Equinox Buys Leagold
Equinox buys Leagold.
Equinox Gold buys Leagold Mining for $578 million.
The deal unites two Vancouver-based miners, both backed by industry heavyweights and both focused on the Americas, with six mines spread across Brazil, Mexico, and the US. Equinox has a multi-million-ounce gold reserve base and growth potential from three wholly-owned mines. It's producing gold from its Mesquite mine in California and its Aurizona mine in Brazil and is building its Castle Mountain mine in California with the target of pouring gold in Q3 2020. Leagold operates four gold mines in Mexico and Brazil, along with a near-term mine restart project in Brazil and an expansion project at the Los Filos mine complex in Mexico. The new company will keep the Equinox name and have a market capitalization of $1.75 billion.
Ross Beaty of Equinox said: ‘This merger will create one of the world's largest gold companies operating entirely in the Americas. Besides having strong financial and operating metrics, our large scale will provide improved liquidity, greater asset and country diversification, and a lower risk profile for all shareholders. This is the kind of gold company investors want today and I'm pleased we are combining forces to achieve it. There’s no magic to one million ounces, it’s a number. But it represents scale and scale matters. It’s a horribly overused term, but what you want to always end up with is 1 and 1 equals 3. We think we’re doing that by having a larger company that will get a better multiple that will attract new investors, with lower overhead - that will create value. We have real synergies, exclusively Americas assets and outstanding management teams on both sides with long, successful track records. And it’s a true merger of equals, avoiding the kind of unconscionable premiums that investors hate, and building true scale and value.’
Frank Giustra of Leagold said: ‘The combination of Leagold and Equinox Gold will deliver on a promise we made to our shareholders when we launched Leagold three years ago: to create a major gold producer in a short time frame in anticipation of a new phase to the gold bull market that started in 2001. I will be stepping down as Chairman and Director to focus on my global philanthropic work but will remain an enthusiastic shareholder as I believe that together, Ross Beaty, Neil Woodyer, and their management team will continue to grow Equinox Gold and deliver value to our shareholders.’
Neil Woodyer of Leagold said: ‘This transaction is a rare opportunity to combine companies with common business plans and growth strategies, complementary assets, and management teams that can be integrated effectively, with Equinox Gold as the go-forward entity to maintain the TSX and NYSE American listings. The transaction has received exceptionally strong support from shareholders, from Mubadala and from a syndicate of leading commercial lenders which collectively will enable us to fully fund the new company's growth plans.’
Christian Milau of Equinox said: ‘Combining these companies creates a leading growth-focused gold company and accelerates our shared vision of becoming a million-ounce gold producer. As both a shareholder and executive, I believe the scale and diversification of the joint company will create significant value for all shareholders, demonstrating the value of industry consolidation that investors have been asking for. Having worked with Neil before to build a mid-tier gold producer, I am pleased to be part of the combined management team for the long term.’
BMO Capital Markets served as financial advisor to Equinox Gold. Blake, Cassels & Graydon served as legal advisor.
Scotia Capital served as financial advisor to Leagold. Fasken served as legal advisor.
Equinox Gold buys Leagold Mining for $578 million.
The deal unites two Vancouver-based miners, both backed by industry heavyweights and both focused on the Americas, with six mines spread across Brazil, Mexico, and the US. Equinox has a multi-million-ounce gold reserve base and growth potential from three wholly-owned mines. It's producing gold from its Mesquite mine in California and its Aurizona mine in Brazil and is building its Castle Mountain mine in California with the target of pouring gold in Q3 2020. Leagold operates four gold mines in Mexico and Brazil, along with a near-term mine restart project in Brazil and an expansion project at the Los Filos mine complex in Mexico. The new company will keep the Equinox name and have a market capitalization of $1.75 billion.
Ross Beaty of Equinox said: ‘This merger will create one of the world's largest gold companies operating entirely in the Americas. Besides having strong financial and operating metrics, our large scale will provide improved liquidity, greater asset and country diversification, and a lower risk profile for all shareholders. This is the kind of gold company investors want today and I'm pleased we are combining forces to achieve it. There’s no magic to one million ounces, it’s a number. But it represents scale and scale matters. It’s a horribly overused term, but what you want to always end up with is 1 and 1 equals 3. We think we’re doing that by having a larger company that will get a better multiple that will attract new investors, with lower overhead - that will create value. We have real synergies, exclusively Americas assets and outstanding management teams on both sides with long, successful track records. And it’s a true merger of equals, avoiding the kind of unconscionable premiums that investors hate, and building true scale and value.’
Frank Giustra of Leagold said: ‘The combination of Leagold and Equinox Gold will deliver on a promise we made to our shareholders when we launched Leagold three years ago: to create a major gold producer in a short time frame in anticipation of a new phase to the gold bull market that started in 2001. I will be stepping down as Chairman and Director to focus on my global philanthropic work but will remain an enthusiastic shareholder as I believe that together, Ross Beaty, Neil Woodyer, and their management team will continue to grow Equinox Gold and deliver value to our shareholders.’
Neil Woodyer of Leagold said: ‘This transaction is a rare opportunity to combine companies with common business plans and growth strategies, complementary assets, and management teams that can be integrated effectively, with Equinox Gold as the go-forward entity to maintain the TSX and NYSE American listings. The transaction has received exceptionally strong support from shareholders, from Mubadala and from a syndicate of leading commercial lenders which collectively will enable us to fully fund the new company's growth plans.’
Christian Milau of Equinox said: ‘Combining these companies creates a leading growth-focused gold company and accelerates our shared vision of becoming a million-ounce gold producer. As both a shareholder and executive, I believe the scale and diversification of the joint company will create significant value for all shareholders, demonstrating the value of industry consolidation that investors have been asking for. Having worked with Neil before to build a mid-tier gold producer, I am pleased to be part of the combined management team for the long term.’
BMO Capital Markets served as financial advisor to Equinox Gold. Blake, Cassels & Graydon served as legal advisor.
Scotia Capital served as financial advisor to Leagold. Fasken served as legal advisor.
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