CHINA – Eldorado and Sino Gold to merge

Sino Gold Mining and Eldorado Gold have agreed to a business combination which will see Canadian-based Eldorado purchase all of Sino Gold’s shares in a transaction that values the Australian company at about Aus$2.2 billion.
The combination will create an intermediate global gold producer with combined market capitalization of about Can$6.4 billion and will establish Eldorado as the leader among international gold producers in China, the world’s largest gold producing country.
It reinforces Eldorado’s position as a low-cost, high-growth global gold producer with the addition of Sino Gold’s Chinese assets. Combined current annual gold production is 550,000 ounces from four new mines, growing to 850,000 ounces by 2011 from six mines.
Project pipeline and expansion opportunities are expected to fuel gold production growth to beyond 1 million ounces by 2013.
The combination also provides Sino Gold shareholders with continued exposure to China’s gold industry as well as diversifying their country risk by gaining exposure to quality gold assets in Turkey and South America.
Eldorado will seek to establish an Australian listing of Eldorado shares such that Sino Gold shareholders can hold the Eldorado shares they receive on the ASX.
Sino Gold directors have unanimously recommended that shareholders vote in favor of the proposed scheme.
After completion of the transaction Eldorado shareholders will own about 75% of the merged company and Sino Gold shareholders 25%, but including Eldorado as a shareholder, Sino Gold’s ownership will reach about 30%.
Eldorado’s president and CEO Paul Wright says, “Eldorado entered China in 2004 recognizing that it was quickly emerging as the most important gold producing country in the world.
“China is blessed with outstanding geological potential, a supportive population and government, and a strong mining law.
“The business combination with Sino Gold enables Eldorado to realize its vision of establishing a leading presence in China.”
Sino Gold’s president and CEO Jake Klein says, “This transaction is an exciting opportunity for Sino Gold shareholders to participate in the creation of a leading intermediate gold producer with an international footprint and exciting prospects.”
www.sinogold.com.au

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