Zijin Mining Group Co Ltd, one of China’s biggest gold miners, has agreed to buy Canadian miner Continental Gold Inc for $1.33 billion, saying the purchase would increase its gold reserves and boost cash flow as well as profit.
Zijin will pay $5.50 per share in cash for Continental, a premium of about 13 per cent to the Canadian company’s closing price on Friday, as it aims to secure Continental Gold’s flagship Buriticá gold project, the Chinese company said in a filing to the Shanghai Stock Exchange.
The Buriticá gold project has measured and indicated gold reserves of 165.47 tonnes and an inferred reserve of 187.24 tonnes, Zijin said.
Continental chief executive officer Arti Sussman said the project is expected to reach production next year and the “timing is right for Continental to sell to a more experienced mine operator.”
Zijin expects its gold reserves to exceed 2,000 tonnes after the purchase, with output eventually increasing by about 20 per cent. It expects the Buriticá gold project to generate “robust” profit and cash flow after becoming operational in 2020.
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