(Yicai) Jan. 12 -- Chinese mining giant Zijin Mining Group plans to invest CAD130 million (USD97 million) in Solaris Resources, a Canadian miner with the rights to explore resources in several South American countries.

Zijin Mining’s Singaporean unit signed a new share subscription agreement with Solaris to buy nearly 28.5 million ordinary shares at a price of CAD4.55 (USD3.40) apiece issued by the target company through a private placement, the Fujian province-based company announced yesterday.

After the private placement, Zijin Mining will hold 15% of Solaris’ outstanding shares, becoming its second-largest shareholder.

The investment, which is subject to regulatory approval in both China and Canada, will significantly enhance Zijin Mining’s resource reserves and improve the output and efficiency of its main metal varieties, the firm noted.

The deal’s share price is equivalent to a premium of 14 percent to Solaris’ closing price of CAD4 on Jan. 10. The Canadian company’s Toronto-listed stock [TSE: SLS] closed up 5.3 percent at CAD4.21 yesterday.

Vancouver-based Solaris has the rights to explore mineral assets in Ecuador, Mexico, Chile, and other countries. Its major asset, the Warintza copper mine project in Ecuador, has the conditions for large-scale open-pit mining. The proceeds from the private placement will be used to develop the Warintza mine, Zijin Mining noted.

As of April 1, 2022, the Warintza project was estimated to have an ore volume of nearly 1.5 billion tons, containing about 6.2 million tons of copper, 280,000 tons of molybdenum, and 63 tons of gold. The figures are expected to significantly increase in the newest exploration report, which will be released in the second quarter of the year, Zijin Mining added.

Zijin Mining [SHA: 601899] was trading up 0.5 percent at CNY12.19 (USD1.72) as of 2.50 p.m. in Shanghai today. The stock soared 28 percent last year.

Editor: Futura Costaglione