China’s Zijin Mining said on Friday it would acquire Guyana Goldfields for C$323 million ($238 million), bringing an end to a protracted takeover battle for the Canada-listed gold miner.
Toronto-based Guyana Goldfields announced on June 3 that it had received a binding proposal from an unnamed overseas-based miner to acquire the company, valuing it around 35% higher than a previously accepted offer from Silvercorp Metals.
On Friday, Zijin, one of China’s biggest state-controlled gold producers, was confirmed as the mystery bidder behind the higher all-cash offer to buy Guyana Goldfields, whose flagship asset is the Aurora gold mine in Guyana, for C$1.85 per share.
Zijin has been on an acquisition spree, wrapping up its purchase of Continental Gold for C$1.3 billion in March and earlier this week taking a 50.1% stake in a copper miner in Tibet for $548 million.
“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,” Guyana Goldfields Chief Executive Alan Pangbourne said in a statement.
While the deal falls below Canada’s review threshold, all foreign investments by state-owned firms face enhanced scrutiny under toughened takeover rules introduced by the Canadian government in April, raising the prospect of delay.
“We currently have no reason to believe this will be an issue,” a Guyana Goldfields spokesman said.
Zijin has also agreed to provide Guyana Goldfields with a $30 million loan to finance ongoing operations at Aurora and for other liquidity needs.
Vancouver-based Silvercorp had announced on April 27 it would acquire Guyana Goldfields for C$0.60 per share in cash and stock before upgrading its offer to C$1.30 following a rival all-cash bid from an unnamed third party.
Silvercorp had been given the chance to match Zijin’s offer but announced on June 10 it would not be doing so.