China’s Zijin Mining clinches US$2.6 billion Chifeng Gold takeover in expansion drive

Zijin Mining, China’s largest gold producer, has expanded its buying spree by acquiring controlling shares in China-based Chifeng Jilong Gold Mining for 18.26 billion yuan…

Zijin Mining, China’s largest gold producer, has expanded its buying spree by acquiring controlling shares in China-based Chifeng Jilong Gold Mining for 18.26 billion yuan (US$2.64 billion), the company said.

The acquisition came only two months after Zijin Mining proposed to buy Canadian Allied Gold for 28 billion yuan as part of its global expansion.

Through its subsidiary Zijin Gold, the acquisition was structured in two primary tranches, Zijin Mining said in a Hong Kong stock exchange filing on Monday. Zijin will purchase 242 million A shares from Li Jinyang, the controlling shareholder of Chifeng Gold, and affiliate Zhejiang Hanfeng Venture Capital at 41.36 yuan per share, representing a 1.3 per cent premium over the last closing price. Li was the spouse of Chifeng’s late founder, Zhao Meiguang.

Zijin has agreed to subscribe to 311 million newly issued H shares of Chifeng Gold at HK$30.19 per share. Upon completion, Zijin Mining’s total stake will rise to 25.85 per cent, granting it effective control and allowing full financial consolidation of the company.

Chifeng Gold operates six gold mines and has reserves of 583 tonnes of gold. Photo: Shutterstock

Shares of Zijin Mining lost 4.7 per cent to HK$32.6 while Chifeng Gold slumped 24 per cent to HK$31.88 before the noon trading break in Hong Kong.

Don't Miss:

China’s Zijin Mining clinches US$2.6 billion Chifeng Gold takeover in expansion drive

EU and China need a grand bargain to avoid a trade war

2 Japanese held in China over alleged rare earths smuggling

Hidden cost of China’s electric car boom, record-breaking week for sales: 7 EV reads

Singaporean woman jailed for slapping, punching helper over job performance

Keiko Fujimori edges closer to winning Peru’s presidency