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Sino Gold Successfully Completes A$170 Million Placement

Tuesday, December 18th, 2007

Sino Gold announces that it has successfully completed an A$170 million placement through the issue of 26.46 million ordinary shares to institutional investors (“Placement”). There was very strong demand for the Placement which was heavily over subscribed.
The Placement was conducted through a bookbuild process joint lead managed by Macquarie Equity Capital Markets and Merrill Lynch with a final price of A$6.45 per share. The final price represents a 4.4% discount to the closing price of Sino Gold shares of A$6.75 on the day immediately prior to the announcement of the Placement. Austock Corporate Finance acted as broker to the issue.
Commenting on the Placement, Mr Jake Klein, CEO of Sino Gold said:
“The support by new and existing shareholders for the Placement is a strong endorsement of the Company’s strategy and leading position in China’s gold industry.
“The successful execution of the Placement provides the financial resources to progress Eastern Dragon and Beyinhar towards becoming Sino Gold’s third and fourth gold mines after White Mountain and Jinfeng.”
The Placement will be settled in two tranches:
– Unconditional Tranche: 9.79 million shares to be settled on 19 December 2007;
– Conditional Tranche: 16.67 million shares which will be settled subject to approval at an extraordinary general meeting of Sino Gold shareholders, expected to be held on 24 January 2008.
The shares were allotted to a range of institutional investors globally and to Sino Gold’s major shareholder, Gold Fields Limited. A total of 4.36 million shares were allotted to Gold Fields Limited.
The funds raised by this A$170 million placement are planned to be used as follows:
– Eastern Dragon acquisition and ssociated costs ~A$105 million;
– Eastern Dragon exploration and working capital ~A$5 million;
– Construction, pre development, feasibility and exploration of various assets including Beyinhar, Nibao, Biogold and White Mountain along with general working capital ~A$40 million; and
– General working capital and exploration and development of other existing assets ~A$20 million.
The Stock Exchange of Hong Kong requires disclosure in relation to the HK$894.15 million raised by the Company in its Initial Public Offering (IPO) in March 2007. Of the funds raised a total of HK$749 million has been used as anticipated, with the funds remaining still allocated to the Jinfeng underground pre-production development.
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