China Gold Poised for Bolivian Reserves

(Beijing) – State-owned China National Gold Group, the country's largest gold producer, is planning to apply for mining rights in Bolivia to explore gold mines in the country, as part of the company's effort for expanding its overseas investments.

Song Xin, vice general manager of China Gold said on July 25 that a subsidiary of China Gold has signed a contract to offer technology services for a mining project in Bolivia.

China Gold has also conducted a review on a gold mine in the Democratic Republic of Congo, and a related evaluation is underway, according to Song.

In another effort, China Gold and Russia-based Renova Group have signed a memorandum of understanding for future cooperation in mining exploration and project operation earlier this month. Detailed terms of the partnership will be worked out soon.

According to Song, China Gold will continue its gradual investment expansion in the overseas market with top priority in neighboring countries in consideration of lower transportation costs and cultural proximity, and the second priority for investment will be countries with well-developed mining industry such as the United States, Canada and Australia.

"We are active in overseas investment but remain cautious in each individual project," said Song, adding that the company will not only consider the quality of the resource but also the target country's political stability and investment environment when conducting investments aboard.

In May 2005, China Gold acquired Canada-listed Jinshan Gold Mines and renamed it as China Gold International Resources Co. to become China Gold's overseas investment vehicle.

In the first half of this year, China Gold reported sales revenues of 27.67 billion yuan, up 98 percent from the same period last year. The first half operating profit was 1.55 billion yuan, a year-on-year rise of 300 percent. The company expects to realize annual revenues of 50 billion yuan.