Gold Fields' Tibetan venture ploughs on
December 17, 2003
By Sherilee Bridge
Johannesburg - Sino Gold, the Australian-listed gold junior that has a 50:50 joint venture with Gold Fields, said this week that it had successfully raised US$30 million from a global private placement.
The company said the capital raising was conducted primarily to help fund development costs at Jinfeng in China's Guizhou province, as well as to allow Sino to take a "fairly aggressive" look at other acquisition opportunities.
Sino Gold has come under global scrutiny for its plans to develop the first foreign-owned gold mine in Chinese-occupied Tibet.
Gold Fields, South Africa's second-largest gold producer, has a 10 percent stake in Sino and its joint venture involves the acquisition and exploration of gold properties in China's Shandong province.
But Gold Fields, which has not publicly stated its stance on the gross human rights violations reported since China's occupation of Tibet in 1949, has still to disassociate itself from Sino or map out its plan to clear its name of the ethical questions that arise from Sino's ambitions in Tibet.
Sino has run into strong opposition from non-governmental organisations concerned that by going ahead with the project it would be publicly backing the Chinese occupation of Tibet.
Sino's capital raising comes just 10 days after it warned investors that it might mothball one of its other Chinese projects at Jianchaling.
"While it is close to finalising a deal at Jianchaling giving it access to ore from an adjoining mine, the operation may be put on care and maintenance in 2005 without further exploration or acquisition success," reported Minenews.
The Jianchaling mine, which produces 91 000 ounces a year, provides Sino's only access to cash flow.
The company, which is confident that Jinfeng would produce about 200 000 ounces a year by 2005, said the International Finance Corporation and Standard Bank - both shareholders in Sino - had been mandated to offer $30 million in financing for the project.
Gold Fields, which ranks fourth on the list of the world's largest gold producers, has said it was in talks with Chinese groups and other foreign investors over opportunities in China.
Gold Fields gained R1.39 to R86.10 in Johannesburg on Monday.
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