April 7 (Bloomberg) -- Taung Gold Ltd., studying two gold projects in South Africa, said it will have enough funds for the next two years after agreeing to a $580 million takeover by Hong Kong investment company Wing Hing International Holdings Ltd.
Taung will be “fully funded,” Chief Executive Officer Neil Herrick said today by telephone from Johannesburg, where the company is based. Taung won’t make an investment decision on its two prospective South African mines for another two years, he said, adding that each would cost about $1 billion.
Wing Hing, with holdings in Chinese gold and coal projects, will swap 84 percent of its shares for 87 percent of Taung to expand gold reserves in anticipation of rising prices, Wing Hing said April 4. Gold has gained for the past 10 years and touched a record $1,462.35 an ounce in London today.
While it’s too early to detail funding for Taung’s two gold projects, “getting access to the Hong Kong market is a big plus for us,” Herrick said. The mines, named Evander and Jeanette, contain a combined 12 million ounces of indicated gold resources and may have annual output of 267,000 ounces and 380,000 ounces, respectively, according to Taung’s preliminary estimates.
Harmony Gold Mining Co., Africa’s third-largest producer of the precious metal, agreed three years ago to transfer the “low-priority” Evander and Jeanette assets to African Precious Minerals Ltd., of which Taung was a unit, for about 700 million rand ($104 million).
While the deal gave Taung the right to earn equity in Evander over time, the company agreed late last year to acquire all of the project from Harmony for 225 million rand, subject to government approval.
Taung’s largest shareholder is Electrum.
To contact the reporter on this story: Carli Lourens in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: Amanda Jordan at email@example.com