Sino Gold Mining Ltd., the owner of China's second-largest gold mine, agreed to buy 72 percent of the Eastern Dragon gold and silver deposit for $90 million.

The company will sell A$170 million ($150 million) in shares and use some of the money to fund acquisition of the deposit in northern Heilongjiang province, the Sydney-based company said today in a statement to the Australian Stock Exchange.

Sino started output from its Jinfeng mine in May and is seeking to develop three others in China. The $55 million White Mountain mine is due to start production in 2009.

``This acquisition provides Sino Gold a clear path to more than 500,000 ounces of low-cost production from four quality operations,'' Chief Executive Officer Jake Klein said in the statement.

Sino yesterday fell 10 cents, or 1.5 percent, to A$6.75 on the exchange, giving it a market value of A$1.4 billion. The stock was halted from trading on the exchange ahead of an announcement by the company, Sino said in a separate statement today.

Merrill Lynch & Co. and Macquarie Group Ltd. will manage the private share sale to investors.