CMOC Group, a leading Chinese cobalt and copper miner, agreed to buy Canada’s Lumina Gold Corp. for about $581 million (US$420 million) to tap the largest primary gold deposit in Ecuador.
CMOC will acquire all shares of Lumina Gold at $1.27 a piece in an all-cash transaction, subject to approvals, the Vancouver-based company said in a statement. That represents a premium of around 40 per cent to its closing price on April 17.
Lumina is focusing on developing the Cangrejos gold project in El Oro province, southwest Ecuador. In 2023, the company completed a pre-feasibility study on the project.
The Chinese miner overtook Glencore Plc in 2023 as the world’s biggest cobalt producer and posted a record profit last year, boosted by higher copper prices. Gold has reached a series of all-time highs this year after U.S. President Donald Trump kicked off a global trade war, lifting haven demand.
Mining deals involving China often face challenges. The Canadian government in 2022 placed restrictions on foreign investment in its mining sector, in a move widely seen as targeting China’s influence in the global critical minerals supply chain. CMOC sold a controlling stake in its Northparkes copper and gold mine in Australia in 2023, citing geopolitical concerns.
The deal will bring benefits to Lumina including a “highly credible and capable counterpart with track record of successful M&A,” according to the statement. The parties expect the transaction to be completed in the third quarter pending on approvals from relevant parties and authorities, it said.
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