China's Shandong Gold to buy stake in Australian miner to boost reserves
BEIJING, Sept 20 |
BEIJING, Sept 20 (Reuters) - Shandong Gold Group , China's second-largest producer of the metal by reserves, agreed to buy a 51 percent stake in Australia's Focus Minerals for $227.5 million to boost output and help meet soaring domestic demand.
China's gold market has grown at a blistering pace in recent years, helping fuel a rally in prices to a record $1,920.30 an ounce in 2011 and spurring domestic producers to ramp up overseas mine acquisitions.
Shanghai-listed Zijin Mining Group Co Ltd bought out Norton Gold Fields in Australia this year. China National Gold Group Corp bid for a stake in African Barrick Gold PLC in August.
Shandong Gold agreed to pay 5 cents a share for the Focus stake. That would be a 13.6 percent premium to the Coolgardie-based company's closing share price on Wednesday.
"The investment by Shandong Gold will help the senior management of Focus to unlock the Company's growth potential at an accelerated pace. Only 4 percent of our landholding has so far been explored," Focus Chief Executive Officer Campbell Baird said in a statement on Thursday.
Focus has four producing mines in Coolgardie and Laverton in the eastern goldfields region of Western Australia. The miner has 1,650 square kilometres of tenement holdings and 4.3 million ounces of gold resources.
The deal, subject to Chinese and Australian regulatory approvals, as well as the approval of Focus shareholders, is expected to be completed in early December.
Shandong Gold was advised by Perth-based PCF Capital.
Focus shares closed 2.3 percent lower at A$0.043.
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