ID :
20732
Tue, 09/23/2008 - 12:59
Auther :
Shortlink :
https://oananews.org//node/20732
The shortlink copeid
Dubai Group buys major stake in gold company
Dubai, Sept 23, 2008 (WAM) Dubai Group, an investment arm of Dubai Holding, has acquired 18 per cent of Australian gold mining firm Citigold in its first precious metals sector acquisition that also marks the group's entry into Australia according to a report in ‘Gulf News.
The capital raising deal is worth A$35 million ($29.4 million, Dh107.90 million) and could make Dubai Group the single largest shareholder in Citigold, which has an estimated 10 million ounces in ore deposits at Australia's richest Charters Towers goldfield in the country's north-east.
Citigold Corporation Limited, which is listed on the Australian Stock Exchange and Dubai International Financial Exchange, said the deal, made through Dubai Group subsidiary Dubai Ventures Group, will be implemented through a securities placement in stages.
Dubai Group will initially invest A$10 million when a placement of 50 million shares at 20 cents per share will be carried out. It will be followed by an investment of A$15 million in a loan that is convertible into shares of the company at 26 cents per share within two and half years. Dubai Group also has an option to invest a further $10 million in Citigold shares at 26 cents per unit.
Citigold has more than 678 million outstanding shares at present and about 70 investors from the region hold its stock.
Abdul Hakeem Kamkar, chief executive officer of Dubai Ventures Group, said the current market turmoil presents good opportunities for diversifying investments and Dubai Group hopes to benefit from them.
"Mining is an important sustainable industry in both emerging markets as well as developed markets like Australia. Our investment in Citigold stems from our confidence in the continued growth of this industry and in the demand for gold," he told Gulf News.
Mark Joseph Lynch, managing director of Citigold, said with Dubai's being a major consumer of gold and Australia being a leading producer, the investment represents a 'natural alliance' between the two.
The capital injection is expected to boost Citi-gold's production capabilities. Citigold expects to ramp up its production to 250,000 ounces per annum by 2011.
The capital raising deal is worth A$35 million ($29.4 million, Dh107.90 million) and could make Dubai Group the single largest shareholder in Citigold, which has an estimated 10 million ounces in ore deposits at Australia's richest Charters Towers goldfield in the country's north-east.
Citigold Corporation Limited, which is listed on the Australian Stock Exchange and Dubai International Financial Exchange, said the deal, made through Dubai Group subsidiary Dubai Ventures Group, will be implemented through a securities placement in stages.
Dubai Group will initially invest A$10 million when a placement of 50 million shares at 20 cents per share will be carried out. It will be followed by an investment of A$15 million in a loan that is convertible into shares of the company at 26 cents per share within two and half years. Dubai Group also has an option to invest a further $10 million in Citigold shares at 26 cents per unit.
Citigold has more than 678 million outstanding shares at present and about 70 investors from the region hold its stock.
Abdul Hakeem Kamkar, chief executive officer of Dubai Ventures Group, said the current market turmoil presents good opportunities for diversifying investments and Dubai Group hopes to benefit from them.
"Mining is an important sustainable industry in both emerging markets as well as developed markets like Australia. Our investment in Citigold stems from our confidence in the continued growth of this industry and in the demand for gold," he told Gulf News.
Mark Joseph Lynch, managing director of Citigold, said with Dubai's being a major consumer of gold and Australia being a leading producer, the investment represents a 'natural alliance' between the two.
The capital injection is expected to boost Citi-gold's production capabilities. Citigold expects to ramp up its production to 250,000 ounces per annum by 2011.
