Shandong Gold Surges 10% Limit After Reviving Asset PurchaseBloomberg News
Shandong Gold Mining Co., China’s third-largest producer by value, surged by its daily limit after it revived a plan to buy and develop reserves worth 5.05 billion yuan ($822 million).
The company’s stock rose 10 percent to 18.21 yuan in Shanghai, making up about half of the advance seen in the wider market since it was suspended July 31 pending a restructuring.
Shandong Gold will swap shares with the assets’ current owners -- its parent Shandong Gold Group Co., two sister companies, and an individual, Wang Zhiqiang - and offer them new shares for 1.68 billion yuan to fund mining development, it said yesterday in an exchange filing.
The reserves hold 330 metric tons of underground deposits, according to the company. It’s the second attempt by the Jinan, Shandong-based miner to buy the assets after it scrapped a similar plan on Dec. 27 because of the plunge in gold prices. At the time, the company was looking to spend 13 billion yuan for a bigger chunk of the reserves, which it said would help expand production and improve competitiveness.
Gold is on course for its second annual drop in value. Gold for immediate delivery in London today fell as much as 0.9 percent to $1,181.84 an ounce, according to Bloomberg generic pricing. On Dec. 27, the price was $1,213.27 an ounce.
— With assistance by Helen Yuan