Equinox Gold to divest Nevada mining projects to Minera Alamos for $115m - yahoo

Equinox Gold to divest Nevada mining projects to Minera Alamos for $115m - yahoo

Equinox Gold has entered into a definitive agreement to sell its Nevada mining assets to Minera Alamos for a total consideration of $115 million. This strategic transaction marks a pivotal moment for both companies, as they realign their operational focuses and capital allocation strategies [1].

The transaction involves Equinox Gold divesting its entire stake in Calibre USA Holdings, which owns a 100% economic interest in three Nevada-based projects: the producing Pan Gold Mine, the Gold Rock Project, and the Illipah Project. This comprehensive deal represents a full exit from the Nevada region for Equinox Gold while establishing Minera Alamos as a significant player in one of North America's premier mining jurisdictions [1].

The $115 million transaction is structured as a combination of cash and equity components. The cash component is $90 million (approximately C$123.57 million), while the equity component is $25 million in Minera Alamos shares. The equity portion is designed with a 9.99% ownership cap, meaning if Equinox's stake would exceed this threshold, the cash component will be adjusted accordingly [1].

Darren Hall, Equinox Gold CEO, emphasized the strategic importance of the deal: "The sale of our non-core Nevada Assets reflects our commitment to portfolio optimization and disciplined capital allocation. This transaction simplifies our business and allows the team to focus our efforts and capital on core operations and key development opportunities, positioning Equinox Gold to divest Nevada mining projects to Minera Alamos while driving greater shareholder returns" [1].

The transaction package includes three distinct Nevada properties, each offering different value propositions. The Pan Gold Mine is an established operation currently producing gold with consistent cash flow generation. The Gold Rock Project is a development-stage project with higher-grade gold potential, located approximately 13 miles from the Pan Mine, offering significant exploration upside. The Illipah Project is an exploration-stage property completing the Nevada portfolio [1].

For Equinox Gold, this divestment represents a deliberate strategic refocusing on core operations. The company has identified these Nevada properties as non-core assets that, while valuable, lie outside their primary operational focus. This strategic rationalization offers several advantages, including streamlined operational focus, reduced jurisdictional complexity, enhanced capital efficiency, and better alignment with long-term corporate objectives [1].

The transaction offers several financial benefits for Equinox Gold. The immediate cash infusion of $90 million strengthens the company's balance sheet. The flexible capital allocation allows for more targeted deployment of financial resources to fund growth initiatives and core asset development. The $25 million equity stake in Minera Alamos provides ongoing participation in the assets' future performance and reduced operational overhead [1].

Minera Alamos is financing the acquisition through a comprehensive financing strategy. They have announced a private placement structure led by Stifel Canada, with a base financing target of approximately C$110 million. Additional financing of up to C$25 million may be secured if market demand warrants. Proceeds will primarily cover the cash portion of the acquisition, with any surplus funds providing working capital for ongoing Pan Mine operations [1].

The Nevada assets represent a compelling portfolio with multiple value drivers, including established production, development upside, exploration potential, and strategic location. Nevada's mining landscape offers well-documented geology, established infrastructure, a skilled workforce, and well-understood permitting and compliance frameworks [1].

For Equinox Gold, this transaction represents a strategic pivot with several implications. The cash component bolsters financial flexibility, management can direct attention to core operations and development priorities, the corporate structure is simplified, and there is retained economic interest through the equity stake in Minera Alamos [1].

For Minera Alamos, the acquisition represents a transformative opportunity. They gain an immediate producing asset, a development project with higher-grade potential, and establish a presence in Nevada. This acquisition accelerates their growth trajectory and provides a platform for future expansion [1].

The transaction reflects several important industry consolidation trends currently reshaping the mining landscape, including portfolio rationalization, strategic divestments, mid-tier emergence, and capital discipline. It also highlights evolving market expectations, such as operational focus, balance sheet strength, value creation, and growth pathways [1].

Before completion, the transaction must satisfy several regulatory requirements, including mining industry regulators' approvals, stock exchange compliance, environmental compliance, and customary transaction completion requirements. The companies expect these processes to be completed in the fourth quarter of 2025, allowing the transaction to close as scheduled [1].

References:

[1] https://discoveryalert.com.au/news/equinox-gold-nevada-asset-divestment-2025/