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Jinchuan Agrees to Purchase Canada's Continental Minerals for $419 Million
Sep 19,2010 13:32CST
industry news
Source:SMM

Sep 18 (Bloomberg)--

Jinchuan Group Ltd., a closely held Chinese nickel and copper producer, agreed to acquire Continental Minerals Corp. for C$432 million ($419 million) to gain a gold and copper project in Tibet.

Jinchuan, which controls 12 percent of Vancouver-based Continental, will pay C$2.60 for each of the 166 million shares it doesn’t already own, Continental said today in a statement. The proposed deal values Continental 13 percent more than its last closing price in Toronto. Continental also said it plans to pay investors as much as 10 cents a share in cash before the takeover is completed.

Chinese companies have announced or completed 17 mining acquisitions of North American companies during the past year with a total deal volume of $2.77 billion and an average premium of 31 percent, according to data compiled by Bloomberg. In April, Jinchuan said it would acquire Crowflight Minerals Inc., a Toronto-based nickel producer, for $140 million.

Continental is developing the Xietongmen deposit in Tibet, which may produce 116 million pounds of copper and 190,000 ounces of gold during its 14-year life, according to Continental’s website.
Continental climbed 28 cents, or 12 percent, to C$2.58 at 3:59 p.m. in TSX Venture Exchange trading. The shares have risen 21 percent this year.

BMO Capital Markets served as a financial adviser to Continental, and Sino Resources Capital Pty Ltd. advised Jinchuan.


 

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