TSX-V-listed Abcourt Mines has announced the acquisition of fellow-listed Pershimex Resources to create a larger and more diversified emerging gold producer and explorer in Québec.

Under the terms of the merger agreement, announced on Monday, Pershimex shareholders will receive 0.0816 of an Abcourt share (post-Consolidation) for each Pershimex share, implying a consideration of C$0.0289 a Pershimex share.

As part of the transaction, Abcourt will complete a share consolidation on the basis of seven for one common shares of the company.  The proposed consolidation will reduce the number of outstanding Abcourt shares from 348 814 130 to 49 830 590.

In addition, Abcourt will change its name to Infinitas Gold/Infinitas Or and its trading symbol to “IN”.

Abcourt chairperson and CEO Pascal Hamelin who also serves as a director of Pershimex, said Abcourt was pleased that the board of Pershimex supported the transaction.

“We have an opportunity to become a large land holder of gold properties, many gold exploration projects and an advanced development gold project with the Sleeping Giant Mine and Mill. These are the right ingredients to become a significant gold company in the Abitibi camp.”

Pershimex  president and CEO Robert Gagnon stated: “With this major transaction to come, our company will move to another level, from a modest explorer we will soon become a gold producer established in Abitibi with two gold mines, an ore processing plant and one of the largest claim portfolios in Abitibi. The work done by our team to carry out such an undertaking is noteworthy, and we can be proud of it.”

Infinitas will hold about 510 km² of strategic landholdings in major gold districts in central Québec, with two underground gold mines that are currently on care and maintenance and awaiting restart following a revised mine plan, an operating 750 t/d mill at the Sleeping Giant mine site; 14 early-to-advanced stage gold exploration projects hosting many known deposits; and a feasibility stage zinc/silver project (Abcourt-Barvue) and a nearby satellite deposit (Vendome).

The merger will create the potential for substantial synergies from mining and processing the 5 000-t bulk sample at the historical Pershing-Manitou mine, and consolidating and optimising exploration and development activities in the region, to corporate overhead costs.

With a larger capital markets profile and increased marketing, Infinitas is expected to be better positioned to attract institutional and high net worth investors to raise the required capital to accelerate the exploration and development of its key projects.

The transaction will require approval by at least two-thirds of the votes cast by all Pershimex shareholders at a special meeting of Pershimex shareholders to be held on December 20.

Some large Pershimex shareholders, together representing about 21.52% of the Pershimex shares, are reportedly supportive of the transaction and have entered into voting support agreements with Abcourt.

In addition to the Pershimex shareholders' approval, the transaction is subject to applicable regulatory approvals and the satisfaction of other closing conditions customary of this nature, including the approval of the TSX-V.