Zijin Mining Expands Capital Footprint Again: Plans to Invest 18.2 Billion Yuan to Acquire Chifeng Gold

Reprinted from: China Business News

By Zhongjing reporter Li Zhe, Beijing

After Chifeng Gold (600988.SH, 06693.HK) disclosed the equity transfer intent of its actual controller, just four days later, Zijin Mining (601899.SH, 02899.HK) announced that it plans to bring the control right under its belt in a deal valued at RMB 18.258 billion.

According to Zijin Mining’s announcement, on March 22, Zijin Mining’s wholly owned subsidiary, Zijin Gold (Group) Co., Ltd. (hereinafter “Zijin Gold”), signed a share transfer agreement with Chifeng Gold’s controlling shareholder and actual controller, Li Jinyang, and its concerted parties. The transaction amount was approximately RMB 10.006 billion. On the same day, Zijin Gold also signed a “Strategic Investment Agreement” with Chifeng Gold, proposing to subscribe for 311 million H shares in Chifeng Gold’s targeted placing at HK$30.19 per share (about 83% of the average price of Chifeng Gold’s H shares over the sixty full consecutive trading days prior to its suspension), with a subscription amount of approximately HK$9.386 billion (equivalent to about RMB 8.252 billion). The combined consideration for the two transactions totals approximately RMB 18.258 billion.

After the above transactions are completed, Zijin Mining’s wholly owned subsidiary will hold approximately 572 million shares of Chifeng Gold in total, representing 25.85% of Chifeng Gold’s total share capital after the completion of the additional issuance. Zijin Mining will thereby obtain control over Chifeng Gold and include it in its consolidated financial statements.

Four days to finalize a deal at the hundred-billion level

The speed at which this transaction has been advanced has drawn significant attention from the market.

On the evening of March 18, Chifeng Gold issued an announcement stating that it had received notice from its controlling shareholder and actual controller, Li Jinyang, that he and his concerted parties were planning to transfer shares held in the company. This matter may lead to a change in the company’s actual controller. The company’s shares were suspended from trading starting from the opening of the market on the morning of March 19, with the expected suspension period not exceeding five trading days.

Just four days later, on March 22, Chifeng Gold disclosed that Li Jinyang and his concerted parties, Zhejiang Hanfeng Venture Capital Partnership (Limited Partnership) (hereinafter “Zhejiang Hanfeng”), had signed a “Share Transfer Agreement regarding Chifeng Jilong Gold Mining Co., Ltd.” (hereinafter the “Agreement”) with Zijin Mining’s wholly owned subsidiary, Zijin Gold.

Pursuant to the Agreement, Zijin Gold plans to acquire 242 million A shares of Chifeng Gold held in total by Li Jinyang and his concerted parties at a price of RMB 41.36 per share, with a transaction amount of approximately RMB 10.006 billion. The price represents a premium of 1.3% over Chifeng Gold’s A-share closing price before the suspension.

In addition, Zijin Gold also signed a “Strategic Investment Agreement” with Chifeng Gold, proposing to subscribe for 311 million H shares of Chifeng Gold in its targeted placing at a price of HK$30.19 per share, with a subscription amount of approximately RMB 8.252 billion. The subscription price for the H shares is approximately 83% of the average price of Chifeng Gold’s H shares over the sixty full consecutive trading days prior to its suspension.

After the completion of this transaction, Zijin Mining’s wholly owned subsidiaries will jointly hold 572 million shares of Chifeng Gold, accounting for approximately 25.85% of the total number of shares after the completion of the additional issuance. Zijin Mining will obtain control over Chifeng Gold and achieve financial consolidation of it.

Zijin Mining said that this transaction is an “all-in-one” package arrangement aimed at obtaining control of Chifeng Gold. The company promptly took advantage of the market window created by the sharp prior rise in gold prices followed by short-term volatility and pullbacks, and actively advanced the transaction. The transaction pricing is prudent and reasonable and is in line with the interests of the company and all its shareholders.

With the framework of this transaction locked in, the family presence of Zhao Meiguang, the former founder of Chifeng Gold, gradually receded from view. On December 11, 2021, Zhao Meiguang, the former controlling shareholder and actual controller of Chifeng Gold, passed away due to illness. During his lifetime, he directly held 237 million shares of Chifeng Gold, accounting for 14.27% of the company’s total share capital. According to Zhao Meiguang’s will and notarization by the Beijing Chang’an Notary Public Office, the above shares were inherited by his spouse, Li Jinyang.

