China's Zijin Mining launches Shanghai IPO

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SHANGHAI, April 7 (Reuters) - Zijin Mining Group (2899.HK: Quote, Profile, Research, Stock Buzz), China's second largest gold miner, said on Monday it was launching a Shanghai initial public offer of shares that could raise roughly $1.4 billion.

The company plans to issue as many as 1.5 billion new local currency A shares, or 10.2 percent of its enlarged share capital, to raise funds for expansion projects that mainly involve mining and processing of gold and copper.

Zijin will start consulting investors about pricing the offer on Tuesday, and take subscriptions on April 15 and 16. Money will be returned to unsuccessful applicants on April 18 and 21.

Thirty percent of the shares on offer will be earmarked for institutions and the rest for retail investors. The ratio may be shifted in favour of the retail tranche if demand proves strong.

Based on the HK$7.17 last closing price of its Hong Kong-listed H shares, Zijin could raise up to HK$10.8 billion ($1.4 billion) in the A-share offer.

It said it would invest 4.92 billion yuan ($702 million) of the IPO proceeds in the expansion projects, and further proceeds would go towards repaying bank loans or serve as working capital.

Zijin obtained initial approval for the Shanghai IPO from the China Securities Regulatory Commission late last year, but the launch was delayed by technical difficulties and the stock market's slump, a source familiar with the offer told Reuters.

The company's shares have a face value of 0.1 yuan each, compared with 1.0 yuan for nearly all listed mainland Chinese firms, which requires adjustments to trading systems.

Zijin said it aimed to list in Shanghai "as soon as possible" after completion of the IPO, without giving a specific date. ($1 = 7.01 yuan) (Reporting by Andrew Torchia; editing by Ken Wills)