Eldorado Gold has agreed to acquire the remaining stake of around 83% in Canada-based junior exploration company QMX Gold for CAD132m ($104.1m) in a cash-cum-stock deal.

The Canadian gold miner had acquired a stake of nearly 17% in QMX Gold in late 2019 for C$0.06 ($0.047) per share through a private placement.

Currently, QMX Gold is engaged in the exploration of its acreage in the Val d’Or mining camp located in the Abitibi District, Quebec, Canada.

The junior exploration company is drilling in the Val d’Or East part of its land package where it is focused on the Bonnefond deposit, and in the Bourlamaque Batholith zone. Additionally, the company owns the Aurbel gold mill and tailings facility in the Abitibi District.

As per the terms of the deal, Eldorado Gold will acquire the remaining shares of QMX Gold for CAD0.075 ($0.059) in cash plus 0.01523 of its shares.

QMX Gold president and CEO Brad Humphrey said: “I am proud to say that this transaction is a testament to all the hard work and effort that the QMX team has put in over the years, and in particular, a testament to the success and strength of the QMX exploration team in Val d’Or. In addition, QMX could not have achieved its success to date without a number of supportive stakeholders.

“After evaluating the terms of the transaction, management and the board of directors of QMX view this transaction as beneficial for all shareholders as it provides immediate value for their support and the opportunity to continue to benefit as part of an established and well financed gold producer.”

Eldorado Gold said that the transaction would considerably grow its presence and landholdings in the Abitibi Greenstone Belt by nearly 550%.

Eldorado Gold to gain organic opportunities near Lamaque mine

Besides, the deal gives the company, a pipeline of additional organic opportunities near its producing Lamaque gold mine. Eldorado Gold expects to exploit the opportunities by utilising existing infrastructure along with its operational, exploration, and stakeholder expertise.

Eldorado Gold president and CEO George Burns said: “This transaction expands our position in the Abitibi camp and is consistent with our strategy of pursuing growth at Lamaque in Quebec, a high-quality jurisdiction.

“QMX’s highly prospective land package is ideally located immediately adjacent to our current Lamaque operation and associated exploration projects in the heart of the Val d’Or gold district. Eldorado’s growing financial flexibility will enable us to continue to identify and secure opportunities for prudent growth within our operating footprint.”

The closing of the deal is subject to approvals from QMX Gold’s shareholders, court, stock exchange, and any other regulators, apart from satisfying certain customary closing conditions.

It is expected to occur in either late March or early April 2021, said Eldorado Gold.