Chinese company completes takeover of Guyana Goldfields

– company to be delisted from Toronto Stock Exchange

Zijin Mining Group Co, the Chinese mining company that emerged as the company that would be taking over Canadian Mining company Guyana Goldfields, has completed the process for acquisition.

According to a brief statement from Guyana Goldfields on Tuesday, the two companies have completed the transaction following the receipt of all the necessary regulatory approvals and all closing conditions being satisfied.
“Pursuant to the Arrangement, the Purchaser acquired all of the issued and outstanding common shares of Guyana (the “Shares”) not already owned by Zijin. Each Guyana shareholder is entitled to receive cash consideration of C$1.85 per Share held,” they announced.
“Further details of the Arrangement are set out in Guyana’s management information circular dated June 26, 2020. Registered Guyana shareholders should send their completed and executed letters of transmittal and certificates representing their Shares to the depositary, TSX Trust Company, in accordance with the instructions contained in the letter of transmittal, as soon as possible in order to receive the consideration to which such shareholders are entitled pursuant to the Arrangement.”
Moreover, Guyana Goldfields announced that its shares, which were trading at approximately C$1.84 a share price as of Tuesday, are expected to be delisted from the Toronto Stock Exchange within one to three business days.
This publication had reported earlier this month that Guyana Goldfields had gone to court in order to secure a final order to close their deal with Chinese company Zijin, citing the interference of an unnamed third party and the need to resolve their claim.
According to Goldfields, a hearing on the matter was held at the Ontario Superior Court of Justice, where they were seeking a final order to approve the statutory agreement between Goldfields and Zijin Mining.
Goldfields had explained that once this agreement is approved, Zijin would be able to acquire the issued and outstanding shares in Guyana Goldfields, for approximately C$1.85 per share. But there was a problem.
The arrangement, Goldfields said, was approved by the court subject to the company placing additional funds in escrow pending the resolution of an unproven claim by a third party. This condition does not affect the terms of the arrangement, and, with Zijin’s consent, the company is in the process of satisfying this condition.
“Completion of the Arrangement is anticipated to occur by the end of August, 2020, subject to the satisfaction or waiver of all conditions precedent to completion. The Company expects that the Shares will be delisted from trading on the Toronto Stock Exchange shortly after the closing date of the Arrangement.”
The Canada-based Guyana Goldfields, which operates local subsidiary Aurora Gold Mine (AGM), had moved to downsize its operations since May, after facing constraints from the COVID-19 pandemic coupled with other financial woes.
It was also linked to the company’s transition into underground mining. Hundreds of local workers were also laid off by Goldfields in the process.
The layoffs were announced by Goldfields Chief Executive Officer, Alan Pangbourne, who said a reduction in the workforce would take place at all levels including both national and expatriate employees as the company transitioned its mining operation into a state of care and maintenance for an undetermined period.
At first, Goldfields had entered into an agreement with another Canadian mining company named Silvercorp. They had agreed that Silvercorp would acquire Guyana Goldfields for some C$105 million.
But Goldfields then received a rival offer from Gran Columbia Gold soon after and Silvercorp revised the agreement and increased the offer to C$227 million. The Gran Columbia offer was rejected.
Subsequently, Guyana Goldfields announced that another company had topped that second offer by 35 per cent. Silvercorp was then given five business days to match or improve the C$1.85 cash-per-share new bid. It never did.
The company that bettered the purchasing price and conditions set by Silvercorp Metals Inc turned out to be Zijin Mining Group Co, which specialises in gold, copper, zinc, and other mineral resource exploration and development.
Last month, Goldfields processed its last batch of ore from stockpile and announced that it produced 56,000 ounces of gold for 2020. The site has also gone into a care and maintenance period, ahead of the anticipated takeover by Zijin.