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Equinox Gold Corp. agreed to acquire Orla Mining Ltd. in a cash-and-stock deal valuing the Canadian miner at about US$5.1 billion.
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Gold producers have been consolidating to cash in on record prices for the metal. Buying Orla will give Equinox access to assets across the Americas, including the flagship Camino Rojo mine in Mexico. The combined company will produce about 1.1 million ounces of gold a year, Equinox said Wednesday.
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Equinox will pay largely in stock, with Orla shareholders receiving one Equinox share and a nominal cash payment of US$0.0001 for each share, according to a statement. Equinox shareholders will own 67 per cent of the combined firm.
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Gold prices rose to a record in January and have mostly traded above US$4,500 an ounce since then, spurring tie-ups in the sector. Still, extreme bouts of price volatility in metals markets have raised investor concerns about supporting acquisitions they see as overpriced. That’s led to more nil-premium and low-premium deals.
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Wednesday’s agreement values Orla at about US$5.1 billion based on Equinox’s closing price on Tuesday, according to Bloomberg calculations.
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—With assistance from Ben Scent.
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