TORONTO (miningweekly.com) – Toronto-based North American Palladium (NAP) has agreed to buy gold exploration firm Cadiscor Resources in an all-share transaction.

NAP will exchange 0,33 of one of its shares for every Cadiscor share, which implies a share value for Cadiscor of C$0,59 apiece, and represents a 47% premium based on closing prices on Tuesday. The transaction was announcd after markets closed.

NAP flagship asset is the Lac Des Iles mine, in Thunder Bay, Ontario, which was put on care-and-maintenance in October, and the company said last month it wants to buy gold mines.

Cadiscor is exploring for gold on several properties in Quebec, and last year acquired the Sleeping Giant mine from Iamgold.

"The acquisition of Cadiscor is an important step in growing our precious metals business by adding additional gold to our significant palladium resources,” said NAP CEO William Biggar.

The company wants to acquire more gold assets, to become a mid-tier precious metals producer, he said.

“The combination with Cadiscor increases the attractiveness of NAP for investors seeking exposure to multiple precious metals while minimizing currency and political risks."

Cadiscor shareholders will own 14% of the enlarged company, and the firm's board will have the right to nominate a director to join the NAP board when the transaction closes.

In the meantime, NAP has also bought $7,5-million of debentures in Cadiscor, which the smaller company will spend on Sleeping Giant, in order to return the mine to production.

Cadiscor said in February that it planned to start production at Sleeping Giant in the third quarter of 2009, at a rate of 50 000 oz/y.

On February 11, the company announced it planned to merge with another junior, Tiomin Resources, but the firms said a few days later they had broken off talks.

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