China’s Zijin Mining to raise US$1.2 billion through share issue to fund takeover of Nevsun Resources

China’s largest gold miner will issue A shares in Shanghai, raising US$1.16 billion to fund takeover of Canadian miner

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The Zijinshan copper mine owned by Zijin Mining Group in Longyan city, Fujian province, in a photo made available on July 14, 2010. Photo: AP

Published: 7:03am, 2 Jan 2019Updated: 7:02am, 2 Jan 2019

Zijin Mining Group, China’s largest gold miner, said it plans to issue 8 billion yuan (US$1.16 billion) worth of shares in Shanghai to finance the purchase of a Canadian mining company, the biggest overseas acquisition since the company went public in Hong Kong in 2003.

The miner said in a Hong Kong filing Tuesday filing that it planned to issue 3.4 billion shares, raising 8 billion yuan to finance its 9.36 billion yuan purchase of a 100 per cent stake in the Toronto-listed company Nevsun Resources. Nevsun has a copper-gold project in Serbia and a 60 per cent stake in the copper-zinc Bisha Mine in Eritrea.

Zijin Mining said the Canadian company’s copper resource accounts for 26.2 per cent of Zijin’s present copper reserve, 18.3 per cent of its current gold reserve and 24 per cent of its zinc reserve.

The share sale proposal, pending approval by China’s securities regulator, came just one day after Nevsun said Zijin had been successful in its friendly takeover offer for the company.

Nevsun said about 89.37 per cent of the total issued and outstanding shares were tendered to the offer of C$6 (US$4.46) per share in cash by the December 28 deadline.

In November Zijin cleared the last major regulatory condition for the takeover as it won approval from China’s State Administration of Foreign Exchange and the support by the Canadian Investment Canada Act.