Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF) (FRA: WCLA) and Equinox Gold Corp (TSE: EQX) (NYSEAMERICAN: EQX) (FRA: 1LRC) agreed to merge their companies into a global gold mining powerhouse in February.
Now, the gold producers have chosen to amend their merger arrangement agreement. Once finalized, pending shareholder approval, Calibre shareholders will have a 39 per cent stake in the combined company “New Equinox Gold” while Equinox shareholders have a 61 per cent interest. They had previously agreed to a 35-65 split, on a fully diluted basis.
Calibre shareholders will get 0.35 of an Equinox Gold share for each Calibre stock held rather than the 0.31 originally agreed upon. Equinox Gold noted that this new exchange ratio represents a 10 per cent premium on the closing price of Calibre shares Friday Feb. 21 on the TSX — the last trading day prior to the original collaboration announcement.
In conjunction with this alteration, both companies have pushed shareholder meetings for voting on the proposed amendment back until May 1. Calibre will hold its meeting at 10:00 am pacific standard time while Equinox hosts its discussion at 1:30 pm. They were originally scheduled to be held Thursday, Apr. 24.
The merger arrangement is expected to be finalized by the end of this quarter, pending regulatory approvals and stakeholder assent.
“We believe the offer of 0.35 Equinox Gold shares for every Calibre share is full and fair valuation that reflects both the current production and the growth potential of each company,” Equinox CEO Greg Smith said in a news release Thursday.
“The combination of Calibre and Equinox Gold will create more shareholder value together than either could achieve individually,” added Calibre chief executive, Darren Hall. “I encourage Calibre shareholders to cast your vote in favour of the transaction.”
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Merger will bring a wealth of knowledge to the table
Hall has highlighted that bringing Calibre and Equinox together will create a gold producer with exceptional expertise in both the operational and financial management aspects of international mining.
“These two organizations are absolutely stronger together than what they are apart,” Hall said recently. “With the integration of our teams, we see a tremendous opportunity to leverage best practices, optimize mining operations and improve cost structures.”
New Equinox Gold will benefit from 10 producing mines once construction at Newfoundland’s Valentine gold project is completed. The company will have 22 million ounces of measured and indicated gold resources to work with and is expected to produce 950 kilo ounces throughout 2025.
In a recent article on LinkedIn, the director of a Mexican mining consulting firm and former communications manager for First Majestic Silver Corp (TSE: AG) (NYSE: AG) highlighted the importance of the merger in Latin America.
“Regionally, particularly in Central America and Mexico, this merger represents a significant opportunity to harness operational synergies and effectively manage specific jurisdictional challenges such as regulatory complexity in Nicaragua,” Eliuth Irigoyen said, “the necessity of maintaining strong institutional relationships, and managing inherent political and social risks.”
Calibre produced 64,649 ounces from its operations in Nicaragua during this year’s first quarter.
Calibre Mining is a sponsor of Mugglehead news coverage
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