BILLINGS, Mont. (AP) -- Two companies that own gold and silver mines in Montana and Idaho announced Friday that they intend to merge to form a company called U.S. Silver and Gold Inc.
RX Gold owns the Drumlummon gold and silver mine northwest of Helena. U.S. Silver, which owns the Galena mine in northern Idaho, has announced plans to bring its Coeur d'Alene mine back into production.
RX Gold spokesman Darryl James said that the merger is undergoing regulatory review and the companies hope that it will be finalized in July. Under the agreement, U.S. Silver shareholders will own 70 percent of the new company, while RX shareholders will own the remaining 30 percent.
RX Gold has a market value of about $44 million. The market value of U.S. Silver was not available.
Darren Blasuti, president and chief executive of RX Gold, will assume the same role for the combined company. U.S. Silver interim chief executive will assume the role of chairman of the new company's board of directors.
"It's a business deal that made sense for both their long-range plans," James said. "The way to grow these smaller mining companies is to acquire these smaller assets It's not really more production, it's acquiring additional assets."
After the Coeur mine is brought back into production, production from the three mines combined could exceed 5.3 million ounces of silver annually, the companies said.
Shares of U.S. Silver were up more than 9 percent to $1.51 on the Toronto Stock Exchange through early afternoon trading. Shares of RX Gold and Silver were down by almost 24 percent to $0.26 on the TSX Venture Exchange.