China’s Zijin plans selling $1.2B worth of shares to fund Nevsun takeover

Bisha mine in Eritrea

China’s Zijin plans selling $1.2B worth of shares to fund Nevsun takeover

By Cecilia Jamasmie | Mining

China’s No.1 gold producer Zijin Mining plans to issue 8 billion yuan (about $1.2 billion) worth of shares in Shanghai to finance the acquisition of Canada’s Nevsun Resources (TSX, NYSEMKT:NSU), the biggest overseas purchase since the Beijing-backed miner went public in Hong Kong in 2003.

Zijin aims to sell up to 3.4 billion A shares to investors in China, in a plan which is subject to shareholder and regulatory approval, it said in a filing to the Hong Kong bourse.

The news comes only days after Nevsun announced Zijin had succeeded in its $1.86-billion friendly takeover bid for the company, with about 89.37% of the total issued and outstanding Nevsun shares tendered to the offer of $6 per share in cash by the Dec. 28 deadline.

The offer has now been extended until Jan. 7 to allow the remaining shareholders to tender their shares.

In recent years, the Chinese gold, copper and zinc miner has been expanding its footprint by acquiring assets from Africa to Australia.

Last summer, it spent $1.26B for a 63% in Serbia’s largest copper mining and smelting complex RTB Bor. A few days later, it trumped Lundin Mining’s (TSX:LUN) earlier hostile bid for Nevsun, gaining access to yet another Serbian asset — Timok copper and gold project. With the move, it also secured ownership of the Vancouver-based miner’s flagship operation, the Bisha copper-zinc mine in Eritrea.

Zijin has said the Canadian company’s copper resource will account for 26.2% of its current copper reserves, 18.3% of its present gold reserves and 24% of its zinc reserves.

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