Equinox Gold buys out Orion for almost US$1B as it readies Greenstone for first gold

Equinox Gold (TSX: EQX; NYSE-AM: EQX) is buying partner Orion Mine Finance’s 40% stake in their new Greenstone gold mine in Ontario for US$995 million in cash and shares as it prepares to pour first gold.

The purchase includes US$745 million in cash and 42 million shares valued at US$250 million. It was announced late on Tuesday after Australia’s Gold Road Resources (ASX: GOR) said it was no longer considering buying a stake in Greenstone from Orion. Equinox said it would fund the purchase through a new US$500-million loan and a US$260-million bought-deal equity financing.

“When we acquired our 60% interest in Greenstone in 2021, our goal was to ultimately own the whole mine,” Equinox chairman Ross Beaty said in a release. “Consolidating 100% of Greenstone into Equinox Gold delivers our shareholders full exposure to a mine of outstanding scale and quality.”

Shares in Equinox fell 11% on Wednesday to $7.23 apiece, valuing the company at $2.4 billion. They’ve traded in a 52-week range of $5.36 to $8.79.

The deal increases Equinox’s annual gold production by about 160,000 oz. while boosting earnings and cash flow, the company said. Greenstone will be its largest mine among eight total, producing about 400,000 oz. of gold per year over the first five years, and is expected to be one of the world’s lowest-cost open-pit gold mines with all-in sustaining costs of US$890 per oz., it said.