One of China’s largest mining companies is buying a publicly traded gold company in Canada. But, why?
What’s happening:
- Lumina Gold (TSXV: LUM) has announced they have entered into a deal with China based CMOC Group to be acquired for approximately $581M CAD
By the numbers:
- CMOC Group will pay $1.27 CAD per share for Lumina Gold, which is a 41% premium to the closing price prior to the deal being announced
- CMOC Group will also provide Lumina Gold with a $20M USD convertible note financing to fund the company prior to the deal officially receiving regulatory approval to close
Why it matters:
- Lumina Gold’s flagship property the Cangrejos Gold-Copper Project is the largest primary gold deposit in all of Ecuador and one of the largest gold resources globally
Going deeper:
- CMOC Group is one of the world’s largest producers of tungsten, cobalt and molybdenum and is partly owned by the Chinese government
- Wheaton Precious Metals (NYSE: WPM) previously provided Lumina Gold with a $300M gold stream financing deal to fund the construction of Lumina Gold bringing the Cangrejos Gold-Copper Project into production
