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Shares in Rising Development Holdings surged as much as 39 per cent yesterday after the company said it would buy a vanadium mine in Shaanxi province for  HK$1.14 billion to capitalise on the mainland's rising demand for natural resources.
The stock climbed to 43 HK cents at one point after resumption of  trading and ended at 37.5 HK cents, up  20.97 per cent from its last closing price of 31 HK cents on December 21.
Rising Development, an investment firm in the fur garment and securities trading sectors, said it planned to pay in bond and cash  for an 80 per cent stake in Shaanxi Jiuquan Mining,  according to a statement filed with the Hong Kong stock exchange.
The company will settle the deal through HK$300 million in cash and HK$837 million in three-year notes that can be swapped into its shares at 28 HK cents each.
If all the shares were fully converted, the seller would own 29.99 per cent of Rising Development and become its largest shareholder.
Oriental Day International's stake in the firm will then be diluted to 28.9 per cent from 52.66 per cent.
Jiuquan owns rights to a vanadium mine in Xunyangba county in Shaanxi, which has total estimated vanadium ore  of 26.67 million tonnes or vanadium oxide of 300,761 tonnes, based on a survey report by the Institute of Mineral Resources of the Chinese Academy of Geological Sciences.
Jiuquan is also building a refinery with daily capacity of 500 tonnes of vanadium ores and plans to further expand the  capacity to 1,000 tonnes with an investment of 100 million yuan.
Vanadium is commonly applied to produce alloy with steel, iron, aluminium and titanium products, making them tougher and lighter.
World demand for vanadium oxide increased to 98,900 tonnes in 2006 from 79,800 tonnes in 2003 amid rising steel output on the mainland.
Rising Development chairman Lai Leong said the outlook for vanadium consumption through 2010 appeared optimistic and the new investment could broaden the company's source of income.



Rising Development surges on HK$1.14b Shaanxi mine deal