EMERGING Australian resources exploration and development company Northern Mining has acquired a 49% stake in Northland Resources Limited which has gold mining interests in Xinjiang Uygur Autonomous Region of western China and interests in Inner Mongolia, northern China, for a total of Aus$7.25 million.
The acquisition includes a gold concession in Xinyuan County in the Ili Valley of Xinjiang. The neighbouring tenements owned by a separate party are the site of a recently announced large discovery of gold within the Narat-Hongliu River metallogenic belt which continues into Northland’s concession.
Northern intended to pay Aus$2.5 million cash and issue more than 158 million shares with a value of Aus$4.75 million for the stake in Northland, which is owned by Mr Wan Yew Cheong. The agreement was signed on September 18.
However, in an announcement on September 25, the company stated it was only able to issue up to 140,766,239 ordinary shares by utilizing its 15% placement capacity under ASX rules, which left the remaining shares of 17,567,094 to be issued. In order to have the certainty of the completion of the acquisition, the company agreed with Northland to pay cash of $527,013 in lieu of issuing the shortfall shares.
The acquisition and payment arrangements were subsequently approved by shareholders at the company’s annual general meeting. The arrangement is subject to due diligence and other required approvals.
Oulinda Group, a Northland subsidiary, has spent the last two years and more than US$12 million to secure the gold concession. Oulinda is expected to secure financing support from its parent company Northland so as to complete its final geological study before further submissions are made to the Xinjiang Geology and Mineral Resources Bureau in China. A formal drilling and exploration program is also expected to be submitted for the Bureau’s approval as soon as funding is secured.
The acquisition agreement also included the appointment of Northern Mining’s chairman Tony Ong as a director of Northland Resources Limited.
Northern Mining is also seeking exposure to other gold and nickel mining opportunities. Its exploration portfolio comprises gold prospects in the Kalgoorlie region of Western Australia.