SHANGHAI, Jul. 4 (SMM) – The slump in gold prices has little impact on Shandong Gold’s restructuring plans, the leading Chinese producer of the precious metal said today.
``Some media outlets have overwhelmingly reported on bearish views of gold prices in the market,’’ Shandong Gold Mining Co. told Shanghai Stock Exchange on Thursday, July 4. However, ``…all forecasts (for gold prices) have bias and onesideness,’’ it said.
As reference for projected sales prices of gold in its restructuring plan, the company used the prices on Shanghai Gold Exchange, it said. The average price of the No. 2 gold between January, 2010 and March, 2013 was 313.01 yuan ($50.6) per kilogram, it added.
The precious metal has shed about a quarter of its value in the last three months as investors have sold gold because its appeal as an inflation hedge and a weaker dollar has diminished.
Gold slipped below $1,200 an ounce on Friday, June 28, to a level below some producers' production costs.
The fact that Shandong Gold planned to buy its parent’s assets with stock issuance instead of cash also made gold prices fall irrelevant, the company said in today’s statement.
Shandong Gold planned to issue stocks to buy Shandong Gold Group’s stakes in several mining units, exploration and mining rights, it announced in a filing to Shanghai Stock Exchange on Saturday, June 29.
It also planned to issue stocks to no more than ten investors to raise no more than 3 billion yuan to be used in the restructuring, it said.