Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] said Thursday January 21 that it has agreed to purchase all the shares of QMX Gold Corp. [QMX-TSXV] that it doesn’t already own for $132 million or 30 cents per share in a friendly transaction.
QMX Gold shares jumped 30.2% or $0.065 to 28 cents on volume of almost 26.5 million. The shares are currently trading in a 52-week range of 37.5 cents and $0.06.
QMX is applying a systematic and methodical approach to targeting, drilling, and evaluating an extensive land package across 200 km2 in the Val d’Or camp, Quebec. Its exploration focus has been on growing the Bonneford deposit on the eastern side of the property and drilling the River and Poulmaque targets on the Bourlamaque Zone.
QMX recently said the Bonneford South Intrusion is estimated to contain an indicated resource of 397,100 ounces of gold and an inferred resource of 290,800 ounces.
In addition to the land package, QMX owns the Aurbel gold mill and tailings facility, which is located 15 km east of Val d’Or.
Based in Vancouver, Eldorado is a mid-tier gold and base metals producer with an international portfolio that includes mining, development and exploration projects in Turkey, Canada, Greece, Romania, Serbia and Brazil.
Eldorado currently owns 68.1 million shares of QMX, or approximately 17%, which it bought at $0.06 per share in a private placement on December 30, 2019.
The acquisition of QMX would increase Eldorado’s footprint and landholdings in the Abitibi Greenstone Belt by approximately 550%. It will also add a pipeline of additional organic opportunities in the vicinity of Eldorado’s Lamaque gold mine on the outskirts of Val d’Or at the eastern end of the southern Abitibi Greenstone Belt.
Under the terms of the arrangement, shareholders of QMX will each receive $0.075 in cash and 0.01523 of an Eldorado common share. That amounts to 30 cents per QMX share based on the closing price of Eldorado shares on January 20, 2021.
It represents a 39.5% premium to the closing price of QMX shares on the TSX Venture Exchange on January 30, 2021.
On Thursday, Eldorado Gold shares eased 3.8% or 57 cents to $14.20 on volume of 787,966. The shares are currently trading in a 52-week range of $18.90 and $6.29.