Equinox Gold surges 7% on $1B Brazil sale, debt slashed to $150M
Balance sheet transformation completes pivot to North American assets as high-cost Brazilian operations sold to CMOC subsidiary
Equinox Gold shares surged to a 52-week high on Friday after the Canadian miner completed the $1.015 billion sale of its Brazilian operations, triggering an immediate debt repayment that has transformed its balance sheet and positioned the company as a North America-focused producer.
The Vancouver-based miner's stock rose 7.4% to $15.93, extending gains that have pushed the shares up more than 60% over the past year. The rally came as Equinox announced receipt of $900 million in cash proceeds from selling its Aurizona Mine, RDM Mine, and Bahia Complex to a subsidiary of China's CMOC Group, with an additional $115 million contingent payment possible based on production targets in 2027.
The transaction immediately eliminated more than $800 million of debt, including the full repayment of a $500 million term loan and $300 million of Sprott Loan obligations. Equinox's net debt has been slashed to approximately $150 million, a dramatic improvement from the roughly $950 million burden that had weighed on the company just days earlier, according to the company's regulatory filing.
"Monetizing the Brazil Operations has streamlined our portfolio and transformed our balance sheet," said Darren Hall, Equinox's chief executive officer. "Equinox Gold is now well established as a leading North America focused gold producer, with greater financial flexibility to self-fund high return, near term organic growth opportunities and consider capital return initiatives."
The strategic divestiture represents a significant shift for Equinox, which had operated in Brazil for years through its acquisition of Leagold Mining in 2020. The Brazilian assets represented roughly one-third of the company's total expected production but were also its highest-cost operations, with All-In Sustaining Costs exceeding $2,000 per ounce, according to industry analysts. By shedding these capital-intensive mines, Equinox has improved its cost profile and reduced exposure to Brazilian regulatory and operational risks.
Analysts have responded positively to the transaction, with several firms upgrading their price targets. TD Securities raised its objective from C$21.00 to C$26.00, while RBC increased its target to C$25. The average analyst price target now stands at approximately C$22.79, according to MarketBeat data, with a consensus "Buy" rating covering 10 analysts.
The balance sheet strengthening comes as Equinox delivers record operational performance. The company produced 922,827 ounces of gold in 2025, including a record 247,024 ounces in the fourth quarter alone. For 2026, excluding the divested Brazilian assets, Equinox expects production of 700,000 to 800,000 ounces, with Canadian production forecast to increase by 80% compared to 2025 levels.
Equinox's growth strategy now centers on its North American portfolio, particularly the Greenstone and Valentine mines in Canada and the Castle Mountain project in the United States. The Valentine mine is expected to reach nameplate capacity by the second quarter of 2026, while the company's development pipeline could add 450,000 to 550,000 ounces of incremental annual production in the coming years.
The debt reduction significantly lowers Equinox's interest expense burden, freeing up cash flow for organic growth initiatives and potential shareholder returns. With the company's market capitalization now exceeding $12 billion, analysts project earnings growth of 49.4% annually over the next three years, driven by the combination of lower debt, improved operational efficiency, and higher-margin North American production.
The transaction also marks a significant expansion for CMOC, the Chinese mining conglomerate that has been aggressively acquiring international assets to build its precious metals portfolio. The purchase price represents a premium to Equinox's carrying value of the Brazilian assets, according to several analysts who reviewed the deal terms.