Equinox Gold Corp. and LeaGold Mining Corp. management emphasized scale in pitching a merger of the two gold mining companies, noting in a Dec. 16 conference call that the move could hasten the combined company's inclusion in indexes.

The merger will create a larger, less risky company in a market where size matters more than ever, Equinox Chairman Ross Beaty said.

LeaGold CEO Neil Woodyer took a similar view, saying the merger would unleash growth at a faster pace with greater financial resources at play and, given a larger market cap and increased liquidity, could see the merged entity qualify to join indexes.

"This is one of those organic deals that just make sense," Beaty said on the call, describing LeaGold as a twin to Equinox.

Both gold miners are focused on the Americas and expect to produce about 700,000 ounces of gold as a combined company in 2020 from six mines. Annual production rates are expected to hit about 1 million ounces in 2021.

Woodyer, picked to become CEO of the resulting company, described a more aggressive approach to mining developments than would be possible as separate companies. As part of the merger, the companies are pursuing a US$670 million financing package.

Growing annual production to about 1 million ounces of gold will hinge on expansions of the Los Filos gold mine in Mexico and the Castle Mountain gold mine in California, among other assets, Woodyer said.

While Beaty and Woodyer did not describe any plans to sell assets as a result of the combination, they said a reevaluation would come after the merger closes. "We'll be assessing that in the short term," Woodyer said.

Likewise, the companies have yet to pin down an estimate for all-in sustaining costs but expect to release one early in 2020, Woodyer said.

Speaking to more general strategy, Beaty said the goal is to pursue cash flow and asset quality. "It may mean getting bigger," Beaty said. "It may mean getting smaller."

Beaty also expressed a desire to see the combined company issue dividends and make share buybacks. "We can't pay a dividend quickly enough, as far as I'm concerned."

Without giving a specific timeline, shareholder distributions would have to wait until the company pushes through expansions, according to Beaty.

The proposed combination adds to a growing list of recent merger and acquisition activity in the gold sector, including Zijin Mining Group Co. Ltd.'s C$1.33 billion offer to buy Continental Gold Inc. and Kirkland Lake Gold Ltd.'s C$4.9 billion deal to buy Detour Gold Corp.