China has granted the necessary regulatory approvals for one of its companies to take over Guyana’s largest gold mining operations.
According to Canadian-owned Guyana Goldfields Inc., which controls the Aurora mines in the Cuyuni, Region Seven, Zijin Mining Group Co., Ltd. has announced that it has received the remaining required Chinese regulatory approvals.
These include approvals from the National Development and Reform Commission of the People’s Republic of China and the State Administration of Foreign Exchange of the People’s Republic of China, with respect to the previously announced statutory plan of arrangement under the Canada Business Corporations Act involving the company and Zijin.
Pursuant to the arrangement, a wholly-owned subsidiary of Zijin will acquire all of the issued and outstanding common shares of Guyana Goldfield not already owned by Zijin for cash consideration of Canadian $1.85 per share.
The completion of the arrangement is still anticipated to occur in August 2020.
Guyana Goldfields Inc. is a Canada-based gold producer primarily focused on the exploration, development and operation of gold deposits in Guyana, South America.
Zijin, it was announced in June, completed a proposed purchase of Guyana Goldfields. It was also announced that Zijin entered into a binding arrangement agreement which will allow it to acquire all of the outstanding common shares of Guyana Goldfields for cash consideration of C$1.85 for each Guyana Common Share, valuing Guyana Goldfields at approximately C$323 million.
In early June, Guyana Goldfields, after receiving the proposal from Zijin had notified Silvercorp, a Canadian mining company that had submitted a first proposal to purchase Guyana Goldfields, that a superior offer was received. Silvercorp elected not to exercise its right to match and, as a result, Guyana Goldfields terminated the Silvercorp Arrangement Agreement.
Zijin has since agreed to provide Guyana Goldfields with a US$30 million secured loan facility to finance ongoing operations of the Aurora gold mine and to fund its other liquidity needs.
The Aurora operations went into commercial operations in early 2016 with questions surfacing about its tax benefits granted by the government. It then faced internal problems after a battle with a number of shareholders who were unhappy with the operations. That matter was settled.
Before the Zijin deal, hundreds of workers had been sent home as the company actively sought an investor.
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