A friendly deal to take over Great China Mining (GCHA-O) will see Hunter-Dickinson company Continental Minerals (KMK-V) trade one of its shares for 8.7843 Great China shares. The bid, under which Continental would issue 36 million shares, values Great China at $68.4 million.
Continental is the operator of the Xietongmen copper-gold project in the Tibet autonomous region of China, with Great China as a joint-venture partner. Continental currently has a 50% interest and has almost spent enough to earn another 10%.
Owners of 67% of Great China have agreed to a lockup arrangement with Continental, which will go through regardless of whether minority shareholders tender to the bid. Three Great China directors will go on the board of Continental, and have undertaken to vote their shares with the Continental board for three years.
Xietongmen, about 240 km southwest of Lhasa, has a measured resource of 131 million tonnes grading 0.44% copper and 0.65 gram gold per tonne, plus an inferred resource of 41 million tonnes grading 0.37% copper and 0.5 gram gold per tonne. Both resource figures are based on a 0.3% copper cutoff grade. Preliminary pit designs showed stripping ratios ranging from 1.25 to 2.
A feasibility study is underway. Early metallurgical tests on three mineralization types (oxide, supergene, and primary) showed that flotation works on both supergene and primary material, with recoveries of 93% copper adn 83% gold from the primary material and 91% of the copper and 75% of the gold from the supergene material.