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."
This report by The Canadian Press was first published Dec. 2, 2019.
Companies in this story: (TSX:CNL)
The Canadian Press