Sino Gold and Golden China announce signing of agreement regarding proposed takeover offer for Golden China

Sino Gold Mining Limited (Sino Gold) (ASX: SGX, SEHK:1862 ) and Golden China Resources Corporation (Golden China) (TSX/ ASX: GCX) today announced that they have entered into an agreement (the Agreement) regarding a proposed offer (the Offer) by Sino Gold for all of the outstanding common shares of Golden China.

The Agreement, which values Golden China at A$80.7 (C$73.0) million, has the unanimous support of the Golden China board of directors. Under the proposed Offer, Golden China shareholders would receive one Sino Gold share for every 4.5 Golden China common shares they hold. Following successful completion of the Offer, should Sino Gold acquire all of the currently outstanding Golden China shares, Golden China shareholders would collectively hold an interest of approximately 6.5% in Sino Gold.

The Offer values Golden China at a 51% premium over the TSX closing price on 10th August 2007, and a 48% premium over the 10 day TSX volume weighted average trading price of the Golden China common shares.

Sino Gold believes that the proposed acquisition of Golden China provides an attractive addition to its asset base and enhances its growth profile as Golden Chinas Beyinhar project is advanced to development status.

Commenting on the proposed Offer, Sino Golds Chief Executive Officer, Jake Klein, said:

We have previously indicated that we intend to acquire advanced exploration assets that have the potential to be developed once our second mine, White Mountain, starts commercial production in early 2009.

Golden Chinas assets fit perfectly with this strategy and enables Sino Gold to focus on a potential third mine development. Importantly, Golden Chinas key assets are all within the three areas in which Sino Gold already has significant activity and capacity.

This acquisition will further consolidate Sino Golds position as the leading foreign gold company in China. Our financial strength and operating expertise will ensure that the full potential of the Golden China assets is realised.

Importantly, the Sino Gold offer provides Golden China shareholders with significant value for their shares, and the opportunity to participate in the future growth of the combined company.
Golden Chinas President & Chief Executive Officer, Greg Starr, added:We are excited by the current and potential value created for our shareholders from the acquisition by Sino Gold. The combined assets and strengths of the two companies diversifies the opportunities for our combined shareholders and brings increased financial and management strength to the exploitation of Golden Chinas asset base.

Rationale for the Offer
Golden China is a gold exploration and production company listed on the Toronto Stock Exchange (TSX) and Australian Securities Exchange (ASX) whose principal asset is the advanced Beyinhar exploration project located in Inner Mongolia, Peoples Republic of China.

Sino Gold believes that the Golden China assets are complementary to its own project portfolio and its operational expertise. Sino Gold has the ability to:

  • Rapidly advance the Beyinhar project to production. Golden China has previously publicly stated that its intention is to develop a 100,000 ounce production base at Beyinhar
  • Extract full value from the BioGold processing facility in Shandong province; and
  • Unlock regional exploration synergies at the Nibao project, which is located near to Sino Golds Jinfeng mine in Guizhou Province, Peoples Republic of China.

The Offer would provide significant benefits to Golden China shareholders. By accepting the Offer, Golden China shareholders would become shareholders in a company with a successful track record of developing gold mines in China and enhancing shareholder value. Benefits are expected to include:

  • The opportunity to realize an attractive premium for their Golden China shares;
  • Enhanced share trading liquidity;
  • Greater access to development finance, a robust balance sheet and strong cash position; and
  • Access to a company with a team of over 600 experienced mining and exploration employees

This announcement continues and is available at www.sinogold.com.au

For further information, please contact:

Investor Enquiries: Jake Klein, CEO or Roger Howe, Investor Relations
+61 2 8259 7000, [email protected]

Media Enquiries: Kate Kerrision
+61 2 6746 3221, [email protected]