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Mallesons advises Chinese on Qld gold investment
Mallesons has advised the Chinese corporation, Reignwood International Investment, on its agreement to invest $50m into Citigold to fund the development of its Queensland gold mine.
The New Lawyer
Mallesons Stephen Jaques has advised the privately owned Chinese corporation, Reignwood International Investment Group, on its agreement to invest $50 million into Citigold to fund the development of its 10 million ounce gold mine at Queensland's Charters Towers.
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Hemming & Hart lawyers acted for Citigold.
Under the deal, Reignwood will initially subscribe for 274 million fully paid ordinary shares at 9 cents per share to raise $24.66 million, securing them a 19.9 per cent stake in Citigold.
Citigold will also seek shareholder approval to issue a three-year convertible note valued at $25 million which can be converted in to fully paid ordinary shares in Citigold for 12.45 cents per share at any time during the three year period.
Following receipt of the placement funding by Citigold, Reignwood will be entitled to nominate three directors to the Citigold Board. Following shareholder approval of the Convertible Note issue, an additional Reignwood representative will be invited to join the Board which will then comprise a total of 7 Directors.
The funds raised will be used to transform Citigold’s 10 million ounce Charters Towers gold deposit into a world class large-scale gold mine with significant annual gold production through re-commissioning the Central mine and expanding operations at the Imperial site.
Citigold's managing director Mark Lynch said the company now has the platform to elevate itself into a major Australian gold producer, The Wall Street Journal reports.
"This funding gives us the catalyst to successfully exploit [the ore body]," he said in a statement. He said the transaction is potentially "company transforming".
Reignwood is a diversified investment group with investments in energy and resources, food and beverages and real estate and has operations in Mainland China, Hong Kong, Singapore and the UK.
The Mallesons team was led by partner Craig Semple, who was supported by solicitors Shelley Goldwasser and Daiwei Shi.
This is the latest in a number of cross-border gold deals the firm has acted on.
Mallesons previously advised Canadian Goldminer, Goldcorp, on its acquisition of all outstanding shares in Andean Resources for $3.7 billion. We also represented a Chinese consortium, including Baiyin and the China Africa Development Fund) on its strategic investment in the ASX-listed Gold One International Limited.
