CMOC Group Acquires Lumina Gold for C$581 Million to Advance Cangrejos Gold Project
Chinese mining company CMOC Group has agreed to acquire Canada’s Lumina Gold in an all-cash deal worth C$581 million, marking a significant step for the Cangrejos gold project in Ecuador.
Lumina CEO Marshall Koval expressed excitement about the transition of the Cangrejos project, saying, “After more than a decade of advancing the Cangrejos project, we are thrilled to see it move to CMOC, which is poised to further develop it into one of the largest gold projects globally.”
CMOC will pay C$1.27 per Lumina share, offering a 71% premium to the 20-day volume-weighted average price and a 41% premium to the April 17 closing price.
The transaction, set to be completed through a court-approved plan of arrangement, is supported by shareholders holding 52.3% of Lumina’s stock.
Alongside the acquisition, CMOC will provide $20 million in interim financing by purchasing unsecured convertible notes, which are convertible into Lumina shares at C$1.00. The notes, which mature in April 2026, will bear an interest rate of 6% per year.
The acquisition includes protections such as a C$23.3-million break fee and a C$2.8-million expense reimbursement. Lumina retains the option to accept a superior offer, with CMOC having the right to match it.
The Cangrejos project, located in southwest Ecuador, is one of the largest undeveloped gold projects in the world.
Its prefeasibility study estimates average annual production of 371,000 oz of gold and 41 million pounds of copper, with gold accounting for nearly 80% of the revenue. Over the life of the mine, average annual output is expected to be 469,000 oz of gold equivalent.
The project will begin with a 30,000 t/d operation, scaling to 60,000 t/d in year four and 80,000 t/d by year seven.
The base-case project is estimated to have an after-tax net present value of $2.2 billion, with an internal rate of return of 17.2%.
Initial capital costs are estimated at $925 million, with all-in sustaining costs projected at $671/oz, net of by-product credits.
