Continental Minerals Corp. reported that the company has entered into a letter of intent to be acquired by a large Chinese mineral company for consideration of $432 million CAD.
Continental Minerals Corporation signed the letter of intent with Jinchuan Group Ltd, which will pay $2.60 CAD per share for the 166 million outstanding shares of Continental Minerals Corporation. This was a 13% premium to where the stock was trading prior to the announcement.
The letter of intent contains a provision calling for a mutual breakup fee of $13.4 million if either Continental Minerals Corporation or Jinchuan Group Ltd is unable to complete its obligations.
Holders of options on Continental Minerals Corporation are allowed to exercise the options prior to expiration and participate in the deal. The company will also pay a special dividend of $0.10 CAD per share right before the closing of the deal.
Continental Minerals Corporation has established a special meeting of shareholders to be held in November 2010, at which time a vote will be called for shareholders to vote on approving the deal.
Jinchuan Group Ltd. is a mining and chemical engineering company that produces nickel, copper, cobalt, rare and precious metals. The company also produces various acids, chlorine and caustic soda.
For more information on the company, go to www.hdgold.com.
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