Author: Umesh Ellichipuram

Equinox Gold has secured full ownership of the Greenstone Gold Mine in Ontario by reaching a $995m (C$1.36bn) deal to acquire the remaining 40% stake in the mine from Orion Mine Finance Management.

Under the binding share purchase agreement (SPA), Equinox will issue 42 million common shares and make cash payments of $705m on closing and $40m by 31 December 2024.

This acquisition will be financed through a combination of a new $500m three-year term loan and a bought deal equity financing (offering) of around $260m.

The term loan is being provided by a syndicate of banks including the Bank of Nova Scotia, Bank of Montreal, ING Capital and National Bank of Canada.

Equinox also signed an agreement with underwriters led by BMO Capital Markets, National Bank Financial and Scotiabank for the equity financing.

The company plans to use the offering’s proceeds to fund the cash consideration of the SPA as well as for general working capital and corporate requirements such as paying down certain debts.

The offering’s closure is anticipated around 26 April 2024, subject to approvals from the Toronto Stock Exchange and the NYSE American.

Completion of the deal is scheduled in the second quarter of 2024, contingent on regulatory clearances.

Greenstone Gold Mine, located near Thunder Bay, Ontario, is considered one of Canada’s largest and highest-grade open-pit gold mines.

The project includes plans for an open-pit mine, processing plant and related facilities, built on the site of the historic Hardrock, MacLeod-Cockshutt and Mosher mines, which produced more than two million ounces of gold until 1970.

Equinox Gold president and CEO Greg Smith said: “Opportunities to own gold mines like Greenstone are incredibly rare in our industry, and the Greenstone Mine will now be the foundation for long-term value creation in our company.

“I also welcome Orion as a shareholder of Equinox Gold and thank them for being a great partner over the last few years, as together with the Greenstone team we have executed a very successful mine build.

“Greenstone is well into hot commissioning, with first gold in sight. Now, as full owners, we remain focused on advancing Greenstone to commercial production and look forward to surfacing its full potential.”

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Lithium Americas has announced an underwritten public offering to raise $275m, earmarked for the construction and development of the Thacker Pass lithium project in Humboldt County, Nevada.

The company is looking to sell 55 million shares at $5 each.

This public offering is being facilitated by a syndicate of underwriters, with Evercore ISI, Goldman Sachs & Co and BMO Capital Markets acting as the co-lead book-running managers.

 In addition to the initial offering, Lithium Americas has granted the underwriters an option to buy up to another 8.25 million common shares at the issue price, which can be exercised within 30 days post-closing.

The closing of the offering is anticipated on 22 April 2024, subject to the satisfaction of customary closing conditions, including approval from the Toronto Stock Exchange and the New York Stock Exchange.

Last month, Lithium Americas secured a conditional commitment for a $2.26bn loan from the US Department of Energy to construct processing facilities at the Thacker Pass mine.

This loan, part of the Advanced Technology Vehicles Manufacturing Loan Programme, is intended to support the initial annual production of 40,000 tonnes (t) of battery-grade lithium carbonate.

The Thacker Pass project is expected to generate approximately 1,800 direct jobs during its three-year construction period and 360 jobs after becoming operational, over its projected 40-year lifespan.

The mine will be developed in two phases, with a total anticipated production capacity of 80,000t of battery-quality lithium carbonate per year.

The commencement of Phase 1 production is targeted by 2027, with the lithium produced expected to qualify electric vehicles for consumer incentives under the US clean energy tax credits programme.

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Western Copper and Gold has reached an agreement with Eight Capital, acting for a syndicate of underwriters, to sell 13,158,000 common shares at $1.90 each, aiming to raise gross proceeds of $25.2m (C$34.77m).

The bought-deal offering is expected to bolster the company’s financial position as it advances its Casino Project in the Yukon Territory.

In addition to the initial offering, the underwriters have been granted an over-allotment option.

Under the option, they can buy up to a further 1,973,700 common shares, which is 15% of the offering, to manage over-allotments and for market stabilisation, exercisable within 30 days post-closing.

The net proceeds from the offering are earmarked for the progression of permitting and engineering activities at the Casino Project.

Additionally, Western Copper and Gold also intends to allocate funds for general corporate and working capital purposes.

Casino Project, located in the Yukon Territory, is expected to be one of the most economically viable greenfield copper-gold mining projects globally.

The company emphasises its commitment to responsible mining practices and collaboration with First Nations and local communities.

