Far East Gold Ltd (ASX:FEG, OTC:FEGDF) strategic investor Xingye Gold (Hong Kong) Mining Company Limited has received all necessary Chinese regulatory approvals to release the first placement tranche funds to FEG with almost A$6.4 million received by the company.
This is part of a three-tranche conditional share placement agreement by Xingye Gold, a wholly-owned subsidiary of Inner Mongolia Xingye Silver & Tin Mining Co. Ltd, targeting an investment of more than A$14 million for a 19.99% strategic stake in Far East Gold.
The first tranche totals A$6,391,669.60 and all tranches are priced at A$0.20 per share, representing a 47% premium to the company’s recent placement and share purchase plan.
Logical next step
FEG chief executive officer Shane Menere said: “This transaction marks a tremendous milestone and the logical next step for FEG, following recent announcements around the Idenburg acquisition which triggered several approaches from strategic investors.
"We are delighted to welcome Xingye as a strategic partner because it ticks all our boxes – significant funding, deep technical expertise and an alignment with our strategic goals for our portfolio of high-quality assets to develop through to production.”
READ: Far East Gold attracts major Chinese miner Xingye as strategic partner with A$14 million investment
About Xingye
Xingye, a Chinese mining company listed on the Shenzhen Stock Exchange with a market capitalisation of more than A$4 billion, is China’s largest silver producer and one of the largest silver producers in the world along with being China’s second-largest tin producer.
In addition to the funds, the strategic investor will add deep technical expertise and a successful track record of bringing greenfield projects to production.
The agreement also provides the capacity for potential follow-on investment.
A “perfect fit”
“We are pleased to make this significant investment," Xingye chief executive officer Shucheng Zhang said.
"Far East Gold’s portfolio represents a perfect fit for Xingye’s competencies around bringing highest-quality greenfield projects all the way through to production.
"We are looking forward to working closely with the Far East Gold team to achieve this.”
Menere has released a video discussing this announcement. Watch the video here: https://investorhub.fareast.gold/link/DexG3y