SHH Resources enters gold mining with RM4 mil Stellar Jewel stake acquisition

PETALING JAYA (July 17): SHH Resources Holdings Bhd is entering the gold mining business through a RM4 million acquisition of a 51% stake in Stellar Jewel Mining Sdn Bhd.

In a Bursa Malaysia filing on Thursday, the group said its wholly-owned subsidiary Pureyield Mining Sdn Bhd had entered into a share sale agreement with Sa Yijiao to acquire 510 ordinary shares representing a 51% equity interest in Stellar Jewel.

Upon completion, Stellar Jewel will become a 51%-owned subsidiary of Pureyield and an indirect subsidiary of SHH.

Stellar Jewel’s principal asset is a mining agreement dated June 11, 2026 with Jayamas Mining Sdn Bhd, which grants contractual rights to undertake gold mining and extraction activities over about 153.8 hectares at Lot 12634, Hutan Simpan Kekal Sokor Taku, Mukim Sokor, Tanah Merah, Kelantan.

The mining lease (ML8/2019) runs until July 30, 2027, with a further renewal period extending to July 30, 2031.

The RM4 million purchase consideration will be satisfied via an initial deposit of RM1.2 million, a completion payment of RM1.3 million, and RM1.5 million held by Pureyield’s solicitors as a stakeholder sum pending fulfilment of completion conditions.

Separately, Pureyield has agreed to provide Stellar Jewel with a RM1.53 million shareholders’ loan within seven days after completion to fund working capital requirements and operations.

The acquisition will allow SHH to participate in upstream gold mining through Stellar Jewel’s existing contractual mining rights, rather than having to independently secure mining rights and establish operations.

The purchase consideration was arrived at on a willing buyer-willing seller basis, taking into account factors including the mining agreement, remaining lease period, renewal rights, production commitments, identified gold off-taker arrangements and contractual protections under the share sale agreement.

Under the agreement, the vendor has warranted an average extraction of not less than 10kg of gold per month based on an 18-month period.

In the event of a breach of the vendor’s warranties, Pureyield has recourse including the refund of the purchase consideration and shareholder advances, subject to the terms of the agreement.

Following completion, expected by August 2026, Stellar Jewel will be held by Pureyield with a 51% stake, while Sa Yijiao will retain 49%.

Under the shareholders’ agreement, Pureyield will have the right to appoint two directors to Stellar Jewel’s board, while the vendor may appoint one director. Pureyield’s nominee will chair the board and hold a casting vote in the event of an equality of votes.

SHH said the acquisition forms part of its strategy to diversify its business portfolio and establish new revenue streams.

“Subject to the successful execution of the mining operations, the Board expects the Proposed Acquisition to contribute positively to the future revenue, earnings and cash flow of the SHH Group,” it said.

However, SHH noted that contribution from the acquisition will depend on factors including the commencement and continuity of mining operations, recoverable gold reserves, operating costs, gold prices, regulatory compliance, and the continued validity or renewal of the mining lease.

The acquisition does not require approval from SHH shareholders and will not have a material immediate effect on the group’s earnings per share, net assets or gearing as the mining operation remains at an initial stage.

The transaction has a highest percentage ratio of 6.86%, based on SHH’s audited consolidated financial statements for the financial year ended June 30, 2025.

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