Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) (“Equinox Gold” or the “Company”) has agreed to sell its 100% interest in the Aurizona Mine, RDM Mine and Bahia Complex in Brazil (the “Brazil Operations”) to a subsidiary of the CMOC Group for an aggregate consideration of $1.015 billion (the “Transaction”). Under the transaction, Equinox Gold will receive upfront cash of $900 million due at closing, subject to customary adjustments, and a production-related contingent cash payment of up to $115 million one year after the transaction. Closing is expected in the first quarter of 2026, subject to regulatory approvals and other customary closing conditions, and is not subject to any financing conditions. All financial figures are in US dollars unless otherwise stated.
Darren Hall, Chief Executive Officer of Equinox Gold, said: “The sale of our Brazil operations is a critical step to position Equinox Gold as a North America-focused gold producer, supported by robust cash flow and a tier-one growth profile. The proceeds will transform our balance sheet and immediately strengthen our financial position by fully repaying our $500 million term loan and $300 million Sprott loan, and reducing our revolving credit facility. This will significantly reduce interest expense and improve cash flow per share. The company will have greater flexibility to sustain organic growth self-finance and consider capital return initiatives within a disciplined capital allocation framework.
“Monetizing our operations in Brazil simplifies the portfolio and allows the company to deploy capital for higher-return, lower-risk organic growth opportunities in Canada and the United States. By focusing on our long-term assets, including Greenstone in Ontario, Valentine in Newfoundland and Labrador, and Castle Mountain in California, we are positioning the company to deliver stronger margins and sustainable returns.”
“With Valentine’s growth, continued performance improvements at Greenstone and steady contributions from Mesquite and Nicaragua, Equinox Gold is positioned to increase long-term value per share for our shareholders.”
Pro Forma Production and Asset Profile
Upon completion of the transaction, Equinox Gold’s production platform will consist of the Valentine and Greenstone mines in Canada, the Mesquite mine in California, and the El Limón and Libertad mines in Nicaragua. As Valentine and Greenstone reach nameplate capacity, and assuming stable performance across the portfolio, the company expects annual production of between 700,000 and 800,000 ounces of gold by 2026. Equinox Gold is also positioned for near-term organic growth thanks to the Valentine expansion, Castle Mountain Phase 2 and a redefined development plan at Los Filos, Mexico. Formal production and cost guidance for 2026 will be provided in early 2026.
Strategic rationale
- The power of balance: Significant immediate debt forgiveness and significantly lower interest charges.
Portfolio focus: Concentration on long-lived and lower-cost assets in tier-one jurisdictions.
Growth capacity: Ability to finance expansions and explorations from cash flow yourself.
Shareholder alignment: Improved ability to consider disciplined capital return initiatives.
Following the completion of the merger with Caliber Mining, the company conducted an extensive review of its expanded portfolio and received numerous incoming inquiries. After evaluating several alternatives and consulting with multiple potential buyers, Equinox Gold’s Board of Directors concluded that the transaction maximizes value for Equinox Gold shareholders by providing enhanced flexibility to self-finance the company’s near-term North American growth strategy.
The contingent cash consideration of up to $115 million is payable upon the one-year anniversary of closing if certain production thresholds are met, as set forth below:
12.5% of sales for production between 200,000 and 280,000 ounces, or
$115 million if production equals or exceeds 280,000 ounces.
The transaction will be effective through the sale of the issued and outstanding shares of certain non-Brazilian subsidiaries of Equinox Gold that indirectly own the Brazilian operations.
Advisors and advisors
BMO Capital Markets is acting as financial advisor to Equinox Gold and has provided a fairness opinion in connection with the Transaction. Blake, Cassels & Graydon LLP and Veirano Advogados are acting as legal advisors to Equinox Gold in Canada and Brazil, respectively. Canaccord Genuity Corp. acts as financial advisor to CMOC Group. McCarthy Tétrault LLP and Mattos Filho are acting as legal advisors to CMOC Group in Canada and Brazil, respectively.
