Vancouver's Northgate Minerals Corp. (TSX:NGX) plans to acquire Australian gold producer Perseverance Corporation Ltd. for US$257 million.
The deal will add Perseverance's two mines and their estimated 200,000 ounces of production in 2008 to Northgate's Australian gold mining assets.
Perseverance had agreed to the deal because it needed additional capital to fund future development of its mines and preferred being acquired than raising additional capital through a large and dilutive equity offering.
The deal, which will create a mid-tier gold producer with three producing mines, will give Northgate roughly 434,000 ounces of gold and 71 million pounds of copper production in 2008.
The deal, which is subject to shareholder and regulatory approval, is expected to close in February 2008. Shareholder meetings are expected to be held in December.
Northgate's share price range during the past week: between $2.55 and $2.71; 52-week high: $4.55; 52-week low: $2.45.