Toronto-based company Kinross Gold Corp. reached a definitive agreement Tuesday to buy the rest of Underworld Resources Inc.

The companies said that Kinross, which already owns 8.5 per cent of Underworld's common shares, would buy the rest in exchange for a fraction of a Kinross share plus a penny cash. The two had previously announced the stock-and-cash deal on March 11 that valued Underworld at $139.2 million.

Last year, Vancouver-based Underworld's gold discovery near the Yukon's White River was called a modern day gold rush. Results from drilling showed the potential for a million ounces of gold.

Kinross, one of Canada's largest gold producers, said that both Underworld's directors and senior management have also agreed to tender their common shares to the offer as part of a lockup agreement.

Yukon government geologist Mike Burke said that having a major gold producing company get on board is a real plus for the territory's mining industry.

"They are a Canadian company and are one of the largest gold producers in the world and they are confident that the Yukon is a great place to invest their money," said Burke. "So, I think that speaks very highly of what we are doing in the Yukon and the potential that they think is here and remains here."

Investors are also paying a lot of attention to several other Yukon gold properties in the White River area.

Kinross hasn't said yet what its immediate plans are for the property this summer. But, it has said that it will continue exploration and development work in the area. The merger still requires shareholder and regulatory approval.

With files from The Canadian Press