Update 1-China's Zhongjin Gold plans $604 mln placement

Sun Aug 15, 2010 7:40pm EDT

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* Still needs regulator, shareholder approval

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(Adds detail)

SHANGHAI, Aug 16 (Reuters) - Zhongjin Gold (600489.SS) said on Monday it planned a private placement of up to 150 million A shares to raise about 4.1 billion yuan ($603.6 million) to buy assets from its parent, state-owned China National Gold Group.

The price per share will be no lower than 27.35 yuan, it said in a statement to the Shanghai Stock Exchange.

Zhongjin's shares have been suspended from Aug 10 pending an announcement on private share placement plans and are set to restart trading on Monday, according to a statement last week.

The firm said it planned to buy assets in three gold mines owned by China National Gold Group to help support its own expansion, with proceeds from the share placement also to help replenish its cash flow.

Zhongjin said it would issue shares to up to 10 investors, but did not give details.

Zhongjin is also investing in the expansion of a copper and iron mine.

China National Gold would remain Zhongjin's controlling shareholder with a stake no lower than 47 percent after the issuance, from the current 52.4 percent, according to the statement.

The placement still requires approval from regulators and shareholders. ($1=6.793 Yuan) (Reporting by Farah Master and Rujun Shen; Editing by Jonathan Hopfner)

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