ABOUT Equinox Gold
Equinox Gold (TSX: EQX) (NYSE American: EQX) is a Canadian mining company positioned for growth with a strong foundation of high-quality, long-lived gold operations in Canada and across the Americas, and a pipeline of development and expansion projects. Founded and chaired by renowned mining entrepreneur Ross Beaty and led by an experienced leadership team with broad expertise, the company focuses on disciplined execution, operational excellence and long-term value creation. Equinox Gold offers investors meaningful exposure to gold with a diversified portfolio and a clear path to growth. For more information, visit www.equinoxgold.com or contact ir@equinoxgold.com.
Cautionary Statements and Forward-Looking Statements
This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws and may contain forward-looking financial information or financial forecasts (collectively, “Forward-Looking Information”). Actual results of operations and resulting financial results may differ materially from those indicated in any forward-looking information. Forward-looking information in this press release includes: the Company’s strategic vision and expectations regarding exploration potential, production capabilities, growth potential, expansion projects and future financial or operating performance, including shareholder returns; the fulfillment of the conditions precedent to the Transaction; the expected time of closing of the Transaction if at all; timing, receipt and expected effects of regulatory approvals relating to the Transaction; realization of the conditional cash compensation; expectations for Greenstone’s and Valentine’s operations, including achievement of design capacity, expected production and cost guidance; potential future mining opportunities around Valentine’s Day; receipt of required approvals and permits and effectiveness of the FAST-41 designation for Castle Mountain Phase 2; and the company’s ability to improve cash flow and reduce debt. Forward-looking information is generally identified by words such as “believe,” “will,” “achieve,” “grow,” “plan,” “expect,” “estimate,” “anticipate,” “target” and similar terms, including variations such as “may,” “could” or “should,” or the negative connotations of such terms. Although the Company believes these expectations are reasonable, they are not guarantees and undue reliance should not be placed on them. Forward-looking information is based on the Company’s current expectations and assumptions, including: achieving exploration, production, cost and development objectives; completion and performance on Valentine’s Day; realizing design capacity at Greenstone and Valentine’s activities; timely receipt of Castle Mountain permits and completion of Castle Mountain Phase 2; stable gold prices and input costs; availability of financing, accuracy of estimates of mineral reserves and mineral resources; successful long-term agreements with the communities of Los Filos and management of suspended activities; compliance with mine plans and schedules; expected ore grades and recoveries; absence of labor disruptions or unplanned delays; productive relationships with employees, unions and communities; maintenance and timely receipt of permits and regulatory approvals; compliance with environmental and safety regulations; and constructive engagement with Indigenous and community partners. Although the Company believes these assumptions are reasonable, they may prove incorrect. Forward-looking information involves numerous risks, uncertainties and other factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking information. Such factors include failure to satisfy or waive the closing conditions for the Transaction; failure to obtain required regulatory approvals to effect the Transaction; changes in laws, regulations and government practices; and other risks and uncertainties described in the section “Risk Factors” in the Company’s MD&A dated March 13, 2025 for the year ended December 31, 2024, and in the section entitled “Risks Related to the Company” in Equinox Gold’s most recently filed Annual Information Form available on SEDAR+ at www.sedarplus.ca and on EDGAR op www.sec.gov/edgar and in the section entitled “Risk Factors” in Caliber Mining’s MD&A dated February 19, 2025 for the year ended December 31, 2024 and the section entitled “Risk Factors” in Caliber Mining’s most recently filed annual information form available on SEDAR+ at www.sedarplus.ca. Forward-looking information reflects management’s current expectations of future events and is subject to change. Except as required by applicable law, the Company assumes no obligation to update or publicly release the results of any changes to any forward-looking information incorporated or incorporated by reference to reflect actual results, future events or developments, changes in assumptions or other factors affecting forward-looking information. If the Company updates any forward-looking information, no inference should be given that the Company will make additional updates to this or other forward-looking information. All forward-looking information contained in this press release is expressly qualified by this cautionary statement.
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