The Asia Miner

OCT-DEC 2015

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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26 | ASIA Miner | October-December 2015 China China has established a fund that is expected to raise about US$16 billion for gold-related investment as part of its Silk Road initiative to develop trade and transport infrastructure across Asia and beyond. The fund will be run by a new company set up by gold produc- ers and fnancial institutions, and will be used to develop gold mining projects along the planned Silk Road infrastructure being developed by China. The proposed Silk Road will run through Kazakhstan, Uzbekistan, Iran and Turkey. About 60 countries are expected to take part in the fund that is expected to raise an estimated 100 billion yuan in three phases. The fund aims to develop gold production for trading on the new Shanghai Gold Exchange. In addition, central banks will be able to buy gold locally for their reserves using this fund. Activities could take in the launch of gold-backed exchange-traded funds and buying stakes in listed gold companies and mining frms. Two leading gold producers, Shandong Gold Group, the par- ent of Shandong Gold Mining Co Ltd, and Shaanxi Gold Group will take stakes of 35% and 25% respectively, with the rest to be owned by fnancial institutions. Asia Now in hands of receiver China Gold Pte Ltd has provided Asia Now Resources Corpora- tion with a notice of default on its secured loan for failure to repay the aggregate amount outstanding of the loan, which China Gold indicates is in the amount of Can$1,068,544.35. After indicating its intention to enforce its security in Asia Now, China Gold has subsequently appointed a receiver to realize on its security interest in the corporation. These actions have result- ed in the resignation of James Macintosh and Elliott Jacobson from Asia Now's Board of Directors, and the resignation of Julio DiGirolamo as chief fnancial offcer. These developments occurred after a special meeting of share- holders of Asia Now on June 18 at which a special resolution in respect of a proposed going private transaction by way of statutory plan of arrangement initiated by China Gold was not approved by the requisite shareholder approval. The arrangement would have resulted in China Gold purchasing all the shares of Asia Now it did not already own and would have provided minority shareholders with Can$0.02 cash for each Asia Now share held. Asia Now's assets include gold, silver, copper and lead at two major projects – Beiya North and Habo South. Shandong Gold raises funds Shandong Gold Mining Co Ltd has adjusted its share issuance plan initially announced on December 1, 2014, to raise further funds and enable acquisitions. The new plan is to issue more than 354 million common shares at 14.23 yuan per share, to Shandong Gold Group Co Ltd, a Shan- dong-based mining company, a Shandong-based prospecting company, a Yantai-based mining company and to Wang Zhiqiang. The company intends to use the funds to acquire a 70.65% stake in a Shandong-based mining industry company and a 100% stake in a Penglai-based mining company, as well as the assets of several mines. The company will also issue up to 116,982,464 shares at 14.40 yuan per share, to raise more than 1684 million yuan. Earlier this year Shandong Gold sold 100% stakes in a Shan- dong-based jewellery subsidiary and a Shandong-based trading subsidiary, through listing on equity exchange, at a base price of 60.35 million yuan in total. These sales followed the appointment of Wang Lijun as Shan- dong Gold chairman and Bi Hongtao as general manager. Recently Shandong Gold's RMB1 billion unsecured super short term bills with maturity of 120 days confrmed its coupon at 2.92% or 19.25bp less the 3-month SHIBOR. China Construc- tion Bank is lead underwriter and book-runner. China Lianhe Credit Rating Co Ltd rated the issuer at AAA. The rating agency's view is that due to the issuer's strong repayment ability and that it is not affected by external economic factors, the possibility of default is considered lowest. Outotec rodshop technology order Outotec has received an order for rodshop technology from Chiping Xinyuan Aluminium Co Ltd for its new aluminium smelter in Shandong Province. Xinyuan is a subsidiary of China Xinfa Group, a leading aluminium producer in China. The order value exceeds EUR12 million and has been booked in Outotec's 2015 second quarter order intake. Outotec's delivery includes process engineering and propri- etary process equipment as well as services for the commis- sioning and operational support for a new anode rodding shop, which is part of the new aluminium smelter. The new smelter is expected to annually produce 1 million tonnes of aluminium. The deliveries will take place in 2016 and include both local and offshore equipment supply. "This is our third aluminium technology order from China Xin- fa Group and reaffrms Outotec's technological leadership and competitiveness in China in the primary aluminium industry. We have a strong reputation as a provider of high capacity rodding shops for the needs of increasingly large aluminium smelters," says Outotec's APAC region head Stuart Sneyd. China establishes gold mining fund

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