of Equinox Gold once the deal is complete, as well as 70% of the shares of i-80 Gold. The spin-off company will be led by Premier鈥檚 current boss, Ewan Downie.
Equinox Gold will own the remaining 30% of i-80 Gold.
鈥淭his transaction is exactly the kind of accretive Americas-focused growth we promised shareholders when we started Equinox Gold at the beginning of 2018,鈥� Beaty said in the statement.
The friendly acquisition is subject to court approval and Premier shareholders鈥� approval at a meeting scheduled for February.
Steady growth
The deal boosts Equinox Gold in the gold market, building on the company鈥檚 acquisition of Leagold Mining Corporation. The parties completed their merger earlier this year, creating one of the world鈥檚 top gold producing companies operating entirely in the Americas.
The Vancouver-based company moved from developer to producer status in July, when it kicked off commercial production聽at its second gold mine, Aurizona,聽in northeastern Brazil.
Equinox is also advancing construction at the previously-mined Castle Mountain, located about 320km north of its Mesquite operation, which reached commercial production in November.
Gold producers have benefitted from historic-high metal prices as unprecedented stimulus measures around the world were unleashed on financial markets.
Endeavour Mining (TSX: EDV) in November took over Toronto-based Teranga Gold in an all-stock transaction worth about C$2.44 billion.
In May, Canada鈥檚 SSR Mining (TSX: SSRM) bought Denver-based miner Alacer Gold for $2.4-billion.