Under the agreement, UrbanGold shareholders will receive 0.3004 of a Troilus share for each UrbanGold share, which implies a consideration of C30c per share, a 35.3% premium. Troilus currently owns 9.7% of UrbanGold and will issue 17.2 million Troilus shares.

"The acquisition of Urban Gold aligns with Troilus' focus on developing a near-term production asset while executing a growth strategy supported by a broad portfolio of exploration and early-development assets," said Troilus Gold president and CEO Justin Reid.

Troilus has a permitted advanced development asset with a preliminary economic assessment and extensive infrastructure in place and an estimated indicated mineral resource of 177 million tonnes grading 0.87 grams per tonne gold-equivalent for 4.96 million ounces gold-equivalent and an inferred resource of 116.7Mt grading 0.84g/t for 3.15Moz gold-equivalent.

Shares in Troilus Gold fell 5% upon the news to C$1.09, valuing the company at $144 million.