Fortuna Silver Mines has signed an agreement to acquire Canada-based Goldrock Mines for C$129m ($101m).
Goldrock fully owns the open-pit, heap leach Lindero gold project in Salta Province, Argentina.
Following the acquisition, Fortuna’s will focus on bringing the project into production by 2018.
With the acquisition of Goldrock, Fortuna will be able to expand its low-cost silver production, and add an asset with more than ten years of reserve mine-life to its portfolio.
Fortuna Silver Mines president and CEO Jorge Ganoza said: "Fortuna has remained disciplined in its growth initiatives while building and preserving a robust balance sheet and positioning the company for the value-creating opportunities that complement our existing portfolio of high-quality assets.
"We believe the addition of the low-cost, long-life Lindero gold project provides such an opportunity, while underpinning an industry leading business."
The combined company will have two operating mines and a development project in three mining jurisdictions in the Americas.
The combination will also expand Fortuna’s low-cost production with free cash-flow generation and diversified production.
Goldrock Mines president and CEO Paul Matysek said: "This transaction provides our shareholders with an immediate premium, while retaining exposure to longer term value creation that the Lindero Project will offer to the merged company.
"We look forward to Fortuna constructing and commissioning this mine."
The transaction is subject to the approval of at least 66% of the votes cast by holders of Goldrock Shares and also the receipt of certain regulatory approvals.
Fortuna specialises in mining opportunities in Latin America and its primary assets include the Caylloma silver mine in southern Peru and the San Jose silver-gold mine in Mexico.