Zijin goes after Aussie gold miner in overseas buying spree

In May Zijin bought 50% of Barrick’s Porgera gold mine in Papua New Guinea (Image courtesy of Barrick Gold)

Chinese miner Zijin Mining Group tabled an unsolicited takeover bid for Australian gold explorer Phoenix Gold (ASX:PXG) on Monday, in what it could be the firm’s third major overseas acquisition in less than a month.

The Asian gold producer, which already mines next door to a Phoenix deposit, offered to pay 10 cents per share for the Australian company, valuing it at $47 million.

Phoenix’s board, however said in a statement this morning it had rejected such offer, as discussions with Zijin over the weekend failed to produce a better offer price.

“Phoenix will continue to consider means to maximize value for the company’s shareholders including actively soliciting alternative proposals,” the explorer added.

The company is also weighing whether to adjourn a shareholder meeting on Tuesday to vote on a proposal for Evolution Mining to lift its interest in Phoenix to 19.9%.

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Last month, Zijin attracted global media attention over two separate deals with Canadians Barrick Gold (TSX:ABX) and Ivanhoe Mines (TSX:IVN). The agreements, totalling about $700 million, include the acquisition of 47.5% of Barrick’s Porgera gold mine in Papua New Guinea, as well as a 49.5% stake in Ivanhoe’s subsidiary Kamoa Holding Limited, which currently owns 95% in the Democratic Republic of Congo (DRC) Kamoa copper project.

Zijin, which besides gold also produces copper and zinc, acquired in March a 10% ownership in Ivanhoe for about $85 million.

Gold prices were moderately lower in early U.S. trading Monday, with August Comex last down $9.00 at $1,192.90 an ounce. July Comex silver was last up $0.016 at $16.125 an ounce.