Sino Gold has acquired a 72% interest in the Eastern Dragon gold-silver deposit in Heilongjiang Province, northern China.

To fund the acquisition Sino Gold is making a private placement for approximately Aus$170 million via a bookbuild.

Sino Gold chief executive officer Jake Klein says: 'Eastern Dragon Lode 5 is an outstanding near-surface gold-silver deposit with the potential to be a low-cost mine. The district has demonstrable potential for additional epithermal gold deposits and this acquisition complements our adjacent Sanjianfang Joint Venture.

'We are pleased to have acquired a majority interest in this high-grade deposit which we have pursued for several years. It provides Sino Gold a clear path to more than 500,000 ounces of low-cost production from four quality operations.

'The placement provides the financial resources to progress Eastern Dragon and Beyinhar towards becoming Sino Gold's third and fourth gold mines after White Mountain and Jinfeng.'

The acquisition of a 72% interest in Eastern Dragon at a cost of US$90 million was achieved through the acquisition of 90% of Rockmining, a private Hong Kong company, and is part of a strategic partnership with the vendor in relation to gold opportunities in Heilongjiang province.

Further verification work is required prior to reporting an Identified Mineral Resource for Lode 5 in accordance with internationally accepted standards. The exploration and development target is to confirm 600,000 to 800,000 ounces of contained gold, with potential average grades of between 7 and 8 grams/tonne gold, 70 and 75 grams/tonne silver and a potential tonnage range of 2.3 to 2.9 million tonnes.

www.sinogold.com.au