Dubai Group buys stake in Aussie gold mining firm

GOLDEN TOUCH: Dubai Group aims to tap into the rising price of gold by buying a stake in an Australian mining firm. (Getty Images)

Dubai Group, owned by the ruler of the Gulf Arab emirate, said on Monday it had bought an 18 percent stake in Australian mining firm Citigold Corporation Ltd to tap into rising gold prices.

The deal, completed by Dubai Ventures Group (DVG), is worth about 35 million Australian dollars ($28.27 million), Dubai Group said in a statement on the Dubai International Financial Exchange, where Citigold has a secondary listing.

"Gold, like oil, continues to play a significant role in the global economy as a fundamental backbone of the financial services sector and a key safe haven commodity," DVG's Chief Executive Abdulhakeem Kamkar said.

Gold rallied to a six-week high above $900 on Thursday due to fears the financial crisis had not yet run its course, and bullion also benefited from a wave of risk aversion after US investment bank Lehman Brothers filed for bankruptcy.

Gold hit a record high of $1,030.80 in March.

Dubai Group plans to help Citigold increase production to 250,000 ounces a year by 2011, it said without clarifying how much the company produces at present.

The mining company has an estimated 10 million ounces in ore deposits. (Reuters)

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