The Federal Commission for Economic Competition (Cofece) authorized the concentration between Equinox Gold Corp, i-80 Gold Corp. and Premier Gold Mines Limited.
By way of introduction, on January 2, 2021, Equinox Gold, Premier Gold Mines Limited and i-80 Gold Corp. notified Cofece of their intention to carry out a concentration, in accordance with the provisions of the Federal Law on Economic Competition (LFCE ) from Mexico.
Earlier, on December 16, 2020, Equinox Gold announced that it had entered into a definitive agreement with Premier Gold Mines Limited, whereby Equinox Gold will acquire all outstanding shares of Premier, and each Premier shareholder will receive 0.1967 of a common share of Equinox Gold for each Premier share owned.
In addition, the company will retain Premier’s interest in the ready-for-build Hardrock mine project in Ontario, Canada; the Mercedes mine in production in Mexico; and the exploration-stage Hasaga and Rahill-Bonanza properties in Ontario.
At the same time, Premier will split among its shareholders shares of a newly created United States-focused gold production and development company to be called i-80 Gold Corp., which owns Premier’s South-Arturo and McCoy-Cove properties. and will complete Premier’s previously announced acquisition of the Getchell Project.
Concurrent with or earlier with the closing of the Premier Transaction, i-80 Gold intends to fund up to $ 75 million. Equinox Gold has agreed to subscribe 30% of the total amount of the financing up to a maximum subscription amount of $ 22.5 million.
The Cofece is in charge of the prevention of concentrations whose object or effect is to diminish, damage or impede competition and free competition.
It is also empowered to challenge and sanction those concentrations and legal acts derived from them, whose object or effect is to diminish, damage or impede competition and free competition, in the production, distribution and commercialization of goods and services in the Mexican Republic.
Therefore, it may authorize concentrations that are not contrary to the process of competition and free competition in terms of the LFCE.
The notified transaction consists of the acquisition by Equinox Gold of up to 100% of the issued and outstanding ordinary shares of Premier.
In return, Premier shareholders will collectively acquire approximately 16% of Equinox shares.
At the same time, derived from the acquisition of Premier, Equinox will indirectly acquire: approximately 30%) of the capital stock of SpinCo and 100% of the capital stock of certain Mexican companies.