Canadian miner Equinox to buy Premier in $611.7M agreement
Canadian miner Equinox Gold Corp said on Wednesday it would buy Premier Gold Mines Ltd in an all-stock deal valued at $611.7 million and simultaneously spin-out Premier's U.S. production assets.
The deal, worth about $2.57 per share, represents a two-per-cent premium to Premier's Tuesday close, according to Reuters.
It fits Equinox's strategy “to grow as big as we can as quickly as we can,” chairman Ross Beaty said on a call.
Cost-conscious miners have bulked up as gold prices climbed to record highs of above US$2,000 an ounce this year.
On Tuesday, private equity firm Orion Mine Finance Group said it would buy gold miner Centerra Gold Inc's 50-per-cent interest in the Greenstone Gold Mines partnership for US$225 million in cash.
Premier Gold has a 50 per cent stake in the partnership, whose principal asset is the Hardrock mine in Ontario.
Equinox CEO Christian Milau said the larger company would assess potential for dividends once that project is finished.
“It may be a two, three-year period before we really can get into thinking about dividends,” he said.
Under the deal, Premier shareholders will receive 0.1967 of an Equinox share for each share held and 0.4 of a share in the spin-out company i-80 Gold Corp, the companies said on Wednesday.
However, the exact value that Premier shareholders will get depends on the pricing of the spinout company's shares.
Upon deal closing, Equinox Gold will own about 84 per cent of Equinox Gold and Premier shareholders about 16 per cent. Equinox Gold and the existing shareholders of Premier will own 30 per cent and 70 per cent of i-80 Gold, respectively, on an issued share basis.
The transaction is expected to close in the first quarter of 2021.
The friendly acquisition is subject to court approval and Premier shareholders' approval at a meeting scheduled for February.