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Northgate Minerals to acquire Primero Mining for US$409 million

Northgate Minerals Corp. (TSX:NGX) has agreed to acquire Primero Mining Corp. in a deal valued at US$409 million that includes the San Dimas mine in Mexico.

The announcement, made Wednesday, comes with the intention of combining the two companies into a "new, leading mid-tier gold producer" they said.

The combined company will have a combined market value of about $1.2 billion, they said.

Under the agreement, Primero (TSX:P) shareholders will get 1.50 Northgate shares for each of their shares, valuing them at $4.215 based on Northgate's share price Tuesday.

Primero shares were up 35 cents or nine per cent at $4.05 in trading Wednesday on the Toronto Stock Exchange, while Northgate shares were down six cents at $2.75.

Northgate shareholders will hold a 69 per cent in the combined company, while Primero shareholders will hold a 31 per cent stake.

The combined operations will be headed by Primero's chief executive Joe Conway, while Northgate chairman Terry Lyons will be chairman of the company.

Richard Hall, who was appointed chief executive of Northgate earlier this week, will be a director of the company.

The agreement has the support of Goldcorp Inc. (TSX:G), which owns 35.5 per cent of Primero's outstanding shares.

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