Equinox Gold to acquire Orla Mining to create $18.5bn gold producer
Equinox Gold said on Wednesday it would acquire Orla Mining in an all-stock deal to create a North American gold producer worth about $18.5-billion.
US-listed shares of Orla Mining rose 3.4% in premarket trading.
A record rally in gold prices has bolstered miners' cash flows and improved their access to capital, encouraging producers to expand reserves of the precious metal and grow their presence in safer mining regions such as Canada and the US.
Under the deal, Orla shareholders will receive one Equinox common share and a nominal cash payment for each share held, valuing the transaction at about C$7.02-billion ($5.13-billion), according to Reuters calculations.
The merger would create Canada's second-largest gold producer, led by Equinox's Greenstone and Valentine mines and Orla's Musselwhite mine in Ontario, which together are expected to produce about 685 000 oz this year.
Overall, the combined company is expected to produce about 1.1-million ounces of gold this year from six operating mines across Canada, the US, Mexico and Nicaragua.
The combined entity would have "the production base, the balance sheet, and the team to compete at a level otherwise unattainable by either company on its own," Orla's CEO Jason Simpson said.
Equinox's CEO Darren Hall will lead the combined company, while Orla's chief executive will serve as the president.
Once the transaction closes, existing Equinox shareholders will own about 67% of the combined company, while Orla shareholders will hold the remaining 33%.
The transaction is expected to close in the third quarter, after which the combined company will continue operating as Equinox Gold.
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