Acquisition of Premier Gold Mines
On December 16, 2020, Equinox Gold announced that the companies have entered into a definitive agreement whereby Equinox Gold will acquire all of the outstanding shares of Premier. Premier shareholders will receive 0.1967 shares of Equinox Gold for each Premier share held. Concurrently, Premier will spin-out to its shareholders shares of a newly created US-focused gold production and development company to be called i-80 Gold Corp., with Premier shareholders receiving 0.4 of a share of i-80 Gold for each Premier share held.
Equinox Gold will retain Premier’s interest in the world-class Hardrock Project in Ontario, the Mercedes Mine in Mexico, and the Hasaga and Rahill-Bonanza properties in Red Lake, Ontario. i-80 Gold will own the South-Arturo and McCoy-Cove properties and will complete Premier’s previously announced acquisition of the Getchell Project, all in Nevada.
On closing of the Transaction, existing Equinox Gold and Premier shareholders will own approximately 84% and 16% of Equinox Gold, and Equinox Gold and existing shareholders of Premier will own 30% and 70% of i-80 Gold, respectively, on an issued share basis.
The Transaction is further subject to certain regulatory approvals, including the approvals of Premier shareholders, the Mexican Comisión Federal de Competencia Económica, the Toronto Stock Exchange and the NYSE American Stock Exchange, and other customary closing conditions. The Transaction is expected to close in the first quarter of 2021.
Equinox Gold and Premier held a joint conference call and webcast to discuss the Transaction.
Equinox Gold to acquire a 50% interest in the permitted, development-ready, multi-million-ounce Hardrock Project through a joint venture between Equinox Gold and Orion Mine Finance (“Orion”)
5.54 million ounces of Proven and Probable Mineral Reserves grading 1.27 grams per tonne (“g/t”) gold1,2
414,000 ounces average annual gold production with average head grade of 1.45 g/t gold for the first five years; 358,000 ounces average annual gold production over the initial 14-year mine life1
- Maintains Premier shareholders’ exposure to Premier’s current asset base and adds exposure to a larger, diversified gold producer – Equinox Gold has seven operating gold mines with construction underway at an eighth site, a peer-leading growth pipeline and the financial capacity to fund development of Hardrock
- Reinforces Equinox Gold’s position as the Premier Americas Gold Producer – Hardrock bolsters Equinox Gold’s robust pipeline of growth projects and will add approximately 200,000 attributable ounces of long-term, low-cost annual gold production, when in operations, in Ontario, Canada, one of the world’s top mining jurisdictions
- Enhances Equinox Gold’s existing portfolio of operating gold mines in the Americas with the addition of the producing Mercedes Mine in Sonora, Mexico – Mercedes adds approximately 50,000 ounces of gold per year (with expansion potential to 80,000 to 90,000 ounces of gold annually) to the estimated 700,000 ounces of gold production expected in 2021 from Equinox Gold, based on consensus estimates
- Delivers longer-term growth and exploration potential – Expansion and exploration potential at Hardrock and the Mercedes Mine and exploration potential from the Hasaga and Rahill-Bonanza properties, both located in the heart of the prolific Red Lake gold camp
- Provides exposure to i-80 Gold, a new high-growth US-focused gold company – High-quality portfolio of producing and development properties to be owned 70% by Premier shareholders and 30% by Equinox Gold
- Equinox Gold to undertake a C$75 million equity financing fully underwritten by its Chairman, Ross Beaty
1 Highlights from the Hardrock Feasibility Study, shown on a 100% basis. See Premier news release dated December 16, 2020.
2 At a 0.35 g/t cut-off grade. A breakdown of Mineral Reserves is provided at the end of this news release.