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Southeast Europe
September 7, 2018 www.intellinews.com I Page 16
Zijin taps deeper into Serbian copper sector with €1.2bn Nevsun takeover
bne IntelliNews
China’s Zijin Mining Group has agreed to buy Canada’s Nevsun Resources, which is the 100% owner of the high-grade copper-gold Timok Up- per Zone and 60.4% owner of the Timok Lower Zone in Serbia. The deal, agreed on September 5, was valued at CAD1.86bn (€1.2bn).
The transaction extends Zijin’s planned invest- ments relating to Serbia to over $2.5bn, after last week the government selected it to become strategic partner in copper smelting and mining complex Rudarsko Topionicarski Basen Bor (RTB Bor). The Chinese company has pledged to invest $1.26bn in RTB Bor. In addition, Zijin Mining is obliged to recapitalise the miner with $350mn.
The deal with Zijin allowed Nevsun to fight off
a hostile takeover attempt from Lundin Mining Corp, which had offered CAD$4.75 per share — well below the CAD6 offered by Zijin — back in July. Zijin’s offer, which Nevsun executives recom- mended shareholders to accept, represented
a 57% premium to the Nevsun share price on May 7, the day before Lundin made its offer, which was rejected in August. They claimed the Lundin offer “ignored the fundamental value of Nevsun's assets”.
Referring to the deal with Zijin, Ian Pearce, chair of Nevsun's board of directors, said that the “premium transaction is an excellent outcome for our shareholders, and the result of a rigorous and competitive global process to generate maximum value for Nevsun's outstanding assets.”
Surface plan map showing location of drill holes at Nevsun's Timok project in Serbia.
Some analysts say Zijin’s takeover would have cost more had the copper price not fallen over the sum- mer amid growing fears of new international trade wars. China, the world’s largest copper consumer, is firmly in US President Donald Trump’s sights.
Despite the recent fall in copper prices, however, long-term demand is expected to remain strong driven by, for example, infrastructure projects especially in developing Asia and wider adoption of electric cars.
Chen Jinghe, chairman of Zijin, said in a state- ment that as the new owner of Nevsun, Zijin would continue to advance ongoing projects.
“At the Timok Project in Serbia we intend to rap- idly develop the Upper Zone and bring it into pro- duction, and continue to advance and define the world-class potential of the Lower Zone," Chen Jinghe, chairman of Zijin, said.
As part of the deal with Nevsun, Zijin Mining Group will also take over assets in Eritrea. Nevsun has significant exploration areas licensed in Macedo- nia, but last year citizens of the southern Macedo- nian town of Gevgelija resoundingly voted 'no' in a referendum on whether to allow Nevsun’s Reser- voir Minerals to open two gold mines in the area.
Formed in 1993, Zijin is based in Fujian, China and is a leading global mining company specialising in gold, copper, zinc and other mineral resource ex- ploration and development. It manages an exten-