Equinox-Orla merger wins approval, creates Canada’s No. 2 gold miner

Equinox Gold (TSX: EQX) (NYSE: EQX) and Orla Mining (TSX: OLA) (NYSE: ORLA) have secured shareholder approval for their $18.5 billion merger, creating Canada’s second-largest gold producer with expected annual output of 1.1 million ounces.

The all-share transaction, approved by shareholders of both companies, will leave existing Equinox investors owning about 67% of the combined company, while Orla shareholders will receive one Equinox share for each Orla share they hold. The merged company will operate six mines in North America and rank behind only Agnico Eagle Mines (TSX, NYSE: AEM) among Canadian gold producers.

“The combination with Equinox dramatically enhances our North American portfolio and propels us to a senior gold producer with industry leading growth potential,” Orla CEO Jason Simpson said in a news release. “I am excited for what’s to come next from this combination with Equinox.”

Independent proxy advisers endorsed the transaction earlier this month, saying the merger would diversify Equinox’s asset base, improve strategic flexibility and strengthen long-term production potential. Equinox CEO Darren Hall said the deal creates a new senior North American gold producer with more than 1.1 million ounces of annual output from six operating mines.

Growth pipeline

The companies expect production to climb about 70% to more than 1.9 million ounces annually as development projects come online, giving the combined company one of the sector’s strongest growth profiles in politically stable mining jurisdictions.

The merger extends an industry consolidation trend as gold miners pursue greater scale, lower operating risk and stronger balance sheets while bullion prices remain near record highs.