TORONTO – A Chinese mining company has signed a friendly deal to buy Continental Gold Inc. for $1.4 billion.
Zijin Mining Group Co. Ltd. has agreed to pay $5.50 per share in cash for the Toronto-based company which is developing the Buritica gold project in Colombia.
Continental shares closed at $4.87 on the Toronto Stock Exchange on Friday.
The Buritica project is expected to produce approximately 250,000 ounces of gold per year on average over a 14-year mine life.
The agreement is subject to the approval of at least a two-thirds majority vote by shareholders and simple majority of the votes cast by disinterested shareholders at a special meeting of Continental shareholders.
Newmont Goldcorp Corp. and directors and officers of Continental, who collectively hold about a 21.5 per cent stake in Continental, have agreed to back the deal.
“In the span of a decade, Continental has transformed the Buritica project from a grassroots discovery into one of the world’s largest and highest-grade gold projects,” Continental chief executive Ari Sussman said in a statement.
“With 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 favour of the transaction.”