By Clarence Leong 

Shares of Zijin Mining Group Co. jumped after the company unveiled plans to acquire Canada's Neo Lithium Corp. in a deal worth 960 million Canadian dollars (US$769.7 million).

Zijin's H-shares rose as much as 8.8% in Monday morning trading and were last 7.8% higher at HK$10.38. The stock has gained 18% so far this year.

A unit of Zijin Mining has entered into an agreement to acquire all outstanding shares of Neo Lithium for C$6.50 each, an 18% premium to the Toronto-based company's closing price Friday, the Chinese mining company said late Sunday in a filing to the Hong Kong stock exchange.

The all-cash transaction will be self-financed by the company, Zijin Mining said.

Neo Lithium's core asset is a lithium brine lake project in northwestern Argentina. Lithium is a "strategic mineral resource for new energy," Zijin Mining said, and an expansion into the segment will broaden and sustain the company's development. Zijin Mining's board has approved the deal unanimously.

The project could also offer a quick investment return and "has a large resource volume, with the potential to further expand its production capacity," the mining company said. The project's profitability appears relatively strong, it said.

The deal still requires regulatory and shareholder approvals.

Companies that own lithium mines have become hot acquisition targets amid a booming electric-vehicle industry and a rush to secure raw materials in the long term.

Last month, major EV battery maker and Tesla Inc. supplier Contemporary Amperex Technology Co. said it will acquire Canada-based Millennial Lithium Corp. in a deal worth C$377 million, outbidding rival Ganfeng Lithium Co.

Write to Clarence Leong at clarence.leong@wsj.com