Zijin Mining to acquire Canada’s Continental Gold in $1bn deal
Zijin Mining is targeting improved bullion reserves and ramped cash flow with the $1bn purchase of Canada’s Continental Gold.
China’s number one gold producer would gain access to Continental’s main asset, the Buriticá gold project in north-western Colombia.
"Continental's 100%-owned Buriticá project in Antioquia, Colombia is one of the largest and highest-grade gold projects in the world and represents a highly complementary addition to Zijin's international asset portfolio,” commented Chen Jinghe, Chairman of Zijin
The Buriticá project is expected to produce approximately 250k ounces of gold per annum on average over a 14-year mine life at LOM all-in sustaining cost of $600 per ounce.
“We believe the sizeable, high-grade mineral resource of 16.02 Mt at an average gold grade of 10.32 g/t (being a measured resource of 1.40 Mt with a gold grade of 13.70 g/t and an indicated resource of 14.62 Mt with a gold grade of 10.00 g/t) presents excellent opportunities to expand production and extend mine life,” added Zijin.
Continental has successfully advanced and substantially de-risked the Buriticá project with commercial production now clearly in sight and the 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.
"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,” commented Aris Sussman, CEO and a Director of Continental. “
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 is one of the world's fastest growing mining companies and boasts an impressive track record of successful international acquisitions and operations.”
The world’s largest gold company, Newmont Goldcorp said it would support Zijin’s bid to acquire Continental by selling its 19.9% equity stake in the Canadian miner and its convertible bond for $260mn.