Canadian mining company Equinox Gold has agreed to divest its Brazil portfolio to a CMOC Group subsidiary for a total consideration of $1.01bn (C$1.39bn), to focus on North American growth.
The sale includes its 100% interests in the Aurizona Mine, RDM Mine and Bahia Complex.
The terms of the transaction provide Equinox Gold with $900m in upfront cash upon closing, subject to customary adjustments.
An additional production-linked contingent cash payment of up to $115m will be payable one year post closing if specified output thresholds are achieved.
The transaction is expected to close in the first quarter of 2026, pending regulatory approvals and standard conditions, and is not contingent upon any financing conditions.
Post sale, Equinox Gold’s production platform will be comprised of the Valentine and Greenstone mines in Canada, the Mesquite mine in California, and the El Limón and Libertad mines in Nicaragua.
Equinox Gold aims to increase its output to between 700,000oz and 800,000oz of gold in 2026 as the Valentine and Greenstone mines ramp to nameplate capacity, and operational performance remains steady across the portfolio.
The company flagged additional near-term organic growth from the Valentine Expansion, Castle Mountain phase two and a revised development plan at Los Filos in Mexico.
Equinox Gold plans to issue formal 2026 production and cost guidance early next year.
Equinox Gold CEO Darren Hall said: “The sale of our Brazil operations is a pivotal step to position Equinox Gold as a North American-focused gold producer underpinned by robust cash flow and a tier-one growth profile.
“The proceeds will transform our balance sheet and immediately strengthen our financial position by fully repaying our $500m term loan and $300m Sprott loan and reducing our revolving credit facility. This will greatly reduce interest expense and enhance per-share cash flow. The company will have enhanced flexibility to self-fund organic growth and consider capital return initiatives within a disciplined capital allocation framework.”
After completing its merger with Calibre Mining, Equinox Gold conducted a thorough review of its expanded portfolio and received multiple inbound queries.
The transaction will be effected through the sale of issued and outstanding shares of certain non-Brazilian, wholly owned Equinox Gold subsidiaries that indirectly hold the Brazil operations.
Hall added: “Monetising our Brazil operations simplifies the portfolio and enables the company to deploy capital toward higher-return, lower-risk, organic-growth opportunities in Canada and the US. By concentrating on our long-life assets, including Greenstone in Ontario, Valentine in Newfoundland and Labrador, and Castle Mountain in California, we position the company to deliver stronger margins and sustainable returns.
“With Valentine ramping up, continued performance improvements at Greenstone, and steady contributions from Mesquite and Nicaragua, Equinox Gold is positioned to drive long-term per-share value for our shareholders.”
BMO Capital Markets is serving as financial advisor, while Blake, Cassels & Graydon and Veirano Advogados are acting as Equinox Gold’s legal counsel in Canada and Brazil, respectively.
Canaccord Genuity is advising CMOC Group on the financial side, while McCarthy Tétrault and Mattos Filho are providing legal counsel in Canada and Brazil, respectively.
In September, Equinox Gold announced the inaugural gold pour at the Valentine Gold Mine in Newfoundland and Labrador, Canada.
