Ivanhoe Mines is to sell its controlling stake in Jinshan Gold Mines to China National Gold Group Corp. Sun Zhaoxue is to be nominated as Jinshan’s Chairman; Jay Chmelauskas will continue as Jinshan’s President and CEO. Ivanhoe Mines and China National Gold commit to establishment of a strategic Chinese exploration partnership.
Ivanhoe’s Executive Chairman Robert Friedland announced today that the company has agreed to sell its 42% control block in China gold producer Jinshan Gold to China’s national gold-mining conglomerate, China National Gold, of Beijing, and its financial partners. “This is the first step toward the formation of a long-term, strategic partnership between Ivanhoe Mines and China National Gold Group that will focus on gold and copper exploration and mine development opportunities in China,” Friedland said.
“Industry research has confirmed that China’s gold industry has overtaken the US and South Africa. China is expected to consolidate its position this year as the world’s largest gold producer. It is a dynamic industry in the world’s most remarkable economy – in a period of high gold values and a dramatically depreciating US dollar.
“There are significant benefits to be realized for Ivanhoe Mines’ independent, 100%-owned gold exploration programs now underway in China, through a cooperative partnership with China’s pre-eminent, government-owned gold group. A substantial portion of the proceeds of this asset sale will be dedicated to advancing Ivanhoe Mines’ significant and advanced gold and copper exploration ventures across China.”
Under terms of the agreement, the purchaser will acquire from Ivanhoe Mines:
- Ivanhoe’s entire holding of 67,520,060 common shares of Jinshan Gold Mines, at a price of C$3.1115 a share
- A Jinshan promissory note of C$7.5 million issued to Ivanhoe Mines, due June 26, 2010, together with accrued interest at 12% from March 31, 2008.
Ivanhoe will retain warrants to purchase up to 1.5 million common shares of Jinshan, each exercisable to purchase one Jinshan common share at C$2.50 at any time up to June 26, 2009.