(Yicai) Jan. 29 -- Shandong Gold Mining, a unit of Chinese state-owned enterprise Shandong Gold Group, plans to purchase China’s largest single gold mine from one of its affiliate companies for about CNY10.3 billion (USD1.4 billion).

Shandong Gold Mining will buy the prospecting rights of the Xiling gold mine in Laizhou, China’s eastern Shandong province, from Shandong Gold Geological and Mineral Exploration, a unit of Shandong Gold Group, the Jinan-based buyer announced on Jan. 26.

The Xiling mine has estimated gold reserves of 592 tons, 444 tons of which can be mined, and 591 tons of silver reserves, Shandong Gold Mining noted, adding that the mine’s detected mineral resources totaled about 147 million tons.

Shandong Gold Mining predicted that the Xiling mine can process 3.3 million tons of minerals every year for 36 years. The mine has not yet kicked off production.

Shandong Gold Geological and Mineral Exploration assured the mine can bring Shandong Gold Mining annual net profits of around CNY2.3 billion (USD320.5 million) between 2031 and 2033, the buyer said. If the mine fails to reach such figure, Shandong Gold Geological and Mineral Exploration will compensate Shandong Gold Mining.

After the acquisition, Shandong Gold Mining will integrate the prospecting rights of the Xiling mine with those of the neighboring Sanshandao gold mine, which is also owned by the company, and simultaneously allocate resources to develop the two mines, Shandong Gold Mining pointed out.

Shares of Shandong Gold Mining [SHA: 600547] closed 0.5 percent up at CNY20.75 (USD2.89) in Shanghai today, after earlier gaining as much as 2.3 percent.

Editor: Futura Costaglione