(Yicai) Feb. 11 -- Shares of JCHX Mining Management rose after the leading Chinese mining contractor said it will proceed with fully acquiring CMH Colombia, which owns the development rights to Colombia's Alacrán copper-gold-silver mine, just a week after two major partners exited the deal.

JCHX [SHA: 603979] closed up 4.3 percent at CNY75.70 (USD10.95) a share today. The broader Shanghai stock market climbed 0.1 percent.

JCHX's Swiss unit Veritas Resources will make a one-time cash payment of USD128 million in fixed consideration to acquire all mining rights and assets of Cordoba Minerals in Colombia, including the other half of CMH Colombia that it does not yet own, in order to accelerate the preparatory work for the development of the Alacrán mine, the Beijing-based parent firm announced late yesterday.

In May last year, JCHX announced it would buy the 50 percent stake in CMH through Veritas for USD108 million to USD128 million, based on copper prices on the London Metal Exchange at the specific time of acquisition, with the subsidiary issuing new shares to Naipu Mining Machinery and two other investors to fund the move.

Due to the withdrawal of Naipu and one of the other investors earlier this month, due to various reasons including concerns over rising regulatory risks and difficulties in raising funds, JCHX's contribution for the capital increase will be raised to USD122.3 million from USD25.4 million, the company said, adding that its stake in Veritas will rise to 97.5 percent and not 55 percent as initially planned.

On Feb. 3, Naipu said it will not complete the acquisition of a stake in CMH because one of the target firm's owners, Cordoba Minerals, demanded adjustments to the acquisition payment terms, Colombia's Autoridad Nacionál de Licencias Ambientales had not yet approved the transaction, and rising global geopolitical risks.

JCHX will accept Cordoba Minerals' request to adjust the acquisition payment terms and will no longer make the approval of the project's environmental assessment report by the ANLA a prerequisite for the transaction, it said, while also agreeing to Cordoba Minerals' latest proposal on the method of determining the transaction consideration.

Regarding proceeding with the deal before obtaining approval from the ANLA, JCHX noted that there have been no substantial obstacles from the authorities in the review of the report so far and there is a desire to initiate the development work for the Alacrán mine as soon as possible due to the surge in precious metal prices.

The acquisition constitutes a related party transaction because JCHX is the second-largest shareholder of Cordoba Minerals, holding about 19 percent of its shares, and given that a senior executive from its controlling shareholder serves as a director of Cordoba Minerals, along with JCHX's existing 50 percent stake in CMH.

The Alacrán mine is an open-pit mine. In its life cycle, it is expected to recover a total of 797 million pounds of copper, 550,000 ounces of gold, and 5.35 million ounces of silver, according to the project feasibility report provided by JCHX.

The total investment amount for the development of the Alacrán project was USD420.4 million, which was expected to be shared by the shareholders of Veritas in proportion to their holdings, according to JCHX's initial plan.

Editor: Martin Kadiev