China CITIC Bank contributes to $568 million syndicated loan for Buriticá Gold Mine Project

Project narrative

In 2020, Gold Mountains (H.K.) International Mining Company Limited — a special purpose vehicle and wholly-owned subsidiary of Zijin Mining Group Co., Ltd. — signed a $568 million (equivalent to approximately RMB 3.621 billion) syndicated loan agreement with a group of Chinese banks for the Buriticá Gold Mine Project. There were four participants in the syndicate: China CITIC Bank Fuzhou Branch, China Minsheng Bank Fuzhou Branch, Bank of China Hungarian Branch, and China Merchants Bank Hong Kong Branch. The loan carries a 6-year maturity. The other borrowing terms of the loan are unknown. However, it is known that the borrower pledged an equity interest in Zijin (America) Gold Mining Company Limited (“Zijin America”) as a source of collateral. The major asset of Zijin America is the Buriticá Gold Mine in Colombia. The loan’s (principal) amount outstanding was 3.706 billion as of December 31, 2020, and RMB 3.283 billion as of June 30, 2023. On March 4, 2020, Zijin Mining Group Co., Ltd. acquired a 69.28% ownership stake in Continental Gold through Gold Mountains (HK) International Mining Co., Ltd. At the time of the acquisition, Continental Gold held a 100% ownership stake in the Buriticá Gold Mine in Colombia, which is among the world’s largest, ultra-high grade gold mines, grading at 6.93 g/t. The mine has been in operation since October 23, 2020. After reaching its designed capacity in 2021, the mine’s production capacity was expected to increase from 3,000 tons to 4,000 tons per day, and annual gold production will increase from 7.8 tonnes to 9.1 tons. However, Zijin Mining Group Co., Ltd. has encountered a number of challenges and delays since it acquired the mine. Three strikes have taken place since March 2020. The first was in March 2020, a few days after COVID-19 lockdowns began in Colombia. The second was in October 2021, which ended with the intervention of Esmad, the anti-riot squad. Then, on February 9, 2022, hundreds of people wearing white t-shirts to indicate their pacifism protested against the Chinese mining company Zijin in Buriticá town square. In June 2023, some 60% of operations at the Buriticá Gold Mine were halted because of attacks against workers, allegedly carried out by illegal miners allied with a major crime gang.