TORONTO (miningweekly.com) – Vancouver-based Entree Gold has agreed buy to ASX-listed PacMag Gold for about C$47-million (A$49-million) in cash and shares, the firms announced on Sunday.

PacMag has assets in the US and Australia, including a copper/molybdenum project in Nevada that is contiguous with two properties recently optioned by Entree.

Entree is exploring for copper, gold, molybdenum and coal in Mongolia and for copper and gold in the US and China.

The company has a joint venture with Ivanhoe Mines' on some property that falls under the huge Oyu Tolgoi copper/gold project in Mongolia, for which Ivanhoe recently signed an investment agreement.

It has also said for some time that it is assessing potential acquisition opportunities.

Entree is offering about 0,102 of its shares and C$0,041 in cash for each PacMag share, and will also buy all of the outstanding PacMag options for a total of about 294 000 shares and C$343 500.

Altogether, Entree expects to pay about 15-million shares and C$6,34-million for the acquisition.

PacMag's Ann Mason copper/molybdenum porphyry deposit, near Yerington, Nevada, has a Joint Ore Reserve Committee-compliant inferred resource of 810-million tons, grading 0,40% copper and 0,004% molybdenum at a 0,30% copper cutoff grade.

It is estimated to contain more than 7,1-billion pounds of copper, which would more than double Entree's current resource inventory, the firm said.

The Ann Mason property also hosts other significant copper prospects.

“The business combination with PacMag complements our current copper/gold resources in Mongolia, consolidates our exploration and development position in the highly prospective, under-explored Yerington Camp in Nevada, and brings under the Entree umbrella a sizeable copper and molybdenum inventory,” CEO Greg Crowe said in a statement.

PacMag's directors have agreed to recommend the transaction to shareholders in the absence of a superior proposal.

Ivanhoe Mines owns 15% of Entree and its partner Rio Tinto holds 16%.

The company is well funded, with more than C$40-million in the treasury, and holds a carried interest in the Lookout Hill property in Mongolia, the joint venture with Ivanhoe.

The property completely surrounds the Oyu Tolgoi project and hosts the Hugo North Extension of Oyu Tolgoi's Hugo Dummett copper/gold deposit and the Heruga copper/gold/molybdenum deposit.

Entree will not need to contribute upfront to the cost of building the mine, as its share of development costs will be repaid from future production cash flow.