China National Gold studies bid for Canadian miner Iamgold
- The potential takeover bid comes as gold futures for August delivery rose 3.6 per cent on Thursday and settled at US$1,396.90 an ounce at 1:35pm on Comex
China National Gold Group Corp, the nation’s second-biggest miner of the metal, is studying a bid for a stake in Canada’s Iamgold Corp, people familiar with the matter said. Iamgold shares jumped the most in more than four years on Thursday.
The state-owned gold miner is working with financial advisers on the potential offer, the people said, asking not to be identified as the information is private. Iamgold is exploring a possible sale of all or part of the company and has spoken to several potential buyers, Bloomberg News reported last month.
The Toronto-based firm’s decision to explore a sale follows several sizeable mergers in the industry, including Newmont Mining Corp’s acquisition of Goldcorp and Barrick Gold Corp’s deal for Randgold Resources.
Iamgold’s shares were 6.8 per cent higher at close in Toronto trading, giving the company a market value of C$1.5 billion (US$1.14 billion). The shares earlier gained as much as 18 per cent, the biggest intraday increase since December 2014.
Gold prices have been on the rise as investors seek havens amid slowing global growth. Bullion for immediate delivery jumped to the highest in more than five years on Thursday after the US Federal Reserve indicated a readiness to cut interest rates.
Gold futures for August delivery rose 3.6 per cent on Thursday to the highest for a most-active contract since September 2013, and settled at US$1,396.90 an ounce at 1:35pm on the Comex in New York.
China National Gold is the largest shareholder of China Gold International Resources Corp, listed in Hong Kong, and Shanghai-traded Zhongjin Gold Corp. No final decisions have been made and China National Gold may still decide against an offer, the people said.
A representative for China National Gold didn’t respond to requests for comment. A representative for Iamgold declined to comment.
The relationship between China and Canada remains tense after the arrest of Huawei Technologies. chief financial officer Meng Wanzhou in Vancouver last December on an American extradition request.
More than 80 per cent of Iamgold’s revenue comes from outside Canada, with major operations in South America and Africa, according to data compiled by Bloomberg.
