Left Menu
Development News Edition

UPDATE 3-China's Zijin Mining to buy Canada's Continental Gold for $1 bln amid security risk


UPDATE 3-China's Zijin Mining to buy Canada's Continental Gold for $1 bln amid security risk

China's Zijin Mining Group Co Ltd has agreed to buy Canadian miner Continental Gold Inc for C$1.3 billion ($1 billion), but a top executive with the target company said elevated security concerns in Colombia pose a risk to the deal. State-backed Zijin's offer for Continental, announced on Monday, aims to secure Continental Gold's flagship Buritica gold project in Colombia.

"Zijin doesn't have any experience in Colombia, and we have obviously had some incidents in the past," Continental Chief Financial Officer Paul Begin told Reuters. "But if a major security incident happened at any project, it would be considered a material adverse change and they would have an out if they wanted to," he said.

Four employees of Colombia-focused Continental were killed in a single month last year, one near Buritica and the others at a different exploration site. Zijin's cash offer of C$5.50 per share represents nearly a 13% premium to Continental's Friday's close.

Continental's shares were up nearly 10% in Monday afternoon trading in Toronto. The deal marks the second acquisition of a Canadian gold miner in as many weeks as miners look to boost reserves and take advantage of firmer bullion prices. Last week, Canada's Kirkland Lake Gold Ltd offered to buy Detour Gold in an all-stock deal valued around C$4.3 billion.

The Buritica project has measured and indicated gold reserves of 165.47 tonnes and an inferred reserve of 187.24 tonnes, Zijin said. Zijin expects it's gold reserves to exceed 2,000 tonnes after the purchase, with output eventually increasing by about 20%. It expects the Buritica project to generate robust profit and cash flow after becoming operational in 2020. Buritica, whose high-grade ore and hearty output estimates make it a rare find, is shaping up as a key test for the future of large-scale underground mining in Colombia, whose mostly unexplored mineral riches have miners rubbing their hands.

Continental Chief Executive Ari 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." In a separate statement, Newmont Goldcorp Corp said it would tender its 19.9% stake in Continental.

The deal also requires Canadian and Chinese government approvals, Begin said. Canada last year blocked a proposed C$1.5 billion takeover of construction company Aecon by Chinese state builder China Communications Construction Co Ltd on national security grounds.

Continental shareholders are to vote on the deal in January. Begin said he expected to receive all approvals in late March or early April. Zijin said in early November it would buy partner Freeport McMoran Inc's copper-gold assets in Serbia for up to $390 million.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

WEF2020: Trump seems politically correct in pulling out from Paris Agreement

If the survey of the World Economic Forum WEF is believed, Trump seems to enjoy the confidence of his people in flaying climate intuitions and climate activists. His preference for economic development over environmental protection not only...

From home to healthcare, here are Robotic innovations transforming lives

Lovot is equipped with more than 50 sensors such as thermography, microphone array, obstacle detection, and touch sensor to generate motion and emotions in real-time....

Translating words to deeds: Achieving gender parity in access to financial resources

... ...

SDG13: How you can reduce global warming by changing your food habits

The mega narratives of various international organizations give the impression that fighting global warming is only a job of government agencies. However, the European Investment Bank EIB has designed a questionnaire which besides making th...

Videos

Latest News

FACTBOX-Trump impeachment: What happens next?

Here is what to look out for next as the proceedings advance in U.S. President Donald Trumps impeachment trial in the SenateSTARTING JAN. 21 After debate between House Democrats who are prosecuting the case against Trump, known as managers,...

HIGHLIGHTS-Tennis-Day three at the Australian Open

Highlights of the third day at the Australian Open, the first Grand Slam tournament of the year, on Wednesday times AEST GMT11 1246 OSAKA STAVES OFF ZHENG CHALLENGEDefending champion Naomi Osaka fended off a strong comeback attempt from Chi...

CBI awaits responses of three countries in Rajiv Gandhi assassination case

The Central Bureau of Investigation CBI is waiting for the response from three countries regarding the Letters Rogatory sent to them in connection with the Rajiv Gandhi assassination case. The counsel for the CBI explained to the court that...

Reading of Preamble to become mandatory in all schools from Jan 26: Maharashtra govt

Maharashtra government has made reading of Preamble of the Constitution after prayer mandatory in all primary and secondary schools, starting from January 26. The statement issued by School Education Minister and senior Congress leader Vars...

Give Feedback