China Purchasing Canadian Gold Miners Amid Gold Rally

As the coronavirus pandemic significantly impaired economies around the world and seeded uncertainty and volatility in global equity markets, it appears that gold prices are one of the few to come out on top. Since the beginning of the year, gold prices have increased by approximately 35%, given that the commodity’s stability as a store of value has increased its demand.

As such, Canada’s sizeable amount of gold reserves have caught the attention of international miners. Some of the smaller gold producers in Canada are being bought up by Chinese miners, for a price that hinders any other otherwise competitive offers. Zijin Mining Group Co. Ltd, has recently purchased Guyana Goldfields (TSX: GUY) for a deal valuation of approximately $323 million, despite facing competition from other bidders.

Silvercorp Metals (TSX: SVM) initially offered Guyana a price of $0.60 per share, which was then followed by a rival offering from Gran Colombia Gold Corp (TSX: GCM) for a price of $0.90 per share. Sensing the competition, Silvercorp increased its offer to $1.30 per share. However, neither of the companies were any match for Zijin Mining, who ultimately offered Guyana $1.85 for each of its shares.

This is not the only Canadian gold mining company Zijin Mining has purchased. Back in December, the Chinese gold miner bought Continental Gold Inc for a cash payment of $1.37 billion. As the uncertainty in global markets continues, especially with the potential threat of a second wave of COVID-19 looming ahead, it will not be surprising to see more international companies take interest in Canada’s gold production.

Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

4 thoughts on “China Purchasing Canadian Gold Miners Amid Gold Rally

  • June 14, 2020 6:29 PM at 6:29 pm
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    We must stop selling Canada to the Chinese. They care not for our country or our people. Sure it employs canadian but all profits and resources go to a communist regime.

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  • June 15, 2020 9:06 AM at 9:06 am
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    Other countries like Chine will buy up Canada companies at distressed prices and then just hord that commodity at their whem. In China’s case of gold mines to support their currency or for their own needs. Until we have cleared this economic disaster from Covid-19 this should be limited to 51% Canadian stock holders ownership. The penalty for this would be removing their mining licence for 6 to 12 months until this can be rectified. They may also try to do long term contracts where they own the output or inventory, therefore contracts should be limited to 1 year at a time for certain critical commodities. This may also pretain to food supply chain where they just take the products, process it thier country and sell it back to us if we are lucky at 5 times the price. We will need 5 to 10 years to recover from Covid-19 so at the end of that period we don’t want to be owned by another country. Our goverment must act swiftly before Canada’s industries become the coladeral damage of Covid-19.

    Remember China has detained the 2 Michaels in crouded jails for over 500 days while their complaintent is sitting in her mansion with full legal representation. Chine is not our friend and they have proven it time and time again by their actions.

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  • June 15, 2020 4:04 PM at 4:04 pm
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    Make no mistake, China is heading for global economic, political and military domination. They right now can ruin half the world’s countries economically. They’re already buying out African countries after dominating everywhere else in the world.
    How to stop them? Tell them to get out. No compensation, no remorse.

    Reply
  • August 5, 2020 2:39 PM at 2:39 pm
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    simple solution. put some discipline back into your own lives and stop buying china-made products. and try to educate others in your lives to do the same. it’s only one of the few options we have

    Reply

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