The Chinese miner said that it is cancelling the deal to protect its interests and also that of its shareholders

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Shandong Yulong Gold intends to pull out from the deal to acquire Barto Industry. (Credit: Free-Photos from Pixabay)

Shandong Yulong Gold has announced that it is looking to withdraw from its previously announced deal to acquire Australian gold mining firm Barto Industry, due to the recent developments in the global economy and macro environment.

The Chinese miner had announced last month that it will acquire Barto Industry from another China-based firm Shandong Tianye. As consideration, Shandong Yulong Gold at that time said that it will assume Barto Industry’s debt of CNY1.22bn ($190m).

As per its filing to the Shanghai Stock Exchange, Shandong Tianye stated that it had studied the transaction carefully amid the recent changes in the global economic situation.

Following the assessment, the company has come to the decision to negotiate the scrapping of the deal to safeguard its interests and also that of its shareholders.

Had the deal gone ahead, Shandong Yulong Gold through its subsidiary Lanjing Mining would have got control of Barto Industry’s gold mining operations in Western Australia.

The deal would have been subject to receipt of several approvals, including a clearance from the Australian Foreign Investment Review Board.

Presently, Minjar Gold is managing Barto Industry’s operations in the Southern Cross greenstone belt on behalf of Shandong Tianye.

Production from the assets is targeted at an annualised rate of 160,000 ounces by 2021, reported Reuters.

The Southern Cross operation of Barto Industry stretches from Bullfich to Marvel Loch in Western Australia, located nearly 13km south of the Southern Cross town and 360km east of Perth.

The operation is made up of various underground and open-pit gold mines.