(Yicai) Feb. 26 -- Yintai Gold, a Chinese precious metals miner, said it plans to invest CAD368 million (USD272 million) to acquire Canadian gold exploration company Osino Resources and fund its ongoing operations at a major mining project in Africa.

Yintai Gold plans to buy all of Osino's shares at CAD1.90 (USD1.41) apiece through its Canadian unit, the Beijing-based firm announced today. 

Osino is listed on the Toronto Stock Exchange, the Namibian Stock Exchange, the Frankfurt Stock Exchange, and the OTCQX international market in the United States.

Osino's portfolio will consist of only gold-related assets located in Namibia, mainly the Twin Hills Gold Project and exploration projects in Ondundu and Eureka, according to the Vancouver-based company.

Twin Hills is an open pit with an investment of about USD365 million for construction work. Gold output over the mine's 13-year life is likely to reach an annual average of 162,000 ounces, with an expected production cost of just over USD1,000 per ounce, according to the Twin Hills Definitive Feasibility Study released last June.

Osino was insolvent by the end of last September, with minus net assets of about USD1.9 million, Yintai Gold noted, citing the target firm's latest unaudited asset data. It had no revenue in the first nine months of last year, with a consolidated loss of USD11.2 million.

The Twin Hills Gold Project was initially scheduled to begin construction in July and start production in 2026. Yintai Gold will adjust the project's building plan, production commencing date, and annual production target after the acquisition, it noted.

Yintai Gold's unit in Canada will also provide Osino with USD17.4 million of convertible debt financing to support the smooth progress of the Twin Hills Gold Project during the acquisition, it said.

If China's government does not approve the deal, the creditor will have the option of converting some or all of its rights into Osino’s common shares at a conversion price of CAD1.39 (USD1.03) apiece by the end of this year, Yintai Gold added.

Shares of Yintai Gold [SHE: 000975] closed down 0.6 percent at CNY14.48 (USD2.01) in Shenzhen today.

Editor: Martin Kadiev