Equinox Gold Sells Versamet Royalties Stake for C$130M

Equinox Gold sold 8.7 million shares of Versamet Royalties for C$130 million through a block trade arranged by National Bank Financial, the company said Monday. The sale dropped Equinox's stake in the royalty company from 10.7% to 2.7%.

The transaction also terminates Versamet's right of first offer on any royalty or stream Equinox Gold holds, the release said. An investor rights agreement between the two companies will end once Equinox's ownership stays below 10% for 30 consecutive days.

Equinox Gold is in the middle of a merger with Orla Mining, with a shareholder vote set for July 22. The C$130 million from the Versamet sale adds to the cash pile for the combined company. Equinox said it used the proceeds for general corporate purposes.

For Versamet, the removal of the right of first offer simplifies its corporate structure. The royalty company now has fewer strings attached to a major shareholder, which could make it a cleaner target if another buyer emerges. The company's head office remains in Vancouver.

EQX carries an Alpha Score of 51, labeled Mixed, while VMET scores 48, also Mixed. Both sit in the Basic Materials sector. The sale reduces the cross-ownership between the two names, a setup that some traders had flagged as a potential drag on Versamet's standalone valuation.

Equinox Gold will no longer file early warning reports on its Versamet holdings, since its stake fell below 10%. The company said it may buy or sell more Versamet shares depending on market conditions, subject to escrow restrictions.