Mining and resources firm Wing Hing International's plan to invest up to HK$4.52 billion to acquire a majority stake in a South African-based gold miner is set to be completed by the end of next month, pending shareholders' approval.
The Hong Kong-listed company, which mainly operates coal and gold mines as well as leasing mining licences on the mainland, proposed in April to buy up to 87 per cent of South African-based gold exploration and development company Taung Gold.
'The proposed acquisition represents a good opportunity for Wing Hing to take advantage of the expected rising trend in the global price of gold, and will deliver a substantial portfolio of measured, indicated and inferred gold resources, exploration projects and future growth opportunities to Wing Hing,' Jack Li Hok-yin, chairman and chief executive of the listed company, said.
Taung Gold owns two gold exploration projects in South Africa - namely Jeanette in the Free State province and Evander in Mpumalanga province - with gold resources of 15.1 million ounces and 8.1 million ounces respectively. Neil Herrick, chief executive of Taung Gold, said it would develop into one of the lowest-cost producers in South Africa.
He said the Evander project would start producing in the first quarter of 2015, and the Jeanette project would start producing in the second quarter of 2016.
The total estimated capital cost of the Evander project is more than US$1.03 billion including plant construction costs, while Jeanette will cost almost US$1.07 billion.
The two gold mines would have a 30-year life span, Herrick said, and their peak annual production would be 267,000 ounces for Evander and 380,000 ounces for Jeanette.