FMX Ventures has entered into a letter of intent with Tolima Gold to form a new combined business unit that will explore and develop gold mineral properties in Colombia.

The transaction will be completed by Canada’s Tolima, FMX and FMX subsidiary Newco, following which Tolima and Newco will combine to form Amalco – a new subsidiary of FMX.

FMX currently has 4.9 million common shares issued and outstanding, as well as 393,000 stock options.

The firm has agreed to seek shareholder approval to consolidate the FMX common shares and to change its name, and, at the request of Tolima, to modify its board structure and amend its stock option plan.

Tolima has agreed to use its best efforts to complete, brokered private placement financing prior to the completion of the transaction.