The deal represents a 39.5% premium to the closing price of QMX shares on the TSX Venture Exchange on January 20, 2021.
Deal expands Eldorado Gold’s footprint and landholdings in the Abitibi Greenstone Belt by about 550%.
Once the transaction is closed, QMX shareholders will own approximately 2.8% of the issued and outstanding shares of Eldorado.
George Burns, Eldorado’s president and chief executive officer, said the deal will expand the company’s footprint and landholdings in the Abitibi Greenstone Belt by approximately 550%.
“The transaction is consistent with our strategy of pursuing growth at Lamaque in Quebec, a high-quality jurisdiction,” Burns said in the statement. “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.”
The Vancouver-based gold major also noted that the acquisition of QMX adds a pipeline of additional organic opportunities close to its Lamaque gold mine, which can be exploited by leveraging existing infrastructure.
The companies said that they are working towards closing the transaction in late March, early April 2021.
Betting on Canada
Eldorado is in the midst of building a $24-million tunnel at Lamaque, its only Canadian operation, which will allow the company to grow production and reduce energy use.
The Vancouver-based miner, which kicked off commercial production at Lamaque in 2019, has said the fully permitted decline project will connect the Sigma mill and the 405 metre level of the Triangle mine.
Expected to be finished in the first half of 2022, the tunnel will eliminate re-handling and transport (a roughly 26-km round trip) of the ore from the Triangle mine to the mill, reducing carbon emissions, costs, and removing haulage traffic from public roads.
It is also expected to cut energy requirements for mine ventilation.
Other than in Canada, Eldorado has mining, development and exploration operations in Greece, Turkey, Romania and Brazil, but has increased focus on the local market in recent years.
