GCA Professional Services Group
GCA: Gold Mine Acquisition Active by Chinese Gold Miners and Investors
Pivotal role of competent evaluator and competent person in mining company’s acquisition
China is the leader country in extraction of gold, becoming the top gold producer since last decade. However, gold consumption in China is not yet satisfied. According to BMI Research (a Fitch Group Company), the recent China’s production-to-reserve ratio for gold is 23.5%, in contrast to global usage rates of gold which is 4.9% only. The huge gap between China’s domestic mineral capacity and demand would be a strong incentive for companies to invest in gold mines in China and overseas. Greater China Appraisal (“GCA”), a leading valuation firm in Hong Kong, has studied 18 Mergers and Acquisitions of Chinese gold mines in last five years, committed to building a comprehensive database for better valuation of Chinese gold mines to support the increasing demand. GCA has been appointed by China Mining Resources Group Limited (“China Mining”, 00340.HK) recently for valuation in relation to a gold mining project company located in Shaanxi Province of the PRC. The mining licences and exploration licences application covered indicated resources of 5.92 tonnes of gold (with probable ore reserves of 1 tonne), inferred resources of 3.66 tonnes and under the Australasian JORC Code, according to the technical report prepared by SRK Consulting. An independent valuation report was issued by GCA estimating the market value of 90% equity interest of gold mining project company as at 1 June 2016 to be HK$494 million. Mr. John S. Dunlop, Principal Mineral Representative and Competent Evaluator of GCA said, “This was quite a complex assignment as the entity being valued had streams of revenue from various sources. In addition, it had little in the way of proved and probable ore reserves on which to base an extended life of mine production schedule.” Mr. Max Tsang, Director of GCA said, “We observe the sustainable demand in gold mines from Chinese mining companies but we also note the increasing difficulty in completing a sizeable acquisition deal especially on illustrating project value to investors or shareholders. Since the update of VALMIN Code to 2015 Edition, we see the trend of stricter disclosure requirements to pass the reasonableness test. We were able to apply our state of the art valuation modelling skills and comparable transaction database developed over 5 years, specially designed for valuing the Chinese gold mine. Leveraging effective modelling with Mr. Dunlop’s 45 years of experience in mining, our Hong Kong based technical firm is ideally positioned to further support listed mining companies or wishing to list on the Hong Kong Stock Exchange and Singapore Stock Exchange.” About China Mining China Mining Resources Group Limited is principally engaged in production and sale of tea products and investment in mining companies. For further information, please contact mktg@gca-group.com for general enquiry or Mr. Max Tsang at max.tsang@gca-group.com for mining valuation enquiry. You may also visit www.gca-valuation.com for more details. For the circular of the major transaction, please visit http://file.irasia.com/listco/hk/chinaminingresources/circulars/c161028.pdf. Document: http://n.eqs.com/c/fncls.ssp?u=INPTPWNQXY Document title: GCA: Gold Mine Acquisition Active by Chinese Gold Miners and Investors
28/11/2016 Dissemination of a Press Release, transmitted by EQS Group. |
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