South African miner Gold Fields has agreed to sell its 19.9% stake in Sino Gold Mining to Canada-based Eldorado Gold Corporation for $282m.

Gold Fields will receive a 7% stake in Eldorado on a fully diluted basis in return.

In addition, Gold Fields will hold a top-up right for 18 months, which will apply should Eldorado purchase an additional 5% or more of the outstanding shares of Sino Gold.

Gold Fields CEO Nick Holland said that the transaction with Eldorado was the most value-creating for shareholders as it enabled them to retain exposure to China as a potential area for business development in the future.

Gold Fields plans to strengthen its team in China and retain some of its exploration joint ventures with Sino Gold in the country.

The company plans to grow in its key regions of West Africa, South America and Australasia to produce at least one million ounces per annum, within a three- to five-year time frame.

The transaction is awaiting regulatory approval and is expected to close by the end of August.

Sino Gold is an Australian public company focused on gold exploration in China with operating mines at Jinfeng and White Mountain.