TORONTO — Kinross Gold Corp said Thursday it planned to buy Aurelian Resources Inc in a friendly deal worth $1.2-billion, giving the Canadian mid-tier gold miner ownership of the Fruta del Norte discovery in south-eastern Ecuador.

Kinross said it would offer Aurelian shareholders 0.317 of a Kinross common share, plus 0.1429 of a warrant, valuing it at $8.20 per Aurelian common share. This is a 63 per cent premium over the 20-day volume-weighted average price of Aurelian common shares.

The deal will add a major gold deposit to Kinross's development portfolio, the companies said.

The Fruta del Norte deposit is the most significant discovery within Aurelian's Condor Project, part of more than 95,000 hectares of exploration concessions that Aurelian holds in Ecuador.

“This particular combination creates value for both Aurelian and Kinross shareholders, and provides a strong partner for local employees and communities in Ecuador to develop this asset in a responsible manner, which will generate significant economic benefits for the country,” Tye Burt, Kinross president and chief executive, said in a release.

Aurelian's board recommended that Aurelian shareholders tender their shares, and the directors and senior officers of Aurelian have entered into lock-up agreements with Kinross and have agreed to tender all of their Aurelian common shares to the offer.

The proposed deal is subject to a break fee of $42-million.