New Gold plans to sell its Mesquite mine, located in California, to Equinox Gold for $158 million in cash. The transaction is expected to be completed in the fourth quarter of 2018.

“Mesquite has generated significant value for New Gold, averaging more than 135,000 ounces of gold per year over the last 10 years since Western Goldfields, a predecessor to New Gold, brought the mine back into production,” said Renaud Adams, president and CEO of New Gold.

Equinox intends to fund the transaction through a combination of committed debt and equity.

Adams said the proceeds of the transaction will be used to strengthen the balance sheet and enhance the overall financial flexibility of the company. The transaction is subject to customary closing conditions, but does not require an Equinox shareholder vote.