Zijin invests US$18.5m in ICI
By Joyce Pan |
April 17, 2010, Saturday
|
Print Edition
Print Edition
ZIJIN Mining Group made a strategic investment of C$18.56 million (US$18.5 million) in Canada's Inter-Citic Minerals Inc (ICI) which has a gold project in China's Qinghai Province.
Zijin, China's largest gold producer, has subscribed to 16 million ICI common shares at C$1.16 per share in a private placement. In addition to the 4.16 million shares purchased previously, Zijin will become the largest shareholder of ICI with 19.15 percent of the outstanding share capital, the company said in a statement to the Hong Kong stock exchange yesterday.
Zijin made the investment through a QDII (Qualified Domestic Institutional Investor) account in ICBC Credit Suisse Asset Management Co. The company has an asset management contract with ICBC Credit Suisse in December 2009 which allows the miner to invest in mining companies overseas using a quota of US$200 million.
"It signals the company's strengthened efforts to expand the resources portfolio," Yang Baofeng, an Orient Securities Co analyst. "Together with the gold-copper mines in Philippines acquired earlier, the gold and copper reserves (of Zijin) will be greatly boosted," said Yang.
Yang estimated gold output from the project at 31.1 tons this year.
ICI, based in Toronto, is primarily engaged in gold exploration in China. Its 83 percent interest in the Dachang Gold Project in Qinghai Province is the company's major asset. The project has proven reserves of 90 tons of gold while analysts forecast the potential gold resources could come up to 300 tons.
Zijin, China's largest gold producer, has subscribed to 16 million ICI common shares at C$1.16 per share in a private placement. In addition to the 4.16 million shares purchased previously, Zijin will become the largest shareholder of ICI with 19.15 percent of the outstanding share capital, the company said in a statement to the Hong Kong stock exchange yesterday.
Zijin made the investment through a QDII (Qualified Domestic Institutional Investor) account in ICBC Credit Suisse Asset Management Co. The company has an asset management contract with ICBC Credit Suisse in December 2009 which allows the miner to invest in mining companies overseas using a quota of US$200 million.
"It signals the company's strengthened efforts to expand the resources portfolio," Yang Baofeng, an Orient Securities Co analyst. "Together with the gold-copper mines in Philippines acquired earlier, the gold and copper reserves (of Zijin) will be greatly boosted," said Yang.
Yang estimated gold output from the project at 31.1 tons this year.
ICI, based in Toronto, is primarily engaged in gold exploration in China. Its 83 percent interest in the Dachang Gold Project in Qinghai Province is the company's major asset. The project has proven reserves of 90 tons of gold while analysts forecast the potential gold resources could come up to 300 tons.
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