Central China Goldfields (AIM: GGG) said today it was in the market for gold and copper assets in Southeast Asia, looking to spend the cash it derived from the recent sale of its Nimu copper exploration project in China.
In a letter to shareholders, Central China’s newly appointed chairman Peter Ruxton said the company was searching “underdeveloped and undervalued” projects, focusing on Southeast Asia (outside of China), looking for “stable, mining friendly jurisdictions” and aiming to advance towards feasibility and project development in 12-18 months.
The main focus remains on gold, copper and ferrous metals projects.
The company is looking to make the move once it receives the proceeds from the sale of its Chinese assets, which is expected in the next six months.
Central China has been looking for a new direction since selling its 30% stake in the Nimu copper-molybdenum project to its local joint venture partner, state owned Sichuan Bureau of Metallurgy and Geological Exploration (SBMGE), which desired to take full responsibility for the development of Nimu and bought out Central China’s stake for £6.43 million. The sale is expected to boost the company’s cash reserves to £4.5 million, compared to its market capitalization of £3 million. The first payment of about £1.8 million was received in August.
The statement came just a week after Central China’s largest single shareholder Obtala Resources (AIM: OBT), which also owns 29% of Kopane Diamonds (AIM: KDD), increased its stake in the company to 7.29%.
The company added 2% on the news this morning.