November 21, 2019 / 4:31 AM / 22 days ago

Australia's Vango Mining gets gold project funding from Chinese miner

Nov 21 (Reuters) - Vango Mining Ltd on Thursday entered into a deal with a Chinese mining company to help develop Vango's Marymia gold project in exchange for a stake in the gold miner.

Under the deal, Vango's gold project in Western Australia will get around A$70 million ($47.54 million) in financing from China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd.

The Chinese miner will also provide engineering and construction services for the project.

In return, Sydney-based Vango would issue A$13 million worth of its shares to China Nonferrous at A$0.35 per share, which represents a 141% premium to the stock's last close.

Upon closing of the deal, China Nonferrous, which is engaged in mining and smelting of non-ferrous metals, will hold a 5.6% stake in Vango, based on the offer price, according to Reuters' calculations.

The deal also allows China Nonferrous to maintain its percentage ownership and participate in any future Vango equity raising.

Vango's shares rose as much as 6.9% to A$0.155, in its best session since Sept. 24, following the announcement.

$1 = 1.4723 Australian dollars Reporting by Nikhil Subba in Bengaluru; Editing by Shailesh Kuber

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