Equinox Gold Corp. and Leagold Mining Corp. plan to merge, creating one of the top gold producing companies operating entirely in the Americas. The combined entity will continue as Equinox Gold and be headquartered in Vancouver, Canada.

Pro forma gold production of 700,000 ounces (oz) in 2020 will grow to 1 million oz during 2021 and beyond. Equinox Gold will operate six operating mines in the U.S., Mexico and Brazil. With a strong balance sheet and cash flow, the company said it will have the ability to fully fund two development projects and two expansion projects. A pro forma market capitalization of $1.3 billion will provide scale, liquidity and re-rate potential, according to the companies.

The new Equinox Board, led by Ross Beaty (former Equinox chairman), will have eight members with four from each company. The company will have an experienced management team led by Neil Woodyer as CEO, Christian Milau as executive vice president of corporate, Attie Roux as COO and Peter Hardie as CFO.

“In addition to having strong financial and operating metrics, our large scale will provide improved liquidity, greater asset and country diversification and a lower risk profile for all shareholders,” Beaty said. “This is the kind of gold company investors want today and I’m very pleased we are combining forces to achieve it.”

Leagold shareholders will receive 0.331 of an Equinox Gold share for each Leagold share held. This implies at-market consideration of C$2.70 per Leagold common share, using closing prices for both Equinox Gold and Leagold common shares on the Toronto Stock Exchange on December 13. At closing, existing Equinox Gold and Leagold shareholders will own approximately 55% and 45% of the merged company, respectively, on an issued share basis.

“The combination of Leagold and Equinox Gold will deliver on a promise we made to our shareholders when we launched Leagold three years ago: to create a major gold producer in a short time frame in anticipation of a new phase to the gold bull market that started in 2001,” said Frank Giustra, chairman of Leagold. “I will be stepping down as chairman and director to focus on my global philanthropic work but will remain an enthusiastic shareholder as I believe that together, Ross Beaty, Neil Woodyer and their management team will continue to grow Equinox Gold and deliver value to our shareholders.”

Equinox Gold is producing gold from its Mesquite gold mine in California and its Aurizona gold mine in Brazil. It is also constructing its Castle Mountain gold mine in California with the target of pouring gold in the third quarter of 2020. Leagold owns four operating gold mines in Mexico and Brazil, along with a near-term gold mine restart project in Brazil and an expansion project at the Los Filos mine complex in Mexico.

The transaction is subject to regulatory approvals. It is expected to close in the first quarter of 2020.