Zijin Mining, China’s No.1 gold producer, is buying
Canadian miner Continental Gold (TSX: CNL) for almost C$1.4 billion ($1bn),
in a move aimed at increasing the company’s bullion reserves and boosting cash
flow as well as profit.
The mining giant is offering C$5.50 a share in cash, a
premium to Friday’s close price of C$4.87. The friendly deal will give it
access to Continental’s main asset — the Buriticá gold project in Colombia — which
is expected to begin production next year.
Buriticá has measured and indicated gold reserves of 165.47
tonnes and an inferred reserve of 187.24 tonnes, Zijin said, adding that the
acquisition of Continental would boost its gold reserves to more than 2,000 tonnes,
with output growing by nearly 20%.
The Chinese gold, copper and zinc miner has been
expanding its footprint by acquiring assets from Africa to Australia.
In November, Zijin announced it was buying partner Freeport
McMoran’s copper-gold assets in Serbia for up to $390 million,
substantially boosting its resources of both metals.
Last year, it spent $1.26bn for a 63% in Serbia’s largest copper mining and
smelting complex RTB Bor.
It also trumped Lundin Mining’s (TSX:LUN) earlier hostile
bid for Canada’s Nevsun Resources, gaining access to yet another
Serbian asset — Timok copper and gold project. With the move, it also secured
ownership of the Vancouver-based miner’s flagship operation, the Bisha
copper-zinc mine in Eritrea.
The world’s largest gold company, Newmont Goldcorp (NYSE:
NEM)(TSX: NGT) said in a separate statement that it would support Zijin’s bid
to acquire Continental by selling its 19.9% equity stake in the Canadian miner and
its convertible bond for $260 million.
With the announced
sale of Red Lake for $375 million, the mining giant said it expected to
realize $635 million in total cash proceeds when the transactions close in the
first quarter 2020.
More to come…