A leading Canadian mining company, embroiled in acquisition talks for the last few months, has finally accepted a takeover bid from one of the biggest mining companies in china.
Nevsun Resources announced this week that its board of directors “unanimously recommends” that the company’s shareholders accept a $1.41 billion acquisition bid from Zijin Mining.
This comes shortly after the company rejected an earlier “hostile” take-over bid from Lundin Mining, which was valued at around $1.4 billion.
“This 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," said Ian Pearce, Chair of Nevsun's Board of Directors. "The all-cash consideration of C$6.00 per share better reflects the fundamental value of Nevsun's mining and development assets, while also providing an appropriate change of control premium to our shareholders."
Zijin is a leading global mining company that specialises in gold, copper, zinc and other mineral resource exploration and development. With a market cap of around $10 billion, Zijin works with a number of international miners such as Barrick Gold Corporation and Ivanhoe Mines.
Chen Jinghe, Chairman of Zijin, says the acquisition will allow the company to expand its portfolio into East Africa and Serbia.
"Nevsun is an exceptional operator, with a strong focus on safe, efficient and sustainable mining practices,” he says. “As the new owner we will continue that focus, and we look forward to working with stakeholders in Eritrea and Serbia to advance these mining and development assets. At the Bisha mine in Eritrea, our objective will be to further extend the life of the mine and explore for new deposits. At the Timok Project in Serbia we intend to rapidly develop the Upper Zone and bring it into production, and continue to advance and define the world-class potential of the Lower Zone."
Earlier this year, Nevsun's Board of Directors rejected the “hostile bid” from Lundin on the grounds that it, among other reasons, ignored the fundamental value of Nevsun's assets.