Monday, 16th January 2006 (3273 views)

China's second largest gold producer, Lingbao Gold, claims it now owns the largest gold smelting facility in the country after expanding its processing capacity.

The firm's base in the Henan Province can now process 800 tons of gold a day, enabling it to produce 14 tons of the yellow metal annually.

The increased capacity also allows it to churn out 41 tons of silver, 208,000 tons of sulphuric acid and 8,000 tons of electrolytic copper a year.

The company is currently attracting huge demand for its US$110 million Hong Kong initial public offering, which it would mainly use to expand mining capacity.

The institutional chunk of the IPO is rumoured to be oversubscribed by 50 times, with 900 as many retailer investors as needed also wanting on board, according to Reuters.

The company generates 80 per cent of its profits from melting and 20 per cent from mining.

Analysts expect Lingbao's stock to soar in its first days on the stock market due to the current high demand for gold among affluent Indian and Chinese investors and central banks.

 

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