CDB Hong Kong Branch provides $300 million term loan to Shandong Gold Mining Co., Ltd. for the acquisition of the Veladero Mine (Linked to Project ID#85389, #69238, #69239)

In April 2017, Shandong Gold Mining Co., Ltd entered into a Share Purchase Agreement with Barrick Gold and Barrick Cayman worth $989.8 million (adjusted upward from $960 million) to acquire a 50% stake of Veladero gold mining project from Barrick Gold Corporation soon after an environmental accident severely affected the reputation of the Canadian mining group. Shandong Gold Mining Co., Ltd completed the acquisition of a 50% interest in Veladero Mine on June 30, 2017. To provide funds for the Veladero Acquisition, Shandong Gold Mining Co., Ltd utilized the following capital sources: (i) a syndicated term loan of $960 million (as captured via Project ID#69238 and #69239); and (ii) a 3-year term loan of $300 million from the China Development Bank Hong Kong Branch. The interest rate of the syndicated term loan was LIBOR plus 1.25%, and the interest rate of the term loan from China Development Bank was LIBOR plus 1.23%. The Veladero mine is located in San Juan province and it has probable reserves for 6.7 mm ounces (3.3 mm proved), and it is expected to produce as much as 830,000 ounces of gold per year Shandong Gold Mining (Hong Kong) Co., Limited (“SDG Hong Kong”) was the borrower of the CDB term loan. It is a wholly-owned subsidiary of Shandong Gold Mining Co., Ltd. . SDG Hong Kong was also the entity in charge of implementation of the acquisition of the Veladero gold mine project in Argentina on behalf of its parent company (Shandong Gold Mining Co., Ltd). On January 24, 2019, SDG Hong Kong proposed to apply to China Development Bank Hong Kong Branch (“CDB Hong Kong Branch”) for an operation capital loan in an amount of $200 million for a financing term of one year (as captured via Project ID#85389). Under the approved agreement, SDG Hong Kong also agreed to provide a guarantee for the loan.

Additional details

1. The all-in interest rate was estimated using the average 6 Month LIBOR rate in June 2017 (1.432%) + 1.23% = 2.662%. 2. According to the 2018 Interim Report, the term loan facility agreement from CDB was dated June 22, 2017.

Number of official sources

5

Number of total sources

7