Sino Gold investor sells 19.9pc holding

PUBLISHED : Thursday, 04 June, 2009, 12:00am
UPDATED : Thursday, 04 June, 2009, 12:00am
 

Gold Fields, the world's fourth-biggest gold producer, has agreed to sell its entire 19.9 per cent stake in Hong Kong and Australia-listed Sino Gold Mining to Canada's Eldorado Gold Corp for US$282 million.

Under the deal, Johannesburg-based Gold Fields would receive 48 Eldorado shares for every 100 Sino Gold shares, the company said yesterday.

That will give Africa's second-largest gold mining company 27.8 million shares or a 7 per cent stake in Vancouver-based Eldorado.

Sino Gold, one of the largest foreign gold producers in China, has several gold projects in the world's biggest source of the precious metal.

Gold Fields chief executive Nick Holland said the deal would crystallise the value of the company's investment while retaining some exposure to the mainland as a potential area for future growth.

The sale did not detract from Gold Fields' strategy to increase its international output, Mr Holland said.

Gold Fields will retain some exploration joint ventures with Sino Gold at the Jinshu project while strengthening its own team to allow for independent growth on the mainland, he added.

The sale, which is subject to regulatory approval, is expected to close at the end of August.

Sino Gold posted for the first time an operating profit of A$43.3 million (HK$274.4 million) last year. It had a net loss of A$101.4 million after impairment and hedging losses.

Its flagship project - its 82 per cent owned Jinfeng mine in Guizhou - is the mainland's second-largest gold mine with ore reserves of 3.2 million ounces and is producing 180,000 ounces of gold a year.

Other projects include the White Mountain mine in Jilin, Beyinhar mine in Inner Mongolia and Eastern Dragon mine in Heilongjiang.

Cashing out

Gold Fields has agreed to sell its stake in Sino Gold to Eldorado for, in US$: $282m

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