A Chinese firm is making an initial $13 million investment in Vancouver's Buffalo Gold Ltd. (TSX-V:BUF) to help finance the mining junior's Mount Kare project in Papua, New Guinea.
Under a signed memorandum of understanding, China Railway Resources Co. Ltd. will invest $3 million in Buffalo by purchasing 30 million units at $0.10 per unit.
It will also sink $7.5 million into the Mount Kare project within 24 months of signing the MOU. The company's investment, which is part of China Railway's resource development branch, will earn it a 54% stake in the project. It will also invest $2.5 million into Buffalo's Australian projects.
The investment is contingent upon China Railway completing due diligence on Buffalo Gold and its assets.
Buffalo Gold's share price range during the past week: between $0.06 and $0.07; 52-week high: $1.09; 52-week low: $0.05.