SINGAPORE - Gold producer CNMC Goldmine Holdings on Friday (Jan 20) inked an agreement with the Kelantan state government to acquire a majority stake in a Malaysian mining company.
Under the deal, CNMC will buy over a 51 per cent stake in the firm Pulai Mining for RM13.8 million (S$4.4 million) in cash.
The deal was first announced by CNMC in June last year as a non-binding letter of intent.
The Catalist-listed company said in a statement it has "satisfactorily completed" its due diligence investigations on Pulai Mining, which owns a brownfield project in Kelantan that can potentially yield gold, iron ore and feldspar.
It is on track to complete the acquisition, and is set to expand its mining footprint in Malaysia by nearly five times when the process is completed.
The brownfield project spans 38.4 sq km and is nearly four times the size of CNMC's flagship Sokor gold field in Kelantan.
Pulai Mining has 11 exploration and mining licences in the north-eastern Malaysian state, where Singapore-based CNMC is one of the largest foreign investors.
The remaining 49 per cent of Pulai Mining is owned by Kelantan State Economic Development Corporation, Sumberjaya Ventures, Centurion Resources and CM Strategic Holdings.
CNMC chief executive Chris Lim said: "This is a major milestone for CNMC. Just as we managed to turn Sokor into a gold-producing mine after several years of exploration work, we hope we can do the same for the Pulai Mining project, and hopefully within a shorter time frame. The prospect of being able to produce not just gold but also iron ore and feldspar makes this project all the more exciting."
CMNC has produced more than 100,000 ounces of fine gold at Sokor since 2010, when it achieved its first gold pour. Output at Sokor reached 31,206 ounces in 2015, the most in any given year since the mine started production.