Equinox Gold (EQX) and Orla Mining (ORLA) are merging to create an C$18.5 billion ($13.5 billion U.S.) gold miner that produces about 1.1 million ounces of the precious metal annually.
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The two Vancouver-based mining companies will create a North American-focused gold producer. The cash and stock deal from Equinox values Orla Mining at $5.1 billion. Buying Orla will give Equinox access to assets across the Americas, including a flagship mine in Mexico.
Equinox shareholders will own 67% of the combined company and Orla shareholders will own the remaining 33% once the deal is successfully concluded. The merged company will continue to operate under the Equinox name.
What Shareholders Get from the Deal
Under the agreement, Orla shareholders will receive one Equinox common share and a cash payment of 0.01 of a cent U.S. for each Orla common share they hold. The deal is expected to close in the third quarter of this year, subject to regulatory approvals.
“By combining our operating teams, financial strength, and complementary asset bases, we are creating a differentiated North American gold producer with the scale, growth profile, and asset quality to drive a meaningful re-rate and deliver long-term value for shareholders,” said Equinox CEO Darren Hall in a news release.
Is EQX Stock a Buy?
Equinox Gold’s stock has a consensus Strong Buy rating among six Wall Street analysts. That rating is based on six Buy recommendations issued in the last three months. The average EQX price target of $21.25 implies 50% upside from current levels.
