China Development Bank Hong Kong Branch pledges $200 million USD capital loan to SDG Hong Kong for operation of Veladero Gold Mine (linked to #62557)

On January 24, 2019, Shandong Gold Mining (Hong Kong) Co., Limited (“SDG Hong Kong”, "the Company"), the entity in charge of implementation of the acquisition of the Veladero gold mine project in Argentina released an overseas regulatory announcement approving the "Proposal Regarding Provision of Guarantee by the Company for the Financing of a Wholly-owned Subsidiary in Hong Kong". In order to solve the operating capital requirements, 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 US$200 million for a financing term of one year. Under the approved agreement, SDG Hong Kong was to provide a guarantee for this loan. Under the approved guarantee agreement, SDG Hong Kong will enter into a “Contract on Issuing a Letter of Guarantee” (開立保函合同) with China Development Bank Shandong Branch (“CDB Shandong Branch”), in which CDB Shandong Branch shall issue a letter of guarantee regarding a maximum compensation amount of US$210 million for the overseas loan in an amount of no more than US $200 million owed by SDG Hong Kong to CDB Hong Kong Branch. The Company, as the counter-guarantor, and the CDB Shandong Branch, entered into the Contract on Counter-guarantee for the Contract on Issuing a Letter of Guarantee by China Development Bank (Guarantee) (《國家開發銀行開立保函合同反擔保合同（保證）》) in relation to provision of a counter-guarantee for the aforementioned letter of guarantee issued by CDB Shandong Branch. The pledged $200 million operation capital loan as captured in this project is different from the CDB Term loan to support this Veladero acquisition in 2017 which is detailed in Project ID #62557).

Additional details

SDG Hong Kong a wholly-owned subsidiary of Shandong Gold Mining Co., Ltd.

Number of official sources

3

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