Shandong Gold soars on acquisition bid
By Hu Xiaocen |
June 5, 2012, Tuesday
|
Print Edition
Print Edition
THE shares of Shandong Gold Mining Co, China's second-biggest gold producer by market value, yesterday jumped the most in almost six weeks in Shanghai trading after its parent announced plans to buy two local gold producers within a year.
Shandong Gold Group agreed to pay 3.75 billion yuan (US$590 million) for 98.5 percent stake in both Shandong Shengda Mining Co and Shandong Tiancheng Mining Co, a price lower than the estimated net assets of the two companies at 3.85 billion yuan, according to the gold miner's statement filed with the Shanghai Stock Exchange.
According to the statement, both Shengda and Tiancheng have mining and exploration rights for iron ore and gold in several locations.
The shares of the listed unit soared 5.7 percent, the most since April 25, to close at 36.31 yuan yesterday. The stock has gained 27.9 percent so far this year, compared with the Shanghai Composite Index's 5 percent growth.
The unit also plans to invest an additional 200 million yuan of its existing fund on three other mines, it said.
Chinese gold miners are competing for mining resources this year, as the country outshone India in bullion consumption in the first quarter of this year and may become the world's biggest consumer this year, the Gold World Council said in its latest report.
Zhongjin Gold Co, another major gold producer, also planned to bid for the two mining companies, according to its filing statement on April 13.
Shandong Gold's successful bid for the two miners will benefit the Group and extend its peripheral expansion, Xiao Zheng, industry analyst at GF Securities, said in a report.
Shandong Gold Group agreed to pay 3.75 billion yuan (US$590 million) for 98.5 percent stake in both Shandong Shengda Mining Co and Shandong Tiancheng Mining Co, a price lower than the estimated net assets of the two companies at 3.85 billion yuan, according to the gold miner's statement filed with the Shanghai Stock Exchange.
According to the statement, both Shengda and Tiancheng have mining and exploration rights for iron ore and gold in several locations.
The shares of the listed unit soared 5.7 percent, the most since April 25, to close at 36.31 yuan yesterday. The stock has gained 27.9 percent so far this year, compared with the Shanghai Composite Index's 5 percent growth.
The unit also plans to invest an additional 200 million yuan of its existing fund on three other mines, it said.
Chinese gold miners are competing for mining resources this year, as the country outshone India in bullion consumption in the first quarter of this year and may become the world's biggest consumer this year, the Gold World Council said in its latest report.
Zhongjin Gold Co, another major gold producer, also planned to bid for the two mining companies, according to its filing statement on April 13.
Shandong Gold's successful bid for the two miners will benefit the Group and extend its peripheral expansion, Xiao Zheng, industry analyst at GF Securities, said in a report.
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