Toronto-listed companies First Mining and Treasury Metals on Wednesday unveiled a deal to combine their Ontario projects, creating a district-scale, multimillion-ounce gold opportunity.

The companies will put together their adjacent Goldlund and Goliath projects in a transaction that will see advanced-stage developer Treasury acquire First Mining subsidiary Tamaka Gold.

First Mining will be the largest shareholder in Treasury.

The consolidation solidifies the combined asset as one of the largest undeveloped gold assets in Canada, with a consolidated resource base of two-million ounces of gold in the measured and indicated resource categories, and 1.1-million ounces of gold in the inferred resource category.

Goldlund has 809 200 oz of gold in the indicated resource category and 876 954 oz of gold in the inferred resource category, and Goliath has 1 192 000 oz of gold in the measured and indicated resource categories and 222 000 oz of gold in the inferred resource category.

“This combination recognizes the advanced stage of Goliath with a completed federal environmental assessment, and importantly will result in significant synergies between the Goliath-Goldlund deposits and greater development flexibility owing to the scale and proximity of resources at Goldlund,” said Treasury CEO and director Greg Ferron.

He added that, upon completion of the transaction, the company would start discussions with indigenous and community partners to aid the development of these projects.

The combination should shorten the timeline to production, given the existing federal environmental assessment approval to build a mine, mill and tailings facility at Goliath.

Meanwhile, First Mining founder and chairperson Keith Neumeyer said the transaction delivered on a promise he made to shareholders in 2015 that First Mining would return value to its shareholders by creating new district-scale opportunities.

“We believe that the pro forma company is well positioned to benefit from the current rising gold market given the district-scale potential of these two projects and the robust co-development opportunities. Within 12 months of the closing of the transaction we will look to return value to our shareholders through a substantial distribution of the equity consideration, allowing our shareholders to directly benefit from this value-enhancing transaction,” he said.

First Mining would distribute up to 70-million common shares of Treasury Metals received under the transaction, along with all 35-million common share purchase warrants to purchase shares received, to First Mining shareholders.

First Mining shareholders retain leverage to upside potential of the combined assets through share and warrant ownership, a 1.5% net smelter returns royalty, and contingent milestone payments

Shares in First Mining closed 3.23% lower on the TSX on Wednesday at C$0.30 apiece, while Treasury Metals’ stock closed 3.03% up at C$0.34 a share.