Sino Gold hits the road for US$120m stock offer
Sino Gold Mining, a loss-making Sydney-listed gold miner preparing for a US$120 million Hong Kong public offering, will start selling retail shares on Monday, sources said.
The Sydney miner, whose mainland-focused business is expected to return to profit this year, is offering 21.039 million shares of which 10 per cent are old equities sold by shareholders including president and chief executive Jacob Klein.
A management roadshow started yesterday with the first stop in London. Subscription for both institutional and retail tranches will close on March 8.
Pricing will then be decided using the company's trading price on the Australian Stock Exchange as reference.
The shares closed 5.8 per cent higher at A$7.63 yesterday.
Trading in Hong Kong is scheduled to begin on March 16. Morgan Stanley is the deal sponsor.
Proceeds from the secondary listing will be used for projects including the Jinfeng gold mine in Guizhou province, the mainland's second-biggest and the White Mountain project in Jilin province.
Sino Gold, in which the world's No4 gold producer Gold Fields has a 17.4 per cent stake, is expected to report strong production growth at its Jinfeng mine.
The gold mine, which has 2.9 million ounces of ore reserves, will start commercial production this quarter.
Merrill Lynch expects Sino Gold's gold production to increase to 144,907 ounces this year and rise further to 269,899 ounces next year from 11,312 ounces last year, says a report dated February 21.
The report said Sino Gold could make a profit of A$38 million (HK$233.8 million) this year and A$75 million next year before any 'abnormal' items.
Sino Gold reported a net loss of A$20.05 million last year, which includes A$2.1 million of losses incurred from the disposal of its Jianchaling mine in Shaanxi province and a non-cash expense of A$11.4 million relating to an adjustment for the fair value of vested options.
