Chinese firm backs out of gold mine deal

• Source: Global Times
• [00:12 December 23 2009]
• Comments

A Chinese mining company has to make a last-minute withdrawal on Monday from an agreed investment in a Nevada gold mine, amid pressures from US national security concerns about its capital injection.

"They basically let me know it was a tough call, but they ... didn't feel it was in their best interest to push forward," said Terry Lynch, chief executive of Firstgold Corp, a Nevada-based mining company.

Firstgold had lined up a $26.5 million deal in July with China's Northwest Nonferrous International Investment Co to sell a 51-percent stake in the company and develop the Relief Canyon mine near Lovelock, Nevada.

Northwest also agreed to buy the company's senior secured debt from its lenders.

Both companies were told last week by the Committee on Foreign Investment in the United States (CFIUS) the deal raised national security concerns because of its proximity to US military installations, Lynch said.

"It's unfair. Some miners closer to the base than we are operate smoothly there with foreign shareholders," Lynch was quoted by the Guangzhou-based 21st Century Business Herald as saying.

"We may be the first China-involved mining company, but that doesn't justify the rejection," Lynch added.