“We are extremely pleased to increase our stake in this world-class Canadian gold deposit located in one of the world’s top mining jurisdictions. Hardrock will be a low-cost, long-life gold mine, bringing more than 240,000 attributable ounces of annual gold production to Equinox Gold when in production, with significant upside potential from near-mine exploration and underground development,” Christian Milau, CEO of Equinox, said in a release.
The transaction terms include a $51 million payment at closing, with up to $41 million payable in shares at Equinox’s option; and Equinox assuming contingent payment obligations that include $5 million in cash due 24 months after a positive construction decision; and the delivery of approximately 2,200 oz. of refined gold, its cash equivalent value, or a mix of the two, after three production milestones from Hardrock.
This transaction is expected to close in March.
In January, Orion closed its purchase of the 50% share in the Hardrock project from Centerra Gold (TSX: CG) for approximately $210 million in cash and up to $75 million in contingent payments.
The pre-production Hardrock project, 275 km northeast of Thunder Bay, includes the past-producing Hardrock, MacLeod-Cockshutt and Mosher underground mines that produced over two million gold oz. between the late 1930s and 1970.
According to the Greenstone Gold Mines website (the partnership for the development of Hardrock), the latest vision is to mine the existing deposit as an open pit over a 15-year mine life, using a 27,000 t/d mill.
(This article first appeared in the Canadian Mining Journal)