China Hongxing Sports might see gold mining as its main business as it heads toward a reverse takeover (RTO) allowing it to enter the gold mining industry in the Philippines.
The firm announced on March 25 that it has entered into an agreement with Singapore’s Mining and Minerals Industries Holding Pte Ltd (MMIHPL). Based on the agreement, China Hongxing is said to acquire all issued and paid-up share capital of MMJV Pte Ltd.
MMJV, incorporated on March 22, is a holding company of two joint-venture companies.
One joint-venture company, between KC Development Phils and MMIHPL, owns a gold-mine project comprising 3,619 hectares, located in the provinces of Isabela and Nueva Vizcaya. The other joint-venture company, between Wolfland Resources and MMIHPL, owns a gold-mine project located in the province of Misamis Oriental comprising 761 hectares.
$ 100 million is the cost of acquisition with the valuation set up by the Independent Qualified Person’s Valuation Report, less the discount rate between the parties.
This will be financed by the allotment and issuance of new ordinary shares to the vendor at an issue price of 0.357 Singapore cent per consideration share.
Every 100 shares will be consolidated into one share on or before the acquisition is completed.
Meanwhile, the consideration shares and issue price are computed without having taken into account the completion of the proposed share consolidation.
China Hongxing said that the RTO is also a way for the group to remain listed as it will allow it to apply for an extension of time to remove its cash company status.
