Canadian gold mining company Claude Resources Inc. on Thursday said it has agreed to sell its Madsen Gold Project to Laurentian Goldfields Ltd. 

According to a report by Gold Investing News, Claude will receive cash and equity from Laurentian. Under the terms of the agreement, Laurentian will pay the company C$3.75 million in cash upon closing of the transaction, C$2.5 million in cash three months after the deal closing and C$2.5 million in cash or equity six months after closing the sale.

Claude will also be given shares representing 19.9% of Laurentian's shares outstanding following the closing of the transaction. Claude will have the option to participate in any future equity offerings to maintain ownership position in Laurentian, so long as it retains a minimum 9.9% stake in Laurentian, the report said.

Claude in a statement said that the deal is expected to close in February 2014 and is subject to the consent of its shareholders, regulatory bodies and third parties.

The Madsen Gold Project is a 4,000-acre property located in the Red Lake gold camp of Northwestern Ontario. It hosted two two gold producers including the Madsen Gold Mine, which had a gold production of 2.4 million ounces, the report said.