Equinox Gold Corp. (AMEX:EQX) stock rose Monday after the company disclosed an agreement to sell its full ownership of the Aurizona Mine, RDM Mine, and Bahia Complex in Brazil (collectively, the “Brazil Operations”) for $1.015 billion.
Deal Structure And Transaction Terms
The company sold the Brazil Operations to a subsidiary of CMOC Group. As per the deal, Equinox Gold will receive $900 million in cash at closing, subject to customary adjustments.
The company may also receive a production-based contingent payment of up to $115 million one year after closing, provided specific production milestones are achieved.
If production falls between 200,000 and 280,000 ounces, the contingent payment will equal 12.5% of revenue. If production reaches or exceeds 280,000 ounces, the full $115 million will be payable.
The sale is expected to close in the first quarter of 2026, pending regulatory approvals and other standard conditions.
Once the transaction is finalized, Equinox’s producing assets will comprise Canada’s Valentine and Greenstone mines, California’s Mesquite mine, and Nicaragua’s El Limón and Libertad mines.
Production Outlook And Growth Projects
With Valentine and Greenstone operating at full capacity and assuming steady performance across its portfolio, the company expects total gold output in 2026 of 700,000-800,000 ounces.
Notably, last month, the company guided Valentine to contribute toward the upper end of the fourth quarter production range, which spans 15,000 to 30,000 ounces of gold.
With the ramp-up progressing as planned, Valentine is expected to reach full nameplate capacity by the second quarter of 2026, supporting an estimated annual production of 150,000 to 200,000 ounces of gold for the year.
Management Commentary On Strategic Shift
Darren Hall, Chief Executive Officer of Equinox Gold, added, “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 $500 million Term Loan and $300 million Sprott Loan, and reducing our revolving credit facility.”
“Monetizing 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 United States.”
Recent Financial Performance And Guidance
Last month, the company reported a strong quarter, achieving record production of 236,382 ounces at all-in sustaining costs of $1,833 per ounce.
Equinox stated that it remains on track to reach the mid-point of its 2025 consolidated production guidance, factoring in the divestment of its Nevada assets and excluding any output from Valentine.
EQX Price Action: Equinox Gold shares were up 3.33% at $15.19 during premarket trading on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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