Chicago’s Coeur Mining Inc. has inked a deal to take over Toronto-based New Gold Inc. for US$7 billion in an all-stock deal that will create a US$20 billion mining giant , provided the merger passes muster with Ottawa. The deal will add two of New Gold’s Canadian mines to Coeur’s five spread across Mexico and the United States, giving it production of about 20 million ounces of

silver, 900,000 ounces of gold and 100 million pounds of copper

annually, the companies said in a press release on Monday. If the deal goes through, Coeur and New Gold shareholders will own about 62 and 38 per cent of the company respectively.

“Both companies are in the early stages of generating significant cash flow after several years of heavy investment,” Coeur’s chairman Mitchell J. Krebs said in the statement. “We believe this is an extraordinary opportunity to create an unrivalled North American-only, mining powerhouse at just the right time.”

Patrick Godin, chief executive of New Gold, described the deal as “monumental.”

“Together, we will be a cash flow powerhouse, leaping above larger peers, with significant exploration upside and the potential to significantly extend mine life,” he said.

Coeur’s acquisition of New Gold comes at a time when there has been increasing interest in the precious metals sector with gold prices rapidly rising. The bid to take over the mid-sized miner also comes two months after another major Canadian miner,

Teck Resources Ltd. , announced a merger with Anglo American PLC. The opportunity to merge with New Gold is one that has been on the radar for over two-and-a-half years, Krebs said on a conference call on Monday.

“We have always seen this as a really interesting and unique combination to add two high quality Canadian assets into our portfolio,” he said. You really can’t find opportunities out there. We have pretty stringent M and A (mergers and acquisitions) filters, and New Gold is the one that checks all of the boxes.”

But Coeur may have to deal with changes that have made it more difficult for foreign companies to merge with or buy Canadian mining companies that deal with minerals, such as copper or lithium, deemed critical for the economy’s future. While New Gold primarily produces gold, it also produces copper at its New Afton mine in British Columbia.

The companies haven’t had any preliminary conversations with the federal government regarding the matter, Krebs said on a conference call on Monday. He doesn’t expect there to be a “significant level of risk” with respect to the required approval from the Canadian government and will go through the required process.

“It’s probably the reason why the estimated closing date is in the first half of 2026 because that will probably be the long pole in the tent,” he said.

Overall though Krebs said that the deal would provide “multiple benefits” to Canada through elevated levels of investment, the maintenance of a Toronto office team and the application for a listing on the Toronto Stock Exchange.

The company also said in its Monday statement that it would “sustain significant employment levels in Canada and increase Canadian representation on Coeur’s board of directors and senior management team.”

The combined company would have over 1,700 employees in Canada with 450 more employed as contractors, it said.

The completion of the deal will also depend upon shareholder votes.

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