Eldorado Gold Said to Weigh $1.5 Billion Sale of China Mines

By Zijing Wu and Fox Hu  

Eldorado Gold Corp., the largest foreign producer of the precious metal in China, is seeking a buyer for its mines in the country as part of a dual-track sale process, people with knowledge of the matter said.
The miner is seeking as much as $1.5 billion for its four Chinese projects, the people said, asking not to be identified as the matter is private. The assets have drawn interest from companies including China National Gold Group Corp., the nation’s biggest producer of the commodity, as well as Zhaojin Mining Industry Co., Zijin Mining Group Co. and Jiangxi Copper Co., they said.
Eldorado, based in Vancouver, said Oct. 30 it hired Bank of America Corp. to lead a proposed Hong Kong initial public offering of the Chinese business. The company, which also has operations in Turkey, Greece and Brazil, has three operating mines in China that produce about 300,000 ounces of gold a year.
Exploring both a sale and an IPO, known as
a dual-track process, can help propel a deal by pressuring buyers to act before a stock offering puts the company in public investors’ hands. A Beijing-based spokeswoman for Eldorado said she couldn’t immediately comment. Representatives for the four potential bidders didn’t answer phone calls seeking comment.

Photographer: Angelos Tzortzinis/Bloomberg

Construction equipment is seen during the digging of a pit at the Skouries gold mine... Read More

Eldorado plans to seek about $250 million from an initial public offering of the business if the listing plans move forward, a person familiar with the matter said. It aims to submit an application to Hong Kong’s stock exchange next year, according to the person.

Eastern Dragon

Shares of Eldorado have fallen 3.3 percent in Toronto this year, compared with the 14 percent decline in the Standard & Poor’s/TSX Global Gold Sector Index. The price of gold is down 39 percent from its 2011 high and is now trading at $1,149.85 an ounce.
The company’s assets in China include the Tanjianshan open pit mine, located in northwestern China’s Qinghai province, and the White Mountain underground mine in Jilin province close to the border with North Korea, according to its website.
In February, Chinese private equity firm CDH Investments Fund Management Co. agreed to spend $40 million for a 20 percent stake in Eldorado’s Eastern Dragon project, situated near the Russian border. Eldorado aims to resume construction at the mine next summer after it receives approvals from the Chinese government, Chief Executive Officer Paul Wright said on an Oct. 31 conference call with analysts.

Photographer: Norm Betts/Bloomberg News

Paul Wright, Chief Executive Office of Eldorado Gold Corporation, said on an Oct. 31... Read More