Sino Gold launches placement and accelerated pro-rata...

Sino Gold launches placement and accelerated pro-rata entitlement offer
Gold Fields to increase stake in Sino Gold to 19.9%

TORONTO, May 20 /CNW/ - Sino Gold Mining Limited (ASX: SGX, HKSE: 1862)
today announced an equity raising comprising a placement to its major
shareholder, Gold Fields Limited and an accelerated renounceable pro-rata
entitlement issue to raise a total of up to approximately A$204 million,
primarily to fund the close-out of all of the Company's gold forward sales
contracts.
The proposed raising is comprised of:

<<
- a placement at A$5.03 per share (the "Placement") to Sino Gold's
major shareholder Gold Fields Limited ("Gold Fields") to raise up to
approximately A$68 million which will effectively result in
Gold Fields increasing its holding to 19.9% of the issued shares in
Sino Gold; and

- a pro-rata entitlement offer at A$4.00 per share (the "Offer") to
eligible shareholders to raise approximately A$136 million through a
2 for 15 Accelerated Renounceable Entitlement Offer ("AREO"). Gold
Fields have committed to take up all of its entitlements.
Shareholders in Canada are not eligible to participate in the AREO.

The Placement and Offer prices represent discounts of 5.5% and 24.8%,
respectively, to the closing price of Sino Gold shares on the ASX on
Monday, 19 May 2008. The Offer price also represents a 22.6% discount to the
theoretical ex-entitlements price.
Sino Gold intends to apply the funds raised by the Placement and the Offer
as follows:

- close out all of the Company's gold forward sales contracts, which
totaled 278,657 ounces at an average delivery price US$525/ounce as
at 30 April 2008; and

- Acquisitions, development, exploration expenditure, working capital
and general corporate purposes.
>>

Commenting on the raisings, Sino Gold CEO Jake Klein said:

"This is an important step for Sino Gold. We are delighted to have
received such significant support from our major shareholder,
Gold Fields, through its commitment to purchase shares at a premium to
the entitlements issue and increase its holding in Sino Gold to 19.9%.

"With the close out of our forward sales, Sino Gold's shareholders will
now have the opportunity to fully participate in the value created by our
growing gold production in a rising gold price environment."

Hedging Contracts

A requirement of the Jinfeng Project Finance Facility was for the Company
to enter into a hedging program in 2005. Sino Gold has not entered into any
hedging contracts since 2005.
All outstanding gold forward sales contracts are to be closed out at an
estimated cost of A$122 million. These contracts are summarised in the table
below (Sino Gold's share being 82%).

<<
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2008 2009 2010 2011 2012
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Ounces ('000) 49 65 65 65 36
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Delivery Price (US$/oz) 524 525 525 525 530
-------------------------------------------------------------------------
>>

Following this transaction, Sino Gold has total exposure to rising gold
prices. Sino Gold does not anticipate putting in place any further gold
hedging.

Placement

Gold Fields, the largest shareholder in Sino Gold, has accepted a
Placement totaling up to approximately A$68 million at a maximum price of
A$5.03 per share which will effectively result in Gold Fields increasing its
holding to 19.9% of Sino Gold's issued shares post the completion of the
Offer. In addition, Gold Fields has advised Sino Gold that it will fully take
up its entitlements in the Offer.
The issue price for the first tranche of the Placement was determined by
applying a 4% discount to Sino Gold's Volume Weighted Average Price on the ASX
for the 5 trading days ending on 16 May 2008. The issue price for the
Placement is at a 25.8% premium to the issue price of the Offer.

