Toronto-listed miner GCM Mining and Aris Gold on Monday announced that it would join forces in a merger deal, which would see GCM acquire all the outstanding Aris Gold shares not already owned.

The merged entity would be “top-of-the-class” among junior producers and the biggest gold company in Colombia, with diversification in Guyana and Canada.

The resulting entity would be named Aris Gold and would be led by Ian Telfer as chairperson and Neil Woodyer as CEO and director. Lombardo Paredes, CEO of GCM, and Mike Davies, CFO of GCM, would retire from their roles. Serafino Iacono would step back from an executive role, but would continue as a member of the board and an adviser on matters in Colombia.

"After Aris Gold became operator of the Soto Norte joint venture, joining forces with GCM became a logical next step. Our increased scale will also broaden our future opportunities to continue building a one-million-ounce producer over the next few years,” said Telfer, who is Aris Gold’s chairperson.

Iacono added that each team had unique strengths, with GCM being a Colombian leader for responsible, sustainable mining practices.

“Together with Aris Gold's board and management, the combined group brings a track record of building sizable and successful mining companies; this transaction further diversifies the company's portfolio and reaffirms Colombia as an area of focus. While I am stepping down from a day-to-day executive role, I will remain a director and adviser on matters in Colombia as well as an enthusiastic securityholder,” he said.

The combined gold mining business will have scale, cash flow and a strong financial position with $397-million of cash and $260-million of additional committed funding, as well as a high-quality growth pipeline.

“Our teams are well known to each other, and together we will optimise the delivery of the growth projects to unlock shareholder value,” commented Woodyer, who is also currently the CEO of Aris Gold.

Under the terms of the transaction, all the outstanding Aris Gold shares not held by GCM will be exchanged at a ratio of 0.5 of a common share of GCM for each common share of Aris Gold.

Both the GCM and Aris Gold boards of directors have approved the terms of the arrangement agreement.