China’s Zijin Mining has been revealed as the international company that presented Canada’s Guyana Goldfields with a superior proposal, outbidding Silvercorp Metals with its C$323-million offer for the gold miner.
Zijin and Guyana Goldfields on Friday announced a binding arrangement agreement, pursuant to which the Chinese group will acquire the Guyana-focused mining company for C$1.85 a share in cash.Based on the closing price of the Silvercorp common shares on the TSX on June 3, the Zijin arrangement represents a premium of about 35% to the implied value of the consideration offered pursuant to the Silvercorp arrangement agreement.
On Wednesday, Guyana Goldfields terminated its arrangement agreement with Silvercorp, which with its improved offer that valued the takeover target at about C$227-million was sufficient to get Gran Colombia out of the race.
“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. Zijin is a highly regarded mining company with an impressive track record of successful international acquisitions and operations. We look forward to working with Zijin over the coming weeks to close this transaction and transition to the new team,” says CEO Alan Pangbourne.
Zijin chairperson Chen Jinghe commented that the group believed the mine was a high-quality gold asset, with significant upside potential.
The Guyana Goldfields board had unanimously approved the Zijin agreement and recommended that shareholders vote in favour of it.