Hong Kong-based CDH Investments has teamed with Vancouver’s Eldorado Gold Corporation to invest in China’s Eastern Dragon Project, according to a statement.
Eastern Dragon, a gold mine based in Northeast China’s Heilongjiang Province, is already 95 percent-owned by Eldorado. CDH will acquire a 20 percent stake from the Canadian firm’s Hong Kong-based subsidiary Sino Gold Tenya for $40 million in cash.
The gold mine, which can produce a potential 70,000 ounces of gold a year, with an expected mine-life of 11 years, has been on “care and maintenance”, a term used to describe a mine site that has been closed but has potential to reopen at a later date.
CDH’s investment is expected to allow the mine to reopen and return to full production, according to the statement.
“We are pleased to partner with CDH in Eastern Dragon and look forward to a long term mutually beneficial partnership,” Paul Wright, chief executive officer of Eldorado, commented.
CDH did not respond to requests for further comment.
The deal comes just weeks after CDH closed its fifth private equity vehicle oversubscribed on $2.55 billion. The new vehicle launched and made a first close on about $800 million in February 2013, quickly raising more than $200 million in commitments shortly after, PEI reported earlier.
A source told PEI at the time that CDH’s success was due to its ability to “[make] more money during tougher times” and that LPs are increasingly looking for “a direct allocation to China so they know they are getting exposure to China”.