St Barbara is set to acquire Moose River Resources to take ownership of the Touquoy gold mine in Nova Scotia, Canada.
The ASX-listed gold producer will pay around $C60 million ($62.8 million) in cash for the operation.
St Barbara currently owns around 7 per cent interest in Moose River and 60 per cent of the Touquoy operations through its subsidiary Atlantic Mining (formerly Atlantic Gold).
St Barbara managing director and chief executive Craig Jetson said the company’s intent to purchase Moose River’s interest had been consistently communicated since the initial acquisition of Atlantic Gold.
“Touquoy is a low-cost operation, generating impressive margins and is located in a very favourable and prospective jurisdiction,” Jetson said.
“It produced a record 106,663 ounces of gold in (the 2020 financial year), reinforcing the credentials of this operation and the value it is delivering to St Barbara.”
The transaction requires a vote of approval from 75 per cent of Moose River shareholders, with its company board vowing to recommend St Barbara’s offer.
The proposed takeover will deliver the remaining interest in the Touquoy mine and the surrounding tenements to St Barbara.
“In addition to developing our existing project pipeline, We are exploring in the Moose River Corridor and elsewhere in Nova Scotia to identify further development opportunities,” Jetson said.
“Collectively, the opportunity for value creation for the community of Nova Scotia and our shareholders is exciting.”
The Touquoy mine reached first commercial production in March 2018 and exceeded production guidance in the first year.
Its three additional pits nearby are planned for an expansion, delivering a combined estimated mine life of 12 years.