China National Gold Group Corp, owner of China's third-largest gold mining company, is the preferred bidder to develop the country's largest deposit, beating Zijin Mining Group Co, a company official said.

China National offered 2.2 billion yuan (US$320 million) for the right to the Yangshan gold project, said the official, who declined to be named before a government announcement. The deposit was discovered last year in Gansu Province.

The Yangshan deposit, with a resource of 308 metric tons, may be more than twice as big as Zijin Mining's Zijinshan mine, currently the largest gold project in China. China National's ability to work well with local governments may help its bid, Everbright Securities analyst Wang Feng said earlier this month.

"China National Gold should eventually sell the assets to the listed arm," Wang said yesterday. He said the offer price is "cheaper" than he had expected.

(Shanghai Daily July 1, 2008)