Eldorado Gold Corp. is finally making its long-awaited exit from China.
The Vancouver-based miner unveiled a deal Monday to sell its White Mountain, Tanjianshan and Eastern Dragon operations in China for US$600 million in cash. The buyer is an affiliate of the Yintai Group, a large Chinese conglomerate involved in many different industries.
Just three weeks ago, Eldorado agreed to sell its Jinfeng mine to China National Gold Group for US$300 million. The result of these two transactions is that Eldorado gets completely out of China for US$900 million. Eldorado was also studying an initial public offering of its Chinese assets, but these two sales make for a quicker and cleaner exit.
Eldorado has been trying to divest its Chinese business since 2014. The mines are smaller than its core projects in Turkey and Greece, and the company is facing a challenging political environment in Greece that requires management’s full attention. Eldorado also believed it was getting insufficient value for the Chinese mines in its stock price.
China is a difficult and complex place for foreign miners to operate. Its gold industry is extremely fragmented, with many small mining companies running tiny operations.
None of the senior North American gold companies has built a mine there. Eldorado is one of the only foreign miners to have success in China, and it was on a modest scale. Jinfeng, its biggest Chinese operation, produced less than 150,000 ounces of gold last year.
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