Canadian mining company Kinross Gold Corporation has signed a definitive agreement to acquire all issued and outstanding shares of local peer Great Bear Resources for $1.4bn (C$1.8bn).

Under the agreement, Great Bear shareholders can elect to receive either C$29 in cash or 3.8564 Kinross shares per Great Bear share they hold.

The arrangement is subject to a proration up to an aggregate cash consideration of $1.1bn (C$1.4bn) or maximum aggregate shares issuable of 95.8 million.

Additionally, Great Bear shareholders can receive a contingent consideration of up to $46m (C$58.2m) in the form of contingent value rights.

Based in Vancouver, Great Bear Resources is working to develop its 100%-owned Dixie project in the Red Lake mining district in northwestern Ontario. The project includes 9,140ha of contiguous claims extending more than 22km.

Great Bear has drilled 794 drill holes in the property to date and identified five high-grade gold discoveries.

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A drilling programme is currently underway to define mineralisation within the LP Fault zone, which was discovered in 2019.

Kinross said that the project has the potentiality to become a top-tier deposit and it will become a centrepiece in its development portfolio.

Kinross president and CEO J Paul Rollinson said: “The Dixie project represents an exciting opportunity to develop a potentially top tier deposit into a large, long-life mine complex.

“In addition to the prospect of developing a quality, high-grade open-pit mine, we also believe that a significant portion of the asset’s value is its longer-term potential, which includes the view of a sizeable underground operation.”

Great Bear president and CEO Chris Taylor said: “As a senior gold producer, Kinross has the financial strength, technical expertise, and commitment to the highest ESG practices to advance the Dixie project at the pace and scale that this industry-leading discovery deserves.

“Dixie will remain a centrepiece project that will receive significant development and exploration focus, which will continue to unlock and maximise the project’s value while mitigating our shareholders’ exposure to the risks of a single-asset developer.”

The acquisition is expected to close in the first quarter of 2022, subject to customary conditions and regulatory approvals.