Reno, Nevada-based Meridian Gold said it has assumed as of July 1 production costs and output from the Pedro Valencia gold mine in central Chile.

Meridian is acquiring the mine through a 100% takeover of local private miner Minera Florida.

"Effective July 1, 2006, production and production costs from Minera Florida's Pedro Valencia mine will be realized to Meridian Gold's account," said the company in a statement. The transaction is planned to close on July 31.

Pedro Valencia, 120km south of capital Santiago, produced 70,000oz of gold at a cash operating cost of about US$200/oz in 2005 accounting for silver and zinc as by-product credits.

The US-based miner is preparing a reserve and resource estimate compliant with Canada's National Instrument 43-101, due by the end of the Northern Hemisphere summer.

Meridian Gold's flagship El Peñón gold-silver mine in northern Chile's Region III is forecast to produce 280,000oz of gold and 6.5Moz of silver in 2006.