The Placement is structured in two parts:

<<
1. Tranche 1 comprises 11,000,000 shares which are to be settled on
Thursday, 22 May 2008; and

2. Tranche 2 will comprise the requisite number of shares which will
result in Gold Fields holding 19.9% of the issued shares immediately
following settlement of the Retail Offer. Settlement of the Tranche 2
will occur on the same date as settlement of the Retail Offer,
anticipated to be Wednesday, 25 June 2008.
>>

Immediately prior to settlement of the first tranche of the Placement,
Gold Fields holds approximately 15.5% of the issued shares in Sino Gold.
Immediately following settlement of the second tranche of the Placement, Gold
Fields will hold 19.9% of the issued shares in Sino Gold.
The final number of shares to be issued pursuant to the Placement, and
the final proceeds raised from the Placement, will be announced to the ASX and
the HKSE on the date of announcement of the results of the Retail Offer
(expected to be Friday, 20 June 2008).

Pro-rata Entitlement Offer

The Institutional Offer and the Hong Kong component of the Retail Offer
are fully underwritten by Goldman Sachs JBWere Pty Ltd ("the Lead Manager").
Up to approximately 34 million shares are to be issued in the Offer.

The Offer price of A$4.00 (HK$29.80) per share represents:

<<
- a discount of 24.8% (24.3%) to the most recent closing price of
A$5.32 (HK$39.35) per share; and

- a discount of 22.6% (22.1%) to the theoretical ex-entitlements price
of A$5.16 (HK$38.23) per share.
>>

The Offer is comprised of an Institutional Offer and a Retail offer as
detailed below.
Entitlements under either the Institutional Offer or the Retail Offer
cannot be traded on ASX, HKSE or any other exchange, or privately transferred.

1. Institutional Offer

The Institutional Offer is expected to raise approximately A$102 million,
75% of the total Offer.
During the Institutional Offer period, eligible institutional
shareholders will be invited to participate in the Institutional Offer.
Eligible institutional shareholders can choose to take up their entitlement in
whole, in part or not at all.
A number of shares equivalent to those which would have been issued on
exercise of the entitlements not taken up by those eligible institutional
shareholders and those which would have been issued to institutional
shareholders who are ineligible to participate in the Institutional Offer,
will then be offered for subscription to selected institutional investors
through a bookbuild process, to be undertaken on Thursday, 22 May, 2008 and
Friday, 23 May, 2008 (the Institutional Bookbuild). The Joint Lead Managers
have the right to close the Institutional Bookbuild earlier.
Any positive difference between the Institutional Bookbuild price and the
Offer price of the shares will be paid to the institutional shareholders who
did not take up all or any of their entitlement or who were ineligible to
participate in the Institutional Offer.

2. Retail Offer

The Retail Offer is expected to raise up to approximately A$34 million,
25% of the total Offer.
Existing eligible retail shareholders in Australia, New Zealand and
Hong Kong will be invited to participate in the Retail Offer on the same terms
as the Institutional Offer.
Eligible retail shareholders may choose to take up their entitlement in
whole, in part or not at all. A number of shares equivalent to those which
would have been issued on the exercise of the entitlements not taken up by
eligible retail shareholders and those which would have been issued to retail
shareholders who are ineligible to participate in the Retail Offer, will be
offered for subscription to selected institutional investors through a
bookbuild process commencing on or around Thursday, 19 June, 2008 (the Retail
Bookbuild).
Retail shareholders who do not take up all or any of their entitlement or
who are ineligible to participate in the Retail Offer will receive any
positive difference between the Retail Bookbuild Price and the Offer price for
the shares.
Full details of the Retail Offer will be set out in a prospectus which is
expected to be lodged with ASIC and registered with the Registrar of Companies
in Hong Kong on Monday, 26 May, 2008 (the "Prospectus").
Any eligible retail shareholder who wishes to acquire shares under the
Retail Offer will need to complete the personalised entitlement and acceptance
form that will accompany the Prospectus.

