Zijin Mining to acquire Buritica gold project owner Continental Gold
Zijin Mining acquisition of Continental Gold : Chinese miner Zijin Mining Group has signed an all-cash deal worth $1.05 billion to acquire Continental Gold, which owns 100% of the Buritica gold project in Colombia.
The Buritica gold mine is being developed by the Canadian gold miner in the Antioquia Department.
Scheduled to be brought into production in 2020, the Colombian gold mine has 3.7 ounces of gold at 8.4g/t gold (13.7 million tonnes) in mineral reserves.
The Buritica mine’s recently updated mineral resource estimate is said to be 5.32 million ounces of gold at 10.32 g/t gold in measured and indicated, while its inferred resources are 6.02 million ounces of gold at a rating of 8.56 g/t gold (21.9 million tonnes).
Continental Gold also has 100% ownership in the Berlin gold project, a past-producing gold mine located in the Antioquia Department. As per the Canadian gold miner, the Berlin gold mine gives scope for discovering various mineralized quartz veins and lodes.
Commenting on Zijin Mining acquisition of Continental Gold, Chen Jinghe – Chairman of Zijin Mining, said: Continental has successfully advanced and substantially de-risked the Buriticá project with commercial production now clearly in sight and first gold pour expected in the first half of 2020. Continental also holds a sizeable and highly prospective land package in Colombia that, combined with the Buriticá project, provides Zijin with the leading position in an emerging world-class gold producing region.”
“We have been greatly impressed by Continental’s focus on safe, efficient and sustainable mining practices which closely align with Zijin’s approach to mining and development operations.”
According to the terms of the deal, Zijin Mining is offering CAD5.50 ($4.14) per share to acquire Continental Gold.
The deal is backed by Newmont Goldcorp, which is one of the major shareholders of Continental Gold. The gold mining giant has agreed to offload its 19.9% equity stake and its convertible bond for a sum of $260 million.
Continental Gold’s senior management which holds a stake of 1.6% in the company is also supporting the takeover by the Chinese miner.
Ari Sussman – CEO and Director of Continental Gold, commenting on Zijin Mining acquisition of Continental Gold, said: “The all-cash offer at a significant premium to market is an excellent outcome for our shareholders and is a testament to the extraordinary effort of the Continental team and its stakeholders in pioneering a new and modern gold industry in Colombia.
“In the span of a decade, Continental has transformed the Buriticá project from a grassroots discovery into one of the world’s largest and highest-grade gold projects. With production on the horizon in 2020, the timing is right for Continental to sell to a more experienced mine operator and therefore Continental’s Board of Directors recommends that shareholders vote in favour of the Transaction.”
Zijin Mining acquisition of Continental Gold will be subject to the latter’s shareholders’ approval, receipt of necessary regulatory, stock exchange and court approvals, alongside other customary conditions.