Calibre Mining Corp. (TSE: CXB) (OTCMKTS: CXBMF) lead shareholder has raised opposition to the company’s proposed $1.8 billion merger with Equinox Gold Corp. (TSE: EQX) (NYSE American: EQX).
Imaru Casanova, a portfolio manager for Van Eck Associates Corp, said in a Tuesday email that the merger “dilutes the quality and potential” of Calibre Mining.
Calibre and Equinox each rose as much as 2.6 per cent in Toronto on Tuesday. Equinox declined to comment, while Calibre did not immediately respond to inquiries.
In February, Vancouver-based Equinox agreed to acquire Calibre in an all-stock deal to increase gold production and consolidate assets across the Americas. Equinox operates gold mines in Canada, Mexico, Brazil, and the US, while Calibre runs mines in the US and Nicaragua. The transaction still requires shareholder and court approvals and is expected to close this quarter.
As of March 17, Van Eck owned 8.69 per cent of Calibre, making it the company’s largest shareholder, according to data compiled by Bloomberg. As of December 31, it also ranked as the second-largest investor in Equinox.
Additionally, both companies plan to hold shareholder votes, which require approval from two-thirds of ballots cast to finalize the deal.
“We are not supportive of this transaction. We don’t see any synergies between any of the companies’ operations,” Casanova wrote. “Both operate in the Americas, but in vastly different locations.”
Gold miners have accumulated cash as bullion prices repeatedly set record highs over the past year, filling company coffers and boosting stocks. Some miners have seized the opportunity to consolidate assets and increase gold output, though past mergers have damaged balance sheets and share prices.
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The acquisition would strengthen Calibre’s position
Casanova said Van Eck expected Calibre’s stock to climb as the company advanced its flagship project in Canada.
“Calibre was on the cusp of a rerate as it advanced Valentine to production,” she said. “The proposed combination dilutes the quality and potential of Calibre.”
Calibre Mining acquired Marathon Gold in early 2024, adding the Valentine Gold Mine in Newfoundland and Labrador to its portfolio.
Furthermore, the acquisition strengthens the company’s position as a growing mid-tier gold producer, expanding its operations beyond Nicaragua and the United States. The Valentine Mine, considered one of the largest undeveloped gold projects in Canada, brings a significant, high-quality asset to Calibre’s portfolio.
The open-pit operation is expected to produce over 195,000 ounces of gold annually over a 14-year mine life. The company anticipates the first gold in 2025. The project also offers strong exploration upside, with multiple deposits across a 32-kilometre gold trend. The addition of Valentine enhances Calibre’s production profile and provides geographic diversification, reducing risk associated with operating in fewer jurisdictions.
The acquisition aligns with Calibre’s strategy of disciplined growth, focused on developing high-margin assets in stable mining jurisdictions. The deal also increases the company’s overall gold reserves and strengthens its financial outlook, as Valentine’s production is projected to contribute to long-term cash flow. With this move, Calibre aims to capitalize on gold prices while leveraging its expertise to optimize the Valentine Mine’s potential.
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