Eldorado Gold bids $132 million for junior miner QMX to fuel potential Quebec growth

·1 min read

CALGARY — Vancouver-based Eldorado Gold Corp. says it has struck a deal to buy the shares of Quebec exploration company QMX Gold Corp. it doesn't already own in a cash-and-shares transaction worth $132 million or 30 cents per share.

Eldorado owns about 17 per cent of the QMX shares, purchased for six cents each in a private placement at the end of 2019. It's offering 7.5 cents in cash and 0.01523 of an Eldorado share for the rest.

CEO George Burns says the deal opens up expansion opportunities for Eldorado within its operating footprint as QMX's lands are located adjacent to its Lamaque underground gold mine at Val-d'Or, Que.

In a note to investors, National Bank analyst Mike Parkin says the deal would expand Eldorado's Abitibi footprint and supports a "hub-and-spoke" production model with a central processing facility.

Shares in QMX rose by as much as 35 per cent or 7.5 cents to 29 cents on Thursday as Eldorado shares fell by as much as five per cent or 75 cents to $14.02.

Shareholders in QMX are to vote on the proposed deal in March.

“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,” said Burns.

“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."

This report by The Canadian Press was first published Month Date, 2021.

Companies in this story: (TSX:ELD, TSXV:QMX)

The Canadian Press