China’s biggest gold producer Zijin Mining is expected to push further into Australia after a $229 million takeover of Norton Gold Fields.
Norton shares leapt five cents, or 27.03 per cent, to 23 cents on Tuesday after the gold miner’s biggest shareholder launched a $229 million indicative takeover offer.
Norton managing director Andre Labuschange said he expected the Perth-based firm would be a springboard for Zijin’s further involvement in Australia’s mining sector.
“It makes a lot of sense to use Norton as a platform,” he told a teleconference on Tuesday.
Speculation had abounded that Zijin would make a bid for Norton since it took a near 17 per cent stake in the company in September 2011.
Mr Labuschange said Zijin made the initial approach in January and talks had been underway since then.
“It was always a thought that they might be interested,” he said.
“In the last week, we have got to a point where the board feels that there is now an attractive premium.”
Zijin has offered 27 cents for each share in Norton that it doesn’t already own.
Mr Labuschange said the unsolicited, indicative offer was not yet formal and there was no guarantee that the indicative proposal would lead to a formal offer on acceptable terms.
“But, we’re confident we can get this to closure.”
In a statement, the target advised its shareholders to take no action, but said non-associated directors were “minded to recommend acceptance of the offer”.
Mr Labuschange said details of the proposal were still being negotiated, including whether it would be conducted on an exclusive basis.
The proposal is subject to conditions including approval from Chinese regulators and Australia’s Foreign Investment Review Board.
Mr Labuschange said he did not believe Zijin’s environmental record, including a toxic spill in Fujian province in 2010, would be “an issue”.
He also said he believed Zijin would keep Norton listed in Australia “until they get where they want to be”.
Norton runs the Paddington gold mining operations near Kalgoorlie in Western Australia.
