Sino Gold Seizes the Moment...Date: October 17 2007
Jamie Freed
SINO GOLD is aiming to increase its first-mover advantage in China, after producing the first commercial gold at its flagship Jinfeng mine in the September quarter.
The Sydney company has the largest gold exploration program in China of any domestic or foreign company and is hunting for more acquisitions after its recent $81 million friendly scrip bid for Golden China Resources.
"We believe there is this window in China now which is effectively a transition period," said Sino's chief executive, Jake Klein, citing the privatisation of state-owned assets. Sino Gold yesterday lowered this year's production forecast at Jinfeng by 5000 ounces to 65,000 to 70,000 ounces, although it hopes to make up for production lost due to wet weather and faulty tanks at its new plant. Sino produced 14,000 ounces in the September quarter, including 9000 in the month of September.
At full production, the 4.6-million-ounce deposit will produce 180,000 ounces a year, making it China's second-largest goldmine. It should reach its full production rate by the end of the year. In early 2009, Sino will start production at its $US55 million ($61 million) White Mountain mine. The project, already under construction, should produce 70,000 ounces a year at a cash cost of less than $US250 an ounce. Sino has a hedge book which is $US89 million in the red due to the strong gold price, which is trading at 27-year highs.
Mr Klein said Sino's hedge book was required to gain financing for the Jinfeng project and it did not expected to enter more hedging contracts.
"At this point there is no reason to remove that hedge, but as the gold price goes higher, we'll continue to consider our options," he said. "[The gold price] certainly looks good."
Sino shares closed 15c higher at $7.35 yesterday.
LINK
https://www.smh.com.au/text/articles/2007/10/16/1192300768659.html
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