G-Resources Group, the Hong Kong-listed mining company backed by BlackRock, is seeking to buy gold projects in Asia and Australia to lift annual output to 1 million ounces within five years.
"We want to make it a world-class gold company, Asia-based and focused," Chief Executive Officer Owen Hegarty said today in an interview.
"We will be increasing our resource base, we will be looking at acquisitions."
Achieving 1 million ounces would make G-Resources one of the larger Asian producers, still well behind the worlds biggest producer Barrick Gold Corp., which said it would produce as much as 7.6 million ounces this year.
Global demand for the precious metal rose 38 percent in the first quarter, the World Gold Council said in May.
G-Resources will close a HK$4.55 billion ($587 million) stock sale tomorrow with BlackRock Investment Management Ltd becoming the biggest shareholder with a 9 percent stake.
The company, whose main asset is the Martabe gold and silver project in Indonesia, will consider selling shares in Australia and may seek an acquisition there, Hegarty said.We would always look at that, he said. If we did some sort of acquisition it may come with a listing.
G-Resources fell 19 percent to 44 Hong Kong cents. The company is selling 13 billion new shares at 35 cents.
The stock slumped 66 percent on June 30, the last trading day prior to today, as some of the new shares started trading, Hegarty said.
Gold for immediate delivery has risen 6.4 percent this year, trading at $938.92 an ounce at 12:44 p.m. in Sydney.
"We want to be at 500,000 ounces per annum within three years and we want to be at 1 million ounces per annum within five years because youve got to have scale," he said.
Hegarty, who identified Martabe when he was CEO of Australian mining company Oxiana Ltd, bought $30 million in shares in the sale and is one of the 10 largest holders, he said.
Bennelong Asset Management LLP will be the second-largest holder with a stake of between 6 percent and 7 percent, Hegarty said.
The share sale will fund the $221 million acquisition of the Martabe gold and silver project in Indonesia from OZ Minerals Ltd, the company that Hegarty left when it was formed by the merger of Oxiana and Zinifex Ltd last year.
Oxiana bought Martabe from Agincourt Resources Ltd in 2007.It will also fund the $285 million construction costs for the mine and plant.
The mine is expected to start by the end of next year and produce more than 200,000 ounces of gold annually.
G-Resources will have cash of about $100 million following the sale which it will use to boost exploration near Martabe and target new projects in Indonesia, Malaysia, Thailand, Cambodia, Laos, Vietnam, China, Philippines, Australia, he said.
G-Resources will consider buying projects that contain silver and copper while remaining gold-focused, Hegarty said.
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