08:56 AM EST, 02/02/2017 (MT Newswires) -- Luna Gold (LGC.TO) and JDL Gold (JDL.V) have entered into an arrangement to combine their businesses, creating a multi-asset mining company to be named Trek Mining. The new company is expected to trade on the TSX Venture Exchange under the ticker symbol TREK.

In a release, the companies noted they have a strong leadership team with a significant cash position of $66 million and no debt.

The asset portfolio is anchored by near-term production from the Aurizona gold project in Brazil, increasing gold production from milling operations at the Koricancha Mill in Peru, and a pipeline of exploration-stage projects, providing a platform for growth.

Christian Milau, CEO of Luna Gold said: "This transaction achieves a number of our near-term growth objectives and is the next step toward our vision of building a leading mid-tier gold producer."

Under the terms of the agreement, JDL will acquire all outstanding shares of Luna Gold in exchange for 1.105 JDL common shares for each Luna Gold common share. Each Luna Gold warrant, option and restricted share unit will become exercisable for JDL common shares, as adjusted in accordance with the exchange ratio, which represents consideration of approximately $2.20 per Luna Gold share based on the JDL share price as at the close of market on January 31, 2017, a premium of approximately 16% to Luna Gold's 20-day volume weighted average price and 23% to Luna Gold's share price as at the close of market on January 31, 2017.

The deal needs approval from Luna Gold and JDL shareholders. Special meetings are expected to be held in March.