Australia’s Westgold Resources said on Monday it had agreed to acquire Toronto-listed Karora Resources in a cash-and-stock deal worth about A$1.23 billion ($808.36 million), seeking its gold assets in Western Australia.

The deal will propel the combined group to become a mid-tier gold miner producing around 400,000 troy ounces of gold a year in the state and with a market capitalization of around A$2.2 billion.

Karora shareholders will receive 2.524 Westgold shares, with A$0.68 in cash and 0.30 of a share in a new company to be spun off from Karora, which will include its shareholding in lithium explorer Kali Metals and a 1% lithium royalty on certain mining interests.

The deal implies an offer price of A$6.60 per Karora share, or C$5.90 a share, based on Westgold’s last closing price and the Australian dollar to Canadian dollar exchange rate on April 5, representing a 10.1% premium to Karora’s closing share price.

Karora Resources is focused on increasing gold production at its Beta Hunt gold mine and Higginsville gold operations in Western Australia and earlier ended buyout talks with another Australian gold miner, Ramelius Resources.

“The prize here is Beta Hunt’s gold potential. Rarely do you find a gold asset of the quality and potential of Beta Hunt hiding in a nickel belt and drilling is expected to further unlock value at this mine,” Westgold CEO Wayne Bramwell said.

Upon completion of the deal, Westgold shareholders will own 50.1% of the combined company.

Karora Chairman and CEO Paul Huet said the transaction could yield an estimated A$490 million in corporate and operational savings and offered a “compelling opportunity” with gold prices at a record high.

He highlighted that Karora shareholders would become “proud owners of the largest unhedged gold producer in Australia at completion of the transaction”, and stood to gain from the stronger balance sheet and more exploration opportunities.

Shares in Westgold rose as much as 4.4% to A$2.380 a share. Karora closed on Friday at C$5.36.