Coeur Mining plans to acquire Canada-based New Gold in an all-stock deal valued at $7 billion, forging a new North American-focused precious metals producer, as gold prices continue to soar. 

Coeur will combine with two of New Gold’s gold-producing sites to create a combined company valued at $20 billion in market capitalization. The combined company is expected to produce about 900,000 ounces of gold and 20 million ounces of silver next year, Coeur said. 

Upon completion of the deal, which is expected to close in the first half of next year, existing Coeur stockholders and New Gold shareholders will own about 62% and 38% respectively, of the outstanding stock of the combined company. 

As part of the transaction, New Gold’s CEO, president, and director Patrick Godin, and another unnamed New Gold director will join Coeur’s board of directors. 

“This transaction provides clear and compelling benefits for New Gold and Coeur shareholders by bringing together two companies with similar cultures to create a stronger, more resilient, and larger scale precious metals mining company,” Mitchell Krebs, Coeur’s CEO, president, and chairman, said. “Both companies are in the early stages of generating significant cash flow after several years of heavy investment.” 

The new entity is expected to have over 1,700 employees across Canada, with about 450 employees working as contractors. Additionally, the combined company will operate seven mines, including New Gold’s Rainy River mine in Ontario and New Afton in British Columbia, along with Coeur’s five operations in the U.S. and Mexico, Coeur said. 

Chicago-based Coeur will function out of New Gold’s Toronto office and will seek a new listing on the Toronto Stock Exchange. 

New Gold shareholders will receive 0.4959 shares of Coeur’s stock for each New Gold common share, and the combined company is expected to generate approximately $3 billion of EBITDA, Coeur said.