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Australian company OceanaGold is set to buy Canada-based Romarco Minerals in C$856m deal ($641m) following approval from shareholders.

Under the arrangement, Romarco shareholders are set to receive 0.241 of an OceanaGold common share for each Romarco common share held.

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OceanaGold managing director and CEO Mick Wilkes said: "Through our transaction with Romarco and with the addition of the Haile gold mine, OceanaGold will enhance its already solid foundation of high margin, high-quality operating assets.

"Supported by OceanaGold’s strong balance sheet, as well as its development and operating expertise, bringing the Haile Gold Mine through construction and into production will further diversify our global production profile and cement OceanaGold as the low-cost gold producer globally."

Announced in July, the acquisition is expected to close on 1 October, pending approval by the Supreme Court of British Columbia.

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"The combination of these companies will create a sector leading low-cost intermediate gold producer with a diversified asset base and a strong financial platform."

Romarco Minerals president and CEO Diane Garrett said: "The combination of these companies will create a sector leading low-cost intermediate gold producer with a diversified asset base and a strong financial platform that reduces single-asset and development-stage risks as the Haile gold mine is brought into production."

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Once the acquisition concludes, existing shareholders of OceanaGold and Romarco will own 51% and 49% of the combined company respectively.

Operating from four operating platforms in three countries, the new entity is expected to produce about 540,000oz of gold a year by 2017.

Romarco Minerals has started construction of its project, the Haile Gold Mine in South Carolina, US.

Prior to this, the company completed a positive feasibility study and received all major permits in addition to obtaining the required financing for the project.

Image: Upon completion of the acquisition, existing shareholders of OceanaGold and Romarco will own about 51% and 49% of the combined company, respectively. Photo: courtesy of Patou/ FreeDigitalPhotos.net.