Equinox to acquire Premier Gold in friendly deal
Equinox Gold Corp. [EQX-TSXV; EQXGF-OTC] said Wednesday December 16 it will cement its status as the leading America’s focused gold producer by acquiring the Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] in a friendly all-stock deal worth $612 million.
Concurrently, Premier will spin-out to its shareholders a newly created U.S.-focused gold production and development company to be called i80 Gold Corp. that will own the South Arturo and McCoy Cove properties and will complete Premier’s previously announced acquisition of the Getchell Project. All are located in Nevada.
Equinox also said it will undertake a $75 million equity financing that will be fully underwritten by the company’s Chairman Ross Beaty.
Premier Gold shares jumped 16.27% or 41 cents to $2.93 on volume of almost 6.6 million. The shares trade in a 52-week range of $3.10 and 85 cents.
Premier is a gold producer as well as an exploration and development company with a focus on properties in Canada, the United States and Mexico. It aimed to be a low-cost, mid-tier gold producer via its two Mexican gold mines, South Arturo and Mercedes, and through future mine development opportunities at Hardrock in Ontario and McCoy-Cove in Nevada.
“This transaction creates value for both Equinox Gold and Premier Gold shareholders, and further solidifies Equinox Gold’s position as the premier America’s focused gold producer,” Beaty said in a press release.
Under the transaction, Premier shareholders will receive 0.1967 of an Equinox Gold share and 0.4 of a share of i-80 Gold for each Premier share held.
Equinox Gold will retain Premier’s 50% interest in the Hardrock gold project in Ontario, the Mercedes Mine in Mexico and the Hasaga and Rahill-Bonanza properties in Red Lake, Ontario.
The transaction is expected to provide a clear path to production for the Hardrock project which contains 5.54 million ounces of proven and probable gold reserves grading 1.27 g/t and will be developed in a joint venture with Orion Mine Finance.
On December 15, 2020, it was announced that Orion had agreed to buy Centerra Gold Inc.‘s [CG-TSX] 50% interest in the Hardrock mine project for US$225 million in cash plus contingent payment obligations of US$75 million.
On Wednesday, Equinox shares fell 3.5% or 46 cents to $12.64 on volume of just over 1.0 million. The shares and now trade in a 52-week range of $17.99 and $6.60.