Zijin Mining surges on 4.8 billion yuan share placement
Ten investors lined up, as company looks to capitalise on rising price of gold to invest in Congo copper project
Shares in Zijin Mining Group surged on Monday after it unveiled a plan to raise up to 4.8 billion yuan via a private placement to help fund a copper project in Congo, taking advantage of buoyant investment sentiment toward gold and gold mining shares.
The Fujian province-based company, one of China’s largest gold producers, plans to sell up to 1.55 billion Shanghai-listed A-shares to not more than 10 investors, including its largest shareholder Minxi Xinghang and a vehicle that operates the listed firm’s employee shares options scheme.
“The company expects to obtain support from the capital market through the non-public issuance of A-shares to push forward and implement its development strategies proactively,” Zijin said in a filing to Hong Kong’s bourse.
Zijin took advantage of lower gold prices last year to buy a 49.5 per cent stake in the Kamoa copper project in the Democratic Republic of Congo in western Africa from Canada’s Ivanhoe Mines for US$412 million.
Together with the acquisition of another gold mine that Papua New Guinea announced at the same time, the company’s gold reserves have increased 11.7 per cent and its copper reserve by 68.5 per cent.
The firm bought its initial 51 per cent stake in the Kolwezi mine for US$ 77.9 million announced in late 2014.