Friday, 7th March 2008 (2433 views)

Chinese mining firm Zhongjin Gold has reportedly announced plans to buy a mining company in Shaanxi province that holds the exploration rights to a deposit that hosts 81 tonnes of gold.

News service Reuters says the deal will be worth 900 million yuan, equivalent to $126.7 million or £62.8 million.

Zhonjin says it is pursuing the deal to boost its domestic mineral reserves in light of gold's bullish market performance.

According to the service, Zhonjin estimated that these strong market conditions helped to increase its net profits for 2007 by more than 50 per cent.

The company's other operations include the Yuerya gold mine in Hebei province. Mining in this area dates back to 1887.

Total gold production from the Yuerya mine exceeded the one-tonne of gold mark in 1997 and Zhonjin began a new production run at the site in 2000.

 

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