CMOC to acquire Lumina Gold in $580M deal

CMOC Singapore, a subsidiary of China’s CMOC Group, has signed a definitive agreement to acquire Lumina Gold (TSXV: LUM) in an all-cash deal valued at $581 million (US$421 million), marking a major step into Ecuador’s underdeveloped mining sector.

Shares of Lumina Gold surged 31% on the Toronto Venture Exchange following the announcement, and before press time traded for $1.16 apiece, pushing its market capitalization to $480 million. 

Lumina’s main asset, the Cangrejos gold-copper project, is considered Ecuador’s largest primary gold deposit. Located in the El Oro Province in the country’s southwest, the project sits about 30 km southeast of the Pan American Highway and 40 km from the deep-water port of Puerto Bolívar.

71% premium 

The deal represents a 71% premium to Lumina’s 20-day volume weighted average price, and a 41% premium to Lumina’s closing price on April 17, Haywood Capital Markets analyst Marcus Giannini said in a note on April 21.  

“In turn, we view these terms as highly favourable given the all-cash premium, as 52.3% of the company’s shareholders have signed voting support agreements,” he said. 

The miner launched a feasibility study in January 2024, building on its 2023 prefeasibility study. Updates to date include a larger and more advanced processing plant, with projected throughput increasing to 40,000 tonnes per day—up from the previously envisioned 30,000 tonnes. 

Cangrejos hosts 659 million tonnes of probable reserves grading 0.55 gram per tonne gold, 0.1% copper and 0.69 gram silver per tonne. This equates to 11.6 million oz. of gold, 1.4 billion lb. of copper, and 14.4 million oz. of silver. These are contained within an indicated resource of 1 billion tonnes grading 0.48 gram gold, 0.09% copper and 0.7 gram silver—representing 3.7 million oz. of gold, 483 million lb. of copper, and 7 million oz. of silver.

The 2023 study outlined a capital expenditure of $925 million and projected average annual gold-equivalent production of 469,000 oz. over a 26-year mine life.

Ecuador opens 

CMOC’s move highlights growing investor interest in Ecuador, which is rich in mineral resources but has historically lagged behind regional mining leaders Peru and Chile. While the country shares geological continuity with Peru, political and regulatory uncertainty have slowed the development of large-scale mining projects.

On April 13, President Daniel Noboa secured re-election in a presidential runoff, defeating leftist challenger Luisa González. This victory grants Noboa his first full four-year term, following his initial election in a 2023 snap vote to complete the term of his predecessor, Guillermo Lasso.

The pro-business Noboa in November signed an executive decree to reopen and update Ecuador’s national mining cadaster, which had been closed since 2018. The move intends to streamline the registration of mining rights, licences and permits to attract new investments and combat illegal mining. 

The acquisition is expected to close in this year’s third quarter, pending usual shareholder, regulatory and court approvals.