(Yicai Global) Dec. 3 -- Chinese metals producer Zijin Mining Group plans to invest CAD1.3 billion (USD1 billion) in cash to buy all equity in Canada's Continental Gold, picking up Colombia's biggest gold mine in the process.
Zijin and Newmont Goldcorp, Continental's largest shareholder with a 19.9 percent stake, and executives holding 1.6 percent, have penned a lock-in agreement that will be voted on at an extraordinary shareholders meeting, the buyer said in a statement yesterday. It plans to buy the remaining shares through the Toronto Stock Exchange and OTCQX for CAD5.5 (USD4.3) per common share, slightly more than its CAD5.39 closing price yesterday.
Continental's main assets include 100 percent of a gold mine in Buritica, Colombia, and 12 mining rights in the surrounding area. The mine is expected to open in the first quarter of 2020 and produce 8.8 tons of gold and 15.4 tons of silver during the first half-decade, making it the largest gold mine in the country.
The Xiamen-based firm also plans to inject USD50 million into the target via convertible bonds to give it extra cash to pour into new mines, the statement added. It predicts the acquisition will raise its annual gold mining output by 20 percent and take its reserves to more than 2,000 tons, augmenting its market share and making its gold business more profitable.
Editor: James Boynton