TORONTO (miningweekly.com) – Having sold its 82% interest in the Jinfeng mine to China National Gold Group for $300-million in cash late last month, Eldorado Gold on Monday announced the sale of its remaining two mines and one development project for $600-million, signalling the Canadian miner’s exit from China.
Vancouver-based Eldorado agreed to sell its 95% interest in the White Mountain mine and its 90% interest in the Tanjianshan mine, as well as its 75% stake in the Eastern Dragon development project to an affiliate of Yintai Resources.
In 2014 the company announced that it was evaluating value-maximising alternatives for its group of Chinese assets. Eldorado had first broached China through the acquisition of Afcan Mining in 2005, through which it acquired the Tanjianshan advanced development project, in north-west China, which started production late in 2006. In 2009, Eldorado acquired the Jinfeng mine, in the country’s southern Guizhou province, and White Mountain mine, in north-east China, through its acquisition of Sino Gold.
The sales agreement provided for a $30-million deposit to be paid by the purchaser and forfeited under certain circumstances, as well as a reverse break-fee of the same amount payable by Eldorado to the purchaser under certain circumstances.
The transaction was expected to close in the third or fourth quarter, subject to obtaining various regulatory and other approvals, including Yintai shareholder approval, and other customary closing conditions, the company advised.
Eldorado, which also held mineral assets in Greece, Romania, Turkey and Brazil, stated that it would redeploy net proceeds from the sale of its Chinese assets to grow its business based on “long lived, low-cost assets”. In Greece, the company made progress in the development of its portfolio during the first quarter, having received the Skouries technical study and building permit, and the Olympias Phase II installation permit.
BMO Capital Markets and Cutfield Freeman & Co were acting as financial advisers and Fasken Martineau DuMoulin, Herbert Smith Freehills, Morrison & Foerster and JunHe were acting as legal counsel to Eldorado. GMP Securities was acting as financial adviser to Eldorado's board, while Borden Ladner Gervais was acting as legal counsel.
Eldorado’s TSX-listed stock on Monday rose as much as 5% to C$6.34 apiece, having gained more than 47% since the start of the year.