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UPDATE 2-Australia's Newcrest to buy Canadian gold miner Pretium in $2.8 bln deal

(Adds analyst comment, financial details)

Nov 9 (Reuters) - Australia's biggest gold producer, Newcrest Mining Ltd, said on Tuesday it would buy the rest of Pretium Resources Inc in a deal that values the Canadian miner at $2.8 billion.

Newcrest has offered Pretium's shareholders the right to receive C$18.50 in cash or 0.8084 of a Newcrest share for each share of Pretium held. The cash offer represents a 22.5% premium to Pretium's last close, the company said.

Shares of Newcrest, which already owns 4.8% of Pretium, were down 4.7% as of 2312 GMT.

"All the gold companies are absolutely flush with cash. The outlook for gold is supposedly looking better because of the reflationary trade," said analyst David Lennox of Fat Prophets in Sydney.

As a hard asset, gold's value typically rises in line with inflation. Soaring price pressures spurred rate hike expectations even for central banks in the United States, Australia and Britain.

"You don't want to be a bank holding cash, you want to put that money out to work. I think you'll find there will be more M&A in the space into the end of the year and next year," Lennox added.

Pretium's operations include the Brucejack gold mine in British Columbia, Canada, which is close to Newcrest's majority-owned-and-operated Red Chris mine. (Reporting by Harish Sridharan in Bengaluru and Melanie Burton in Melbourne Editing by Sriraj Kalluvila and Matthew Lewis)