West Africa-focused miner Endeavour Mining has signed a definitive agreement to buy all the ‘issued and outstanding securities’ of Teranga Gold.

The combination of both the companies is expected to create a London-listed ‘top ten gold producer’.

The combined company will produce over 1.5 million ounces (Moz) of gold per annum.

Last week, Endeavour reportedly said it was discussing a ‘merger of equals style’ deal with Teranga.

Endeavour Mining president and CEO Sébastien de Montessus said: “This transaction is immediately accretive to our shareholders on a NAV basis and broadly CFPS and EPS neutral over the next two years. It will be strongly accretive from 2023 when Sabodala-Massawa is ramped up into a top asset in the region while immediately adding geographic diversification into mining-friendly Senegal.

“The Wahgnion mine provides immediate cash flow and the rapidly advancing Golden Hill and Afema projects offer further growth optionality.”

Under the agreement, Endeavour will pay 0.470 of its own shares for each share of Teranga, which is a 5.1% premium based on closing prices on 13 November.

The transaction is expected to close in the first quarter of next year.

Teranga CEO president and CEO Richard Young said: “This combination with Endeavour, strongly supported by our two largest shareholders, allows Teranga shareholders to benefit from an improved valuation as owners of a best in class senior gold producer with among the lowest costs as well as among the best balance sheet, free cash flow yield, growth pipeline and dividend yield.”

In July, Endeavour completed its C$1bn (approximately $735m) acquisition of gold miner Semafo.