Chinese miner Zijin Mining Group said on Wednesday that it would buy stake in Xanadu Mines with an eye towards obtaining its copper and gold resources in Mongolia.
In a filing to the Shanghai Stock Exchange, Zijin said it signed an agreement with Xanadu Mines to acquire a 19.9% stake in the company at A$0.04 ($0.0296) per share, and 50% stake in Xanadu’s subsidiary Khuiten Metals for $35 million.
Eventually, Zijin aims to take a 45.9% stake in Mongolia’s Kharmagtai copper and gold mine through Khuiten Metals’ 76.5% stake in the mine, the company said.
The Kharmagtai mine is estimated to hold 2.93 million tonnes of copper and 7.8 million ounces, or 243 tonnes of gold, according to Xanadu’s 2021 annual report.
“The company thinks the project has a large amount of resources and total investment is low,” Zijin said in the filing, noting that its expertise in developing low-grade resources will facilitate the investment.
Zijin currently runs overseas copper projects in Serbia and Democratic Republic of the Congo. It has gold mines in Colombia, Australia, Papua New Guinea and elsewhere.
The company’s first-quarter net profit surged 144% from same period a year earlier to 6.1 billion yuan ($952.68 million), after posting a record annual profit for 2021.
- Reuters with additional editing by Jim Pollard