The Zijin Mining Group is to buy another 138.35 million shares of Norton Gold Fields Limited for $29.998 million. The Chinese company is buying the shares in the Australian gold producer in a bid to increase their gold reserves.
The Fujian Province-based company informed the Hong Kong bourse about its intent to gain 16.98% stake in Norton Gold. The Chinese mining company already owns 5.8 million shares of Norton Gold. This was purchased in the secondary market via a Qualified Domestic Institutional Investor (QDII) account.
The shares of Norton Gold went up by 6.6% to 17.5 Australian cents in the trading in Sydney today. The price that Zijing Mining Group is offering the company is a 31% premium to the 15 day volume weighted average price for shares in the company.
Huatai United Securities analyst Zhang Yong said that Australia was a mature mining market. The purchase will help Zijin enter the Australian market which is in line with the company's international development strategy.
Norton Managing Director Andre Labuschagne said that Zijin has a strong technical and operational background in gold mining which will complement our own expertise. The sale of the shares will also help Norton Gold reduce its debt levels.