Equinox Gold Corp's C$2.6 billion Acquisition of Calibre Mining Corp
- katerinageorgiou5
- 17 hours ago
- 5 min read
By Edoardo Tosti, Alina Shaik, Alex Svandidze, Julianna Zelnhefer (Boston University); Gabriel Ferraz Girotto, Gabriela Pérez-Hernández, Eva Schuppe (IE University)
Photo: Dominik Vanyi (Unsplash)
Overview of the deal
Acquirer: Equinox Gold Corp.
Target: Calibre Mining Corp.
Implied Equity Value: C$7.7 billion
Total Transaction Size: C$2.6 billion
Closed Date: Expected in Q2 2025
Target Advisor: Not disclosed
Acquirer advisor: Not disclosed
Equinox Gold Corp. has entered into a definitive agreement to acquire Calibre Mining Corp. in an all-stock transaction valued at approximately C$2.6 billion. Under the terms of the agreement, Calibre shareholders will receive 0.31 Equinox shares for each Calibre share held. Upon completion, existing Equinox shareholders will own about 65% of the combined entity, with former Calibre shareholders holding the remaining 35%. The merged company, to continue under the Equinox Gold name, is projected to have a market capitalization of around C$7.7 billion.
Combining Equinox and Calibre unlocks several strategic advantages for both sets of shareholders that would be unavailable on a standalone basis. The deal grants Equinox 100% ownership of two cornerstone Canadian gold mines at the beginning of their mine lives, ensuring an immediate increase in production and cash flow amid a record gold price environment. Additionally, the transaction enhances portfolio diversification, reducing operational risk while providing exposure to significant growth opportunities within the combined asset portfolio. With an expanded reserve and resource base, the new Equinox Gold will benefit from extensive exploration and expansion potential. The enhanced capital markets profile is expected to increase the company’s significance in major indices and attract broader investor interest. The deal also strengthens the leadership team, with key additions to both the Board and management, while generating synergies and improving operational efficiencies through the combination of two highly capable teams.
Leadership of the new entity will include executives from both companies, with Equinox's current President and CEO, Greg Smith, remaining as CEO, and Calibre's President and CEO, Darren Hall, joining as President and COO. The board of directors will consist of ten members, with Ross Beaty serving as Chair, and will include representatives from both Equinox and Calibre.
“This merger represents a transformative step forward for both Equinox and Calibre, bringing together two complementary companies with strong production, growth potential, operational expertise, and a shared commitment to responsible mining.” - Greg Smith, CEO and President of Equinox Gold
Company Details (Acquirer - Equinox Gold Corporation)
Equinox Gold Corporation is a Canadian mining company dedicated to exploring, developing, and operating gold properties across the Americas. The company operates six gold-producing mines across Canada, the United States, Mexico, and Brazil, producing more than one million ounces of gold annually.
Founded in 2007, headquartered in Vancouver, Canada
CEO: Greg Smith
Number of employees: 3,692
Market Cap: $3.15bn (as of 28/03/2025)
Enterprise Value (EV): $4.45bn
LTM Revenue: $1.51bn
LTM EBITDA: $439.8m
LTM EV/Revenue: 3.0x
LTM EV/EBITDA: 10.1x
Recent Transactions: Equinox Gold’s $995m acquisition of Greenstone Gold Mine (2024)
Company Details (Target - Calibre Mining)
Calibre Mining is a Canadian gold producer operating across Newfoundland & Labrador in Canada, Nevada and Washington in the USA, and Nicaragua, with a strong pipeline of development and exploration opportunities. In 2023, Calibre achieved record gold production of 283,494 ounces, exceeding guidance, and increased its cash balance by 52% over the previous year. As a result, the company’s share price has experienced sustained growth since, increasing by 40% in 2023 and 58% in 2024. Due to its diversified operations in mining-friendly jurisdictions, record gold production, and growing cash reserves, Calibre Mining would make a strong acquisition for Equinox Gold.
