Shandong raises $300m to buy Australian gold miner
China's Shandong Qizing Iron Tower is one step closer to acquiring Australian gold mining junior Stonewall Resources (ASX:SWJ) after raising $300 million in a private placement.
In a join statement on Tuesday, the companies announced that the capital raising will go towards purchasing and expanding two of Stonewall's South African properties. Shandong intends to "substantially lift gold production" in these mines and has set an increase target of 40,000 ounces pa by the end of the year, and 205,000 ounces pa by the end of 2016.
Stonewall is listed on the Australian exchange and has three main sites, including one in Australia and two in South Africa.
Despite a 8.3% rise on the Sydney stock exchange on Tuesday, the Australian miner had lost %7.69 by closing on Wednesday.
The acquisition is part of a broader trend among Chinese firms to buy up overseas gold interests. So far this year they have spend $436 million on the declining metal, according to the Wall Street Journal.
In comparison, Canadian companies have bought $260 million worth on foreign gold projects.
Creative Commons image by Peter Rowley.