Canada’s Equinox Gold (TSX: EQX) and Leagold Mining (TSX: LMC) said on Wednesday that shareholders in both companies have approved their merger, creating an America-focused gold miner with a market capitalization of about $1.75 billion.
The deal, announced in December, adds Leagold’s four mines in Mexico and Brazil to Equinox’s portfolio, consisting of two mines in California, US, and one in Brazil.
As part of the C$769.3 million-transaction (about $584m), Leagold shareholders will receive 0.331 of an Equinox share for each share they own and will hold 45% of the combined entity, which will keep the Equinox name.
The new gold miner will be led by mining veteran Ross Beaty, current chairman of Equinox and Pan American Silver (TSX: PAAS), who believes the merged company will have better liquidity and risk diversification.
“This merger will create one of the world’s largest gold companies operating entirely in the Americas,” Beaty said in December. “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.”
Thanks to the business combination, Equinox will be able to hit one million ounces of gold production by late 2021 — two years ahead of schedule.
The Vancouver-based company moved from developer to producer status in July, when it kicked off commercial production at its second gold mine, Aurizona, in northeastern Brazil.
Equinox is also advancing construction at the previously-mined Castle Mountain, located about 320km north of its Mesquite operation, with the target of pouring first gold in the second half of 2020.
The announcement comes on the heels of another gold merger. Kirkland Lake Gold’s C$4.4 billion ($3.35 billion) takeover bid for rival Detour Gold Corp won shareholders’ support on Tuesday at both companies.