Vancouver's Eldorado Gold Corp. (TSX:ELD) plans to acquire a 19.9% interest in Sydney, Australia-based gold mining firm in an all-share private placement worth approximately $279 million.
Eldorado is buying approximately 57.9 million shares of Sino Gold Limited from South Africa's Gold Field Ltd. for 27.8 million Eldorado shares. The deal values each Sino Gold share at 0.48 Eldorado share, or about $4.82 per share based on Eldorado's 30-day average trading price on the TSX.
It gives Eldorado a stake in China's Jinfeng gold mine. Jinfeng, which produces approximately 180,000 ounces of gold a year, is China's second largest gold mine. The deal expands Eldorado's presence in China, which includes the Tanjianshan gold mine in central China that produced 118,480 ounces of gold in 2008. Together, both companies are among the largest foreign-owned gold producers in China.
Gold Field will own approximately 7% of Eldorado following completion of the deal, which is expected to close by the end of August.
Eldorado's share price range during the past week: between $10.18 and $10.98; 52-week high: $11.90; 52-week low: $3.44.