Canadian gold and iron miner Eldorado Gold Corp. wants to buy European Goldfields Ltd. in cash and shares worth $2.4 billion, in an effort to add its gold reserves.

On Sunday, Vancouver-based Eldorado Gold Corp. said in a statement it offered to acquire European Goldfields at $12.59 a share, representing a 10 per cent premium over European Goldfields based on its closing price on the Toronto Stock Exchange on Friday.

The bid is 5.1 times European Goldfields's total assets compared with 2.2 times for 10 comparable deals, data compiled by Bloomberg said.

Eldorado Gold Corp., Canada's fifth-biggest gold company by market value, operates in China, Turkey, Brazil and Greece. It has six active mines and other ongoing projects as well.

The deal, should it become successful, will transform Eldorado Gold Corp. into a company with a $10.59 billion worth of market capitalisation. The acquisition will also help it diversify production as it fulfills annual production output to grow more than 1.5 million ounces of gold by 2015.

In October, the company said it expected to produce 650,000 ounces of gold this year.

The board of European Goldfields has supported the bidding. It requires approval of two-thirds of European Goldfields shareholders at a meeting in mid-February.

European Goldfields boasts of gold reserves of 10 million ounces within the European Union. It operates a mine in Greece and is currently developing projects in both Greece and Romania.