11:15 AM EDT, 10/03/2024 (MT Newswires) -- (Adds analyst comment.)

Equinox Gold (EQX.TO, EQX) on Thursday said it issued 24.76-million shares to Ninety Fourth Investment Company, an affiliate of MDC Industry Holding Company, on the conversion of a US$130-million convertible note held by MDC.

Additionally, Equinox Gold ( EQX ) and Ninety Fourth agreed that BMO Capital Markets will purchase on a bought deal basis the 24.76-million shares from Ninety Fourth at US$5.65 per share for total gross proceeds of US$140 million.

Equinox Gold ( EQX ) will not receive any funds from the share sale, with all proceeds going directly to Ninety Fourth.

"Conversion of the US$130 million convertible note reduces our current debt and meaningfully enhances our liquidity," said Equinox chief executive Greg Smith.

MDC's US$130 million note was issued in 2019 with a US$5.25 per share conversion price. Upon the offering's completion, MDC will continue to hold a second US$130 million Equinox convertible note with a Sept. 10, 2025, maturity date and a US$6.50 per share conversion price, representing 4.22% of the issued and outstanding shares on an as-converted basis.

The offering is scheduled to close Oct. 9, subject to customary closing conditions.

National Bank of Canada maintained its outperform rating and $10.00 price target on the company following the news.

The bank said its rating for Equinox is based on the company's reduced geopolitical risk and improved consolidated cost structure with the recent deal to own 100% of the Greenstone mine.

Equinox Gold ( EQX ) shares were last seen down $0.39 to $7.93 on the Toronto Stock Exchange.

Price: 7.91, Change: -0.41, Percent Change: -4.93