Equinox Gold (TSX, NYSE: EQX) said on Monday it had sold its Pilar gold mine in Brazil for $38 million cash as part of a portfolio optimization strategy that includes increasing its stake in the Greenstone project in Ontario, Canada.
As part of the deal, buyer Pilar Gold Inc. is also giving Equinox a 9.9% equity interest in the gold mine and a 1% net smelter return royalty on production.
Pilar, a complex of producing underground mines in central Brazil’s Goiás State, accounts for about 5% of Equinox’s previously reported 2021 production guidance of 600,000 to 665,000 ounces of gold.
Expected output targets will be updated in May, including to reflect the asset sale and the addition of the Mercedes operation in Mexico. Equinox annexed the mine when acquiring Premier Gold Mines in December.
“Equinox Gold has grown considerably over the last two years and the sale of the Pilar Gold Mine is a step toward optimizing our portfolio to focus on our larger production and development assets,” chief executive Christian Milau said in the statement.
Pilar Gold is a private Canadian company with plans to seek a public listing later this year.
The news coincides with Equinox’s acquisition of a 10% additional interest in the Greenstone project in Ontario for $51 million. The move increased the Vancouver-based miner’s stake in the fully-permitted, construction-ready project to 60%.
Greenstone, formerly known as Hardrock, is being advanced in a joint venture with Orion Mine Finance Group. It is expected to bring more than 240,000 attributable ounces of gold production to Equinox once in operation.