i-80 Gold details $14 million subscription by Equinox
i-80 Gold Corp. [IAU-TSX, IAUCF-OTC] on Thursday announced a $14 million top-up subscription by Equinox Gold Corp. [EQX-TSXV, EQXGF-OTC].
i-80 Gold is a newly created U.S.-focused gold production and development company that was spun out by Premier Gold Mines after Premier was acquired by Equinox Gold in an all-stock deal worth $612 million.
i80 Gold Corp. was set up to hold the South-Arturo and McCoy Cove properties and complete Premier’s previously announced acquisition of the Getchell Project. All are located in Nevada.
Under the deal, Equinox Gold retained 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 was 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.
Hardrock is expected to produce 358,000 ounces of gold annually over a 14-year lifespan, including an average of 414,000 ounces annually in the first five years.
On Thursday, i-80 Gold said it can confirm that Equinox Gold has exercised its right under a support agreement dated April, 2020, to defend its pro rata ownership of i-80 shares on a partially diluted basis following the recent issuance of shares by the company in connection with the completion of the acquisition of all of the outstanding membership interests in Osgood Mining LLC, the 100% owner of the Getchell mining project in Nevada from Waterton Gold Resource Management Inc.
In connection with the agreement, Equinox subscribed for 5.5 million new common shares of i-80 at $2.60 share, for gross proceeds $14.24 million.
Equinox now holds directly or indirectly 56.04 million common shares of i-80, representing 29.4% of the basic issued and outstanding common shares of the company on a non-diluted basis. It also holds warrants that when exercised would increase its stake in i-80 to 30.3%.
On Thursday, i-80 Gold shares were up 0.38% or $0.01 to $2.61 on volume of 100,920. The shares are currently trading in a 52-week range of $3.05 and $2.26.
i-80 has said it plans to achieve mid-tier gold producer status. The company said it is beginning to plan for future production growth through the potential addition of phases one and three projects at its South Arturo mine, and by advancing the Getchell project through economic studies and then on to development. It is also focused on advanced exploration at the 100%-owned McCoy-Cove property.