Hook / Thesis
Equinox Gold (EQX) has quietly changed its risk profile. Management closed the sale of its Brazil operations and used the proceeds to eliminate more than $800 million of debt, dropping net debt to about $150 million. At the same time the company published 2026 production guidance of 700,000-800,000 ounces and announced its first quarterly cash dividend plus a 5% NCIB. Those moves materially reduce the leverage premium the market had been assigning to the name.
We think the market still underestimates two things: (1) how quickly freed-up cash flow from a simplified North American portfolio can convert into free cash and buybacks/dividends, and (2) how a clean balance sheet will re-rate a name that traded like a debt-laden growth miner. Technicals are supportive and short interest has been rolling over. This is a mid-term tactical long on EQX.
What the company does and why investors should care
Equinox Gold is a growth-focused gold miner operating a multi-asset portfolio including Greenstone, Mesquite, Castle Mountain, Los Filos, Fazenda and Santa Luz, with corporate headquartered in Vancouver. The recent disposition of Brazilian operations refocuses the company on North American assets and simplifies the operating profile.
Why the market should care: gold producers with low net debt and meaningful near-term production have outsized optionality when gold prices are stable or rising. Equinox’s 2026 guidance of 700,000-800,000 ounces gives it meaningful scale. Combined with a market cap of $12.83 billion and net debt of roughly $150 million, Equinox is now closer to a clean-balance-sheet producer than a highly levered consolidator.
Numbers that matter
- Market capitalization: $12,831,087,600.
- Net debt (post-sale): approximately $150 million after repayment of >$800 million of debt with proceeds from a $1.015 billion sale.
- 2026 production guidance: 700,000 - 800,000 ounces of gold.
- New capital returns: inaugural quarterly cash dividend of $0.015 per share (annualized $0.06) and an NCIB to repurchase up to 5% of shares outstanding.
- Shares outstanding: 784,776,000; float roughly 750.5 million.
- Valuation metrics at current prices: trailing P/E ~283 (reflecting a low near-term EPS base), P/B ~2.20.
- Technicals: current price $16.345 sits above the 10-, 20- and 50-day SMAs (SMA-10 $15.3945, SMA-20 $15.5577, SMA-50 $14.8413), RSI 56.5 and MACD showing bullish momentum.
Valuation framing - simple EV/oz check
Usefully, a quick enterprise-value-per-ounce heuristic highlights the gap between current equity pricing and operating scale. With market cap at $12.83 billion and net debt ~ $0.15 billion, enterprise value is roughly $12.98 billion. Using mid-point 2026 production of 750,000 ounces, EV per ounce is about $17,300 ($12.98B / 750k oz).
Without direct peer multiples in this write-up, readers should note: $17k EV/oz for a producing company with a near-term clear balance sheet and a capital returns program is not extreme when compared to many producing peers that trade at premiums for jurisdictional quality and predictable cash flow. The recent sale and debt reduction materially improve financial optionality — a key argument for a re-rate.
Trade plan (actionable)
Direction: Long EQX
Entry price: $16.35
Target price: $19.00
Stop loss: $13.90
Position horizon: mid term (45 trading days). I expect the combination of continued operational updates, publication of Q1/first-half production and cost figures, and early effects of buybacks/dividend signaling to play out over the next 6-10 weeks. If the company posts outperformance on operating metrics (grades, throughput, costs) or confirms stronger free cash flow, the path to $19 should become clearer. The trade is sized to be meaningful but not a full portfolio overweight; use the stop to control downside on execution or macro shocks.
Why these levels? Entry at $16.35 is essentially current-market participation. The $19 target represents a ~16% upside that assumes a re-rating as the market recognizes lower leverage and clearer cash returns. The $13.90 stop is below the nearby technical support zone (50-day SMA ~ $14.84) and allows for noise while limiting downside to a level that likely reflects renewed macro or company-specific stress.
Catalysts
- Publication of Q1/first-half 2026 operating and cost figures confirming the 700k-800k oz trajectory and showing unit cost improvements.
- Execution of the NCIB and visible reduction in share count or increased dividend guidance that would lift EPS and improve multiples.
- Contingent payments from the Brazil sale (up to $115 million) being realized or progress on earnouts; this would further strengthen the balance sheet.
- Positive operational updates at Greenstone/Castle Mountain/Mesquite that show steady ramp and higher-than-expected output per asset.
Risks and counterarguments
There are several reasons to be cautious, and they matter for position sizing and the stop:
- Gold price risk: The company’s cash flow is highly correlated with the gold price. A sustained pullback in gold would compress cash flow and could reverse any rerating.
- Execution risk: Ramping multiple mines simultaneously invites operational hiccups (grade variability, throughput issues, maintenance). Misses on production or cost guidance would quickly remove investor confidence.
- Reduced asset base: The Brazil sale simplifies the portfolio but also removes production and potential long-term upside from that geography. Future growth is more concentrated in North America.
- Valuation sensitivity: Trailing P/E is currently ~283, reflecting low EPS. If the market requires visible EPS improvement before giving a higher multiple, re-rating might take longer than expected.
- Macro/financing shocks: A risk-off episode or higher rates that hurt commodity sentiment could pause buybacks/dividends and depress the stock.
Counterargument: critics will say the Brazil sale removed valuable optionality and that the market is properly cautious until we see sustained free cash flow and proven operating consistency. That’s a fair point. If operational rollouts hit hiccups or if management re-invests most of the proceeds into lower-return projects rather than returning capital, the rerating thesis would be undermined.
What would change my mind
I would lose conviction if one or more of the following occur: (a) the company reports sequential misses on production or unit costs in the next two operational updates, (b) management abandons the NCIB/dividend program or signals significant new debt-funded M&A, or (c) gold drops materially and sustainably such that near-term free cash flow is impaired. Conversely, I would increase my target and conviction if the company reports consistent quarter-over-quarter free cash flow generation, executes visible buybacks, or receives the full contingent Brazil payments.
Bottom line
Equinox Gold has moved from a debt-laden consolidator to a cleaner, more investible producer. The liquidation of Brazilian assets and the >$800 million debt paydown materially reduce financial risk; the inaugural dividend and NCIB provide a line of sight to shareholder returns. That combination, along with production guidance of 700k-800k ounces for 2026 and supportive technicals, makes EQX a logical mid-term tactical long at $16.35 with a $19 target and a $13.90 stop. Execution matters — watch the next operational updates closely — but the set-up is compelling enough to take a disciplined, medium-horizon position.
Trade sizing suggestion: Keep this as a medium-conviction sleeve (e.g., 2-5% of liquid portfolio) unless you plan to add on demonstrable operational outperformance.