Zijin Mining, China鈥檚 No.1 gold producer, is , in a move aimed at increasing the company鈥檚 bullion reserves and boosting cash flow as well as profit.
The mining giant offered C$5.50 a share in cash, a premium to Friday鈥檚 close price of C$4.87, in a friendly deal that gives it access to Continental鈥檚 main asset 鈥� the Buritic谩 gold project in Colombia.
Buritic谩, in north-western Colombia, has measured and indicated gold reserves of 165.47 tonnes and an inferred reserve of 187.24 tonnes. Expected to begin operations next year, the mine will churn out 250,000聽ounces of gold per annum on average over a 14-year productive life.
Zijin said the acquisition of Continental boosts its gold reserves to more than 2,000 tonnes, with output growing by nearly 20%.
With the acquisition, Zijin boosts gold reserves to more than 2,000 tonnes, with output growing by nearly 20%
鈥淸Buritic谩] is one of the largest and highest-grade gold projects in the world and represents a highly complementary addition to Zijin鈥檚 international asset portfolio,鈥� chairman Chen Jinghe .
The Chinese gold, copper and zinc miner聽has been expanding its footprint by acquiring assets from Africa to Australia.
In November, Zijin announced it was buying partner Freeport McMoran鈥檚 copper-gold assets in Serbia for up to $390 million, substantially boosting its resources of both metals.
Last year, it聽聽complex RTB Bor.
It also trumped Lundin Mining鈥檚聽(TSX:LUN) earlier hostile bid聽for Canada鈥檚 Nevsun Resources, gaining access to yet another Serbian asset 鈥� the Timok copper and gold project. With the move, it also secured ownership of the Vancouver-based miner鈥檚 flagship operation, the Bisha copper-zinc mine in Eritrea.
The world鈥檚 largest gold company, Newmont Goldcorp (NYSE: NEM)(TSX: NGT) said that it would support Zijin鈥檚 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.
Zijin鈥檚 offer for Continental marks the latest deal in the gold sector. Last month, Canada鈥檚 Kirkland Lake Gold (TSX, NYSE: KL) (ASX:KLA) launched $3.7bn all-share bid for rival Detour Gold.
The transaction increases the already large list of mergers and acquisitions to have swept the sector this year, kicked off by the highly publicized multi-billion mergers of聽听补苍诲听.听
