VANCOUVER (miningweekly.com) – Canadian multinational miner Iamgold has agreed to buy Merrex Gold, thereby consolidating its interest in the noteworthy Siribaya gold project, in Mali.

Siribaya is operated by Iamgold under a 50/50 JV with Merrex Gold, in which it already owns a 23% stake.

Iamgold has signed a definitive agreement to buy all issued and outstanding Merrex shares in an all-scrip deal valued at about C$41-million. Iamgold will exchange shares at a ratio of 0.0433 for each issued and outstanding Merrex share.

The payment in shares represents a 30% premium, based on the trailing 20-day volume weighted average price of Merrex stock listed on the TSX-V. All outstanding warrants have been valued at C$0.02 each and will be exchanged based on 0.0043 of an Iamgold common share for each warrant.

Iamgold expects to issue 6.9-million shares, amounting to less than 1.5% of its issued and outstanding shares, in connection with the transaction. The transaction is expected to close in the first quarter of 2017 by way of a court-approved plan of arrangement under the Business Corporations Act of British Columbia.

The Iamgold exploration team, led by Craig MacDougall, and working together with Merrex on the Diakha-Siribaya project has defined indicated resources of 2.1-million tonnes grading 1.9 g/t gold, for 129 000 oz and inferred resources of 19.8-million tonnes grading 1.71 g/t gold for 1.1-million ounces.

Iamgold started operation in Mali a quarter century ago at the Sadiola project which, along with its neighbouring Yatela mine, has already produced over 7.5-million ounces of gold, president and CEO Steve Letwin pointed out.

Merrex also held a 100% interest in the Karita exploration authorisation, in Guinea, and its 100% held zinc/lead property, in Nova Scotia, Canada (the Jubilee project). Merrex holds permits totalling about 700 km2 within an area of interest of about 4 100 km2 in the southern portion of the West Mali gold belt.

Merrex shares jumped 25% on the news Thursday, to C$0.20 apiece.