With a weaker US dollar, gold prices are getting closer to $3,000. In fact, “The dollar’s move lower this month has enabled spot gold to be kept around its record highs, supported by a surge of inflows into bullion-backed exchange-traded funds,” said Han Tan, Exinity Group chief market analyst, as quoted by Reuters. In addition, the growing threat of a trade war, induced by President Trump’s tariffs have been another key catalyst for gold prices. All of which is creating substantial momentum in gold stocks, such as Calibre Mining (TSX: CXB) (OTCQX: CXBMF), Equinox Gold Corp. (NYSE: EQX) (TSX: EQX), Newmont Corporation (NYSE: NEM) (TSX: NGT), Franco Nevada Corp. (NYSE: FNV) (TSX: FNV), and Alamos Gold (NYSE: AGI) (TSX: AGI).
Helping, analysts at Citi just raised their near-term and 2025 average gold price forecasts, citing trade wars and geopolitical risks, along with strong central bank buying. The firm changed its near-term price target to $3,000 per ounce from $2,800 and hiked its 2025 average forecast to $2,900 per ounce from $2,800. “The gold bull market looks set to continue under Trump 2.0 with trade wars and geopolitical tensions reinforcing the reserve diversification or de-dollarization trend and supporting emerging markets official sector gold demand,” Citi added, as also quoted by Reuters.
Goldman Sachs also “raised its year-end 2025 gold price forecast to $3,100 per ounce, up from $2,890, citing sustained central bank demand. The bank estimates that ‘structurally higher central bank demand will add 9% to the gold price by year-end, which combined with a gradual boost to ETF holdings as the funds rate declines.’”
Look at Calibre Mining (TSX: CXB) (OTCQX: CXBMF), For Example
Calibre Mining Corp. and Equinox Gold Corp. just announced that the Companies have entered into a definitive arrangement agreement in an at-market business combination whereby Equinox will acquire all the issued and outstanding common shares of Calibre pursuant to a court-approved plan of arrangement. The combined company will continue under the name “Equinox Gold Corp.”
The Transaction will create an Americas-focused diversified gold producer with a portfolio of operating mines in five countries anchored by two high-quality, long-life, low-cost Canadian gold mines. The Greenstone Mine in Ontario achieved commercial production in November 2024 while the Valentine Gold Mine in Newfoundland & Labrador is nearing construction completion with first gold pour targeted for mid-2025. Collectively, these two cornerstone assets are expected to produce an average of 590,000 ounces of gold per year when operating at capacity. With 100% ownership of Greenstone and Valentine, New Equinox Gold will become the second largest gold producer in Canada.
The combined company is expected to produce approximately 950,000 ounces of gold in 20251, not including production from Valentine or Los Filos. New Equinox Gold has the potential to produce more than 1.2 million ounces of gold per year with Greenstone and Valentine operating at capacity. Additionally, the combined company will have a large gold endowment of Mineral Reserves and Mineral Resources, and a highly prospective pipeline of development, expansion and exploration projects for low-risk sustainable growth.
Under the terms of the Arrangement Agreement, Calibre shareholders will receive 0.31 Equinox common shares for each Calibre common share held immediately prior to the effective time of the Transaction. Upon completion of the Transaction, existing Equinox shareholders and former Calibre shareholders will own approximately 65% and 35% of the outstanding common shares of the combined company, respectively, on a fully diluted in-the-money basis. The implied market capitalization of the combined company is estimated at C$7.7 billion.
New Equinox Gold will benefit from the expertise and successful track record of two industry leaders: Ross Beaty and Featherstone Capital (Blayne Johnson and Doug Forster), who have created substantial shareholder value over multiple decades in the mining sector, all of whom will serve on the Board of Directors of New Equinox Gold.
Strategic Rationale of the Transaction
Merging Equinox and Calibre will create:
– A major diversified gold producer in the Americas: Potential for more than 1.2 million ounces of annual gold production from a portfolio of mines in five countries in the Americas
– The second largest gold producer in Canada: Greenstone and Valentine, two new long-life, low-cost, open-pit gold mines, are expected to produce collectively 590,000 ounces of gold per year when at capacity
– Substantial free cashflow: Immediate increase in production at record high gold prices drives superior free cash flow to quickly deleverage
– Exceptional growth profile: Additional production growth from the ramp up of Valentine and a pipeline of development and expansion projects
– Significant re-rate potential based on valuation of peers: Greater scale, lower risk, near-term production growth, and superior free cash flow relative to peers, providing significant revaluation potential
– An industry-leading team: Proven track record of delivery and shareholder value creation led by Ross Beaty, and Blayne Johnson and Doug Forster of Featherstone Capital, who will all serve on the Board of Directors of New Equinox Gold
Greg Smith, President and Chief Executive Officer of Equinox, stated: “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. By combining our assets, teams, and financial strength, we are creating a leading Americas-focused gold producer with enhanced scale, resilience, and the ability to generate significant long-term value for our shareholders and stakeholders.”
