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China will help its gold producers expand overseas
By Xiao Yu
Bloomberg News
Tuesday, August 3, 2010
http://www.bloomberg.com/news/2010-08-03/china-plans-to-help-bullion-pro...
BEIJING -- China, the world's largest gold producer, will support overseas investment plans by "large-scale" bullion companies by backing them financially, the People's Bank of China said.
Banks should extend credit lines to gold producers and offer loans for overseas acquisitions, the central bank said today in a statement on its website. The government will "support" the companies when they issue corporate bonds and help reduce financing costs, it said, without clarifying what that meant.
This is the first time the Chinese government has singled out bullion producers for financial support in overseas purchases. Global gold mining takeovers this year set a record after Kinross Gold Corp. yesterday agreed to buy Red Back Mining Inc. for about $7.1 billion.
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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property
On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.
Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."
For complete information on Sona Resources Corp. please visit: www.SonaResources.com
China "will place heavy emphasis on supporting large-scale gold producers in their development and overseas expansion plans," the central bank said in the statement.
The Chinese central and provincial governments either fully or partially own stakes in China National Gold Corp., Zhongjin Gold Co., Zijin Mining Group Co., and Zhaojin Mining Industry Co. The Chinese gold industry overtook South Africa to become the biggest producer in 2007.
Chinese bullion producers have completed fewer than five overseas acquisitions of rivals in the past 10 years, according to data compiled by Bloomberg.
Zijin Mining pulled a planned A$545 million ($498 million) purchase of Australia's Indophil Resources NL this year after failing to win approval from the Chinese government. The deal would have given the company a stake in Philippines' Tampakan project, Southeast Asia's largest untapped copper and gold deposit.
Bullion surged to a record $1,266.50 an ounce in June and is set for a 10th straight annual advance, the longest winning streak since at least 1920.
Chinese companies spent more than $30 billion last year buying mining assets and oil deposits to help secure raw material supplies to feed the nation's growing economy.
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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource
Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.
For Prophecy's complete press release about its production plans, please visit:
http://www.prophecyresource.com/news_2010_may11.php
