Companies: AGLD    RDG   

Chen Jinghe, chairman of £2.7 billion Chinese gold and copper group Zijin Mining, is poised to set his stamp on the London market as Zijin takes key stakes in two AIM-quoted mining companies. Zijin is taking 20 per cent of platinum hopeful Ridge Mining by spending £8.2 million on new shares at 45p and taking warrants to subscribe for more at 70p, nearly twice Ridge’s present price of 39p.

Ridge is pursuing platinum group metal projects in South Africa’s Bushveld. At the same time, Hong Kong-quoted Zijin has paid £7.5 million at well above today’s 17p AIM price for ten per cent of Australian counter Allied Gold. Zijin, which last year bought 25 per cent of Canada’s Pinnacle Mines, sees these two latest investments as part of its overseas expansion drive.

The Chinese group, which holds 39 per cent of Tibet’s extensive Yulong copper reserves, operates the Zijnshan open-pit gold mine in Fujian province and the Ashele copper mine in Xinjiang and last year produced 491,000 oz of gold and nearly 20,000 tonnes of copper. Ridge will use the Zijin money to develop its projects at Blue Ridge, where it hopes to start annual 125,000-oz production in 2008, and Sheba’s Ridge, with an estimated resource of 1.4 million tonnes of nickel and 19 million oz of platinum group metals.

Allied Gold, which floated on AIM in May, is focused on gold prospects in Papua New Guinea. Chairman Mark Caruso is also managing director following June’s resignation of Wayne Loxton.

Chen Jinghe says the Blue Ridge investment ‘is an important step’ in Zijin’s overseas expansion strategy. It could also make sense in price terms: Zijin’s interest has perked up Ridge’s bombed-out shares 20 per cent already.