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Zhaojin to spend US$299 on newly acquired mine
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ZHAOJIN Mining Industry Co, one of China's largest gold miners, plans to spend 1.85 billion yuan (US$298.9 million) in the coming three years to bring recently acquired Haiyu Gold Mine to production, South China Morning Post reported on Monday.
The mine, located in the north of Sanshan Island in Laizhou, Shandong Province is likely to be one of Chinese mainland's largest and most profitable gold mine with nearly 470 tons of gold reserves, Weng Zhanbin, chairman of the Shandong province-based miner said on Monday.
The company said on Sunday to acquire 53 percent stake of Ruihai Mining Co for 2.7 billion, thus to hold the exploration right of the Haiyu Gold Mine in US$55.5 per ounce of resource.
The company has paid 1.2 billion yuan for the deal and will pay the rest by bond and bank loans, according to miner's announcement.
"With the gold price trading at a relatively low level, the mine's acquisition price is very favorable," Weng said.
The new acquisition will boost Zhaojin's gold resources by 60 percent to 1,000 tons, according to the statement. And the deal is hopefully to lower the production cost per gram of gold to around 100 yuan from 140 yuan, said Fang Jisheng, the company's chief financial officer.
A precious metal specialist at one of China’s big banks, who declined to be identified, told Shanghai Daily that bullion price won't see sign of resumption in at least 6 month, considering a relatively strong US economy.
The bullion price shed 6 percent to US$1,218.5 per ounce by the end of the first quarter. Thomson Reuters GFMS Commodities Research in its 2015 Gold Survey predicts an average annual gold price of US$1,170 per ounce.
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