CAPE TOWN (Business Day) -- Gold Fields [NYSE:GFI] has raised its stake in Australian-based Sino Gold [ASX:SGX], which has a range of gold projects in China, to 14%, Gold Fields said yesterday.
The group bought an 8.8% stake in Sino Gold several years ago, which was later sold down to 8.1%. But when an opportunity to buy more shares arose after Standard Bank London became a seller, Gold Fields added to its stake.
The announcement follows court approval for Gold Fields’ takeover of Canadian-listed Bolivar Gold, and could raise speculation that similar events may unfold with Sino Gold.
Gold Fields bought a small stake in Bolivar Gold [TSX:BGC], which operates the Choco 10 gold mine in Venezuela, in 2003 and followed it up with a general offer to Bolivar shareholders last November to buy their stake in the company.
Despite opposition to the offer from a major shareholder, the courts approved the deal this week.
“We like Sino Gold because it gives us exposure to China, and it is our policy to take equity positions in the right junior miners,” a Gold Fields spokesman said.
“We’ve taken advantage of an opportunity to increase our stake.”
Sino Gold has operated the Jianchaling gold mine since 1998 and is developing the 4-million ounce Jinfeng gold resource in southern China. The mine is expected to start producing 180000oz a year from the middle of this year and 300,000 ounces a year from next year.
Sino Gold is exploring the Shandong and Sanjianfang projects. Its joint venture partner in Shandong is Gold Fields.
This week Sino Gold said it was undertaking a share placement to raise A$61 million to accelerate the development of Jinfeng, increase exploration spending, and pursue other business and development opportunities.
Gold Fields, one of the world’s biggest gold miners, produces 4.2 million ounces a year from mines in South Africa, Ghana and Australia. It recently announced the go-ahead for the Cerro Corona mine in Peru. Along with other South African gold miners, Gold Fields has been searching for gold resources globally for diversification and because local gold resources are being depleted.
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