Far East Gold Ltd (ASX:FEG, OTC:FEGDF) has boosted its war chest to advance world-class gold and copper assets in Indonesia on receiving the second almost A$3.5 million tranche of a considerable investment by Xingye Gold (Hong Kong) Mining Company Limited.
This follows the strategic investor, a subsidiary of A$4 billion major Chinese miner Inner Mongolia Xingye Silver & Tin Mining Co., Ltd, receiving all necessary Chinese regulatory approvals to release the A$3,498,638.40 Tranche 2 funds.
Following the receipt of the first tranche of A$6.4 million early last month, Xingye has taken its investment in Far East Gold to almost A$9.9 million with a further amount of approximately $3.85 million expected in the third tranche.
Far East Gold shares are 8.82% higher on the ASX to A$0.185.
READ: Far East Gold receives first A$6.4 million tranche of investment by Xingye
Toward 19.9% stake
At the time of the conditional share placement agreement with Xingye in early September 2024, the investment was valued at approximately A$14 million which would give it a stake in Far East Gold of 19.9%.
All tranches were priced at A$0.20 per share, which at the time represented a 47% premium to the company’s recent placement and share purchase plan and a 21% premium to the company’s last traded price.
On November 28, Far East Gold advised that it had received approval from the Foreign Investment Review Board (FIRB) for the second and third tranches.
Shareholder approval for the third tranche was granted the following day at FEG’s AGM as it exceeded the company’s existing placement capacity (Listing Rule 7.1 and Listing Rule 7.1A).
READ: Far East Gold attracts major Chinese miner Xingye as strategic partner with A$14 million investment
Deep expertise
This investment is a major shot in the arm for Far East Gold as Shenzhen-listed Xingye, which has a market capitalisation of more than A$4 billion is the largest silver producer in China, one of the largest silver producers in the world and China’s second largest tin producer.
Along with the significant investment, FEG, which is primarily focused on gold and copper in Indonesia, is expected to benefit from Xingye’s deep technical expertise in bringing greenfield projects through to production.
Far East Gold CEO Shane Menere said: "Partnering with one of China’s most successful precious metals producers validates the potential of FEG’s portfolio of world-class assets and gives the company a clear pathway through to project development in 2025.”
Xingye’s business
Xingye’s main business is non-ferrous metal mining and smelting, operating a full mining industry chain from geological exploration, mining, mineral processing to smelting of silver and tin.
In addition, it has also been actively exploring for copper and gold in Russia, Kyrgyzstan, Laos, Indonesia and Africa for the past five years.
The company, which has 13 subsidiaries and 1 partnership enterprise, has diverse mineral resources and rich reserves with the main products being silver, tin, lead, zinc, copper, iron, bismuth, tungsten, antimony, gold and other non-ferrous metals, precious metals and ferrous metals.
With completion of tranche 2, Xingye is also entitled to nominate one director for appointment to Far East Gold’s Board of Directors.