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Continental Gold's Buritica, Antioquia Gold Mining Works at November 2019 Continental Gold's Buritica, Antioquia Gold Mining Works at November 2019 Source: Continental Gold

China’s Zijin Mining Buys 100% of Continental Gold’s Antioquia Mining Operation

Published in Companies Written by  December 02 2019 font size decrease font size increase font size 0
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Toronto-based Continental Gold – developer of the giant Buriticá, Antioquia gold mine due for start-up in 2020 – announced December 2 that China-based Zijin Mining Group inked a C$1.4 billion/US$1 billion deal to buy 100% of Continental’s stock.

“The offer price represents a premium of 29% over Continental’s 20-day volume-weighted average price at November 29, 2019 on the Toronto Stock Exchange,” according to Continental.

Newmont Goldcorp and directors and officers of Continental collectively holding 21.5% of the outstanding Continental common shares also voted to support the Zijin buyout.

Fujian, China-based Zijin -- formed in 1993 -- specializes in gold, copper, zinc and other mineral resource exploration and development through investments in China and nine countries. Listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, as of November 29, 2019 Zijin had a market capitalization of approximately US$12.13 billion, according to the company.

Commenting on the deal, Continental CEO Ari Sussman 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.

“With [gold] 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 favor of the transaction.”

Zijin chairman Chen Jinghe added: “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.

“The Buriticá project is expected to produce approximately 250,000 ounces of gold per annum on average over a 14-year mine life at life-of-mine all-in sustaining cost of ~US$600 per ounce. We believe the sizeable, high-grade mineral resource of 16.02 metric tonne [Mt] at an average gold grade of 10.32 g/t [grams per tonne] (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.

“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.

“Zijin is conscious of the demonstrated responsibility of Continental’s operation towards the well-being of the local communities and the responsible management of environmental aspects of its operation. Zijin will practice in all its operations the same commitment of Continental towards transparency and ethics and will continue to operate in a highly responsible manner in Buriticá, Antioquia and Colombia more broadly,” Jinghe concluded.

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