State-owned China National Gold Group, the country's largest gold producer, has won a bid for exploration rights to China's largest gold deposit for 2.18 billion yuan ($318 million), a source familiar with the situation and a company source said on Friday.
The company prevailed over the parent companies of Shandong Gold-Mining Co (600547.SS), Zijin Mining Group Co (2899.HK) (601899.SS) and Zhaojin Mining Industry Co (1818.HK) in a two-day tender that started on Wednesday, they said.
The China National Gold Group offered the highest bid, and it was also ahead of other bidders in areas such as governance and technology, one of the sources said.
China's mining rules give the owner of a deposit's exploration rights priority in obtaining mining rights.
Rising spot gold prices
Under the terms of the government-arranged bid, Jinchuan Group Ltd, China's largest nickel miner and based near the deposit in western China's Gansu province, will pay 40 percent of the bid amount to the winner and will help to develop the deposit, the sources said.
China National Gold Group is expected to receive about 870 million yuan from Jinchuan under this provision, they added.
The two companies will form a joint venture for the project, after which they will determine the total amount to be invested.
The gold deposit, in Yangshan in southern Gansu province, has proven reserves of 308 tonnes, making it the largest Carlin-type deposit in Asia and the sixth-largest in the world. ($1=6.865 Yuan) (Reporting by Alfred Cang; Editing by Edmund Klamann)
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