Mainland and Hong Kong investors snap up mines despite gloomy outlook

Despite the bearish state of the global mining sector, participants at a conference in Shenzhen this week said mainland and Hong Kong investors are snapping up mines around the world.

One of them is Samuel Chan Wing-sun, vice-chairman of YGM Trading, a Hong Kong-listed garment firm, who acquired 59 per cent of Crater Gold Mining about 12 months ago and was appointed Crater Gold chairman in February, John Hung, an adviser to Crater Gold, said at the Global Resource Investment Conference.

Crater Gold is an Australian-listed firm with gold mines in Papua New Guinea and a metals mine in Australia.

Stewart Cheng Kam-chiu, a nephew of Hong Kong tycoon Cheng Yu-tung, had agreed to co-underwrite an ongoing rights issue of A$2.1 million (HK$14.8 million) for Crater Gold, Hung said.

“Before Sam came in, the company suffered from a lack of funds,” he said. “At the moment, it is very difficult to raise funding in Australia because market sentiment is very soft for gold mining companies. The decline in gold prices has forced cutbacks in global gold production. We aim to buck the trend with financial backing.”

Crater Gold managing director Greg Starr said the company was not profitable, but its main gold mine in Crater Mountain, Papua New Guinea, would start production in six months.