Nov. 8 (Bloomberg) -- Zijin Mining Group Co., China’s biggest gold producer by value, rose to an almost three-month high in Hong Kong trading after saying it would buy a stake in a copper and gold mine project from Jinchuan Group Ltd.
Zijin climbed 5.9 percent to HK$3.79 at the 4 p.m. close. The stock has declined 21 percent this year, compared with a 15 percent drop in the benchmark Hang Seng index.
The company will pay $228 million to Jinchuan for a 45 percent stake in Gold Eagle, which controls a gold and copper project in Tibet, according to a statement filed to the Hong Kong stock exchange. It also agreed to pay A$175 million ($181 million) to buy a gold project in China from Warrior Advance Pty Ltd. and Dragon Mountain Gold Ltd., according to a separate statement.
The proposed acquisitions “come at good prices” and “have lower integration risks compared to overseas acquisitions,” Robin Tsui, a Hong Kong-based analyst at BOC International Holdings Ltd., wrote in a note to clients.
The gold miner plans to spend as much as 10 billion yuan ($1.6 billion) a year on acquisitions and expansion as global economic concern drives down valuations, Zijin’s Chairman Chen Jinghe said in an interview yesterday.
To contact the reporter responsible for this story: Michelle Yun in Hong Kong at Myun9@bloomberg.net
To contact the editor responsible for this story: Rebecca Keenan in Hong Kong at Rkeenan5@bloomberg.net