China's Zijin Mining to buy Canada's Continental Gold for about $1 bln
By Min Zhang and Dominique Patton
BEIJING, Dec 2 (Reuters) - Zijin Mining Group Co Ltd 601899.SS2899.HK, one of China's biggest gold miners, has agreed to buy Canadian miner Continental Gold Inc CNL.TO for C$1.33 billion ($999.92 million), saying the purchase would increase its gold reserves and boost cash flow as well as profit.
Zijin will pay C$5.50 per share in cash for Continental, a premium of about 13% to the Canadian company's closing price on Friday, as it aims to secure Continental Gold's flagship Buriticá gold project, the Chinese company said in a filing to the Shanghai Stock Exchange.
The Buriticá gold project has measured and indicated gold reserves of 165.47 tonnes and an inferred reserve of 187.24 tonnes, Zijin said.
Continental Chief Executive Officer Arti Sussman said the project is expected to reach production next year and the "timing is right for Continental to sell to a more experienced mine operator".
Zijin expects its gold reserves to exceed 2,000 tonnes after the purchase, with output eventually increasing by about 20%. It expects the Buriticá gold project to generate "robust" profit and cash flow after becoming operational in 2020.
The deal is, however, restricted by external conditions and faces uncertainty, Zijin said, without giving further details.
Monday's announcement comes after Zijin said in early November it would buy partner Freeport McMoran Inc's copper-gold assets in Serbia for up to $390 million, in an effort to boost its resources of both metals.
($1 = 1.3301 Canadian dollars)
(Reporting by Min Zhang and Dominique Patton; Additional reporting by Shariq Khan; Editing by Kirsten Donovan and Arun Koyyur)
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