New Gold Inc agreed on Friday to acquire gold exploration company Rainy River Resources Ltd for about C$310 million ($301 million) in a sign of a life for the dormant Canadian small-cap mining sector.
The deal, which will give Vancouver-based New Gold control of Rainy River's namesake gold project in northwestern Ontario, sent New Gold's shares up 36 percent in midday trading.
Juniors in the sector have been hurt badly by the sharp pullback in the price of gold along with budget blowouts and other concerns at their larger peers.
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