Mining exploration company St Eugene Mining Corp Ltd agreed to buy Takara Resources Inc in a stock deal as it looks to foray into gold production, the companies said.

As part of the deal, St Eugene will hold the rights to acquire 100 percent interest in Tartan Lake Gold Mine in Manitoba and 35 percent interest in Amisk Lake Gold Project in Saskatchewan.

St Eugene will issue one common share for each Takara share and also issue convertible securities of like terms if Takara has any outstanding convertible securities at the closing of the deal.

At the closing of the proposed merger, Takara will apply to delist from the Toronto Venture Exchange, and the board of the merged entity will comprise of two nominees each from both Takara and St Eugene and one jointly appointed nominee.

Shares of the Vancouver, British Columbia-based St Eugene closed at 4.5 Canadian cents, while those of Toronto-based Takara closed at 4 Canadian cents Monday on the Toronto Venture Exchange.