ZIJIN Mining Group, China's largest listed gold producer, said yesterday it has agreed to take over Australian miner Indophil Resources NL for A$545 million (US$502 million) to tap the largest undeveloped copper-gold deposit in Southeast Asia.

Fujian Province-based Zijin offered A$1.28 a share, 18 percent more than the last traded price of Indophil on November 26, and 83 percent more than its average price over the past six months, Zijin said yesterday in a statement to Shanghai Stock Exchange. The deal is subject to Australian and Chinese regulatory approval.

Melbourne-based Indophil has a 34.23 percent stake in the US$5.2 billion Tampakan copper and gold project in the Philippines and reached an agreement to buy a 3.27 percent stake from Alsons Corp. It has its major exploration assets in the Philippines.

Zijin will attain the 37.5 percent stake in the Tampakan project through the deal, according to the statement.

"The deal would effectively boost the company's resource reserves and secure the supply to Zijin's 200,000 tons copper refining project facility," the company said.

Tampakan has an estimated mineral resource of 2.4 billion metric tons of ore containing 13.5 million tons of copper and 15.8 million ounces of gold.

The feasibility study of the project is due for completion in the second quarter of 2010 while operations may start in 2016.

Tampakan is expected to produce an average 340,000 tons of copper and 350,000 ounces of gold annually in its first 20 years of operation, Zijin said.

Zhou Zhuowei, an analyst from Galaxy Securities Co, estimated the project, upon completion, could boost Zijin's gold reserve by 26 percent and copper by 52 percent.

"The price is reasonable and is expected to benefit Zijin's profitability in the long run," Zhou said.

Zijin has already agreed to buy a 19.99 percent stake in Indophil from Swiss-based miner Xstrata Plc, the world's fourth-largest copper producer and the operator of Tampakan.

Zijin's shares increased 7.2 percent to 10.72 yuan (US$1.57) yesterday.