Another day, another gold deal. This time it is one of China’s biggest mining companies swooping with a $1bn cash offer for Canada’s Continental Gold.
Zijin Mining said the deal would increase its gold reserves and boost production.
“The completion of the acquisition can raise the Company’s gold resources reserve volume to over 2 thousand tonnes and increase the production volume of mine-produced gold by approximately 20 per cent,” it said in a statement.
Continental’s main asset is the Buritica gold project in Colombia which is due to start production next year.
Under the deal, Zijin is offering C$5.50 a share in cash, a premium to Friday’s close price of C$4.87. Newmont Mining, which holds a 19.9 per cent stake in Continental, said it will back the deal.
Zijin’s offer for Continental marks the latest deal in the gold sector. Last month, Canada’s Kirkland Lake Gold launched $3.7bn all-share offer for rival Detour Gold.
Bankers have predicted Chinese companies would look to join the consolidation of the sector given the strategic importance of gold to Beijing.