Founded in 1969, headquartered in Vancouver, Canada
CEO: Darren Hall
Number of employees: ~5,000
Market cap: $2.61bn (as of 19/03/2025)
Enterprise Value (EV): $3.06bn
LTM Revenue: $585.9m
LTM EBITDA: $209.6m
LTM EV/Revenue: 5.22
LTM EV/EBITDA: 14.60
Projections and Assumptions
Short-Term Consequences
Not long after Equinox Gold made its $1.7 billion takeover of Calibre Mining, shares of both firms collapsed, dropping by 3% at Equinox and 7% at Calibre. Such a drop is most likely made from the concerns of investors due to the costs and pressures associated with the combination of the two firms.
The biggest challenge currently is integrating the operations and cultures of Calibre and Equinox without jeopardizing ongoing projects. This involves a lot of work and costs, getting the teams combined and allocating resources effectively across locations. Successful execution of these steps is vital so as not to cause any immediate problems with production and to establish a solid foundation for the company's growth in the future.
The Valentine and Greenstone mines are the most significant to this acquisition and are key to the company's goal of eventually producing 1.2 million ounces of gold annually. In the short term, the combined gold production comes at a good time as gold prices are at an all-time high. Within the year, production and therefore revenue and cash flows should increase from the combined operations.
Long-Term Upsides
The all-stock deal between Equinox Gold and Calibre Mining establishes New Equinox Gold as a major Americas-focused gold producer. This strategic combination is projected to result in over 1.2 million ounces of annual gold production, positioning it as the second-largest gold producer in Canada. This increased production capacity is significantly bolstered by two new, long-life, low-cost, open-pit gold mines, Valentine and Greenstone, expected to contribute 590,000 ounces of gold per year at full capacity. The merger enhances portfolio diversification, reduces operational risk, and provides access to substantial growth opportunities, backed by a significant reserve and resource base for further exploration and expansion.
Beyond increased production, the merger aims to enhance the company's capital markets profile and strengthen its leadership team. The combined entity anticipates realizing synergies that will contribute to long-term growth and sustained shareholder value creation. By integrating Calibre’s efficient operating model with Equinox’s established expertise, the company expects to optimize resource utilization and streamline operations. This integration is expected to drive cost efficiencies and optimize resource utilization, leading to improved long-term profitability.
New Equinox Gold is committed to responsible mining practices and maintaining strong relationships with local stakeholders. This focus on sustainable and ethical operations ensures a long-term social license to operate, fostering trust and stability in the regions where it operates and solidifying its position as a leading and trusted gold producer.
Risks and Uncertainties
Although Equinox Gold's acquisition of Calibre Mining broadens its gold holdings, it also entails considerable risks. There are strategic and logistical difficulties in integrating Calibre's activities in Nicaragua, particularly the Limon and Libertad mines. While existing exploration projects must continue uninterrupted to reach production objectives, differences in mining processes and personnel arrangements may result in inefficiencies.
Uncertainties also exist over the deal's financial structure. Equinox has the risk of increasing leverage and higher borrowing costs if it chooses to finance through debt, which might put pressure on its balance sheet. On the other hand, issuing additional shares can make current shareholders less powerful. Expected synergies might not occur if Equinox overpays for Calibre, which would lower profits.
Additionally, the volatility of the price of gold is another uncertainty. Given that both businesses depend on the supply of gold, declining prices may put pressure on profits, especially if operating expenses increase. Low production costs have helped Calibre, but any cost increase might reduce profits.
The acquisition is made more difficult by Nicaragua's geopolitical and regulatory challenges. Environmental laws, possible tax rises, and political unpredictability might cause operational disruptions or cost increases. Tighter ESG regulations may also affect Equinox since mining operations raise environmental issues that could jeopardise the company's finances and image.
Even if this purchase has room to develop, these concerns might make it less successful. Maximising wealth and guaranteeing long-term stability will require proactive management of geopolitical and ESG issues, financial discipline, and effective integration.
Sources
Equinox Gold to buy Calibre for $1.8B - MINING.COM