TORONTO (miningweekly.com) – NYSE- and TSX-listed miner Alamos Gold on Friday announced a friendly deal to buy junior miner Esperanza Resources, which would add a significant gold/silver project in Mexico to Alamos’ portfolio.

The deal, which was worth C$69.4-million in cash, or C$0.85 a share, and included five-million warrants, came nearly four months after Alamos attempted to buy Aurizon Mines, which operates the Casa Berardi gold mine, in Quebec.

Alamos said its takeover offer for Esperanza represented a 38% premium over Esperanza’s volume-weighted average price over the last 30 days.

The eponymous Esperanza openpit gold project held 1.5-million ounces of gold in measured and indicated resources, as well as 16-million ounces of silver. Once built, it is expected to produce more than 100 000 oz/y at all-in cash costs below $900/oz.

“While the transaction represents less than 5% of our market capitalisation, it has the potential to grow our production in Mexico by more than 50%, or nearly 30% on a consolidated basis,” Alamos CEO John McCluskey said in a statement.

“Esperanza is an excellent strategic fit within our existing portfolio and, in our view, is one of the best undeveloped opportunities and significant openpit targets in Mexico. We have followed Esperanza’s progress for some time and see this as a truly compelling opportunity for our shareholders,” he added.

The deal was indicative of how larger companies were looking to snap up cheap and undervalued juniors in the current bear market, as they look to diversify and expand their asset bases.

Esperanza on Friday said it had terminated its agreements with Pan American Silver, entered into in May, under which the company had agreed to buy three advanced-stage gold projects, with Pan American also expected to invest $335-million and to provide a $15-million stand-by credit facility to Esperanza. Esperanza said it had no further obligations under these agreements.

TSX-V-listed Esperanza’s shares shot up 35% on Friday to trade at C$0.89 apiece, while the TSX-listed shares of Alamos dropped 5% to C$13.23 apiece.