(Yicai) Oct. 15 -- Chengtun Mining Group’s shares rose after the Chinese firm said it plans to invest CAD261 million (USD190 million) to fully acquire Canada’s Loncor Gold, thereby gaining a controlling stake in a Congolese gold project so as to hasten its development amid record prices for the precious metal.

After soaring by its 10 percent daily trading limit in Shanghai earlier today, Chengtun [SHA: 600711] finished 8.1 percent higher at CNY11.26 (USD1.58) a share, taking the stock’s advance to 129 percent this year.

Chengtun will set up a wholly-owned Canadian subsidiary to acquire all shares of Loncor for CAD1.38 (98 US cents) each in an all-cash deal that will take Loncor private, the Xiamen-based company announced late yesterday. The transaction will likely be completed within six months of the deal’s signing, it noted. 

Loncor is listed on the Toronto Stock Exchange, the Frankfurt Stock Exchange, and the OTCQX over-the-counter market in the United States.

Loncor owns 85 percent of the Adumbi Gold Mine, with the government of the Democratic Republic of the Congo and other minority shareholders holding the rest.

Gold, a traditional hedging asset, climbed to a new record price above USD4,200 per ounce today, after repeatedly scaling new heights this year amid global geopolitical tensions, trade headwinds, and economic uncertainty.

The Adumbi mine is located in the Ngayu Archean Greenstone Belt in the DRC's western Ituri province, where big gold deposits have been found, Chengtun said. It has a proven indicated mineral resource of 1.88 million ounces of gold, at average grade of 2.08 grams per ton of ore, while its inferred mineral resource stands at 2.09 million ounces of gold, with further upside potential.

Under Loncor's development plan, a mineral processing plant will be built at the mine, with the annual capacity to process 3.6 million tons of ore.

Chengtun, which specializes in mining and processing minerals such as copper, cobalt, nickel, and zinc, is already the developer and operator of the Kalongwe Copper-Cobalt Mine in the DRC and has local copper-cobalt mineral processing factories.

Editor: Martin Kadiev