SMM News: on December 2, Zijin Mining announced that the company and mainland Gold Co., Ltd. (ContinentalGoldInc., hereinafter referred to as "mainland Gold") signed an "arrangement Agreement" on December 2, 2019. the company will set up a subsidiary of Jinshan (Hong Kong) International Mining Co., Ltd. (hereinafter referred to as "Jinshan Hong Kong") at a price of C $5.50 per share. To make an agreement to acquire all the existing issued shares and diluted shares of mainland Gold in cash. At C $5.50 per share, the total value of the 100 per cent stake in mainland gold is about C $1.37 billion. After deducting the exercise price of the equity instruments, the total consideration for the company's actual acquisition of a 100 per cent stake in mainland gold is about C $1.33 billion, or about 7.03 billion yuan, or about US $1 billion.
To support the follow-up construction of the project, the company also provided $50 million in financing for mainland gold by subscribing for convertible bonds. The convertible bond has a maturity of five years, an interest rate of 5% and an interest payment on a semi-annual basis. The company may choose to convert to mainland gold at a conversion price of C $4.50 per share and the higher of the lowest conversion prices approved by the Toronto Stock Exchange.
After the completion of the acquisition, the company's gold resources reserves will exceed 2,000 tons, increasing the mine gold production by about 20% (after reaching production). The project will greatly improve the proportion of the company's gold plate business and profitability.