Canada backs Zijin Continental Gold acquisition
Canadian miner Continental Gold (TSX: CNL) said on Thursday the country’s government had approved its C$1.4 billion ($1bn) takeover by Zijin Mining, China’s No.1 gold producer.
The deal, first announced in December, has also received all three of the required regulatory approvals from China and is expected to close in the next ten days.
The takeover gives Zijin access to Continental’s main asset, the Buriticá gold project in north-western Colombia.
The asset 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 ounces of gold per annum on average over a 14-year productive life.
The acquisition of Continental is expected to boost Zijin’s gold reserves to more than 2,000 tonnes, with output growing by nearly 20%.
The Chinese gold, copper and zinc miner has been expanding its footprint by acquiring assets from Africa to Australia.
In November, Zijin announced it was buying partner Freeport McMoran’s copper-gold assets in Serbia for up to $390 million, substantially boosting its resources of both metals.
In 2018, it spent $1.26bn for a 63% in Serbia’s largest copper mining and smelting complex — RTB Bor.
It also trumped Lundin Mining’s (TSX:LUN) earlier hostile bid for Canada’s Nevsun Resources, gaining access to yet another Serbian asset — the Timok copper and gold project. With the move, it also secured ownership of the Vancouver-based miner’s flagship operation, the Bisha copper-zinc mine in Eritrea.
The latest transaction increases the already large list of mergers and acquisitions to have swept the sector in the past year, kicked off by the highly publicized multi-billion mergers of Barrick – Randgold and Newmont – Goldcorp.