Equinox exits Brazil in $1B China deal

Equinox Gold (TSX, NYSE-A: EQX) is selling its Brazilian operations to China’s CMOC Group in a deal worth over $1 billion (C$1.38 billion) to focus on North America. 

The assets include the Aurizona mine in Maranhão, the RDM mine in Minas Gerais, and the Bahia complex, consisting of the Fazenda and Santa Luz mines, Equinox said Dec. 14. Together, their annual gold output is forecast at 250,000–270,000 ounces. 

The total consideration comprises an upfront cash payment of $900 million due on closing, plus a contingent cash payment of up to $115 million linked to the mines’ production, due one year after closing. The sale marks another example of M&A activity in the precious metal sector where metals prices have rocketed.  

The sale is a logical capital allocation decision, according to Hayward Securities mining analyst Jamie Spratt. 

“The transaction repositions Equinox as a North America focused gold producer and, in our view, upgrades the overall asset quality through the exit of higher cost, shorter life Brazilian assets while also de-levering the balance sheet,” Spratt said in a note. “The combination of higher asset quality, lower costs, and improved balance sheet strength should outweigh the lost production and asset value from our model.”  

North America 

The Valentine mine in Newfoundland and the Greenstone mine in Ontario, both of which were brought into commercial production over the past 13 months, now form the crux of Equinox’s operations, along with the older Mesquite mine in California that’s been active since the late 1980s. 

“Monetizing our Brazil operations simplifies the portfolio and enables the company to deploy capital toward higher-return, lower-risk, organic-growth opportunities in Canada and the United States,” CEO Darren Hall said in a release. The “pivotal step” is “underpinned by robust cash flow and a tier-one growth profile,” he said. 

Equinox said it intends to use the Brazil sale to repay debt, such as a $500-million term loan and a $300-million facility with Sprott, and fund organic growth. That includes planned expansions at the Valentine mine as well as the Castle Mountain project in California, and a new development plan at the Los Filos project in Mexico. 

The future growth of Equinox, which is chaired by Canadian Mining Hall of Fame member Ross Beaty, also includes the El Limón and Libertad mines in Nicaragua. The company acquired them through its $1.8-billion takeover of Calibre Mining in 2025. 

Canada 

The Greenstone mine was expected to contribute 220,000 – 260,000 oz. of gold in 2025, nearly matching the total combined output of the Brazilian assets. The Valentine mine, which hit commercial production in November, is expected to add 175,000–200,000 oz. a year once in full operations. The Mesquite mine was forecast to produce 85,000–95,000 oz. last year. 

The company estimates total output between 700,000–800,000 oz. in 2026. A formal production and cost guidance is due early this year.  

Shares in Equinox Gold closed at C$20.23 apiece in Toronto before the deal, valuing the company at C$15.9 billion. Like most gold producers, the stock has more than doubled in 2025 on record bullion prices.