Commodities & Metals
Is Eldorado Gold Smart to Leave China?
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If you have watched financial news and economics reports for a couple of decades or more, you might think it sounds crazy for any company to leave China. That isn’t the case for all sectors, and mining and producing gold may be done cheaper elsewhere in the world.
News was out on Monday that Eldorado Gold Corp. (NYSE: EGO) was exiting China. This is after being in China for 11 years. Eldorado is selling its stakes in two Chinese mines and a development project, and the announced sale is expected to close in the second half of 2016, subject to approvals.
A company named Yintai Resources is paying some $600 million in cash to pay for the transaction. Eldorado’s stakes were 95% in White Mountain and 90% in Tanjianshan. It held a 75% stake in the Eastern Dragon project. Eldorado Gold previously was reported to be considering a sale of its assets in China, or even listing the shares in Hong Kong or seeking another spin-out.
Eldorado first went into China back in 2005, with production starting the following year. It acquired Sino Gold in 2009, which gave it the Jinfeng and White Mountain projects.
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