Chinese Miners Swoop on South American Gold Assets
Ecuador proving to be a hotspot for corporate activity
With two deals announced in the past week, 2025 has seen a rise in Chinese mining companies operating in South America.
On Monday, Equinox Gold Corp (TSX: EQX) announced the sale of its the Aurizona mine, RDM mine and Bahia Complex in Brazil to China’s CMOC Group (HK: 3993) for US$1.015 billion, comprising upfront cash of US$900 million on closing and a production-linked contingent cash payment of up to US$115 million one year after closing.
Equinox CEO Darren Hall said the sale would reposition the company as a North America-focused producer, underpinned by the new Greenstone and Valentine mines in Canada, and allow it to repay US$800 million of debt.
“This will greatly reduce interest expense and enhance per-share cashflow,” he said.
“The company will have enhanced flexibility to self-fund organic growth and consider capital return initiatives within a disciplined capital allocation framework.”
For CMOC, the three operations mark its first pure-play gold mines in addition to its base metals, niobium and phosphate operations.
“The transaction is an important step that showcases our conviction in gold and delivers on our strategy of pillaring the portfolio on copper and gold,” CMOC chairman and chief investment officer Liu Jianfeng said.
“Considering the rich resources and stable geopolitical environment in Brazil, the transaction offers strategic addition to our existing assets, creating stronger synergy and growing CMOC presence in South America.”
SolGold gets offer
Late last month, Ecuador copper-gold developer SolGold (LSE: SOLG) rejected a 28 pence per share takeover proposal from its 12.2% shareholder Jiangxi Copper Company (SH: 600362).
On Friday, Jiangxi tabled a revised non-binding indicative cash proposal of 28 pence per share, valuing SolGold at £842 million, a premium of 42.9% to SolGold’s undisturbed share price on November 19.
The SolGold board has indicated it would accept the offer.
BHP (ASX: BHP) and Newmont Corporation (NYSE: NEM), which each hold 10.3% of SolGold, Maxit Capital, which holds 5.1%, and SolGold founder Nick Mather, who holds 2.8%, have expressed support for the offer.
SolGold’s flagship asset is the Cascabel copper-gold project in Ecuador. Cascabel’s Alpala deposit has a reserve of 539.7 million tonnes at 0.6% copper, 0.54 grams per tonne gold and 1.6g/t silver for 3.2Mt of contained copper, 9.4 million ounces of gold and 28Moz of silver.
While Alpala is being developed as a large block cave underground mine, SolGold has identified the potential for early production in 2028 via the Tandayama open pit.
Ecuador in focus
While the Equinox deal this week marked CMOC’s first entry into gold production, its first entry into the sector came earlier this year.
In April, CMOC announced the C$581 million cash takeover of Toronto-listed Lumina Gold Corp, owner of the Cangrejos gold project in Ecuador.
CMOC is fast-tracking Cangrejos into production by 2028.
Earlier this year, China’s Lingbao Gold Group paid US$10 million for a 9.9% stake in Titan Minerals (ASX: TTM).
Titan’s flagship Dynasty project in Ecuador hosts of a resource of 3.1Moz of gold and 22Moz of silver.
China’s involvement in Ecuador’s mining sector dates back to at least 2010, when Tongling Nonferrous Metals Group (SH: 630) and China Railway Construction Corp (SH: 601186) acquired Corriente Resources.
The pair subsequently developed the Mirador copper complex in Ecuador.
Ecuador is also home to Lundin Gold’s (TSX: LUG) world-class Fruta del Norte gold mine, while Silvercorp Metals Inc (TSX: SVM) is building the El Domo copper-gold project.
More to come?
Canaccord Genuity believes Solaris Resources Inc (TSX: SLS) is a takeover target following the release last month of the prefeasibility study for the Warintza copper-gold project in Ecuador.
The project has a reserve of 1.3 billion tonnes at 0.48% copper equivalent, based on measured and indicated resources of 3.75Bt at 0.38% CuEq for 9.3Mt of contained copper, 4.4Moz of gold, 143Moz of silver and 490,000t of molybdenum.
The US$3.7 billion project is expected to produce 230,000t of copper, 71,000oz of gold, 1.8Moz of silver and 11,000t of molybdenum in the first five years.
“We continue to believe that Warintza is among the best copper development assets in the hands of a junior mining company, and that the PFS and upcoming EIA approval are major de-risking events that could lead to potential takeover offers for Solaris in short order,” Canaccord analyst Dalton Baretto said.
Earlier this year, Royal Gold Inc (NASDAQ: RGLD) paid US$200 million to acquire a gold stream and net smelter return royalty on Warintza.
Sunstone Metals (ASX: STM) holds 5Moz of gold resources across the Bramaderos and El Palmar projects.
Sunstone is running a partnership process and recently said several parties had accessed the data room and visited site.
Similarly, Challenger Gold (ASX: CEL) is looking at options to monetise its El Guayabo and Colorado V projects in Ecuador, which have combined resources of 9.1Moz of gold equivalent.
The company is considering a Toronto listing, sale or partnership with a major company.
Aside from the Chinese, Newmont, BHP, Barrick Mining Corporation (NYSE: B), Codelco and Gina Rinehart’s Hancock Prospecting are all active in Ecuador.