Real Gold, a gold miner in Inner Mongolia, started pre-marketing yesterday for its US$120 million to US$160 million initial public offering planned for the middle of next month despite the recent stock market downturn. The offering comes as the Hong Kong market shows no significant improvement over the past six months with only seven issues since August. Only two of them raised more than US$100 million. 'Everybody is watching how well they do. The deal is not a jumbo one but is still sizeable in this terrible share offer market, and the response will be a strong indicator of the future of the market,' said a banker who is advising two firms on share offers. Real Gold aims to tap the local equity market by selling a combined 165 million shares, of which 64 per cent are primary shares with the rest to be sold by Lead Honest, the controlling shareholder of the company, according to a preliminary marketing document. The shares represent 25 per cent of its enlarged share capital. The offering could allow the controlling shareholder to cash out as much as US$54 million from the stake disposal. The Hong Kong stock market has posted a loss of more than 2,000 points over the past 10 trading days from the recent high of 15,563.31 on January 5. Real Gold's pre-marketing started in Hong Kong yesterday and will move to Singapore on Monday and London on Thursday and Friday. It will then proceed to the United States and Canada. The company plans to use proceeds from the offering for the acquisition of new gold resources, exploration, capital expenditure and general corporate purposes. Citi is the sponsor and joint bookrunner of the share sale while Macquarie is the joint bookrunner and joint lead manager. The listing candidate and the controlling shareholder have agreed not to get involved in share sales before the six months on the completion of the global share offering. The company operates three gold mines in Inner Mongolia and hopes to make more acquisitions in order to compete with its domestic peers. 'The deteriorating of the US dollar may lure professional investors to switch their asset class to physical gold, and gold stocks would be an alternative for them,' said a source. Gold prices advanced as the US dollar weakened against other major currencies, increasing the metal's appeal as an alternative investment for institutional investors. It was US$16.45 up, a rise of 2.01 per cent, to US$833.90 an ounce yesterday in afternoon trade in London.