Sino Gold Mining Ltd., owner of China's second-largest gold mine, plans to sell as much as A$204 million ($195 million) in shares to existing shareholders to close its forward sales contracts for the precious metal.

Gold Fields Ltd., Africa's second-biggest gold producer, will buy A$68 million of the shares to increase its stake to 19.9 percent, Sydney-based Sino said today in a statement. Small and institutional shareholders will be offered the balance, it said.

Global gold producers including AngloGold Ashanti Ltd. and Newcrest Mining Ltd. are closing forward sales contracts to benefit from surging bullion prices. Gold could ``super spike'' above $1,500 an ounce, Goldman Sachs JBWere Pty said last month.

``With the close out of our forward sales, Sino Gold's shareholders will now have the opportunity to fully participate in the value created by our growing gold production in a rising gold price environment,'' Chief Executive Officer Jake Klein said in the statement.

Sino rose 11 cents, or 2.1 percent, to A$5.32 yesterday on the Australian stock exchange, valuing the company at A$1.3 billion. The stock has dropped 23 percent this year. Gold Fields will pay A$5.03 a share, 5.5 percent less than yesterday's close and small and institutional holders will pay A$4, a 25 percent discount.

Gold for immediate delivery traded at $905.97 at 9:22 a.m. Sydney time. It has gained 13 percent in the last six months.

The sale is being managed by Goldman Sachs JBWere.