Chinese miner Xingye Gold wages bitter war for control of ASX hopeful Far East Gold

A bitter battle for control of a potentially giant Indonesian gold deposit has erupted between the Australian directors of junior miner Far East Gold and its biggest shareholder, Chinese mining group Xingye Gold.

The warring sides are preparing for a showdown at two extraordinary general meetings (EGMs) over the next month, with each seeking to remove directors aligned with the other from the seven-member board.

The dispute boiled over after Xingye lobbed a 13 cents per share takeover offer on May 27, having initially built a 19.99 per cent stake in the explorer.

Far East Gold chief executive Shane Menere dismissed the failed offer as “lowball”, arguing it substantially undervalues the company’s Indonesian gold assets and comes as the explorer prepares to release the results of a scoping study into its Idenberg project.

“Fundamentally this entire thing is about trying to steal the company as cheap as possible and dirty us up along the way,” Menere said of Xingye and his boardroom rivals.

“Because Xingye failed with their takeover bid, they’re now just trying to make up more problems for us, with all sorts of accusations.”

An independent valuation by Lonergan Edwards, commissioned by Far East Gold, put the company’s fair value at 38.4 cents a share at the midpoint or almost triple Xingye’s offer.

Menere says that valuation was completed before the results of the Idenberg scoping study, which he expects could catapult the company’s value higher.

“We commenced a scoping study [of the Idenberg deposit] and at that point they [Xingye] could see the value of these assets will go up significantly and they launched a proper takeover bid,” Mengere said.

Far East shares last closed at 10 cents and Menere blames the weakness on its Chinese shareholder white-anting the company.

“They just want to crash the share price, break-up the company and put it on the Hong Kong Stock Exchange,” he claimed. “They’ve thrown the kitchen sink at us, threatened to sue us individually, and even threatened to refer our auditor KPMG to ASIC, it’s just nuts.”

Chinese response

Xingye did not respond to a request for comment. Its bidder’s statement claims Far East Gold has effectively run out of cash to fund its exploration activities, with its takeover offer the best chance for shareholders to salvage some value from their investments.

Its 13 cents per share takeover offer was at a 34 per cent premium to Far East Gold’s last closing price of 9.7 cents on May 26 before the bid was announced.

Xingye also accused Far East Gold of raising and spending $32 million since listing in March 2022, with little to show for it in terms of project development.

It suggests shareholders now have a choice between accepting 13 cents per share or risking the company falling into bankruptcy if it runs out of funds.

The Chinese group acquired its own 19.99 per cent stake in November 2025 in return for a $14.5 million investment in Far East Gold that has now been largely spent.

As at June 30, Far East Gold had $1.9 million in cash on hand, leaving the explorer reliant on further capital to fund its activities.

Menere acknowledged the company was operating on a “shoestring budget”, but said its precarious funding position was not unusual for an exploration junior and that Far East Gold had other options to finance development.

He also alleges Xingye sought to prevent the company from raising a further $2.8 million through two Australian stockbrokers.

Upcoming EGMs

The complex dispute has since snowballed from a takeover battle to all-out boardroom barney.

Xingye is seeking to remove four of Far East Gold’s seven directors, including Menere and chairman Justin Werner, at an EGM on November 3.

“By the way we’re all the founders of the company they’re seeking to get kicked off,” Menere said.

In response, Far East Gold’s Australian management team is seeking to remove three directors aligned with Xingye at a separate October 21 EGM.

It’s previously proposed funding solutions to Far East Gold, but on the condition the four aligned Australian directors immediately resign from the board.

The competing resolutions require more than 50 per cent shareholder support to pass, putting the company’s retail shareholder base in a potentially decisive position.

The stakes rose further in July when Xingye increased its holding from 19.99 per cent to 33.8 per cent after agreeing to acquire shares from Indonesian entrepreneur Wendy Yap under the terms of its takeover offer..

Menere argues the enlarged stake gives Xingye an effective blocking position and strengthens his contention that the Chinese group is seeking to force through a takeover at an undervalued price.