Continental Gold shareholders urged to back Zijin’s $1bn takeover deal
Canada’s Continental Gold (TSX:CNL) said on Tuesday that independent proxy advisory firms ISS and Glass Lewis have urged the Canadian miner’s shareholders to vote in favor of the takeover offer from Zijin Mining, China’s No.1 gold producer.
Zijin in December agreed to buy the Toronto-based miner for C$1.3 billion ($1bn) to gain access to Continental’s flagship Buritica gold project in Colombia.
The asset, 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 this year, the mine will churn out 250,000 ounces of gold per annum on average over a 14-year productive life, boosting Zijin’s gold reserves to more than 2,000 tonnes.
Institutional Shareholder Services (ISS) and Glass Lewis pointed out the C$5.5 per-share-offer represented a significant premium to Continental’s shares value — 29%. They also referred to favourable market reaction as factors supporting their recommendations.
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.
Continental’s shareholders will meet on January 28 in Toronto.