Canada-based mining company Riverstone Resources has signed an agreement to acquire a 100% stake in gold exploration company Blue Gold Mining for a total value of $30.3m.

Under the terms of the agreement, Blue Gold shareholders will receive 0.801 of a Riverstone share for each Blue Gold share and on completion Blue Gold shareholders will hold 30% of the pro forma outstanding shares of Riverstone on a fully-diluted basis.

The resultant merger will allow for the development of the Karma Project that Riverstone owns and operates in Burkina Faso, West Africa.

Riverstone president and CEO Dwayne Melrose said that the merger enables the company to progress the flagship Karma Project and begin an aggressive exploration campaign at Liguidi and other portfolio projects.

"Our combined entity offers investors and employees a unique opportunity to take part in the growth of a ‘best in class’ exploration company and the advancement of our promising properties, under the guidance of an experienced, proven leadership team," Melrose said.

Riverstone also handles an advanced stage gold development project and three other earlier stage exploration projects encompassing a prospective area of 2,000km² in Burkina Faso.

Blue Gold president and CEO Mark O’Dea said that Riverstone and Blue Gold make a stronger company together.

"Combined, the companies have the expertise and access to capital necessary to accelerate expansion and development of Riverstone’s exceptional gold properties in a mining-friendly jurisdiction in West Africa," O’Dea added.