Canadian gold miners Equinox, Orla unveil $18bn merger

(Sharecast News) - Shares in Canadian precious metal miners Equinox and Orla were trading slightly lower on Wednesday as investors gave a muted reaction to the companies' proposed $18.5bn merger.

The agreed tie-up, which is set to form one of the region's largest pure-play producers of the yellow metal, will create a portfolio of six operating mines across North America producing a combined 1.1m ounces of gold each year.

The companies said there was a "clear path" to add more than 800,000 ounces of gold production each year from current expansion plans across the portfolio.

Under the terms of the deal, Equinox will acquire all of the issued and outstanding common shares of Orla, with Orla shareholders receiving one Equinox and a nominal cash payment for each Orla share held. Equinox and Orla shareholders will own 67% and 33% of the combined company upon closing, respectively.

Based on current consensus estimates, the combined free cash flow of the two firms will equal $1.4bn in 2026, with $1.4bn of total available liquidity.

"Today is an incredibly exciting day for both Equinox and Orla shareholders as we announce a business combination that creates a senior North American gold producer with increased scale, high-quality long-life assets, and one of the strongest organic growth pipelines in the sector," said Equinox's chief executive Darren Hall.

"By combining our operating teams, financial strength, and complementary asset bases, we are creating a differentiated North American gold producer with the scale, growth profile, and asset quality to drive a meaningful re-rate and deliver long-term value for shareholders."

Equinox shares were down 2.7% at CAD19.74 by mid-morning trade in Toronto, while Orla was down 0.2% at CAD19.81.