Canadian gold miner Eldorado Gold to takeover QMX Gold in $104m deal

Eldorado Gold, in late January 2021, signed a cash and stock deal worth CAD 132 million ($104.1 million) to take full ownership in Canadian junior exploration company QMX Gold by acquiring the 83% stake it previously didn’t own.

As per the terms of the transaction, QMX Gold shareholders will receive CAD 0.075 ($0.059) in cash plus 0.01523 of an Eldorado Gold common share, for a total consideration of CAD 0.30 ($0.24) per share.

In late 2019, Eldorado Gold had acquired approximately 17% stake in QMX Gold for CAD 0.06 ($0.047) per share via a private placement.

QMX Gold is focused on the Val d’Or Mining Camp in the Abitibi District of Quebec.

The Canadian junior exploration company is carrying out a drilling program in the Val d’Or East part of its acreage, where it is primarily targeting the Bonnefond deposit. The company is also engaged in the Bourlamaque Batholith zone, where it is focused on the Beacon target.

Canadian gold miner Eldorado Gold to takeover QMX Gold in $104m deal. Photo courtesy of Eldorado Gold Corp.

Brad Humphrey – President and CEO of QMX Gold said: “In 2016, we set to re-focus QMX into a premier exploration company to maximize the value of our Val d’Or property.

“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.”

With the full ownership of QMX Gold, Eldorado Gold said that the company’s footprint and landholdings in the Abitibi Greenstone Belt will expand by almost 550%.

Furthermore, the deal opens additional organic opportunities around the Canadian gold miner’s producing Lamaque mine. Eldorado Gold said that it will explore the opportunities by leveraging existing infrastructure and also its operational, exploration, and stakeholder expertise.

George Burns – Eldorado Gold President and CEO 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 existing 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 transaction is anticipated to close in either late March or early April 2021. This will be after the customary closing conditions are satisfied and all necessary approvals from QMX Gold’s shareholders, stock exchange, court, and any other regulators are received.