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Gold X Mining touts Friedland's Chinese contacts in tapping him as chair

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Gold X Mining touts Friedland's Chinese contacts in tapping him as chair

In appointing veteran mining entrepreneur Robert Friedland chairman, Gold X Mining Corp. is looking to tap his ties with Chinese mining investors as the company pushes forward with its Toroparu gold project in Guyana, CEO Paul Matysek told S&P Global Market Intelligence.

"He has those deep relationships with them, and they are the people that are going to be buying up gold resources," Matysek said in an interview.

Matysek underscored Chinese miners as potential suitors for gold development companies and noted that Friedland, founder and executive co-chairman of Ivanhoe Mines Ltd., also has close ties to Zijin Mining Group Co. Ltd.

Major Chinese miner Zijin recently announced a C$323 million takeover of Guyana Goldfields Inc., which owns the troubled Aurora gold mine about 50 kilometers from Toroparu. Guyana Goldfields has had issues defining resources at the mine and recently announced it would temporarily put the operation on care and maintenance due to COVID-19 restrictions.

In acquiring Guyana Goldfields, Zijin will also acquire assets Gold X had coveted in a failed consolidation bid. It was part of a merger Gran Colombia Gold Corp. proposed earlier this year to consolidate assets in Guyana in a deal that would have seen Guyana Goldfields, Gran Colombia and Gold X join forces.

But the proposal never went ahead. Silvercorp Metals Inc. bid for Guyana Goldfields, Zijin ultimately outbidded it with the C$323 million offer, and Silvercorp withdrew its bid.

Matysek also noted that Jinghe Chen, executive chairman of Zijin, sits on the board of Ivanhoe. Zijin owns about 13.79% of Ivanhoe shares and has a 39.6% stake in its Kamoa-Kakula copper project in the Democratic Republic of Congo, according to Market Intelligence data. The project is one of the few major copper discoveries made in the past decade.

Matysek said there are synergies between Guyana Goldfield's Aurora mine and Gold X Mining's feasibility-stage Toroparu project, with the former transitioning from open pit to underground operations. Matysek said an underground-only operation at Aurora might use about a third of the mine's 7,500-tonne-per-day throughput, opening up capacity for additional feed.

"So whoever buys it, come talk to us," Matysek said, referring to Aurora.

Matysek said he has known Friedland for about two decades and worked closely with him at Potash One, which K+S AG bought for C$434 million in 2010. Matysek said he was keen on leveraging Friedland's contacts in Asia and the Middle East back then, and the same holds true today.

"That is my motivation. His motivation is he likes big deposits and he can bring many relationships to this," Matysek said, referring to Toroparu.

Toroparu has about 7.4 million ounces of gold in measured and indicated resources, along with about 3.2 million ounces of gold in inferred resources, according to Gold X Mining's website.

With Friedland joining Gold X Mining as chairman, Matysek said a Friedland-related company will receive a finders fee should it bring a buyer to the company. Gold X Mining also issued Friedland about 2 million options, according to Matysek.

"Relatively, for a man of his stature, he's been quite shareholder friendly," Matysek said.