China’s Zijin Mining Group is set to acquire a significant minority stake in the Canadian mining company Montage Gold Corp.
The Chinese mining giant, which counts a state-owned investment company as its largest shareholder, will purchase 32.7 million shares of the Canadian company, representing a 9.9% stake.
At a price of C$1.75 per share, it adds up to an investment of approximately C$57.3 million.
This deal, expected to close by Aug. 12, comes on the heels of China’s commitment to expand its global hold on the metals and critical mineral mining sector.
The transaction unfolds against the backdrop of Canada’s heightened scrutiny of foreign investments under the revised Investment Canada Act, particularly concerning national security risks by geopolitical adversaries.
Despite this regulatory tightening, Montage Gold maintains that the deal with Zijin does not require Canadian government approval.
The company’s rationale hinges on three key points: the stake acquired remains below the 10% threshold, gold is not yet classified as a critical mineral within Canada, and Montage’s operational assets are situated beyond Canadian borders.
This development is particularly noteworthy given the recent history of foreign investment in Canada’s critical mineral sector.
In 2022, the Canadian government mandated the divestiture of investments by three Chinese firms in critical minerals, citing national security concerns.
Moreover, earlier in the year, Zijin Mining itself withdrew from a potential acquisition of a 15% stake in Solaris Resources, a move influenced by Canada’s stringent foreign investment standards.
The Canadian government has signalled that significant transactions involving critical minerals will be greenlit only under exceptional circumstances to ensure the protection of natural resources critical to security and economic success.
While gold is not currently deemed a critical mineral, prominent voices including former director of the Canadian Security Intelligence Service Richard Fadden have called for the metal to be added to the list.
