Mining News
Equinox to sell its Mercedes gold mine in Mexico to Bear Creek for $125M in cash and shares
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(Kitco News) - Equinox Gold (TSX: EQX) announced Friday that it has entered into a definitive agreement to sell its Mercedes gold-silver mine in Mexico to Bear Creek Mining (TSXV: BCM).
According to a statement, the aggregate consideration consists of $100 million in cash, 24,730,000 common shares of Bear Creek valued at approximately $25 million based on current trading prices, and a 2% net smelter return payable on production from Mercedes.
Mercedes is an underground gold and silver mine in Sonora, Mexico that achieved production in 2011. Mercedes currently produces approximately 50,000 ounces of gold per year, with expansion potential from increased plant throughput.
The company said that Mercedes is a non-core asset, and that the sale of Mercedes will strengthen its balance sheet.
CEO Christian Milau commented, "Mercedes is non-core to Equinox Gold, representing 5% of our 2021 production guidance and 2% of our resources. The sale of Mercedes strengthens our balance sheet with $100 million as we focus on growth through expansion and development of our larger gold projects, including Greenstone."
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"Equinox Gold will also become a significant shareholder in Bear Creek, continuing to participate in the success of Mercedes and in the future development of Bear Creek’s Corani silver-lead-zinc deposit, one of the largest, fully-permitted silver deposits in the world," he added.
Equinox Gold is a growth-focused Canadian mining company operating entirely in the Americas, with seven operating gold mines (including Mercedes) and a plan to achieving more than one million ounces of annual gold production from a pipeline of development and expansion projects.
