Canadian mining companies Trek Mining, NewCastle Gold and Anfield Gold have hired Fasken Martineau in Vancouver, Pinheiro Neto Advogados in Brasília, Canadian firm Blake, Cassels & Graydon LLP, Veirano Advogados in Rio de Janeiro and Borden Ladner Gervais LLP in Vancouver for the merger of their businesses into a new entity, Equinox Gold, which owns assets in Brazil and the US and has stakes in various gold mining facilities in Peru, Brazil and Canada.
Veirano Advogados advised Trek, which will own 44% of Equinox Gold. It is thought that Blake, Cassels & Graydon LLP also advised Trek, but this could not be confirmed prior to publishing. Fasken Martineau in Vancouver and Pinheiro Neto in Brasília advised NewCastle, which will also own 44% of the entity.
Borden Ladner Gervais LLP in Vancouver worked with Anfield in the transaction. It will own a 12% share of Equinox Gold.
The deal closed on 25 October. The new venture owns the Aurizona mine in Maranhão, Brazil, and Castle Mountain mine in California, USA. The former used to be owned by Trek, and the latter by NewCastle. Both mines are currently inactive, but a feasibility study at Aurizona in July outlined plans for the new development, which is now under construction and is estimated to cost US$131 million. Once completed, the open-pit gold mine is expected to produce around 136,000 ounces of gold per year. Meanwhile, a pre-feasibility study is underway at Castle Mountain to assess plans for the gold mine to return to production by the end of 2020.
Adding to its presence in Latin America, Equinox will hold an 83% share in Koricancha Mill, a gold-processing facility in Peru. Peruvian company EMC Green Group holds the remaining 17%.
It also takes on the Coringa gold project in Para state, Brazil, from former owner Anfield, as well as the Elk project in British Colombia, Canada, from Trek.
Veirano Advogados partner Pedro Garcia, who led the Brazilian leg of the deal for Trek, says the transaction is evidence of a renewed interest in the Brazilian mining sector. He points to Brazilian mining company Nexa Resources' recent US$496 million IPO as further proof of restored confidence in the sector.
The proposed board of directors for Equinox will be headed by Ross Beaty, formerly Anfield's largest shareholder. He will invest some US$20 million into the company, owning approximately 11% of Equinox.
Counsel to NewCastle Gold
Partner Johanna Fipke in Vancouver
Pinheiro Neto Advogados
Partner Carlos Vilhena and counsel Adriano Trindade in Brasília
Counsel to Trek Mining
Blake, Cassels & Graydon LLP
Partner Pedro Garcia and associate Manuela Commette in Rio de Janeiro
Counsel to Anfield
Borden Ladner Gervais LLP
Partners Fred Pletcher, Stephen Robertson, Randy Morphy, Kirsten Kjellander, Jeffrey Thomas and Steve Warnett, and associates Tom Ladner, Michelle Wilkinson, Salvador Pimentel, and Danielle Lewchuk in Vancouver