Canadian Equinox Gold announced the sale of gold mines in Brazil for US$1.015 billion to Chinese company CMOC Group. The mines sold are Aurizona, in Maranhão; Riacho dos Machados, in Minas Gerais; and others in the so-called Bahia Complex. 100% of operations will be sold.
In the agreement reached with the Chinese, Equinox Gold will receive US$900 million in cash at the closing of the operation, which still depends on approval from Brazilian bodies.
Another US$115 million will be paid a year later, subject to adjustments and productivity contingents, according to a statement. The expectation is that the operation will close in the first quarter of 2026.
The sale of the mines comes amid record highs, with increased geopolitical and economic uncertainty leading investors to seek safety in the metal.
Demand for gold has been gaining strength for at least three years, driven by purchases by central banks, especially China. Since 2023, gold has risen by more than 60% and this year the price of a troy ounce surpassed the US$4,000 mark for the first time.
With the rise in gold prices, investment bankers and law firms say that there has been an intense movement of foreign buyers searching for gold mines in Brazil and other parts of the world. Recently, the sale of a mine in Argentina entered the market.
Equinox Gold must use the proceeds from the sale to pay off debts, one of US$500 million relating to a loan and another of US$300 million. With the sale of the Brazilian operation, Equinox informs that it will focus on operations in Canada, California and Nicaragua.
In the transaction, Equinox was advised by the bank BMO Capital Markets and by the law firms Blake, Cassels & Graydon and Veirano Advogados. CMOC was advised by Canaccord Genuity Corp and the firms McCarthy Tétrault and Mattos Filho.