The offering is scheduled to close around 30 April 2024, contingent on receiving all necessary regulatory approvals, including those from the Toronto Stock Exchange and the NYSE American.

Earlier this month, Western Mines Group initiated deep diamond drilling at its Mulga Tank Project on the Minigwal Greenstone Belt in Western Australia, after completing a phase two reverse circulation drilling programme.

The aim of this drill-hole is to explore the potential for a sulphide-enriched keel within the deepest segment of the Mulga Tank complex.

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Australian gold producer and explorer Westgold Resources has announced a definitive arrangement agreement to acquire all shares of Karora Resources, creating a mid-tier gold miner with a market capitalisation of around A$2.2bn ($1.4bn).  

The acquisition is set to establish a diversified gold company focused on Western Australia (WA), featuring a comprehensive portfolio of exploration, development and production assets.

The merged entity will have an annual gold production capacity of 400,000oz.

The transaction will be executed through a statutory plan of arrangement under the Canada Business Corporations Act (CBCA).

As per the terms of the agreement, Karora shareholders will receive a multifaceted offer for each share they hold.

The offer includes 2.524 Westgold fully paid ordinary shares, A$0.68 in cash and 0.30 of a share in a new company, SpinCo, which will be demerged from Karora.

Based on Westgold’s closing share price of A$2.28 on 5 April 2024, the offer values each Karora share at approximately A$6.60.

SpinCo will inherit a suite of assets from Karora, including a 22.1% stake in Kali Metals, a 1% lithium royalty, rights to a deferred payment from the sale of the Dumont asset and A$6m in cash.

Karora’s current shareholders will retain full ownership of SpinCo.

The offer reflects a 10.1% premium over Karora’s closing share price on the Toronto Stock Exchange as of 5 April 2024.

Following the transaction’s completion, Westgold shareholders will control 50.1% of the merged entity, while former Karora shareholders will hold a 49.9% stake.

The enlarged Westgold entity will manage a portfolio with the capacity to produce more than 400,000oz of gold per annum from its WA assets.

It will also have a clear growth trajectory and substantial financial resources amounting to approximately A$160m.

Both Westgold and Karora’s boards have given unanimous approval for the deal, with Karora’s board advising shareholders to vote in favour.

Directors and senior management of Karora, who own 1.2% of the outstanding shares, have agreed to vote for the transaction.

Additionally, key institutional shareholders, including Eric Sprott, who collectively hold about 9% of the shares, have either signed voting support agreements or expressed their intention to back the deal.

Westgold managing director and CEO Wayne Bramwell said: “This merger brings Beta Hunt together with Big Bell, the emerging Bluebird and the iconic Great Fingall mine under one Australian management team.

“These assets combined create the foundations of a new Australian gold mining powerhouse that is focused on free cash generation, is internationally relevant and investable and can stand head and shoulders alongside the biggest names in the Australian gold sector.

“The Westgold and Karora teams have independently been structuring our businesses for growth for several years and now is the time to bring these two businesses together. Westgold welcomes the Karora team, shareholders and stakeholders to the Westgold family and looks forward to creating value across two of Western Australia’s most iconic goldfields.”

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Meridian Mining UK S has announced a bought deal to raise $15m, with Beacon Securities and BMO Capital Market acting as co-lead underwriters.

Beacon and BMO will act on behalf of a syndicate of underwriters.

Under the terms of the agreement, the underwriters will buy 42,860,000 common shares of Meridian at $0.35 each.

The net proceeds will be utilised for the Cabaçal project’s pre-feasibility study, resource delineation drilling and continued exploration, as well as for working capital and general corporate needs.

Meridian also provided the underwriters with an over-allotment option, exercisable in whole or in part, to purchase up to an additional 15% of the offered shares.

This option can be exercised if there is additional demand from investors, providing a potential increase in the total funds raised.

The offering is expected to close on or about 9 April 2024, subject to the satisfaction of various conditions such as the approval of the Toronto Stock Exchange.

Meridian Mining is focused on the regional scale exploration of the Cabaçal VMS belt in Mato Grosso, Brazil, as well as the development and investigation of the advanced-stage Cabaçal VMS gold-copper project.

Within the 50km VMS belt, Cabaçal is a gold-copper-silver-rich VMS deposit that has the potential to be mined independently.

In March 2021, Meridian obtained an environmental permit to start exploration activities at the Cabaçal volcanic massive sulphide project.

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