China Gold Looks at Targets in Hunt for Mining Deal
Source: www.chinamining.org Citation: Bloomberg Date: September 17, 2014
China Gold International Resources Corp. (CGG), a gold and copper producer with mines in Inner Mongolia and Tibet, will probably make an acquisition by the end of next year, according to one of its senior executives.
The Vancouver-based company, whose biggest shareholder is state-owned China National Gold Group Corp., is evaluating four potential targets that meet its criteria on size and capital requirements, Executive Vice President Jerry Xie said.
It`s focused on gold and copper assets and may spend as much as about $1 billion, although the total value of any deal could be higher if the company brings in a partner, Xie said. While the assets China Gold is evaluating are scattered around the world, the sellers are all North American, he said.
"Personally, I can say next year something will happen," Xie said yesterday in an interview in Denver. "For now we`re just doing the due diligence."
China Gold is looking for mines already in production or projects whose development is very advanced, preferably in politically stable jurisdictions like Canada, he said. It`s also interested in joint ventures and partnerships, especially with larger and more experienced producers, Xie said.
The company is targeting annual output of 500,000 ounces of gold and 330 million pounds of copper. Part of that growth will come from increasing output at its CSH gold mine in China`s Inner Mongolia and its Jiama mine in central Tibet. The company plans to make up the rest through an acquisition.
China National Gold owns 39 percent of China Gold. Shares of the latter closed yesterday at C$3.18 in Toronto, giving the company a market capitalization of C$1.26 billion ($1.14 billion.) The stock has gained 18 percent this year.
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