TORONTO - Canadian explorer Kodiak Exploration has agreed to buy Golden Goose Resources in an all-share transaction, the firms announced on Tuesday.

The combination will create a "well-financed gold company with near-term production potential," Kodiak and Golden Goose said.

Golden Goose investors will receive 1,2 new Kodiak shares and one quarter of a Kodiak share-purchase warrant for each outstanding share they hold in Golden Goose.

The deal will require regulatory approval, as well as the go-ahead from Golden Goose shareholders, and is expected to close in the fourth quarter.

Golden Goose's main asset is the past-producing Magino project, about 40 km northeast of the town of Wawa, Ontario.

The project has an NI  43-101 compliant measured and indicated gold resources of 453 190 oz and inferred gold resources of 1,18-million ounces of gold.

Kodiak believes there is "substantial upside potential" to the Magino property and plans to aggressively explore and develop a surface-mineable gold deposit.

Studies had indicated that the known high-grade gold mineralisation at Magino is enveloped by large volumes of lower grade, potentially bulk-minable, gold mineralisation, the company said.

The firm plans to launch a preliminary economic assessment for an openpit mine at the project, and plans to complete the study by the end of this year.

Kodiak had $20,4-million in cash on hand at the end of the second quarter, and said it will have the funds to continue exploring its own projects at the same time as exploration and development work at the Magino project.

Source: miningweekly.com