UPDATE 1-Jinshan mulls HK IPO to double in size via M&A

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By Tom Miles

HONG KONG, June 11 (Reuters) - Jinshan Gold Mines (JIN.TO), a Toronto-listed firm 42 percent-owned by state-controlled China National Gold Corp, is weighing a Hong Kong share listing to fund an acquisition that could double its size, an executive said on Wednesday.

Roger Walsh, vice president for corporate development at Jinshan Gold, told reporters on the sidelines of a conference in Hong Kong that the company, with a market capitalisation of about $420 million, was looking for an asset of at least the same size.

"Something that's Jinshan-size or bigger would make sense. It's going to need 5 million ounces minimum. Production: you're going to need to have at least 150,000-200,000 ounces. Any mine you look at has to have at least a 10-15 year life," he said.

"We're evaluating a Hong Kong listing as one of our various strategic alternatives. Obviously we have a lot of support from China Gold to pursue that," Walsh said.

"It has to be deal-driven. You're going to see a lot more M&A activity out of Jinshan. Ultimately it's very very important, if we are going to be a pre-eminent Chinese gold producer, for us to be listed here."

China Gold, the largest gold producer in China, bought the 42 percent stake in Jinshan last month from Ivanhoe Mines Ltd (IVN.TO) for about C$218 million ($213 million).

Walsh said no final decision had been made on a Hong Kong listing and the company had no plan to delist its shares in Toronto.

Walsh said China Gold was keen for Jinshan to grow rapidly, with an asset purchase from China Gold one of several options.

"We're talking about doing many things with China Gold, which may include assets, it may include joint ventures, it may include us doing joint acquisitions outside of China," he said.

But he said the company was most likely to expand within China first.

"China has very many good opportunities for us and I think now that we are a unique entity, in that we are state-owned but foreign-managed, you might see us doing more and more activities within China." (Reporting by Tom Miles; Editing by Anne Marie Roantree and Keiron Henderson)