The Alliance

In November 2006, Gold Fields and Sino Gold announced the formation of a
strategic alliance to explore and develop large scale gold deposits in China,
combining the 'in-country' exploration and commercial skills of Sino Gold with
the large scale mine development skills of Gold Fields.
Following a thorough review of 58 mineral belts in China, four belts have
been identified as priority belts with the potential to host these styles of
deposits. Work is ongoing in each of these belts.
Outside a 50km buffer around Sino Gold's existing operations (White
Mountain, Jinfeng, Eastern Dragon and Beyinhar), the parties have agreed to
decrease the threshold for new investments to include gold deposits with
resources hosting at least three million ounces, and with annual production
capability of 300,000 ounces per annum.
There is no change to the funding agreements that each party contribute
equally to the activities of the alliance. For an asset to stay in the
alliance, the two companies must equally fund its exploration and development.
These changes therefore broaden and increase Sino Gold's financial capacity to
explore in new belts outside of its four development projects.

Key Dates

Sino Gold has requested that its shares be placed in a trading halt on
the ASX and the HKSE pending the outcome of the Institutional Offer and
Institutional Bookbuild. Its shares are expected to remain in trading halt
until prior to the opening of trading on Monday, 26 May, 2008. The record date
for the Offer will be 7.00pm (Sydney Time) on Friday, 23 May 2008.

<<
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Institutional Offer
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Institutional Offer opens Tuesday, 20 May 2008
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Institutional Offer closes for all
institutions Wednesday, 21 May 2008 (5.00pm)
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Institutional Bookbuild opens Thursday, 22 May 2008 (5.00pm)
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Institutional Bookbuild closes Friday, 23 May 2008 (11.00am)
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Record Date Friday, 23 May 2008 (7.00pm)
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Settlement of Institutional Offer and
Institutional Bookbuild Monday, 2 June 2008
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New Shares issued under Institutional
Offer and Institutional Bookbuild
expected to commence trading (on a normal
settlement basis) Tuesday, 3 June 2008
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These dates are indicative only and subject to change. All times and
dates refer to Sydney Time
-------------------------------------------------------------------------


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Retail Offer
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Record Date Friday, 23 May 2008 (7.00pm)
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Lodgment of prospectus for Retail Offer Monday, 26 May, 2008
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Prospectus dispatched to eligible retail
shareholders Thursday, 29 May 2008
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Retail Offer opens Thursday, 29 May, 2008
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Retail Offer closes Thursday, 12 June 2008
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Retail Bookbuild Thursday, 19 June 2008
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Settlement of Retail Offer and Retail
Bookbuild Wednesday, 25 June 2008
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Holding statements expected to be
dispatched Thursday, 26 June 2008
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New Shares issued under Retail Offer and
Retail Bookbuild expected to commence
trading (on a normal settlement basis) Friday, 27 June 2008
-------------------------------------------------------------------------
These dates are indicative only and subject to change. All times and
dates refer to Sydney Time
-------------------------------------------------------------------------
>>

Information Line

If you are a retail shareholder and you have any questions on your
entitlement or whether you are eligible to participate in the Offer, please
call the Sino Gold Offer Information Line on 1300 737 760 (local call cost
from within Australia) or +61 2 9290 9600 (from outside Australia). Further
information regarding the AREO is available at the Sino Gold website at
www.sinogold.com.au.

About Sino Gold

Sino Gold has been active in China since 1996. The Company owns 82% of
the Jinfeng gold mine in Guizhou Province, southern China, which has Mineral
Resources containing 5.3 million ounces and Ore Reserves containing
3.5 million ounces.
Jinfeng is one of the largest gold mines in China as the mine ramps up to
achieve initial planned production of 180,000 ounces per annum. Sino Gold aims
to increase Jinfeng's gold production to optimal levels as quickly as
possible.
The 95%-owned White Mountain project in Jilin Province, northeast China,
is now being developed into Sino Gold's next mine.
In December 2007, Sino Gold completed the takeover of Golden China
Resources Corporation and announced the Eastern Dragon acquisition. Sino Gold
now has projects that provide a clear pathway for the Company to produce
500,000 ounces of low-cost gold annually.
Sino Gold is a producing gold company actively pursuing a discovery and
acquisition strategy in China. With a "first mover" advantage, it holds a
strong competitive position in China.
Sino Gold is listed on the Australian Stock Exchange (ASX Code: SGX) and
The Stock Exchange of Hong Kong (SEHK Code: 1862).