Equinox Gold secures full ownership of Greenstone mine in $995m deal with Orion
Equinox Gold Corp. (TSX: EQX, NYSE American: EQX), a Canadian mining company, announced a significant move in the mining sector with a binding share purchase agreement to acquire Orion Mine Finance Management LP’s 40% stake in Greenstone Gold Mine GP Inc. This acquisition grants Equinox Gold full ownership of the Greenstone Mine in Ontario, Canada, with a transaction value of $995 million.
The acquisition terms include a payment of 42.0 million common shares of Equinox Gold valued at $250 million, $705 million in cash payable at closing, and an additional $40 million in cash due by December 31, 2024. This strategic move consolidates 100% ownership of the Greenstone Mine under Equinox Gold, enhancing its production capabilities and asset base significantly.
To finance this substantial acquisition, Equinox Gold has arranged a robust funding structure. The company secured a $500 million three-year term loan and has also undertaken a bought deal equity financing of common shares raising approximately $260 million. A syndicate of banks including The Bank of Nova Scotia, Bank of Montreal, ING Capital LLC, and National Bank of Canada have underwritten commitments for the term loan. The equity financing is led by BMO Capital Markets, National Bank Financial Inc., and Scotiabank, with the shares priced at $5.30 each.
The acquisition of Greenstone is expected to significantly enhance Equinox Gold’s production with an addition of approximately 160,000 low-cost ounces of gold annually. This is projected to substantially increase near-term EBITDA and cash flow per share. The fully consolidated Greenstone Mine is set to become Equinox Gold’s largest mine, with an expected average production of 400,000 ounces of gold per year over the first five years. Moreover, this consolidation is poised to deliver substantial growth and exploration potential across a 100-km trend west of Greenstone.
Ross Beaty, Chairman of Equinox Gold, remarked on the acquisition: “Consolidating 100% of Greenstone into Equinox Gold delivers our shareholders full exposure to a mine of outstanding scale and quality, in one of the best mining jurisdictions in the world, while meaningfully growing our expected production, cash flow, and reserves.”
Greg Smith, President and CEO of Equinox Gold, added: “Opportunities to own gold mines like Greenstone are incredibly rare in our industry, and the Greenstone Mine will now be the foundation for long-term value creation in our company.”
This transaction marks a significant milestone in Equinox Gold’s strategy to enhance its footprint in the gold mining industry. By securing full ownership of Greenstone, Equinox Gold not only expands its production capacity but also solidifies its presence in a top mining jurisdiction. The move is aligned with the company’s long-term objectives to boost production efficiency, leverage scale, and explore new growth avenues within its consolidated operations.
The full acquisition of Greenstone Mine by Equinox Gold represents a strategic maneuver that positions the company for robust growth and operational excellence. This deal not only strengthens Equinox Gold’s asset portfolio but also underscores its commitment to maximizing shareholder value through strategic investments and efficient resource management.