Ghina’s Chifeng Jilong Gold Mining on Monday cancelled an agreement to buy the Bibiani gold mine in Ghana, saying it had not received timely information from the seller about the termination of the mining lease.
Australia-based Resolute Mining agreed to sell Bibiani to Chifeng Jilong for around $105 million in December, apparently extending a flurry of Chinese M&A in the gold mining sector, only to announce last month its lease had been terminated by the Ghanaian government.
The lease was restored last week under terms that did not recognise the sale.
In a filing, Chifeng Jilong said Resolute had been told in a November 6 letter from Ghana’s Minister of Lands and Natural Resources that the lease had been terminated but “did not disclose” the information.
In a statement shortly afterwards Resolute said it “will continue to consider all options for the successful development or sale of Bibiani and will provide further information in accordance with continuous disclosure requirements, as required.”
A Resolute spokeswoman said the company was not available to comment. She did not respond to Reuters’ question about Chifeng’s claim that Resolute did not disclose the letter from Ghana’s mines ministry.
The Chinese firm, which urged Resolute to refund an advance payment of around $5 million, said it only found out about the minister’s letter on March 24, when Resolute announced it had received a separate letter from the Ghanaian Minerals Commission saying the lease had been terminated.
The deal would have marked Chifeng Jilong’s second overseas acquisition after it bought a 90% stake in the Sepon gold and copper mine in Laos in 2018.
The company said the cancellation of the Bibiani deal would not adversely affect its overall business development and operations.