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El Dorado And Sino Gold Announce Business Combination


- Building the premier intermediate global gold producer -
High Growth, Low Cost, Pure Gold

Vancouver (Canada) and Sydney (Australia).- Eldorado Gold Corporation (“Eldorado”) (TSX:ELD) (NYSE Amex:EGO) and Sino Gold Mining Limited (“Sino Gold”) (ASX:SGX) (SEHK:1862) are pleased to announce that they have signed a Scheme Implementation Deed under which Eldorado proposes to acquire all of the issued and outstanding shares in Sino Gold that it does not currently own via a Scheme of Arrangement (“Scheme”) under Australian law.

Consideration for the transaction will be Eldorado shares, with Sino Gold shareholders offered 0.55 Eldorado shares for each Sino Gold share they own1. The transaction values Sino Gold at approximately A$2.2 billion (C$2.0 billion)2.

The Sino Gold Directors unanimously recommend that Sino Gold shareholders vote in favor of the proposed Scheme, and each Director intends to vote all of the Sino Gold shares they own or control at the date of the Scheme meeting in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Sino Gold shareholders.

Eldorado will seek to establish an Australian listing of Eldorado shares through ASX-listed CHESS Depositary Interests (CDIs) such that Sino Gold shareholders can hold the Eldorado shares they receive on the ASX (subject to the right to elect to receive TSX-listed Eldorado shares if they desire).

Highlights of the Transaction

* Creates the premier intermediate global gold producer with combined market capitalization of approximately C$6.4 billion
* Establishes Eldorado as the unequivocal leader among international gold producers in China, the world’s largest gold producing country
* Provides Sino Gold shareholders with continued exposure to China’s growing gold industry as well as diversifying their country risk by gaining exposure to quality gold assets in Turkey and South America
* Enhances Eldorado’s strategy of creating competitive advantage through dominant locally managed regional businesses in highly prospective geological environments
* Reinforces Eldorado’s position as one of the lowest cost, highest growth global gold producers with the addition of Sino Gold’s high quality assets
o Combined current gold production of 550,000 ounces from 4 new, high quality mines, growing to 850,000 ounces by 2011 from 6 mines
o Project pipeline and expansion opportunities expected to fuel gold production growth to beyond 1 million ounces by 2013
* Significantly enhances Eldorado’s management in China with the addition of Sino Gold’s highly talented and successful operations, exploration and business development teams
* Strong financial position and cash flow to underpin development of the project pipeline and additional growth opportunities
* Unhedged proven and probable reserves of 12.7 million ounces from 18.8 million ounces of measured and indicated resources, and 5.3 million ounces of additional inferred resources3
* Continues Eldorado’s track record of delivering value to shareholders through proven, operations-focused management

The exchange ratio of 0.55 Eldorado shares for each Sino Gold share represents a value of A$7.244 per share based upon the closing price of Eldorado on the TSX on August 25, 2009 of C$11.96. This represents a premium of:

* 21.3% to the closing price of Sino Gold’s shares on the ASX on August 25, 2009; and
* 32.3% to 30 (trading) day volume weighted average trading price of Sino Gold’s shares on the ASX.

The exchange ratio also represents a premium of 23.8% based on the 30 (trading) day volume weighted average trading prices of Eldorado’s and Sino Gold’s shares on the TSX and ASX respectively5.

After completion of the transaction, current Eldorado shareholders will own approximately 75% of the merged company and current Sino Gold shareholders (excluding Eldorado) will own approximately 25%; including Eldorado as a shareholder, Sino Gold’s ownership would have reached approximately 30%.

Mr. Paul Wright, President & CEO of Eldorado, stated, “Eldorado entered China in the fall of 2004 recognizing that China was quickly emerging as the most important gold producing country in the world. China is blessed with outstanding geological potential, a supportive population and government and a strong mining law. The business combination with Sino Gold enables Eldorado to realize its vision of establishing a leading presence in China. Eldorado and Sino Gold have similar approaches and cultures based on establishing strong regional businesses through empowerment of local management, responsible operations and careful attention to maintaining long-term social license. We look forward to welcoming Sino Gold employees and together continuing to build the leading international gold producer in China.”

