A Brazilian state-run company has launched legal action against Canadian gold miner Equinox Gold Corp (TSX: EQX), seeking to unwind part of a $1.015 billion asset sale to one of China’s largest mining conglomerates.
Companhia Baiana de Produção Mineral, or CBPM, filed for an emergency injunction in the Bahia State Court of Justice, demanding the immediate repossession of a mining concession in Brazil’s northeastern Bahia state. The state firm contends that Equinox held the area as a leaseholder rather than an outright owner and therefore had no authority to transfer it to a third party. CBPM is also pursuing damages and has asked the court to terminate the lease agreement entirely.
“The Canadian company sold a mining right that does not belong to it,” CBPM president Henrique Carballal said.
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The dispute centers on the Bahia Complex — a cluster of gold-producing operations comprising the Santa Luz and Fazenda mines — which formed part of a sweeping asset sale Equinox announced in December 2025.
Under that transaction, Equinox divested its entire Brazilian portfolio to a subsidiary of CMOC Group for $900 million upfront, plus a production-linked contingent payment of up to $115 million due one year after closing. The package included three operational assets: the Aurizona Mine in Maranhão state, the RDM Mine in Minas Gerais, and the Bahia Complex. CMOC’s acquisition announcement confirmed the deal as a strategic expansion of its South American resource base.
CBPM alleged Equinox executed the transaction without its express consent — a condition it says governed the mining area’s use. The legal challenge targets only the Bahia Complex; CBPM named no other properties in its court filing.
Equinox pushed back firmly. Ryan King, the company’s executive vice president for capital markets, said Equinox had not received formal notice of any lawsuit and maintained that the company “is confident that the sale of its operations in Brazil was fully compliant with Brazilian law and all contractual obligations.”
King added that “while Equinox Gold is prepared to defend its position in court if required, the company remains open to engaging in constructive discussions with the State to seek a mutually agreeable resolution.”
The deal has reportedly already closed, with Equinox collecting the $900 million base payment. The company used the proceeds to retire its $500 million term loan, pay down a $300 million Sprott facility, and reduce its revolving credit line — cutting its net debt to approximately $150 million.
The divestiture repositions Equinox as a North America-focused producer, with its portfolio now anchored by the Greenstone and Valentine mines in Canada, the Mesquite mine in California, and two operations in Nicaragua.
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