China Business News reported that Chenzhou Mining Group sold a 100% stake in subsidiary, Xinjiang Tuoli Xinda Gold Mining and an 80% stake in subsidiary, Xinjiang Tuoli Dadi Baobei No 8 Gold Mining, for a total of CNY 52 million.

The purchaser of the equity stakes, natural person Liu Yang, has paid for the share acquisitions on December 12.

According to the report, the main reason for the stake sales was that the subsidiaries had reported losses in consecutive years. Among the company 14 subsidiaries, seven subsidiaries which are not located in Hunan recorded losses in 2010 with total losses hitting CNY 124 million.

An unnamed industry analyst said the earnings growth of Chenzhou Mining in 2011 will depend mainly on the surge in gold and antimony prices. External investments made by the company often resulted in losses due to internal management problems and poor risk controls.

Chenzhou Mining had purchased Xinjiang Tuoli Xinda Gold Mining for CNY 43.6 million and Xinjiang Tuoli Dadi Baby 8th Gold Mining for CNY 53.4 million in May 2008.

Both companies had less than CNY 20 million of registered capital at the time of the acquisitions.

(Sourced from China Business News)