Chinese CMOC Group, the world's largest producer of cobalt, has announced an all-cash acquisition of Canadian development-stage mining company Lumina Gold Corp (OTCQB:LMGDF), valued at C$581 million (around $420 million).
Upon acquisition, CMOC will gain control over the Cangarejos gold-copper project, one of the world's largest undeveloped gold assets located in southwest Ecuador.
"After advancing the Cangrejos project for over ten years and taking it from no defined resources to being poised to be one of the largest gold projects globally, the Lumina Group is excited for the transition of the Cangrejos project to CMOC," said Lumina CEO Marshall Koval.
"We look forward to working with CMOC and all existing stakeholders to ensure the successful future development of the project."
According to Lumina's 2023 prefeasibility study, Cangrejos is expected to operate for 26 years, with an average annual production of 371,000 ounces of gold and 41 million pounds of copper. About 80% of the project's revenue is expected to come from gold, with average gold-equivalent production projected at 469,000 ounces annually.
The project's design is scalable, starting at 30,000 tons per day and increasing to around 80,000 tons per day by the seventh year of production.
The study places the initial capital cost at US$925 million, with an after-tax NPV of US$2.2 billion and an internal rate of return of 17.2%, based on base-case metal prices. All-in sustaining costs are estimated at US$671/oz, net of by-product credits.
The acquisition offers C$1.27 per Lumina share, representing a 71% premium over Lumina's 20-day volume-weighted average and a 41% premium to the company's April 17 closing price.
The transaction, structured through a court-approved plan of arrangement, has already garnered support from shareholders holding 52.3% of Lumina's outstanding shares.
The agreement includes standard deal protections, such as a C$23.3 million termination fee payable by Lumina under certain circumstances and a C$2.8 million expense reimbursement clause in CMOC's favor. Lumina retains a fiduciary out, enabling it to consider superior proposals, subject to CMOC's right to match.
CMOC will also purchase unsecured convertible notes to provide US$20 million in interim financing to Lumina. These notes mature in April 2026, carry a 6% annual interest rate, and convert into Lumina shares at C$1.00 per share. This financing is intended to support ongoing development at Cangrejos before the transaction's closing.
The transaction is expected to be completed in the third quarter of 2025, subject to shareholder, court, and regulatory approvals. Once finalized, Lumina Gold will be delisted from the TSX Venture Exchange and cease to be a reporting issuer under Canadian securities laws.
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