Far East Gold has entered into a conditional share placement agreement with Hsing Yip Gold (Hong Kong) Mine for a strategic investment.
The deal, totalling over $14 million, will see Hsing Yip Gold acquire a 19.99% stake in the company across three tranches at 20 cents per share.
The price represents a 47% premium compared to Far East Gold's recent share placement and purchase plan, and a 21% premium to the last traded price.
Hsing Yip Gold is a subsidiary of Inner Mongolia Xingye Silver & Tin Mining, a major Chinese mining firm listed on the Shenzhen Stock Exchange with a market capitalisation exceeding $4 billion.
"This transaction marks the logical next step for FEG, following recent announcements around the pending Idenburg acquisition which triggered several approaches from strategic investors," said Shane Menere, CEO of Far East Gold.
"We are delighted to welcome Xingye as a strategic partner because it ticks all our boxes – significant funding, deep technical expertise and full alignment with our strategic goals for our portfolio of high-quality assets," Menere added.
The agreement's three tranches are designed to progressively increase Hsing Yip Gold’s shareholding while adhering to ASX regulations.
Tranche 1 targets a 9.99% share capital acquisition, while Tranches 2 and 3 aim to increase the holding to 19.99%, subject to regulatory and shareholder approvals.
"Far East Gold's portfolio represents a perfect fit for Xingye's competencies around bringing highest-quality greenfield projects all the way through to production. We are looking forward to working closely with the Far East Gold team to achieve this," said Shucheng Zhang, CEO of Xingye.