Yamana has significant gold and copper-gold production from five operating mines, gold development stage properties, exploration properties, and land positions in all three major mineral areas in Brazil and an operating mine in Honduras, a development stage project in Argentina and significant exploration concessions in Nicaragua.

In a statement, the Toronto-based Yamana Gold said that it had "entered in to a business combination agreement" with Northern Orion Resources Inc. of Vancouver, British Columbia, in an all-stock deal valued at C$1.1 billion ($1 billion). The two companies have also made a C$3.2-billion stock and cash offer to buy Meridian Gold Inc, which has not yet responded to the offer.

The boards of Yamana and Northern Orion have agreed to the deal, while Meridian released a statement saying that it would consider the offer.

Yamana''s statement added that if the Meridian board does not accept the deal, then Yamana and Northern Orion will make a hostile offer for all of the Nevada company''s shares.

"It is Yamana''s desire that this proposal to Meridian be considered in the friendly manner in which it is being presented — a win-win-win for three successful companies and their respective shareholders," said Yamana chairman and chief executive Peter Marrone in the statement. "We would encourage constructive discussions in this regard."

If it succeeds, Yamana will become a leading gold producer with a market capitalisation of about C$8.5 billion with control of six mines and development projects in Latin America and holding an initial cash balance of C$575 million.

The merged entity would produce 1.4 million ounces of gold in 2009, more than twice the production of the three companies last year.

Recently foreign firms have bought out two important Canadian mining firms; Brazil''s Companhia Vale do Rio Doce SA bought Toronto-based Inco Ltd in January for $16.2 billion, while Switzerland mining giant Xstrata plc completed its $21.7-billion acquisition of Falconbridge, three months earlier.