China's Zijin Mining to buy 15% stake in Canada's Solaris (updated)

Solaris Resources

11/01/2024 21:43

(Recasts paragraph 1, adds details in paragraphs 3, 4, adds
analyst comment in paragraph 9)
       Jan 11 (Reuters) - Solaris Resources  SLS.TO  said on
Thursday that Chinese mining firm Zijin Mining Group  601899.SS 
plans to acquire a 15% stake in the Canadian miner for about
C$130 million ($96.99 million), in a deal that would test
Canada's new foreign investment rules.
    The deal is the first investment by a Chinese miner since
November 2022, when Canada ordered three Chinese companies to
divest their investments in Canadian critical minerals, citing
national security.
    Canada has in recent years tightened its Investment Canada
Act (ICA), under which deals involving a foreign company are
reviewed to safeguard national security.
        The Canadian government did not immediately respond to a
Reuters request for comment.
    Under the terms of the agreement, Solaris will issue about
28.5 million shares at C$4.55 per share to a unit of Zijin,
representing a 14% premium to the stock's close on Wednesday. 
    Shares of Solaris were up more than 5% on Thursday.
    The deal would also permit Zijin to nominate a member to the
Solaris board for as long as the Chinese firm held at least a 5%
stake.
    Solaris said it would use the proceeds of the transaction
for the development of its Warintza copper-gold project in
Ecuador.
    Brokerage Eight Capital said in a note that it was a "good
deal for Zijin Mining and a strong endorsement of the Warintza
exploration strategy."
     
($1 = 1.3404 Canadian dollars)

 (Reporting by Kabir Dweit; Editing by Shailesh Kuber)
 ((Kabir.Dweit@thomsonreuters.com;))