TSX-V-listed Abcourt Mines on Thursday announced a nonbinding letter of intent to buy Pershimex Resources as part of its vision to create a bigger and more diversified emerging gold producer and explorer in Quebec.

The combined company would have a strategic landholding of more than 510 km² across major gold districts in central Quebec. Abcourt estimates that following the transaction, Abcourt will have the third-biggest aggregate landholdings among gold explorers and developers in the regions surrounding Rouyn-Noranda, Amos, Val-d’Or and Lebel-sur-Quevillon.

The group, which would be rebranded with a new corporate name to be decided at the later stage, would have two underground gold mines that are currently on care and maintenance (Sleeping Giant and Elder), an operating 750 t/d mill at Sleeping Giant, 14 early-to-advanced-stage gold exploration projects and a feasibility stage zinc/silver project (Abcourt-Barvue), as well as a nearby satellite deposit (Vendome).

Abcourt stated that the transaction would hold potential for substantial synergies from mining and processing the 5 000 t bulk sample at the historic Pershing-Manitou mine, consolidating and optimising exploration and development activities and corporate overhead costs.

“I am very pleased to see this proposed transaction that will unlock the value of both companies by combining our talented technical teams and project portfolios. 

“Given that we operate in the same region, this is a logical and synergistic transaction to create a stronger Québec gold company,” said Abcourt CEO Pascal Hamelin.

Pershimex shareholders would receive 0.5714 pre-consolidation common shares of Abcourt in exchange for each common share of Pershimex. The exchange ratio implies a consideration of C$0.038 a Pershimex share, based on the volume-weighted average price of Abcourt’s common shares on the TSX-V over the five trading days ending June 8.

The combined company would be 81.2%-owned by Abcourt shareholders and 18.8% owned by Pershimex shareholders.

Shares in Pershimex surged 17% to C$0.035 a share on Thursday.