Chinese firm acquires Stonewall Resources

Chinese energy company Shandong is purchasing a subsidiary of Australian goldminer Stonewall Resources.

Shandong raised $300 million to make the purchase, Stonewall Resources said on Tuesday. The Chinese company is also buying two South African gold mines, expanding current projects and supplying working capital.

Stonewall Resources chief executive Lloyd Birrell believes Shandong’s capital raising was a sign it appreciated Stonewall Mining’s projects and was eager to increase gold production.

“Their intention to direct substantial funds towards the expansion projects signals they wish to ramp up production within a short time frame,” he said in a statement.

“It is clear that they have developed an excellent understanding of Stonewall’s long-term strategy to feed central processing plants from the vast number of available mines and ore bodies in the mining and prospecting areas.”

The purchase announcement led to an 8.3 per cent gain on Stonewall Resources shares, or one cent to close at 13c on Tuesday, The Age reported.

Rumours recently emerged Shandong was interested in buying the Yilgarn South assets from Barrick Gold following rumours Barrick is looking to sell three gold mines in Western Australia to reduce debt and avoid a credit rating downgrade.

Barrick Gold has not released details to confirm the rumours.

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