SYDNEY, August 18 – Australian companies could take advantage of significant cost savings operating in the “emerging story” of the resources sector, China, the head of an Australian gold producer said today.
Sino Gold Ltd (ASX:SGX) chief executive Jake Klein today said the miner, which is based in Sydney but operates all of its mines out of China, had recognised many cost advantages operating in the Asian nation.
“Everything from consumables to engineering, to your operators are at a cost advantage,” Mr Klein told AAP.
“China is the manufacturing centre of the world for good reason and basically mining is about manufacturing so there is no big difference and the same cost advantages apply.”
Sino Gold currently produces about 100,000 ounces of gold annually at a cash operating cost of $US175 per ounce from its main mine in Jianchaling.
It owns three other gold projects in China, Jinfeng in the Guizhou Province, Jinkang in the Sichuan Province and an exploration joint venture in Shandong Province.
The Jinfeng mine is at the early stages, with full scale gold production not expected until 2005.
Mr Klein said Sino Gold was due to report its half yearly results later this month and would provide a market update on the Jinfeng operation.
“Jinfeng is really turning out to be a world class asset and we are drilling there extensively, our update will definitely take the resource up to two million ounces,” he said.
Meanwhile, Mr Klein said he had received a number of letters from non-government organisations in opposition to Sino Gold’s Jinkang mine, which is in eastern Tibet.
One of the concerns raised has been that a foreign company operating a mine in the area may open the floodgates for other foreign miners to move into Tibet.
“We are at the early stages of exploration (at Jinkang),” Mr Klein said.
“We believe local engagement is better than total isolation and if at some point the Australian government decided to put sanctions on China and request that Australian businesses did not go into those areas, we would meet those requirements.”
Sino Gold was incorporated in 2000 after being spun off from Sino Mining International Ltd, a 100 per cent Chinese government-owned entity.
It listed on the Australian Stock Exchange on December 3, 2002.
