August 20, 2015 / 5:55 AM / 4 years ago

Australia's Evolution counter-bids China's Zijin for Phoenix Gold

SYDNEY, Aug 20 (Reuters) - Evolution Mining on Thursday launched a counter bid for fellow Australian miner Phoenix Gold, setting up a battle with China’s biggest gold producer.

The off-market cash and script offer by Evolution values Phoenix at about A$54.6 million ($40 million), or A$0.12 a share, 20 percent above a A$0.10 a share offer Zijin Mining Group already has on the table.

Investors reacted positively to the offer, with Phoenix shares up 14 percent and Evolution stock rising 4.5 percent in late trading.

Phoenix has recommended shareholders not to take any immediate action on either offer.

Undeveloped Phoenix gold mines would provide synergies with neighbouring gold operations held separately by Zijin and Evolution in the Australian outback, hence their interest.

The pair have been among the most acquisitive predators in the mining sector lately.

Evolution snapped up a Barrick Gold mine in Australia for $550 million in May, instantly making it the second-largest independent gold producer listed in Australia.

Before that it struck a binding agreement to pay A$230 million to acquire two locally producing mines from Luxembourg-based La Mancha Group International BV, located close to Phoenix’s operations.

Zijin in May unveiled two acquisitions for more than $700 million - in Papua New Guinea and Democratic Republic of Congo - after issuing shares to build a 10 billion yuan ($1.56 billion)war chest. Before that it paid A$240 million for Norton gold, enabling it to acquire the property bordering Phoenix.

Evolution’s offer is conditional on the spot gold price staying at or above A$1,250 an ounce, while Zijin’s bid hinges on at least 50.1 percent of Phoenix shareholders accepting.

Gold was quoted A$1,550 an ounce at 0526 GMT. It last traded under A$1,250 in April 2010. ($1 = 1.3615 Australian dollars) ($1 = 6.3903 Chinese yuan renminbi) (Reporting by James Regan; Editing by Stephen Coates)

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