In a decisive move that reshapes the landscape of the global mining sector, China Molybdenum Company Limited (CMOC Group) has entered into a definitive agreement to acquire the entirety of Equinox Gold Corp.’s mining operations in Brazil. The all-cash transaction, valued at a headline price of US$1.015 billion, signals a monumental shift for both entities. For Canadian-based Equinox Gold, the deal represents a strategic contraction and balance sheet restructuring, while for CMOC, it marks an aggressive expansion beyond new energy metals into the stability of the gold sector.
The agreement is meticulously structured to balance immediate liquidity for the seller with performance assurance for the buyer. The total consideration is comprised of a US$900 million upfront cash payment and a contingent consideration of up to US$115 million. This contingency is linked to 12-month production thresholds, designed to mitigate "high-grading" risks and ensure operational continuity; no payment is triggered if production falls below 200,000 ounces, with the full amount payable only upon exceeding 280,000 ounces. Valuation metrics place the deal at approximately US$4,060 per ounce of annual production and US$202 per resource ounce, a premium that reflects the current strength of the gold market.
For Equinox Gold, this divestiture is a calculated retreat aimed at de-risking the enterprise. The infusion of US$900 million in immediate capital allows the company to extinguish significant liabilities, including a US$500 million term loan and a US$300 million convertible facility. This move is projected to drastically improve Equinox’s leverage profile, reducing its Net Debt/EBITDA ratio from over 3x to below 1x. Furthermore, the sale facilitates a pivot toward a "jurisdictionally safe" portfolio, allowing management to concentrate resources on lower-risk, long-life assets in North America, specifically the Greenstone and Valentine projects, while exiting the higher-cost and complex regulatory environment of Brazil.
Conversely, CMOC’s acquisition is a diversification play designed to hedge against the inherent volatility of the battery metals sector. Having established dominance in cobalt and copper through its assets in the DRC, CMOC is now exposed to the pricing pressures of the EV slowdown. Gold serves as a counter-cyclical stabilizer for the group's earnings. Beyond the commodity mix, the deal offers significant downstream synergies. CMOC intends to integrate these Brazilian assets with IXM, its global trading house, to capture margin across the entire value chain—from extraction to precious metals trading and financing.
The transaction underscores a broader divergence in global commodity markets observed throughout 2024 and 2025. While "future-facing" commodities like lithium and nickel have suffered from inventory destocking and demand destruction, gold has surged to historic highs, driven by central bank accumulation and geopolitical instability. Simultaneously, the deal highlights a geopolitical shift in capital deployment: as Western mining firms retreat from developing markets due to rising capital costs and ESG pressures, entities like CMOC are leveraging state-backed capital and a higher tolerance for jurisdictional risk to acquire productive assets at attractive valuations.
The acquired portfolio, generating roughly 250,000 ounces annually, presents a mix of steady production and turnaround potential. The Aurizona mine offers significant upside through potential underground development, while the Fazenda mine provides stable, steady-state output. However, the portfolio is not without challenges; the Santa Luz operation requires metallurgical optimization to address recovery rates that currently lag feasibility targets, and the RDM mine has faced historical permitting hurdles. CMOC aims to mitigate these risks by leveraging its vertical integration, utilizing direct access to Chinese supply chains to lower input costs and applying its technical expertise to complex metallurgies.
The transaction is expected to close in the first quarter of 2026, pending standard regulatory approvals. Significant antitrust hurdles from Brazil’s CADE are considered unlikely given CMOC’s lack of existing market share in the domestic gold sector. Ultimately, this acquisition positions CMOC to transform from a battery metals specialist into a diversified mining supermajor, while Equinox Gold successfully executes a high-value exit to fortify its North American core.