Northern Mining (ASX:NMI) will acquire a 49% stake in a gold concession in Xinjiang in China for A$7.25 million that is located in the same gold belt where a major gold discovery was made.
The concession and gold mining assets are located in China's Xinjiang Uygur Autonomous Region, Xinyuan County in the Ili Valley.
Northern will pay $2.5 million cash and issue 158,333,333 shares at A$0.03 each with a value of $4.75 million.
The 49% interest in Northland Resources Limited has seen it spend more than US$12 million to secure the gold concession.
A Northland subsidiary is expected to secure financing support from its parent company Northland so as to complete its final geological study before further submissions are made to the Xinjiang Geology and Mineral Resources Bureau in China.
A formal drilling and exploration program will be submitted for the Bureau’s approval as soon as funding is secured.
Tony Ong, chairman of Northern Mining, will be appointed as a director of Northland Resources Limited.
The acquisition is subject to due diligence and approvals of directors, shareholders and other required approvals.