China Gold International, a mid-sized Canadian-based company with two mines in China, is eager to make an acquisition in Canada, but asset prices remain very high despite a bombed-out mining sector, a company official said recently.
At a time when small and medium sized miners are struggling to raise funds as investors have cooled on the sector, China Gold is in the enviable position of having ready access to finance through its biggest shareholder, China National Gold, a Chinese state-owned enterprise.
China National Gold is China’s only state-owned gold mining enterprise and China’s biggest gold producer. It owns 39% of Vancouver-based China Gold.
“You have seen market cap drops but asset values are still up there. People are refusing to sell at lower prices. We have tried a few times,” China Gold’s executive VP Jerry Xie told Reuters. He said the company would “prefer to find something in Canada” but was not willing to overpay for it.
He said China Gold’s ideal acquisition would be a property containing some 3 million ounces of gold or 1 million tonnes of copper, and with a completed feasibility study.