Equinox Gold sold the Pan Mine to Minera Alamos for US$90m in cash and shares.

At the surface it looks like a great deal for both companies. Equinox gets cash for their balance sheet and Minera Alamos gets Nevada gold production.

Pan is one of the lowest grade operations in the state of Nevada, about 0.4 g/t Au, and no silver.

Interestingly, Pan is lower grade than StrikePoint Gold’s Hercules Gold Project which has an Exploration Target of 0.48 g/t to 0.63 g/t Au. The Hercules Exploration target is bigger too, with an estimated range of 819,000 to 1,018,000 oz Au.

Looking at the numbers. Pan midpoint guidance is 35,000 oz/year, and Midpoint AISC is $1,650/oz Au. At $3,300 gold the operation throws of about $58 million dollars/year. It shows that these low grade assets can really sing if you run them correctly!

Minera Alamos paid about 2 years of cashflow. Bought deal to support the transaction.

The window is opening.

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