Privately held Goldshore Resources has agreed to buy Wesdome Gold Mines’ Moss Lake gold project located 100km west of Thunder Bay in Ontario, Canada for C$57m ($44.7m).

An amalgamation agreement has also been signed between Goldshore Resources and Sierra Madre Developments, whereby the two firms would merge through a reverse takeover of Sierra Madre by Goldshore. The move will result in the creation of a new Canadian gold development company.

Upon completion of the deal with Goldshore, Wesdome will be the major shareholder in the combined company, holding about 30% of the shares on a nondiluted basis.

Goldshore incoming president and CEO Brett Richards said: “We fully believe that Goldshore has assembled the best positioned team to advance Moss Lake which has significant resource growth potential along its 20km+ trend.

“We have already identified several areas of prospective follow up work and intend to work diligently with the entire Goldshore team to unlock value from the asset.”

Covering 14,292ha, the Moss Lake project comprises 282 unpatented and patented mining claims. It hosts gold and base metal rich deposits, including the Moss Lake Deposit, the East Coldstream Deposit, the historically producing North Coldstream Mine, and the Hamlin Zone.

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Wesdome president and CEO Duncan Middlemiss said: “The opportunity to advance Moss Lake and bolster our already strong balance sheet, all while retaining meaningful exposure to the project through a strategic equity position as the largest shareholder of Goldshore allows the Company to remain fully focused on our underground high-grade gold mining expertise.

“This year is pivotal as Wesdome expects to deliver the Kiena Complex into commercial production, expand operations at Eagle, as well as move forward on aggressive surface and underground exploration programs at both sites.”

The deal between Wesdome and Goldshore is subject to customary closing conditions, including completion of the proposed reverse take-over business combination between Goldshore and Sierra Madre Developments.

It is also subject to receipt of required regulatory approvals and is planned for completion in the early second quarter of 2021.

Last year, First Energy Metals signed an option agreement to acquire a gold exploration property in the Red Lake mining district of northwestern Ontario, Canada.