Benzinga | Dec 17, 2021 07:19AM EST

Equinox Gold Reports Will Sell Its Mercedes Gold Mine For $100M In Cash

Equinox Gold Corp. (TSX:EQX) (NYSE:EQX) ("Equinox Gold" or the "Company") is pleased to announce that it has entered into a definitive agreement to sell its Mercedes Gold-Silver Mine in Mexico ("Mercedes") to Bear Creek Mining Corporation (TSXV:BCM) ("Bear Creek") (the "Transaction") for aggregate consideration of:

* $100 million in cash, payable as follows: $75 million on closing of the Transaction; and $25 million payable within six months of closing of the Transaction.

* 24,730,000 common shares of Bear Creek valued at approximately $25 million based on current trading prices; and a

* 2% net smelter return payable on production from Mercedes.

Christian Milau, CEO of Equinox Gold, commented: "We acquired Mercedes in April this year as part of our acquisition of Premier Gold Mines and the large-scale Greenstone Gold Project. Mercedes is non-core to Equinox Gold, representing 5% of our 2021 production guidance and 2% of our resources. The sale of Mercedes strengthens our balance sheet with $100 million as we focus on growth through expansion and development of our larger gold projects, including Greenstone. Equinox Gold will also become a significant shareholder in Bear Creek, continuing to participate in the success of Mercedes and in the future development of Bear Creek's Corani silver-lead-zinc deposit, one of the largest, fully-permitted silver deposits in the world."

The Transaction is subject to certain regulatory approvals including approval of the Mexican Comisi?n Federal de Competencia Econ?mica and other customary closing conditions. The Transaction is expected to close in the first quarter of 2022.