(Yicai Global) Aug. 27 -- Shanghai Construction Group's stock has hovered near the daily 10 percent upper limit most of the day on the company's announcement yesterday that its African gold mine recently added 338,900 ounces of gold to its proven reserves.

The Koka Gold Mine in Eritrea under the firm's Zara Mining joint venture there, in which it holds a 60 percent stake, had around 746,000 ounces of mineable gold as of June 30, per the latest prospecting results, the announcement said.

Shanghai Construction's stock [SHA:600170] climbed 8.36 percent to close at CNY3.37 (49 US cents) in the afternoon on the news.

The Koka Gold Mine in the north of the Horn of Africa nation had 760,000 ounces of mineable gold as stipulated by the two parties to the deal -- the other being the national government -- when the firm's Hong Kong unit acquired a controlling stake in Zara Mining in 2012, per the announcement, which added the mine has sold 352,900 ounces since the takeover concluded. Its extractable gold reserves rose 338,900 ounces after exploration finished.

The newly-discovered gold is worth about USD603 million, based on the USD1,780.5 per ounce closing price of gold on the London Metal Exchange on June 30, around 13 percent of the firm's net assets as of the end of last year, per the announcement.

Prospecting for additional gold in the subject mine area is still underway, the announcement added.

Shanghai Construction, which specializes in project contracting construction, bought the stake in Zara Mining for USD80 million in September 2012. The unit has regional mining rights and prospecting rights to the Koka Mine, which lies amid mountains about 165 kilometers north of Eritrea's capital of Asmara.

Editor: Ben Armour