News blog
Central China Goldfields
- BY: Andrew Hore |
- POSTED: 05/05/2009 |
Central China Goldfields has signed a deal with CITIC Anhua which will give CCG 30% of net profits from the sulphide mining phase at the Dong Mao Huo gold project in Northern China.
CITIC Anhua will build a 500 tonnes a day mining and processing plant and it will fund all the capital and operating costs. Mining could start in September 2009.
CCG will receive RMB250,000 a year for six years in order to cover its initial investment. It will be paid RMB1.5m a year from the oxide phase of the mining prior to receiving the 30% of net profits when sulphide mining starts.
This will provide cash flow for the company, which is concentrating on the Nimu Copper project where it has a 30% stake.
CCG has also reached agreement with the Sichuan Bureau of Metallurgy and Geological Exploration about the payment for the Snow Mountain gold project. The sale was announced in April 2008 but payment was delayed by the Sichuan earthquake. The RMB35m due to be paid will be spent on the final RMB28.8m property payment for Nimu and the rest on drilling and exploration.
At 3p a share, up 0.375p on the day, which values CCG at £5.5m. In March, CCG raised £300,000 at 1.25p a share.
In April, CCG appointed Alexander David as joint broker alongside Hanson Westhouse, which is also its nominated adviser.
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