Darren Hall, President and Chief Executive Officer of Calibre, stated: “The merger with Equinox provides combined shareholders a diversified gold production base with significant growth opportunities. The combination of two new, long-life, low-cost, open-pit gold mines, Valentine and Greenstone, will be the cornerstone of an exciting new major Canadian gold producer that will be positioned to generate substantial shareholder value. I look forward to working with the combined team to continue Calibre’s track record of superior execution and delivering on our commitments.”
Benefits to Shareholders
– Combining Equinox and Calibre unlocks benefits for both sets of shareholders that would be unavailable on a standalone basis, including:
– 100% ownership of two cornerstone Canadian gold mines at the beginning of their mine lives
– Immediate increase to production and cash flow in a record gold price environment
– Enhanced portfolio diversification and reduced risk
– Exposure to several significant growth opportunities within the portfolio
– Substantial reserve and resource base with exploration and expansion potential
– Enhanced capital markets profile with greater significance for indices and investors
– Strengthened leadership team with key additions to both the Board and management
– Realizable synergies and improved efficiencies with the combination of two strong teams
Leadership and Governance
Upon closing of the Transaction, management of the combined operations will include executives from both Equinox and Calibre, with Equinox’s current President and Chief Executive Officer, Greg Smith, remaining as Chief Executive Officer and Calibre’s current President and Chief Executive Officer, Darren Hall, joining management as President and Chief Operating Officer of New Equinox Gold.
The Board of Directors of the combined company will consist of ten directors, with Ross Beaty as Chair, along with five additional directors from Equinox, including Greg Smith, and four directors from Calibre, including Doug Forster and Blayne Johnson.
Ross Beaty, Chair of Equinox, stated: “Great companies are built on strong foundations and strong teams. The combination of Equinox and Calibre brings together two new Canadian cornerstone gold mines, Greenstone and Valentine, a portfolio of operating gold mines in the Americas, and two excellent operating teams to create a gold mining powerhouse. With improved scale, diversification and financial strength, New Equinox Gold will be well positioned to deliver long-term value to its shareholders. I’m really excited about our future as a great new major gold mining company.”
Blayne Johnson, Chair of Calibre, stated: “This merger creates a major gold producer with a solid foundation of two brand-new, high-quality, long-life mines: Greenstone and Valentine. Positioned in Canada’s top gold regions, this combination transforms New Equinox Gold into the country’s second-largest gold producer. With a strong portfolio of highly profitable and prospective assets across the United States, Mexico, Nicaragua, and Brazil, the company is well-positioned for long-term growth and sustained shareholder value creation. Doug and I look forward to continuing as directors and shareholders, working closely with Ross and the combined Equinox-Calibre team to build on Calibre’s strong track record of operational excellence and execution for its shareholders.”
Transaction Details
Pursuant to the terms and conditions of the Arrangement Agreement, Calibre shareholders will receive 0.31 of an Equinox common share for each Calibre common share held immediately prior to the Effective Time. In addition, Calibre’s outstanding convertible securities will be treated in accordance with the terms of the Arrangement Agreement.
The Transaction will be effected pursuant to a court approved plan of arrangement under the Business Corporations Act (British Columbia). The Transaction will require approval by 66 2/3 percent of the votes cast by the shareholders of Calibre and 66 2/3 percent of the votes cast by the shareholders and option holders of Calibre, voting together as a single class, at a special meeting of Calibre shareholders expected to be held before May 31, 2025. The Transaction will also require approval of a simple majority of votes cast by the shareholders of Calibre, excluding those votes attached to Calibre common shares held by persons required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transaction.
The issuance of the Equinox common shares pursuant to the Transaction is also subject to approval by the shareholders of Equinox with a simple majority threshold of votes cast in favour at a special meeting of shareholders, also expected to be held before May 31, 2025.
Board of Directors’ Recommendations
The Arrangement Agreement has been unanimously approved by the board of directors of each of the Companies. Both boards of directors unanimously recommend that their respective shareholders vote in favour of the Transaction.
BMO Capital Markets has provided a fairness opinion to the board of directors of Equinox stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Exchange Ratio provided for pursuant to the Transaction is fair, from a financial point of view, to Equinox.
