SEATTLE (Scrap Monster): Equinox Gold Corporation announced that it has entered into a definitive agreement to sell its Mercedes Gold-Silver Mine in Mexico to Bear Creek Mining Corporation.
The assets will be sold for total consideration of $100 million in cash, out of which $75 million will be payable on closing of the transaction, whereas the remaining $25 million will be payable within six months of closing of the transaction. The other considerations include 24.7 million common shares of Bear Creek valued at around $25 million and 2% net smelter return payable upon production from Mercedes.
The transaction is subject to certain regulatory approvals, including approval of the Mexican Comisión Federal de Competencia Económica, apart from other customary closing conditions. It is expected to close during the initial quarter of 20222.
Commenting on the transaction, Christian Milau, CEO, Equinox Gold said that Mercedes is non-core to the company and the sale of it will strengthen its balance sheet with at least $100 million. Mercedes represents approximately 5% of its 2021 production guidance and 2% of its overall resources, Milau added.
Equinox Gold had acquired Mercedes in April this year, as part of its acquisition of Premier Gold Mines.
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