07:43 AM EST, 12/16/2019 (MT Newswires) -- Equinox Gold Corp. (EQX.TO) and Leagold Mining Corporation (LMC.TO) are combining. The new entity will continue as Equinox Gold and be headquartered in Vancouver.

Leagold shareholders will receive 0.331 of an Equinox Gold share for each Leagold share held, implying at-market consideration of $2.70 per Leagold common share. At closing, existing Equinox Gold and Leagold shareholders will own approximately 55% and 45% of the merged company, respectively, on an issued share basis. The transaction is expected to close in the first quarter of 2020.

The combined company boasts of gold production of 700,000 ounces in 2020, increasing to 1 million ounces annualized production during 2021 and beyond, based on analyst consensus estimates. It will have a diversified operating platform with six operating mines in the US, Mexico and Brazil.

The new Board of Directors will be chaired by current Equinox chairman Ross Beaty and have eight members with four from each company. Neil Woodyer (Leagold) will be CEO, Christian Milau as EVP Corporate, Attie Roux as COO and Peter Hardie as CFO.

Leagold chairman Frank Giustra, will be stepping down.

The companies also announced a concurrent $670 million financing package -- Ross Beaty will subscribe for $40 million in a private placement of Equinox Gold common shares at a price of C$8.15 per common share to maintain an approximate 9% stake in the company. Mubadala will subscribe for a new 5-year $130 million convertible debenture bearing interest at 4.75% and convertible into Equinox Gold common shares at US$7.80 per share. To refinance existing debt and credit facilities of both Equinox Gold and Leagold, a syndicate of banks comprising The Bank of Nova Scotia, Societe Generale, Bank of Montreal, and ING Capital LLC have provided underwritten commitments for a 5-year term loan of $100 million and a 4-year revolving credit facility of $400 million. These financings are subject to completion of definitive documentation, regulatory approvals and other customary closing conditions.