China Daye Non-Ferrous Metals will acquire four Chinese copper mines from a government entity of the Hubei province for a total price of US$900 million.
The company has issued new shares and convertible notes for the acquisition which resulted in a significant reverse takeover for China Daye. International Hong Kong legal practice Norton Rose advised the company on the transaction which involved complicated legal and regulatory processes.
The Tonglyshan, Fengshan, Tongshankou and Chimashan mines are all in commercial production and have an estimated combined ore reserve of 34 million tonnes with an average copper grade of 0.9%. The Tonglyshan mine also has a rich variety of associated metals, including gold and silver, in addition to its abundant copper reserves.
China Daye chairman Zhang Lin says, “China is by far the world’s largest copper cathode consumer. However, the country as a whole does not have sufficient copper resources to support ever-rising domestic consumption, therefore curbing capacity expansion of the copper industry.
“This significant portfolio of high-grade copper reserves and resources will enable us to secure a stable supply of copper concentrates and help reduce our exposure to fluctuations in copper concentrate prices,” he says.
Partner at Norton Rose Julian Chung says, “We are delighted to have completed this significant transaction with China Daye Non-Ferrous Metals. While it will contribute to enhancing the company’s leading position, it also demonstrates Norton Rose group’s strength in its corporate practice in the mining sector.”
The Norton Rose Group employs almost 3000 lawyers in 43 offices across the world. Julian Chung says the company’s lawyers share industry knowledge and sector expertise in energy, infrastructure, mining and commodities, transport, technology and innovation.
China Daye was formerly known as China National Resources Development. It is the first state-owned enterprise in the Hubei province listed on the Hong Kong exchange and specializes in the exploration and development of non-ferrous mines.
The company owns eight copper, molybdenum and wolfram mines and is one of the five biggest raw copper producers in China.