Sino Gold taps Chinese bank to fund acquisitions Sarah-Jane...

Sino Gold taps Chinese bank to fund acquisitions



Sarah-Jane Tasker | February 25, 2009
Article from: The Australian

SINO Gold Mining has tapped a Chinese bank to fund potential acquisitions in the economic powerhouse.

The China-focused gold miner received the renminbi-denominated loan of RMB780 million ($176 million) from China Construction Bank, which will also be used to repay loans on its Jinfeng mine in Guizhou province, as well as fund existing development projects.

"It's a breakthrough to be able to tap the only bank market that still has liquidity and is still making loans," Sino Gold chief executive Jake Klein said. "This loan further integrates us into China."

The resources sector is currently debating the pros and cons of moves by China's state-owned giants to invest in debt-laden miners -- sparked by Chinalco's attempt to lift its stake in Rio Tinto and China Minmetals' $2.6billion takeover offer for OZ Minerals.

Following the high-profile moves, intense pressure is now being placed on the Australian Government, as China monitors its response to the list of Foreign Investment Review Board applications.

But Sydney-based Sino Gold is going against that trend and plans to increase its asset base in China, with the hope of eventually reaching its target of up to eight mines in the country.

Mr Klein said both countries could benefit from bilateral agreements, adding that he supported further integration between the two countries.

"Over the last 15 years, the China and Australian trading relationship has grown," he said. "The natural progression from the trading partnerships is for more integrated relationships and it makes sense to corporately engage with each other.