Eldorado Gold has agreed to acquire the remaining shares of Integra Gold that it does not already own, under a transaction worth about C$590m ($432.4m).

Eldorado Gold currently holds a 13% stake in the junior gold exploration company based in Vancouver, Canada.

Under the terms of the new agreement, it will pay Integra Gold 25% of the total consideration, up to C$129m ($95m) and the rest through issuance of its shares.

Upon closing of the transaction, current Eldorado shareholders will have 90% stake while the remaining 10% in the combined entity will be held by the existing Integra Gold shareholders.

The takeover is expected to help Eldorado Gold gain a high quality development project with meaningful near-term production and cash flow with not much of upfront capital.

By adding Integra Gold in its fold, Eldorado Gold says that it can establish an operating presence in Canada while diversifying its operating portfolio into a highly productive mining camp.

The acquisition would also help it to sustain the flexibility to finance its development pipeline besides generating income tax and general and administrative expenses.

Eldorado Gold president and CEO George Burns said: “From previous experience of building and operating gold mines in Canada, I am excited about Eldorado's entry into the Eastern Abitibi region of Canada.

"With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high quality, low cost assets."

The deal will give Integra Gold exposure to Eldorado's portfolio of mines and development projects. It will also benefit from value creation at Lamaque project near Val-d'Or, Quebec which will come under Eldorado’s control completely post transaction.

Integra executive chairman George Salamis said: “We believe that Integra is a great model for junior mining companies and what they can achieve when you bring together collaborative effort, creative, outside-the-box thinking and the courage to invest in people as much as the assets in the ground.”

The deal is likely to be completed in July subject to receipt of all the required shareholder and regulatory approvals.


Image: Eldorado-operated Kisladag gold mine in Turkey. Photo: courtesy of Eldorado Gold Corp.