Mr. Jake Klein, President & CEO of Sino Gold, added, "This transaction is an exciting opportunity for the Sino Gold shareholders to participate in the creation of a leading intermediate gold producer with an international footprint and exciting prospects. Sino Gold’s view is that the best value creating opportunity for its shareholders is as part of leading low-cost intermediate gold company, and we believe that this merger with Eldorado gives our shareholders exposure to such a company on attractive terms.

The combined entity will continue to benefit from a strong exposure to China, one of the world’s most prospective gold-producing countries, while benefiting from portfolio diversification across Turkey, Greece and Brazil. The Sino Gold team has worked hard to develop a highly successful business in China and we look forward to the prospect of entering a new development phase through our combination with Eldorado"

Management Team and Board of Directors

Eldorado will continue to be headquartered in Vancouver, British Columbia. Eldorado’s intention is to retain a significant regional office in Sydney, Australia, on consummation of the Scheme.

Mr. Jake Klein, President & CEO of Sino Gold, will remain in his position until the transaction closes, after which he will provide consultancy services to Eldorado.

The Board of Directors of Eldorado will invite two directors from the board of Sino Gold, including the current Chairman of Sino Gold, James Askew, to join its board.

Scheme Implementation Deed

Sino Gold has entered into a Scheme Implementation Deed with Eldorado under which Sino Gold has agreed to propose a Scheme between Sino Gold and its shareholders for the acquisition of its shares by Eldorado. A summary of the Scheme Implementation Deed is attached to this announcement.

The transaction is subject to the completion of confirmatory due diligence by Eldorado and Sino Gold prior to September 14, 2009. To date, Eldorado has completed extensive technical due diligence (including mine site visits) on Sino Gold.

The transaction is also subject to satisfaction of a number of customary conditions precedent, including the receipt of required regulatory and Australian court approvals, as well as the approval of Sino Gold shareholders. Regulatory approvals include approval by the Australian Foreign Investment Review Board and TSX, NYSE, (and ASX) approvals in respect of the issue of new shares (CDIs) by Eldorado under the Scheme.

The Scheme Implementation Deed contains certain customary terms usual for a transaction of this nature including no shop and no talk provisions, mutual break fee of A$21 million payable in certain circumstances, as well as providing Eldorado the right to match a competing proposal.

Eldorado currently owns 57,968,029 Sino Gold shares, representing 19.8% of the issued and outstanding shares of Sino Gold.

It is Eldorado’s intention to seek a listing of the Eldorado CDIs on the ASX, subject to applicable laws and regulation. In addition, Sino Gold shareholders who are classified as retail shareholders will have the ability to have the Eldorado shares that they would have otherwise received aggregated and sold on their behalf through a share sale facility.

Eldorado also proposes to acquire all outstanding Sino Gold employee options via an options scheme of arrangement under Australian law.

Next Steps

In due course, Sino Gold’s shareholders will receive a Scheme Booklet that will contain full details of the proposed Scheme, including the basis for the Sino Gold Board’s recommendation that shareholders approve the proposed Scheme. Sino Gold will shortly appoint an independent expert to prepare a report on whether the proposed Scheme is in the best interests of Sino Gold’s shareholders. The independent expert’s report will be included in the Scheme Booklet.

It is currently anticipated that Sino Gold will lodge the Scheme Booklet with ASIC in early October. Sino Gold will seek a Court order to convene a meeting of its shareholders to approve the Scheme, expected to be held in late November 2009, with transaction close expected in early to mid December.

Advisors and Counsel for the Transaction

Eldorado’s financial advisor is Macquarie Capital Advisors, its Australian legal advisor is Freehills and its Canadian legal advisor is Fasken Martineau DuMoulin LLP.

Sino Gold’s financial advisor is Goldman Sachs JBWere, its Australian legal advisor is Allens Arthur Robinson and its Canadian legal advisor is Cassels Brock & Blackwell LLP.


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