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July 22 (Reuters) - NOVAGOLD Resources NG.TO said on Wednesday it will acquire the shares it does not already own in Donlin Gold from Paulson Advisors in an all-stock deal that would create a gold producer worth $4.2 billion.

A record rally in gold prices has bolstered miners' cash flows and improved their access to capital, encouraging them to expand reserves of the precious metal and grow their presence in safer mining regions such as Canada and the United States.

Upon completion of the deal, a new company — NovaGold Corporation — will be formed, with NOVAGOLD shareholders owning nearly 65% and Paulson receiving about 35% in exchange for its Donlin Gold interest.

Inclusive of its existing equity ownership in NOVAGOLD, Paulson would own approximately 40% in the new entity, the company said.

The new company, which would be incorporated in Delaware, will be co-chaired by NOVAGOLD Chairman Thomas Kaplan and John Paulson, and its board will be expanded to 11 directors from 10.

The deal is expected to close in the fourth quarter.