18 Nov 2009 10:48

Zhongjin Lingnan to increase stake in Perilya

Shanghai. November 18. INTERFAX-CHINA - Shenzhen Stock Exchange-listed Zhongjin Lingnan Nonfemet Co. Ltd., one of China's top zinc smelters, will increase its stake in Australian Securities Exchange-listed Perilya Ltd., a lead and zinc miner, from 50.1 percent to 52 percent, Zhongjin Lingnan announced on Nov. 18.

Zhongjin Lingnan will spend about AUD 32 million ($29.78 million) to purchase 75.89 million of the 131.52 million new shares that Perilya issued to raise AUD 55 million ($51.18 million), to fund mining exploration and construction projects, according to the statement. Perilya operates three major base metals projects in the Australian mining regions of Broken Hill, Flinders and Mount Isa.

Zhongjin Lingnan said the purpose of the new capital is to help Perilya expand its annual production capacity of lead and zinc concentrate, which would increase Zhongjin Lingnan's own supply of lead and zinc concentrate supply in the future.

Perilya saw the ore reserves of its Broken Hill lead and zinc project grow to 12.86 million tons as of June 30, with the ore grades at 6.0 percent for zinc, 4.5 percent for lead and 48 grams for silver, per ton.

Zhongjin Lingnan bought a 50.1 percent stake in Perilya in December 2008. Zhongjin Lingnan President Zhang Shuijian previously told Interfax that Perilya could start supplying his company with lead and zinc concentrate in 2010.

Zhongjin Lingnan's share price rose to RMB 29.35 ($4.30) in Shenzhen, up 0.52 percent from previous trading day.