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HONG KONG, Oct 30, 2009 - (ACN Newswire) - Sino Gold Mining Limited ("Sino Gold", and its subsidiaries, collectively the "Group"; stock code: SEHK: 1862, ASX: SGX), the leading foreign gold company in China, announces its operational update for the period from 1 July 2009 to 30 September 2009 (the "Quarter").
Jinfeng Gold Mine in Guizhou Province, 82% owned by Sino Gold, is the second largest gold mine in the PRC with gold production for the Quarter of 42,989 ounces. Cash operating costs remained low at US$404/ounce for the Quarter. Record overall gold recovery of 85.4% was achieved and this was attributable to improved flotation recoveries.
The White Mountain Gold Mine in Jilin Province, 95% owned by Sino Gold, produced 5,036 ounces of gold at average cash operating cost of US$433/ounce for the Quarter. Prior to the suspension of operations in August to September, the ramp-up of production at White Mountain continued to proceed ahead of schedule with ore mined and processed increasing to 52,000 tonnes for the month of July, which is equal to 95% of the planned full production rate. Substantial progress has been made towards restarting operations at White Mountain.
Sino Gold's 95%-owned high-grade Eastern Dragon project in Heilongjiang Province is now being developed into a combined open-pit and underground mining operation. During the Quarter, substantial construction activities took place on site. Sino Gold plans for Eastern Dragon to produce an average of 90,000 ounces of gold annually at a cash operating cost of US$125/ounce for the first five years of operation from 2011.
Sino Gold sold a total of 47,061 ounces of gold at an average realized price of US$961/ounce for the Quarter. Sino Gold does not have any hedging contracts relating to future gold sales, interest rates or foreign exchange transactions.
In August 2009, Sino Gold entered into an option agreement to acquire the Caijiagou Gold Project in Liaoning Province. The Caijiagou Gold Project comprises a small open-pit mine with strong gold mineralisation and new processing plant, together with 17.5 km2 Exploration Licence.
During the Quarter, Sino Gold and Eldorado Gold Corporation (TSX: ELD) (NYSE Amex: EGO), a Canada-based gold producer active in exploration and development in Brazil, China, Greece, Turkey and surrounding regions, announced the intention to merge and create a premier intermediate global gold company. They entered into a Scheme Implementation Deed under which Eldorado proposes to acquire all of the issued and outstanding shares in Sino Gold at a consideration of 0.55 Eldorado shares for each Sino Gold share. The transaction valued Sino Gold at approximately A$2.2 billion. Recently, Eldorado has received the unconditional approval from Australian Foreign Investment Review Board in respect to the proposed business combination with Sino Gold.
Following court approval today, Sino Gold has released the Scheme Booklet in relation to the merger which will by mailed to Sino Gold securityholders by 3 November 2009. Meetings to consider the scheme will be held on 2 December 2009. Upon the completion of business combination, Sino Gold will be delisted from Australia Stock Exchange and will apply to withdraw its secondary listing from The Stock Exchange of Hong Kong Limited on or around 15 December 2009.
Commenting on the Group's 2009 3Q operational update, Mr Jake Klein, Chief Executive Officer of Sino Gold, said:
"Sino Gold continued to produce gold very profitably during the quarter with another consistent performance from our long-life Jinfeng Gold Mine. We are aiming to restart operations at our new White Mountain Gold Mine soon. In addition, Eastern Dragon is now being developed into our third mine in China and remains on-track to commence gold production in 2011.
We are pleased to be merging with Eldorado, one of the lowest cost and highest growth global gold producers. Gold production from the six mines of the combined companies is expected to reach 850,000 ounces by 2011."
Contact:
Quam IR, Quam (H.K.) Limited
Ms. Anita Wan
Tel: (852) 2217-2883
Email: anita.wan@quamgroup.com
Ms. Sharon Au
Tel: (852) 2217-2680
Email: sharon.au@quamgroup.com
Topic: Press release summary
Source: Sino Gold Mining Limited
Sectors: Metals & Mining, Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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