A1 Consolidated Gold has reached an agreement to acquire Maldon Gold Operation from Octagonal Resources Limited just before Christmas.

The Maldon mine has already been producing gold over the past few years, and A1 Consolidated Gold has been doing underground development for the past two years. 

Octagonal Resources and A1 reached a share sale agreement which was announced to the stock exchange on December 29.

A1 Consolidated Gold managing director Dennis Clark said the deal was signed on December 24 before being announced on ASX.

"This acquisition going to turn A1 Consolidated Gold from being a single-mine exploration company to a gold producer with multiple mines," he said.

"Although companies have been aware of each other’s assets for quite a while, over one month an agreement has been reached for the sale of the Maldon assets."

As part of the deal, A1 Consolidated Gold will have to undertake capital raising from the stock market to reach a minimum of $2.4 million, which Mr Clark said was in progress "as we speak". 

Mr Clark said the company would start producing about 30,000 oz of gold, with a scoping study highlighting the potential for $35 million in profits in the first three years.

He said the mine's workforce would probably double, which meant good things for local employment and trade.

"At the moment we have scheduled to have 28 workers, I think it will go up to 56," he said.

"With both the A1 gold mine and Maldon mine, we take pride in employing local people."

Mr Clark said the mine was not at the stage where they were seeking applications for positions yet.

He said local communities could eventually expect to see the flow-on benefits, especially traders in hardware, electrical, pumping and engineering.

"One of the benefits to Bendigo will be using local suppliers for consumables at the mine," he said.

"Octagonal have quite a few suppliers out of Bendigo for their Maldon mine already."

Mr Clark said the next step was achieving shareholder approval. 

"Both companies have to have shareholder approval for the transaction to be completed, we expect that will happen over the next four to six weeks," he said.