Equinox Gold (TSX:EQX) - Canadian Gold Giant Forms in "Merger of Equals" with Calibre Mining

Mar 16, 2025

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Interview with Rhylin Bailie, VP of Investor Relations, Equinox Gold

Recording date: 3rd of March, 2025

Equinox Gold and Calibre Mining have announced a transformative merger expected to close by the end of May 2025, creating one of the top 15 gold producers globally. The combined entity will produce approximately 950,000 ounces of gold in 2025, with potential to exceed one million ounces as additional operations come online.

The transaction originated from casual discussions between Equinox's chairman Ross Beaty and Calibre's leadership, who recognized the strategic benefits of combining their complementary assets. The merger will create the second-largest gold producer from Canada, with the Greenstone and Valentine mines together delivering 600,000 ounces annually—a significant advantage as Canadian producers typically trade at premium valuations.

Structured as a "merger of equals," the deal brings together complementary teams, with Calibre's President and CEO Darren Hall joining Equinox as President and Chief Operating Officer alongside CEO Greg Smith. This dual leadership approach aims to distribute responsibilities effectively across the expanded organization.

The transaction delivers immediate production benefits to both companies' shareholders while providing exceptional cash flow generation in the current high gold price environment. Consensus estimates suggest EBITDA could more than quadruple over the next 12 months, accelerating debt reduction plans. The company aims to pay down at least $200 million in 2025 and reach a debt-to-EBITDA ratio of 1x by early 2026, enabling dividend payments and share buybacks.

Despite its increased scale, the combined company maintains substantial growth opportunities, including the Castle Mountain expansion in California (+200,000 oz/year) and Los Filos expansion in Mexico (+150,000 oz/year). These projects contribute to an expected 60% production growth over the next few years, distinguishing Equinox from larger producers that struggle to meaningfully increase output.

Post-merger integration will include evaluating the combined portfolio of 11 mines, with potential rationalization to focus on larger operations producing 150,000-200,000 ounces annually at competitive costs. Equinox has previously demonstrated willingness to optimize its portfolio, having sold smaller mines and spun out non-core assets.

The transaction elevates the company from the crowded mid-tier space to the elite senior producer category, potentially attracting increased investment from generalist investors and index funds that require larger market capitalization. With strong leadership, premium assets, exceptional cash flow, and substantial growth opportunities, the combined Equinox-Calibre entity is well-positioned to create significant long-term shareholder value in the gold mining sector.

Learn more: https://www.cruxinvestor.com/companies/equinox-gold