Gold mining and exploration company Eldorado Gold has signed a definitive agreement to buy the remaining shares of Integra Gold in a C$590m ($430m) deal.
The deal is inclusive of Integra shares held by Eldorado. Eldorado currently owns 62,170,095 common shares in the capital of Integra, which amounts to 13% of outstanding common shares of Integra on an undiluted basis.
With the proposed transaction, the company aims to acquire 100% of the issued and outstanding common shares of Integra.
Under the agreement, Integra shareholders have the option of receiving cash or shares in Eldorado or a combination of both.
For each Integra share, shareholders can choose to receive 0.24250 Eldorado shares or $0.883 in cash or 0.18188 of an Eldorado unit and $0.22 in cash.
While the maximum number of shares issuable by Eldorado under the agreement will be around 77 million, the maximum amount of cash payable by Eldorado will be approximately C$129m ($94m), equal to 25% of the total consideration.
Once the transaction is complete, existing Eldorado and Integra shareholders will hold about 90% and 10% of the combined company respectively.
Eldorado president and CEO Gold George Burns said: "The company has been following Integra's progress at Lamaque over the last 18 months and commend their team for the accomplishments to date.
“From previous experience of building and operating gold mines in Canada, I am excited about Eldorado's entry into the Eastern Abitibi region of Canada.
“With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high-quality, low-cost assets."
Eldorado intends to establish an operating presence in Canada through the transaction.
It has noted that the acquisition results in a development project that will add near-term production and cash-flow with modest upfront capital.
Alongside approval from Integra shareholders, the transaction is subject to receipt of certain regulatory, court and stock exchange approvals, and other closing conditions.