Loading ...China Goes Shopping for World’s Gold Mines
from Truth in Gold Chinese gold miners are aggressively scouting for overseas acquisitions, encouraged by historically low gold prices that could help them scoop up assets cheaply. Though gold prices have risen by more than 16% since hitting a six-year low in December, the metal has still been trading close to levels last seen in 2010, in a range of roughly $1,220 to $1,240 a troy ounce. China is the world’s largest gold consumer and producer, but only a few Chinese companies, such as Zijin Mining Group Co., have ventured abroad to buy mines, unlike their counterparts in industrial metals. If cash-rich Chinese gold miners embark on an asset-buying spree, China could reduce its dependency on other international producers for supplies and increase its heft in global gold markets. A period of low gold prices also means Chinese companies may have more options to buy because several mining companies are facing credit crunches and have huge debts. “China has five to six gold companies. I have been in touch with all of them, and they all have plans for increasing assets overseas,” said Peter Grosskopf, chief executive officer of Sprott Asset Management, a Toronto-based company that manages assets including physical bullion trusts. He said the Chinese companies are well-capitalized and better positioned than their North American counterparts. Sprott has set up a partnership fund with China’s leading gold company, Zijin Mining Group, which is called the Zijin Sprott Fund, with the aim of buying overseas gold assets, Mr. Grosskopf said. “The expansion [opportunities] are better globally than in China.” The interest in gold mines comes amid a recent surge in overseas deal-making by Chinese companies. –
cont. http://thedailycoin.org/china-goes-shopping-for-worlds-gold-mines/2016/04/11/