China Hanking gold assets consolidate ahead of spin-off

China Hanking Holdings Limited's subsidiary, Watkins Gold, is acquiring the remaining 6.63% of Cygnet Gold for A$16.60m, achieving 100% ownership. This includes an A$6.90m acquisition from Qiu Family and Golden Resource, entities controlled by Dr. Qiu, an executive director, and A$9.70m from minority shareholders. The total consideration for Cygnet Gold stands at A$60.31m. Cygnet Gold, with 2.06m ounces of gold resources, will become a wholly-owned subsidiary of Hanking Gold.

Concurrently, Hanking Gold is undertaking a capital increase, issuing new shares to Dr. Qiu's controlled entities (8,700,000 shares for HK$2.62 per share) and Cygnet Gold's minority shareholders (12,200,000 shares for HK$2.62 per share). This will dilute the group's shareholding in Hanking Gold from 91.19% to 90.44%. Separately, Hanking Australia is redeeming all 11,250,000 outstanding Share Options under its scheme, including 4,200,000 held by Dr. Qiu for A$8.02m, and 7,050,000 held by other employees, for a total redemption consideration of approximately A$20.49m.

These transactions are connected transactions subject to reporting and announcement requirements but are exempt from independent shareholders’ approval, given their percentage ratios fall between 0.1% and 5%.