THUNDER BAY — Two new players are taking over development of a new gold mine just outside Geraldton.
Canadian mining company Equinox Gold Corp. has announced the friendly acquisition of Thunder Bay-based Premier Gold Mines.
Equinox will retain Premier's 50 per cent interest in the Greenstone Gold Mines Hardrock Project at Geraldton, as well as other properties.
The announcement comes a day after Premier and Centerra Gold announced that the private equity firm Orion Mine Finance Group had agreed to acquire Centerra's 50 per cent interest in the Greenstone Gold Mines Partnership, for $225 million.
When that deal was revealed, Premier's CEO and president, Ewan Downie, said it "paves the way for the development of Premier’s flagship asset. We look forward to working with Orion, a long-standing supportive partner of Premier, in advancing the Hardrock Project on an expedited timeline."
Downie added “This new partnership will unlock the substantial value of one of North America’s most advanced, permitted and well-located, multi-million-ounce gold projects.”
Istvan Zollei, portfolio manager at Orion, said “Orion looks forward to being a partner in turning the Hardrock Project into Ontario’s next prominent mine. After years of successful exploration and development work, we believe the Greenstone Project has the potential to grow into a large, long-lived gold mining operation with multiple deposits.”
In a statement Wednesday related to the subsequent Equinox acquisition of Premier, Equinox chairman Ross Beaty said "Hardrock will be an excellent, low-cost long-life gold mine with significant exploration upside."
CEO Christian Milau said he expects Hardrock "will unlock substantial value for both Equinox Gold and Premier Gold shareholders. We look forward to developing Hardrock with Orion as our partner."
Milau also said the company expects to welcome Downie, Premier's president and CEO since its inception in 2006, to the board of directors once the transaction is closed.
"Ewan is a well-respected company builder who will bring additional expertise for the exploration and management of our properties in Mexico, the United States, and now Canada," he added.
Upon the closing of the deal, Equinox will own about 84 per cent of Equinox Gold, and Premier shareholders will own about 16 per cent.
A Reuters report estimated the value of the all-stock deal at about $612 million.
Both transactions are expected to close in the first quarter of 2021.
