Chinese mining giant buys Canada’s Contintental Gold for $1bn
Large high-quality gold reserves in Colombia lure Zijin Group into takeover
One of China’s largest gold miners has agreed to buy the Canadian miner Contintental Gold for C$1.33bn ($1bn, £779m).
Zijin Mining Group said the deal would increase its gold reserves, profit and cash flow. A filing with the Shanghai Stock Exchange outlined how, Zijin will pay C$5.50 per share in cash for Continental, a premium of about 13 per cent to its Friday closing price.
Continental’s Buritica project in Colombia is thought to be the key factor in attracting such a major Chinese firm. According to Zijin, the project has so far identified gold reserves of 165.47 tonnes, with an inferred reserve of 187.24 tonnes.
Not only are these significant but they are also high grade. With large-scale underground mining limited in Colombia compared with other South American countries Zijin will gain an operational foothold in an increasingly integrated nation.
This announcement follows Zijin’s decision to buy Freeport McMoran’s copper and gold assets in Serbia for up to $390m (£301m, C$518m). The Chinese firm expects its gold reserves to exceed 2,000 tonnes after the Buritica purchase, with the project becoming operational sometime next year.
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Continental chief executive Ari Sussman said that the “timing is right for Continental to sell to a more experienced mine operator”.
Zijin added that the deal is restricted by external conditions.
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