Chinese gold miner and smelter Lingbao Gold Co. Ltd. said it would apply to issue up to 300 million Shanghai-listed A-shares to expand its business and repay debt.
Trading in shares of Lingbao, which has a market value of $331 million, is expected to resume on Monday after the proposed share issue statement released late on Friday.
Shares of Lingbao have lost more than half of their value this year and were at HK$3.33 before trading was suspended on Monday afternoon. It underperformed the blue chip Hang Seng Index , which fell 24 percent.
Lingbao said the proposed A-share issue would represent about 28 percent of the company's enlarged issued share capital and was subject to shareholder and regulatory approval.
About 454.7 million yuan ($71.2 million) raised from the share sale will be used to fund the construction of facilities for smelting, 729.4 million yuan for the development of gold ore in Kyrgyzstan, 221.2 million yuan for exploration activities in Henan and Inner Mongolia and 400 million yuan to repay debt and as working capital.
If the amount of funds raised from the proposed share issue proved insufficient for funding all those activities, the shortfall should be funded from the company's internal resources, it added.