[TORONTO] Eldorado Gold Corp, the largest foreign producer of gold in China, agreed to sell its remaining assets in the country for US$600 million to focus on developing mines in Europe.
The Vancouver-based company will sell its interests in the White Mountain and Tanjianshan mines and the Eastern Dragon project to Yintai Resources Co in a cash deal expected to close in the second half, it said Monday in a statement.
Eldorado, which also has mines and projects in Turkey, Greece, Romania and Brazil, said it will use the proceeds from China to grow its business.
"We look forward to closing the sale of both transactions and advancing our internal project pipeline," chief executive officer Paul Wright said in the statement.
The company's shares rose 3.6 per cent to C$6.56 at 11:30 am in Toronto. Gold for immediate delivery, up 0.1 per cent on Monday, has surged 20 per cent this year.
In 2014, Eldorado said it would consider selling or spinning off its portfolio of Chinese assets. Since then, the miner has periodically said these efforts were continuing and last month announced the sale of its stake in the Jinfeng mine to a unit of China National Gold for US$300 million. That deal is expected to close in the third quarter.
"I think they were a little bit dismayed about how difficult it was to operate in China," Barry Allan, an analyst at Mackie Research Capital Corp, said by phone from Toronto. "It's not so much about the balance sheet as it is about trying to limit their jurisdictions of operations."
Mr Allan said the US$600 million price was better than he expected.