Sino Gold talks up China prospects at Paydirt 1st April 2009, 13:30 WST
China is the place to be for gold miners, Sino Gold Mining says, with cheap and abundant debt financing on offer for the right projects.
President and chief executive Jake Klein told the Paydirt Gold Conference in Perth on Wednesday that Sino Gold, which was the first foreign entrant to China's gold sector in 1995, was benefiting from the Asian superpower’s ready access to capital.
“Here’s a bold prediction: Chinese gold companies and the Chinese gold industry is undergoing a revolutionary rate of change and what is going to be a major catalyst for change is access to capital,” Mr Klein said.
“Sino Gold - not even a local, domestic company - has benefited from that access to capital.”
He said it had raised more than one billion renminbi (more than $A175 million) from Chinese banks at an interest rate of less than seven per cent to fund several projects.
These included its five million ounce (Moz) Jinfeng mine - China’s second largest gold mine and Sino Gold's flagship operation - and its one Moz second mine, White Mountain.
“So cheap access to capital is available in China, not only if you’re state owned but for every company operating in China,” Mr Klein said.
“And I think you're going to see state ownership reduce, access to capital increase and those companies are going to get more and more confident, using their production base to expand outside of China and we’re reading about that all the time.”
Mr Klein said China, currently the largest gold producing country in the world, was highly prospective for the precious metal but under explored.
About 10,000 gold deposits had been identified within its borders so far, he said.
And while Australian gold production had steadily declined since 2005, China's gold production continued to grow.
“It’s the tip of the iceberg,” Mr Klein said.
He said Sino Gold was moving toward developing its third gold mine, Eastern Dragon, where an initial 0.8 Moz resource is expected to grow through near mine exploration.
Sino Gold is hitting its nameplate annual production rate of 180,000 oz at Jinfeng, up from 150,928 in 2008, and expects to encounter higher grade ore at depth.
“Jinfeng has not yet told its full story in terms of geology,” Mr Klein said.
