Equinox sells Brazilian operations to CMOC for over $1B

[Ben Graham]

Equinox Gold (TSX, NYSE-A: EQX) has sold its Brazilian operations to China’s CMOC Group in a deal worth over $1 billion, the company announced in a press release on Sunday.

The assets included in the sale are Equinox’s 100% interest in the Aurizona mine in Maranhão, the RDM mine in Minas Gerais, and the Bahia complex, consisting of the Fazenda and Santa Luz mines. Together, they are expected to deliver 250,000–270,000 oz. of gold production this year, according to company guidance.

The total consideration comprises an upfront cash payment $900 million due on closing, plus a contingent cash payment of up to $115 million linked to the mines’ production, due one year after closing.

Pivot to North America

The asset sale, says Equinox CEO Darren Hall, is a “pivotal step” that positions the company as a pure North American-focused gold producer “underpinned by robust cash flow and a tier-one growth profile.”

Following the divestment, the Equinox Gold portfolio will headlined the Valentine and Greenstone mines in Canada, both of which were brought into commercial production over the past 13 months, and the older Mesquite mine in California that has been active since the late 1980s.

“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,” added Hall.

This year, the Greenstone mine is expected to contribute 220,000 – 260,000 oz. of gold, nearly matching the total combined output of the Brazilian assets. The Valentine mine, which hit commercial production a month ago, is expected to add 175,000–200,000 oz. a year once in full operations. The Mesquite mine is also forecast to produce 85,000–95,000 this year.

Equinox’s future growth profile also includes El Limón and Libertad mines in Nicaragua, which it acquired through its $1.8 billion takeover of Calibre Mining earlier this year.

Stronger balance sheet

In its press release, Equinox noted the sale of its Brazilian operations would strengthen its financial position, as this allow the company to fully repay its $500 million term loan and a $300 million with Sprott.

The immediate debt retirement, it said, would “greatly reduce interest expense and enhance per-share cash flow” to fund organic growth. The company is currently seeking near-growth through planned expansions at the Valentine mine as well as the Castle Mountain project in California, and a new development plan at the Los Filos project in Mexico.

As Valentine and Greenstone reach nameplate capacity, and assuming stable performance across the portfolio, the company said it anticipates production of between 700,000–800,000 oz. next year. A formal production and cost guidance will be provided in early 2026, it added.