Latest merger in what’s turning into a boom year for the gold mining space with more than $30 billion of deals announced already
As 2019 draws to a close, the long-anticipated consolidation in the gold sector is picking up speed with news of yet another merger. On Monday, Equinox Gold Corp. proposed a no-premium, all-stock combination with Leagold Mining Corp. valued at around $770 million.
The tie-up would unite two Vancouver-based intermediate miners that are both backed by industry heavyweights and both focused on the Americas, with six mines spread across Brazil, Mexico and the U.S.
Ross Beaty, chairman and the largest shareholder of Equinox, pitched the deal as a means to achieve scale. He argued the new company, which will keep the Equinox name and have a market capitalization of roughly $1.75 billion, would have better liquidity and better risk diversification.
He predicted it would trade at a higher multiple as a result of its larger size, and told investors the combination would enable it to hit one million ounces of gold production by late 2021 — two years ahead of schedule.
“There’s no magic to one million ounces, it’s just a number,” Beaty told analysts during a call Monday. “But it represents scale … and scale really does matter.”
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