Desert Gold Ventures Inc. entered into a binding letter of intent to acquire Ashanti Gold Corp. in an all-share deal valued at C$3.8 million.

A definitive agreement is due by April 15, and closing is anticipated by Sept. 30. Closing is subject to various conditions including Ashanti Gold securing a renewal of its Kossanto East exploration permit in Western Mali, which is set to expire in May.

Desert Gold and Ashanti Gold said in a joint March 11 release that Ashanti Gold shareholders are expected to own 31% of the combined entity. Ashanti Gold CEO Tim McCutcheon will join the Desert Gold board upon closing.

The proposed exchange ratio is 0.2857 of a Desert Gold share for each Ashanti Gold share, with implied consideration of 5.14 Canadian cents per Ashanti share, a premium of 28.5% based on the March 8 closing price on the TSX Venture Exchange.

The consolidated asset portfolio will include a district-scale land package covering 190 square kilometers and hosting two geological structures as well as at least 11 known gold zones.