Coeur Mining Inc. agreed to acquire New Gold Inc. for about US$7 billion in an all-stock deal that consolidates two midsize North American gold producers amid rising investor interest in the sector.

Coeur operates several mines in the U.S. and Mexico, while New Gold has two gold-producing sites in Canada. The merged company will produce 900,000 ounces of gold and 20 million ounces of silver next year.

The transaction will also create a firm with a larger balance sheet and higher cash flow, giving it more strategic flexibility. The addition of New Gold’s assets will lower Coeur’s overall production costs.

The deal follows a record-breaking rally in gold prices this year, with the metal soaring to more than US$4,000 an ounce. Gold equities have also surged, with Coeur’s and New Gold’s shares both tripling in 2025.

Investors will get 0.4959 share of Coeur for each share of New Gold, the companies said Monday in a statement. That represents a takeover premium of about 16 per cent, based on Friday’s closing stock prices.

Coeur will retain New Gold’s Toronto office and seek a stock listing in the city.

BMO Capital Markets is financial adviser to Coeur on the deal. RBC Capital Markets is also acting as a financial adviser, while Goodmans LLP and Gibson, Dunn & Crutcher LLP are the company’s legal advisers.

National Bank Capital Markets is financial adviser to New Gold and CIBC Capital Markets is financial adviser to a special committee appointed by the company to consider the takeover. Davies Ward Phillips & Vineberg LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are New Gold’s legal advisers. Blake, Cassels & Graydon LLP is counsel to the special committee.