China’s Zijin Mining to Buy Guyana Goldfields for $238 Million
China’s Zijin Mining said on Friday it would acquire Guyana Goldfields for C$323 million ($238 million), bringing an end to a protracted takeover battle for the Canada-listed gold miner.
Toronto-based Guyana Goldfields announced on June 3 that it had received a binding proposal from an unnamed overseas-based miner to acquire the company, valuing it around 35% higher than a previously accepted offer from Silvercorp Metals.
On Friday, Zijin, one of China’s biggest gold producers, was confirmed as the mystery bidder behind the higher all-cash offer to buy Guyana Goldfields, whose flagship asset is the Aurora gold mine in Guyana, for C$1.85 per share.
Zijin has been on an acquisition spree, wrapping up its purchase of Continental Gold for C$1.3 billion in March and earlier this week taking 50.1% in a copper miner in Tibet for $548 million.
“The all-cash offer from Zijin represents a significant premium to the amended Silvercorp offer price and is an excellent outcome for Guyana Goldfield’s shareholders,” Guyana Goldfields CEO Alan Pangbourne said in a statement.
Zijin has also agreed to provide Guyana Goldfields with a $30 million loan to finance ongoing operations at Aurora and for other liquidity needs.
“We believe that the Aurora mine is a high-quality gold asset with significant upside potential,” Zijin chairman Chen Jinghe said, adding that his company looked forward to “advancing and developing the next phase of the mine”.
Vancouver-based Silvercorp had announced on April 27 it would acquire Guyana Goldfields for C$0.60 per share in cash and stock before upgrading its offer to C$1.30 following a rival all-cash bid from an unnamed third party.
Silvercorp had been given the chance to match Zijin’s offer but announced on June 10 it would not be doing so.
Guyana Goldfields had also received a buyout offer from Gran Colombia Gold Corp, which it rejected.
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