Canada's Eldorado Gold (TSX:ELD) (NYSE:EGO), until now the largest foreign gold producer in China, is selling its stakes on two mines and development project to an affiliate of China's Yintai Resources (SHSZ:000975) for US$600 million in cash.
The transaction, expected to close in the third to fourth quarter 2016, includes Eldorado's interest in the White Mountain and Tanjianshan mines, as well as its stake in the Eastern Dragon development project.
Deal comes less than three weeks after Eldorado agreed to sell another Chinese asset, the Jinfeng mine, to China National Gold Group.The Vancouver-based miner, which used to have three of its six producing mines operating in the Asian country, inked a deal last month to sell its 82% stake in Jinfeng mine to a wholly-owned subsidiary of China National Gold Group for US$300 million in cash.
The deals mark the end of Eldorado's reign in China, but the company still has several foreign operations in countries that include Turkey, Greece, Romania and Brazil.
The company said it planned to use the proceeds from the sale to Yintai - a nonferrous metals mining company that controls the Huaaobaote polymetallic mine in Inner Mongolia- to expand its business "based on long-lived, low-cost assets."
Investors welcomed the news and boosted the stock price 3.6% to Cdn$6.56 at 11:30 a.m in Toronto. Gold for immediate delivery, up 0.1% on Monday, has surged 20% this year.
BMO Capital Markets and Cutfield Freeman & Co are financial advisors to Eldorado on the transaction.