Sino Prosper State Gold Resources Holdings has acquired a 77% interest in Longyu Mining Company which operates the Qing Jiao gold mine in Guizhou Province. The deal is worth RMB550 million and will allow the group to further diversify its portfolio of precious metal assets.
The Qing Jiao mine is at Xiongwu village, Xingyi city, and Longyu’s permit is valid until July 2015.
Completion of the acquisition is reliant on a number of conditions including due diligence on the project, and a technical JORC report demonstrating the indicated and measured gold resources are no less than 13 tonnes, and that the value of the mine is at least RMB720 million.
The technical report is scheduled for release in August 2012, with the dispatch of the agreement to shareholders to be made in September 2012 for their approval. Sino Prosper will pay the full consideration in a mixture of cash and convertible bonds.
Sino Prosper’s chief executive officer Richard Sung says the move is consistent with the company’s strategy of acquiring producing or near-production assets in China. “We are very excited by the potential acquisition and its positive impact on expanding and further diversifying our resource base and future production.
“We are confident that the acquisition and the developments at our Aohanqi project in Inner Mongolia and the Zhongyi project in Heilongjiang Province will continue to enhance the value of Sino Prosper.”
The Hong-Kong listed precious metals company is about a year away from commencing operations at its Zhongyi-Weiye poly-metallic project in Heilingjiang, with new high potential targets being drilled.
Remedial construction and safety upgrades at the Aohanqi mine’s 500 tonne/day processing plant have been completed with production restarting in September 2011 and currently ramping up back to full processing capability. The upgrade and extension of the office buildings, tailings pond and ancillary facilities is under way.