Equinox adds to Hardrock stake in Ontario

Growing gold miner Equinox Gold (TSX: EQX) has upped its stake in the Hardrock gold project in Ontario by 10%, for a total ownership of 60%. The company has entered into an agreement with Orion Mine Finance to add 10% from Orion’s 50% share of the project for consideration of US$51 million as well as contingent payment obligations.

Equinox will own 50% of the permitted Hardrock project in Ontario upon the closing of the Premier Gold acquisition (the US$480-million purchase was announced in December), and then increase this stake to 60%, with Orion at a 40% interest.

“We are extremely pleased to increase our stake in this world-class Canadian gold deposit located in one of the world’s top mining jurisdictions. Hardrock will be a low-cost, long-life gold mine, bringing more than 240,000 attributable ounces of annual gold production to Equinox Gold when in production, with significant upside potential from near-mine exploration and underground development,” Christian Milau, CEO of Equinox, said in a release.

The transaction terms include a US$51-million payment at closing, with up to US$41 million payable in shares at Equinox’s option; and Equinox assuming contingent payment obligations that include US$5 million in cash due 24 months after a positive construction decision; and the delivery of approximately 2,200 oz. of refined gold, its cash equivalent value, or a mix of the two, after three production milestones from Hardrock.

This transaction is expected to close in March.

In January, Orion closed its purchase of the 50% share in the Hardrock project from Centerra Gold (TSX: CG) for approximately US$210 million in cash and up to US$75 million in contingent payments.

The pre-production Hardrock project, 275 km northeast of Thunder Bay, includes the past-producing Hardrock, MacLeod-Cockshutt and Mosher underground mines that produced over two million gold oz. between the late 1930s and 1970.

According to the Greenstone Gold Mines website (the partnership for the development of Hardrock), the latest vision is to mine the existing deposit as an open pit over a 15-year mine life, using a 27,000 t/d mill.

For more information, visit www.EquinoxGold.com or www.GreenstoneGoldMines.com.