Far East Gold (ASX:FEG) has secured the first tranche of funding totalling $6.39 million from strategic investor Xingye Gold Mining Company.
Xingye Gold is a wholly owned subsidiary of Inner Mongolia Xingye Silver and Tin Mining (SZE:000426), which is a Chinese mining company with a market capitalisation of more than $4 billion. The company is touted as the largest silver producer in China and among the largest silver and tin producers globally.
Under the three-tranche conditional share placement agreement, Xingye Gold has committed to pay $14 million to Far East, taking its total shareholding in the company to 19.99%.
Tranche two totals $4.05 million and will be received subject to obtaining certain approvals and Foreign Investment Review Board approval. Meanwhile, tranche three totals $3.85 million and is subject to the same conditions as well as securing shareholder approval.
The conditional placement comprises the issue of 71.23 million shares at $0.20 per share, which represents a 47% premium to the recent placement and share purchase plan.
Far East Gold CEO Shane Menere says Xingye ticks all of the boxes to become a strategic partner, as it has capital, technical expertise, and aligns with its goals to develop assets through to production.
“This transaction marks a tremendous milestone and the logical next step for Far East Gold, following recent announcements around the Idenburg acquisition, which triggered several approaches from strategic investors,” Menere says.
Xingye CEO Shucheng Zhang says Far East Gold’s portfolio represents “a perfect fit for Xingye’s competencies around bringing highest-quality greenfield projects all the way through to production”.
Far East Gold is a copper and gold explorer with six advanced projects in Australia and Indonesia.
Write to Aaliyah Rogan at Mining.com.au
Images: Far East Gold
