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Central China Goldfields, CITIC in deal to develop gold mine

(Agencies)
Updated: 2009-05-05 17:03

Central China Goldfields PLC said on Tuesday it signed a contract with the mining arm of CITIC Group, a Chinese government investment company, to develop its Dong Mao Huo gold mine in Northern China.

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The AIM-listed company said the contract mining deal would enable it to quickly put this near-surface gold project into production and would enable it to recover its investment in the project.

Dong Mao Huo is the first project which Central China Goldfields has taken from exploration acquisition to the planned production phase, the company said.

Under the terms of the deal, CITIC Anhua, the mining arm, will build a 500-tons-per-day mining and processing plant, and will fund all the capital expenditure and operating costs.

Central China Goldfields will receive 1.5 million yuan ($219,900) per year during the initial oxide phase of the mining, and will then receive 30 percent of the net profits from the key sulphide mining phase, it said.

The company said it would also receive 250,000 yuan per year from CITIC Anhua for the first six years to recover historic expenditures.