UPDATE 1-Eldorado gets private equity partner for China gold mine

Mon Feb 24, 2014 9:47am EST

Feb 24 (Reuters) - Eldorado Gold Corp plans to sell a minority stake in its stalled Eastern Dragon project to Chinese private equity firm CDH Investments, the Canadian miner said on Monday.

CDH will acquire 20 percent of the gold mine in the northern Chinese province of Heilongjiang for $40 million in cash.

Eldorado said it expected CDH to help complete the development of Eastern Dragon.

The mine was nearly finished in 2011 when a key permit was delayed, and construction is now on hold. Eldorado took a $524.9 million charge on the carrying value of the project in the fourth quarter.

Private equity funds, which traditionally have only been niche players in mining, have raised billions in the last two years for funds focused on the sector.

Some expect private equity to play a much bigger role in the industry in the future. A tough market has many miners looking to sell assets or bring in new investors, and buyers are scarce.

Shares of Eldorado slipped 0.8 percent to C$7.90 in early trading on the Toronto Stock Exchange.

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