CDH Investments, a leading Chinese private equity company, is acquiring a 20% interest in Eldorado Gold’s Eastern Dragon project in Heilongjiang province, northeast China, for $40 million in cash. Following a new share issuance, CDH will own a 21.05% interest in Sino Gold Tenya (HK) Ltd., Eldorado’s wholly owned Hong Kong subsidiary, which indirectly holds the company’s 95% interest in Eastern Dragon.
Eastern Dragon has been on care and maintenance pending receipt of outstanding permit approvals. Eldorado anticipates that CDH’s participation will assist in the completion of development and advancement of the project to full production.
Eastern Dragon is based on a high-grade, epithermal, gold-silver vein deposit. Eldorado plans to start operations as a small open-pit mine and then move to underground mining, using carbon-in-leach methods to produce gold doré.
Eastern Dragon has proven and probable gold reserves of 764,000 oz, measured and indicated gold resources of 852,000 oz, and inferred gold resources of 190,000 oz. Production is estimated at 70,000 oz/y of gold, over an expected mine life of 11 years. Capital cost to complete development is estimated at $45 million.
Eldorado Gold currently operates three gold mines in China: Jinfeng, Tanjianshan and White Mountain.
Jinfeng is an open-pit and underground mine in Guizhou province, south China. It uses BIOX technology and a conventional carbon-in-leach circuit to produce gold doré.
Tanjianshan is an open-pit mine in Qinghai province, northwest China. Ore is processed by flotation, roasting, and carbon-in-leach methods. When Tanjianshan began commercial production in 2007, Eldorado became the first North American gold producer to build and operate a gold mine in China.
White Mountain is an underground mine in Jilin province, northeast China. Ore is processed using conventional carbon-in-leach methods to produce gold doré.