Canadian gold miner Northgate Minerals said it agreed to be bought by peer AuRico Gold for C$1.46 billion ($1.48 billion), and ended a deal with Primero Mining .

AuRico, which has three properties in Mexico, will still allow Northgate to enter the South American region — a target that the Australia-focussed miner was hoping to achieve by acquiring Primero for C$370.4 million in July.

AuRico’s offer of 0.365 shares per Northgate share, values each Northgate share at C$5.01 — a premium of about 62 percent to Northgate’s Friday close of C$3.10 on the Toronto Stock Exchange.

The deal will combine Northgate’s Fosterville and Stawell gold mines in Australia along with Aurico’s Ocampo, El Chanate and El Cubo mines in Mexico, and have a total resource base of about 19 million gold equivalent ounces, excluding copper.

The combined entity is expected to produce of 475,000 gold equivalent ounces in 2011 through its assets in Mexico, Canada, and Australia, and grow about 54 percent by 2013.

Aurico’s Ocampo mine and Northgate’s Young-Davidson mine, which is expected to start producing in the first quarter of 2012, alone have the potential to produce over 500,000 gold equivalent ounces, according to the companies’ estimate.

The deal also comes amid record high gold prices. The precious metal has vaulted close to eight-fold from just $250 in 2001 to a recent high of $1,911 an ounce.

Van Eck Associates Corp is the largest shareholder in both companies with an 8.73 percent stake in Aurico, which changed its name from Gammon Gold in May, and an 11.95 percent stake in Northgate, according to Thomson Reuters data.

Primero waived its right to match the AuRico proposal and was paid a termination fee of C$25 million by Northgate.

UBS Securities Canada Inc was the financial adviser for AuRico, while GMP Securities L.P. advised Northgate.