VANCOUVER — Equinox Gold Corp. will acquire Leagold Mining Corp. in a friendly deal that will raise its annual production to about one million ounces of gold starting in 2021.

It's offering 0.331 of an Equinox share per Leagold share.

Based on Friday's closing stock prices, Equinox's offer is worth $2.70 per share — equal to Leagold's stock price, which gave it a market value of about $770 million.

The combined company will be owned about 55 per cent by Equinox shareholders and 45 per cent by Leagold shareholders at the time of closing.

With a capitalization of about $1.3 billion and mines in the United States, Mexico and Brazil, the company will operate under the Equinox Gold name and keep its headquarters in Vancouver.

At the same time as the transaction with Leagold, Equinox will do a $670 million financing package consisting of a $40 million equity investment from its chairman, a $130-million debenture issued to Mubadala Investment Co. and $500 million in commitments from a syndicate of lenders to refinance existing credit facilities.

This report by The Canadian Press was first published Dec. 16, 2019.

Companies in this story: (TSX:EQX, TSX:LMC)

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