Canadian gold mining company Probe Gold has signed an agreement to acquire a 100% interest in the Croinor Gold property in Canada from gold mining company Monarch Mining.

The transaction has an aggregate consideration of C$4.5m ($3.43m), which is payable by Probe Gold in a combination of cash and common shares at the closing of the transaction.

According to the deal, Probe Gold will acquire a 100% stake in the property by issuing its common shares equal to C$2.5m based on a ten-day volume-weighted average price, as well as pay C$2m in cash to Monarch.

Furthermore, Probe will assume any reclamation liabilities pertaining to the past-producing Croinor mine.

Probe expects the acquisition to extend its land package immediately to the east of the Novador Project and increase its landholdings in Val-d’Or to 600km².

Located adjacent to the Probe’s Megiscane property in Val-d’Or East, the property comprises one mining lease and 337 claims covering an area of 152km².

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By GlobalData

The property has measured and indicated resources of 805,900 tonnes (t) at 6.47 grams per tonne (g/t) for 187,900oz of gold and inferred mineral resource of 200,100t at a grade of 6.19g/t for 39,800oz of gold.

Probe president and CEO David Palmer said: “The Croinor property is a highly strategic acquisition for a number of reasons, it ties into our current development model in Val-d’Or; increases our current resource inventory by 228,000oz of high-grade gold; and also gives us an additional 152km² of highly prospective and under-explored ground for further expansion and discovery.

“We see the ability to increase our resource base, and ultimately our production plans, with this acquisition and add significant value to shareholders.”

Upon completion of the deal, the property will become part of Probe’s Val-d’Or consolidated land package.

Due to be closed in the coming weeks, the transaction is subject to receipt of all necessary regulatory and other approvals, including that of the Toronto Stock Exchange.