Under the deal, Flinders will issue one common share for nine common shares of Big North, thereby giving around nine million shares for 81 million Big North shares.
The companies plan to sign a definitive agreement for the deal in October and following which Big North will become a wholly-owned subsidiary of Flinders.
The transaction is subject to closing conditions, including shareholder, court and regulatory approvals.
Flinders operates Woxna graphite mine in central Sweden which has resumed production in August. The mine was put on care and maintenance since 2001, and is said to be a fully-permitted brownfields graphite mine.
Big North gained control of El Tejon flake graphite project as part of acquisition of Grafito de Mexico earlier this year.
The project ceased operations in 2002 when low graphite prices forced it to do so; however, it is on track to commence production.
Flinders president and CEO Blair Way said: "Our successful restart of the Woxna project in Sweden demonstrates Flinders’ expertise which will now be directed towards the restart of the Big North El Tejon project.
"El Tejon has the capacity to be a long term supplier of high quality flake graphite to the expanding North American market, and provide a sustainable alternative to the current Chinese supply."
