China-based Yintai Gold is set to acquire Canadian gold exploration firm Osino Resources in an all-cash deal for N$5.3 billion.
In essence, Osino will end its N$4 billion deal with Canadian gold miner Dundee Precious Metals, which was announced in December, and Yintai Gold also will pay a N$140 million termination fee for the deal, according to the statement.
This week, Heye Daun, President and CEO of Osino revealed that Yintai Gold is a highly credible and capable counterparty.
Yintai Gold is devoted to the exploration, mining, dressing and sales of nonferrous and rare metals, and investment in mineral resources. Currently, Yintai Gold holds an Ag-polymetallic mine with the largest reserve and highest monomer silver grade in China. The company says it will make more effort in resources exploration and acquisition utilizing its own mining and exploration rights, and consolidate existing resources, expand project investment channels and nonferrous metals variety, and initiate diverse forms of cooperation projects to achieve stable and progressive development, and try best to become a listed domestic resources company with significant influence.
Yintai is a mining company publicly listed on the Shenzhen Stock Exchange with a market capitalization of US$5.6 billion as of February 23, 2024, as well as in excess of US$570 million in cash and cash equivalents as of December 31, 2023.
Yintai owns 5 mining operations in China, including the Yulong lead, zinc and silver mine, the Heihe Yintai gold mine, the Jilin Banmiaozi gold mine, the Qinghai Dachaidan gold mine and the Mangshi Huasheng gold mine.
The miner also has good track record in view of mergers and acquisitions including the US$600 million acquisition of Canadian-listed Eldorado Gold gold mines in China in November 2016. The mines involved are Dong’an Gold Mine of Heilongjiang Heihe Luoke Mining Company, Jinying Gold Mine of Jilin Banmiaozi Mining Company and Tanjianshan Gold Mine of Qinghai Dachaidan Mining Company; in particular, it includes four mining rights and nine exploration rights with abundant gold reserves, and of generally higher grades.
The acquisitions brought Yintai Gold’s enormous high grade gold resources and reserves, which further enhances the company’s competitive strength and ability to withstand risks, as well as its status in the non-ferrous metals industry. It has also increased the company’s total assets, further improved its financial structure, and raised profitability, and will generate better returns for all shareholders.
In addition, the acquisitions allowed the company to gain internationally advanced mining technology and mine management experience, management models as well as a team of international talent, laying the foundation for sustainable growth for the company.
In 2023, Yintai produced 225.4 Koz of gold, 6.2 Moz of silver, 9.5 Kt of lead and 16.5 Kt of zinc. The major 29% shareholder of Yintai is Shandong Gold, the operator of multiple gold mines internationally including the 7Moz Namdini Gold Project under construction in Ghana.
OSINO DEAL AND OPTIMISM
In the current deal, Yintai Gold will help Osino fast-track development of the wholly owned Twin Hills gold project in central Namibia.
Business Express understand that there has been an immediate cash infusion for Osino of US$10 million for operations and working capital needs. Osino will also leverage Yintai’s strong balance sheet and access to capital to fast-track development of Twin Hills.
Chinese outbound investment approvals to be obtained in parallel with Namibian competition approval
Xingong Ou, President of Yintai, stated: “Twin Hills represents a unique opportunity to add a high-quality gold development asset to our portfolio in a stable and mining friendly jurisdiction. The project provides the foundation for our future production profile with production targeted for 2026, as well as significant exploration upside. We are excited to leverage the excellent work done by the Osino team in discovering and progressing Twin Hills to this point and we look forward to working with the existing Osino team to grow their Namibian activities and to implement the construction of the project. We are impressed with the responsible mining approach which the Osino team has built, and we intend to continue and to grow that approach.”
Pursuant to the Yintai Arrangement Agreement, all outstanding Osino stock options, restricted share units, deferred share units and warrants which remain outstanding at the effective time of the Transaction, will be deemed to be exercised or settled, for their in-the-money value net of withholding taxes, as applicable, under the arrangement for Osino Shares, which will be exchanged for the Consideration.
Directors and officers of Osino have entered into voting support agreements pursuant to which they have agreed to vote their common shares in favour of the Yintai Arrangement.
Subject to certain conditions, including the parties obtaining the requisite regulatory approvals, the transaction is expected to close in the first half of 2024, subject to timing of the approvals under the Namibia Competition Act. Upon closing of the transaction, the Osino Shares are expected to be concurrently delisted.
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