National Bank Financial Inc. and Canaccord Genuity Corp. have each provided oral fairness opinions to the board of directors of Calibre stating that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in each such opinion, the consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the shareholders of Calibre (other than Equinox).
Advisors and Counsel
BMO Capital Markets and GenCap Mining Advisory are acting as financial advisors to Equinox. Blake, Cassels & Graydon LLP is acting as Canadian legal advisor to Equinox.
Trinity Advisors Corporation and Canaccord Genuity Corp. are acting as financial advisors to Calibre. Canaccord Genuity Corp. and National Bank Financial Inc. have provided fairness opinions to the board of directors of Calibre. Cassels Brock & Blackwell LLP is acting as Canadian legal advisor to Calibre.
Other related developments from around the markets include:
Equinox Gold Corp. announced its unaudited financial and operating results for the fourth quarter and fiscal year ended December 31, 2024. Greg Smith, President & CEO of Equinox Gold, commented: “Equinox Gold finished 2024 with its strongest quarter of production, bringing full-year production to an annual record of 621,893 ounces of gold with 623,579 ounces of gold sold, and driving record financial results including revenue and cash flow from operations. These results reflect commencement of production from our new Greenstone Mine where we consolidated 100% ownership of the mine, achieved commercial production, and produced more than 111,700 ounces of gold at Greenstone in its first, partial year of operations. Looking forward, we expect to produce between 635,000 to 750,000 ounces of gold in 2025 with cash costs of $1,075 to $1,175 per ounce and all-in sustaining costs of $1,455 to $1,550 per ounce. This guidance does not include any production from our Los Filos Mine in Mexico. We have reached consensus on new agreements with the three local communities and two communities have ratified and signed new long-term agreements; however, one community remains outstanding. Continuing operations at Los Filos in 2025 is subject to the successful completion of new long-term agreements with all three communities in the very near term.”
Newmont announced that it has agreed to sell its Musselwhite operation in Ontario, Canada, to Orla Mining Ltd for up to $850 million in total consideration. Under the terms of the agreement, Newmont will receive cash consideration of $810 million upon closing and up to $40 million 1 in contingent payments. The transaction is expected to close in the first quarter of 2025, subject to certain conditions being satisfied. 2 Upon closing the announced transactions, Newmont will have surpassed its target of delivering more than $2 billion in gross proceeds from non-core divestitures.
Franco Nevada just noted, “Record gold prices generated higher revenues, Adjusted EBITDA and earnings in Q3 compared to Q2 2024,” stated Paul Brink, CEO. “GEO sales were stable compared to Q2 although lower compared to Q3 2023 without the contribution from Cobre Panama. The quarter benefitted from contributions from the newly commissioned Tocantinzinho mine in Brazil, and increased contributions from royalties from the recently completed Greenstone mine and the newly acquired Yanacocha royalty. Candelaria reported an increase in copper and gold production for the quarter. While Candelaria’s copper output is on track, Lundin Mining has revised its 2024 gold production guidance lower to reflect revised gold grades for the period. In addition, revenue from our Diversified assets translated into lower GEOs reflecting record gold prices. We have adjusted our 2024 guidance as a result. Franco-Nevada continues to benefit from higher gold prices with limited exposure to cost inflation. The company remains debt-free with substantial available capital and has a strong pipeline of potential precious metal streams and royalties.”
Alamos Gold reported fourth quarter and annual 2024 production. The Company also provided updated three-year production and operating guidance and announced a construction decision on the Lynn Lake project in Manitoba. “With the solid finish to the year, we met both our quarterly and increased annual production guidance. Production increased 7% from 2023 to a record 567,000 ounces and combined with strong margin expansion, we generated record revenues and free cash flow while investing in high-return growth,” said John A. McCluskey, President and Chief Executive Officer. “This investment in growth is expected to drive our production 24% higher over the next three years. We are also pleased to announce the start of construction on Lynn Lake, another attractive project that will provide additional growth into 2028. All of this growth is in Canada, it is lower cost, and it is all fully funded providing Alamos with one of the strongest outlooks and lowest political risk profiles in the sector. This growth is underpinned by high-quality, long-life assets with significant upside potential that we expect to continue to unlock with our largest exploration budget ever,” Mr. McCluskey added.
Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for Calibre Mining Corp. by Calibre Mining Corp. We own ZERO shares of Calibre Mining Corp. Please click here for disclaimer.
Contact:
Ty Hoffer
Winning Media
281.804.7972
[email protected]
