07:34 AM EDT, 04/22/2024 (MT Newswires) -- G Mining Ventures ( GMINF ) and Reunion Gold ( RGDFF ) on Monday said they have agreed to merge in a $875 million deal to create a leading intermediate gold producer.

Reunion Gold ( RGDFF ) shareholders will receive an estimated $0.65 per common share held, a 29% premium based on the company's closing price of $0.50 on Friday. G Mining ( GMINF ) closed at $2.27 on Friday.

G Mining ( GMINF ) and Reunion Gold ( RGDFF ) shareholders will receive common shares of a newly formed company equivalent to Reunion Gold ( RGDFF ) shareholders being issued 0.285 G Mining ( GMINF ) common shares for each Reunion Gold ( RGDFF ) common share. In addition, Reunion Gold ( RGDFF ) shareholders will receive common shares in a newly created gold explorer, dubbed SpinCo, that will hold all of Reunion Gold's ( RGDFF ) assets other than Oko West. G Mining ( GMINF ) has agreed to fund SpinCo with $15 million.

At deal closing, G Mining ( GMINF ) shareholders will own about 57% of the combined company with Reunion Gold ( RGDFF ) shareholders holding the remaining 43%. The combined company and Reunion Gold ( RGDFF ) shareholders will own around 20% and 80%, respectively, of the outstanding common shares of SpinCo.

Under the deal, G Mining ( GMINF ) will acquire Reunion Gold's ( RGDFF ) flagship Oko West project in Guyana within the Guiana Shield region, a mining jurisdiction in South America.

G Mining ( GMINF ) plans to move Oko West quickly through technical studies to a construction decision, leveraging exploration, development and permitting work already completed by Reunion Gold ( RGDFF ). Expected free cash flow from the Tocantinzinho gold project will provide financial support. Tocantinzinho is on schedule and on budget for commercial production in the second half of 2024.

Meanwhile, SpinCo's focus will be on acquiring and exploring gold mineral properties in Guyana outside of a 20-kilometer area of interest surrounding Oko West, and in Suriname.

La Mancha Investments will exercise its anti-dilution right in connection with the transaction and will subscribe for US$25 million, which may be increased to US$35 million, of G Mining ( GMINF ) common shares. La Mancha also plans to buy up to an additional US$10 million of G Mining ( GMINF ) common shares in the open market.

Franco-Nevada ( FNV ) has agreed to subscribe for US$25 million of G Mining ( GMINF ) common shares on the same terms as La Mancha.

Meanwhile, Dundee Corporation (DC-A.TO) -- a public Canadian independent holding company -- said on Monday that two of its subsidiaries and a trust controlled by Dundee had entered into voting support agreements with G Mining ( GMINF ). The agreements require the Dundee Entities to vote all the common shares of Reunion Gold ( RGDFF ) owned by the Dundee Entities in favor of the proposed plan of arrangement between G Mining ( GMINF ), Reunion and a newly created gold explorer that is expected to hold all of Reunion's assets other than Oko West.