Zijin Mining has offered a higher premium to Guyana Goldfields compared to what was offered by Silvercorp Metals and Gran Colombia Gold

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Zijin Mining to acquire Guyana Goldfields. (Credit: PublicDomainPictures from Pixabay)

Canadian gold miner Guyana Goldfields has agreed to be acquired by Zijin Mining Group, a Chinese mining company, for about CAD323m ($236.14m).

In this connection, the parties have entered into a binding arrangement agreement under which the Chinese firm will acquire all the shares of the Canadian miner by way of a plan of arrangement for CAD1.85 ($1.35) in cash.

Prior to the offer from Zijin Mining, the Canadian gold miner received takeover proposals from Silvercorp Metals and Gran Colombia Gold. Last month, Guyana Goldfields turned down Gran Colombia Gold’s offer on the basis that it is highly conditional and not in the best interests of shareholders.

The Canadian miner said that it was committed to the CAD105m ($74.44m) deal it signed with Canadian precious metals company Silvercorp Metals in April. However, as Zijin Mining’s offer is superior, Guyana Goldfields scrapped its arrangement agreement with Silvercorp Metals.

Guyana Goldfields CEO comments on the deal with Zijin Mining

Guyana Goldfields president and CEO Alan Pangbourne said: “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.

“Zijin is a highly regarded mining company with an impressive track record of successful international acquisitions and operations.”

Guyana Goldfield is primarily focused on the exploration, development, and operation of gold deposits in Guyana. The company owns the producing Aurora Gold Mine in the South American country.

Zijin Mining has also agreed to offer the Canadian miner $30m secured loan facility to finance ongoing operations of the Aurora gold mine and to cover the funding of the latter’s other liquidity needs.

Zijin Mining chairman Chen Jinghe said: “Guyana Goldfields’ management team has dedicated tremendous effort and made significant contributions in progressing the Aurora Gold Mine and we look forward to advancing and developing the next phase of the mine.

“We believe that the Aurora mine is a high-quality gold asset with significant upside potential which we believe will be highly complementary to Zijin’s existing mining asset portfolio.”

Closing of the acquisition is subject to Guyana Goldfields’ shareholders’ approval, certain regulatory and court approvals, which includes approval by relevant authorities in China, and meeting of other customary closing conditions.