Gold and base metals producer Agnico-Eagle Mines Ltd. has agreed to buy junior miner Cumberland Resources Ltd. in a friendly deal worth about C$693 million ($592 million), boosting its gold production and reserves.

The deal will give Agnico-Eagle full ownership of Cumberland's Meadowbank gold project in Canada's Arctic territory of Nunavut. Now under construction, the project has proven and probable reserves of 2.9 million ounces of gold.

Initial production is expected in early 2010, with annual production forecast to average 400,000 ounces of gold in the first four years, and average 350,000 ounces per year over the life of the mine.