Chinese Mining Firm Zijin Mining Group Takes Strategic Stake in Canadian Miner Montage Gold
Canadian miner Montage Gold announced on Tuesday that Chinese mining firm Zijin Mining Group will be acquiring a 9.9% strategic stake in the company through a brokered private placement. This move will see Zijin Mining purchasing 32.7 million shares of Montage Gold at C$1.75 per share, amounting to nearly C$57.3 million ($41.90 million) upon the completion of the offering by Aug. 12.
Increased Chinese Investment in Canadian Mining Sector
This investment by Zijin Mining comes at a time when Canada is actively monitoring foreign investments in the mining sector to safeguard national security. In 2022, three Chinese companies were directed to divest their holdings in Canadian critical minerals due to concerns over national security implications. Additionally, Canada has recently made it clear to the mining industry that major deals involving the country’s critical mineral producers would only be approved under exceptional circumstances.
Implications for Montage Gold and the Lundin Family Trust
As part of this agreement, the Lundin Family Trust has also agreed to increase its stake in Montage Gold from 17.7% to 19.9%. The proceeds from the offering will be utilized for development expenditures and exploration activities at Montage’s Kone Project in Cote d’Ivoire.
Insight:
The strategic stake taken by Zijin Mining Group in Montage Gold highlights the growing interest of Chinese mining companies in investing in the Canadian mining sector. This partnership not only brings additional financial resources for Montage Gold but also opens up opportunities for collaboration and technology transfer between the two entities. It also underscores the importance of due diligence and regulatory compliance when navigating cross-border investments in the mining industry.
