Shares in Zijin Mining Group, China's biggest gold producer by value, jumped yesterday after it unveiled an agreement to increase its stake in an Australian gold mine.
The Fujian-based mining company said on Thursday night that it had agreed to buy the shares of Norton Gold Fields it did not already own for about A$180.3 million (HK$1.36 billion).
Zijin, which currently owns 16.98 per cent of Norton, made a general offer to all shareholders of Norton at 25 cents a share, a 35 per cent premium to the 18.5 cents closing price on 29 March, the last trading day before Norton suspended trading.
Robin Tsui, mining analyst for BOC International, said: 'The offer price is very reasonable as the acquisitions on gold fields were on average at a 46 per cent premium [to the closing price] over the past two years.'
Shares in Zijin rose 2.8 per cent to HK$ 2.53 yesterday, while the Hang Seng Index dropped 0.38 per cent.
Zijin has been expanding its global investments, and last year paid a combined US$95 million for the stake in Norton and a 60 per cent holding in Altynken, a Kazakhstan-based firm which has access to a Kyrgyzstan gold mine. Buying Norton gives Zijin 1 million ounces of gold reserves at the Paddington development project in Western Australia.
Zijin said in a statement after the market closed on Thursday: 'The acquisition will help to enhance the company's expansion' overseas and increase its gold reserves, and 'will provide the company with a good platform and foundation for further global expansion'.