Zijin Mining buys into Canadian firm

Reuters and staff reporter

Chinese mining firm Zijin Mining Group (2899) would take a 9.9 percent strategic stake in Canadian miner Montage Gold through its brokered private placement.

Zijin Mining will purchase 32.7 million shares out of nearly 97.1 million common shares of the Vancouver-based company at C$1.75 (HK$9.99) per share, coming to nearly C$57.3 million upon completion of the offering by August 12.

It comes as Canada seeks to tighten its Investment Canada Act, under which deals involving a foreign company are reviewed to safeguard national security.

Montage said it believes the investment does not require approval from the Canadian government because Zijin will own less than 10 percent of Montage upon closing of the transaction.

Gold is not listed as a critical mineral by the Canadian government, and Montage's assets are outside of Canada.

In 2022, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

Earlier this year, copper miner Solaris Resources reported that Chinese state-owned Zijin Mining was planning to acquire a 15 percent stake in the Canadian miner, but scrapped the plans as it feared the deal was unlikely to meet the foreign investment standards.

Shares of Zijin shares dropped 4.6 percent in Hong Kong yesterday.