After that, on December 12, 2021, Li Jinyang sent a letter to the board of directors of Chifeng Gold, stating that he would fully cooperate with the work of the management team with Chairman Wang Jianhua as the core, and would comply with Chifeng Gold’s strategic development plan.

From December 21, 2019 to today, Wang Jianhua has served as chairman of Chifeng Gold for a long time. Judging from his work experience, Wang Jianhua previously served as a director and president of Zijin Mining. Meanwhile, among Chifeng Gold’s management team, its executive director and vice president, Yang Fang, and its vice president and CFO, Huang Xuebin, had also worked at Zijin Mining.

Did the above executives help facilitate a rapid deal between Zijin Mining and Chifeng Gold? In this regard, reporters from China Business News sought verification from both Zijin Mining and Chifeng Gold. As of the time of publication, no response had been received.

It is worth noting that after Chifeng Gold’s A-share resumed trading on March 23, the stock hit the daily limit down on that day.

Surrendering control at a peak in the share price

Looking back at 2025, the gold price upcycle brought Chifeng Gold a significant boost in performance.

Financial reports show that in 2025, Chifeng Gold achieved operating revenue of RMB 12.639 billion, up 40.03% year over year; net profit of RMB 3.082 billion, up 74.70% year over year; and net profit after non-recurring items increased 79.87% year over year.

Driven by the growth in performance, Chifeng Gold’s leverage ratio has continued to decline—from 54.36% at the end of 2023 to 33.91% at the end of 2025. Net assets attributable to shareholders of the listed company increased from RMB 6.152 billion at the end of 2023 to RMB 13.415 billion at the end of 2025.

Against this backdrop, Chifeng Gold’s share price rose from RMB 14 per share at the beginning of 2025, all the way to RMB 31.24 per share at year-end, and then reached a historical high of RMB 51.5 per share on January 29, 2026. At this point, Li Jinyang chose to give up control.

Chifeng Gold operates six gold mines and one polymetallic mine. Its business covers countries and regions including China, Southeast Asia, and West Africa. As of December 31, 2025, on a consolidated basis, Chifeng Gold had gold resources of 583 tons, with an average grade of 1.54 g/ton; copper resources of 590,000 tons, with an average grade of 0.35%; zinc (lead) resources of 560,000 tons, with an average grade of 2.91%; molybdenum resources of 80,000 tons, with an average grade of 0.12%; and rare earth resources of 60,000 tons, with an average grade of 286.17 g/ton.

In recent years, through capital operations, Chifeng Gold acquired the Seiban mine of Lao’s Vientiane Mining in 2018, and acquired the Wassa gold mine in Ghana in 2022. Among them, Lao’s Vientiane Mining holds exclusive rights to explore and exploit mineral resources within an aggregate area of 1,127 square kilometers, including the Seiban mining area. The Wassa gold mine is located in a favorable geological position on one of the world-renowned Ashanti gold belts, with significant potential for prospecting both within the mining area and in the surrounding areas.

At present, the Laos Seiban gold-copper mine project combines open-pit and underground mining methods. It has two independent production lines for gold and copper, with designed mining capacity of approximately 3.5 million tons per year. Its main products are alloyed gold (containing gold 30%—80%, and silver 10%—70%) and electrolytic copper. In 2025, the project processed 3.554 million tons of ore. The Ghana Wassa gold mine project also adopts a combination of open-pit and underground mining methods. It is designed with mining capacity of 3.0 million tons per year and beneficiation capacity of 4.0 million tons per year. Its main product is alloyed gold with a gold content of more than 80%. In 2025, the project processed 3.262 million tons of ore.

The commissioning of the two mines above has driven Chifeng Gold’s performance growth. From 2021 to 2025, Chifeng Gold’s gold production increased from 8.1 tons to 14.51 tons, with a CAGR of 26% on average. In addition, Chifeng Gold’s annual report for 2025 shows that its target for gold production and sales in 2026 is 14.7 tons, and electrolytic copper is 11,000 tons.

Regarding this acquisition, Zijin Mining said that it adheres to a resources-first strategy. In recent years, it has actively looked worldwide for opportunities for mergers and acquisitions and restructuring of high-quality listed companies in the same industry. This type of M&A model helps to reach more project resource coverage at a lower M&A cost, diversify investment risks, and improve the level of asset securitization. The gold mine projects under Chifeng Gold are all in production; they can contribute production and profits in the year of acquisition. Moreover, the production and operating level and production capacity of the projects may have further room for improvement. The investment’s economic benefits are expected to be significant. At the same time, Chifeng Gold’s core mines are all located in globally important gold metallogenic belts, with favorable ore-forming conditions and excellent resource endowment. However, due to insufficient geological exploration investment in the early stage, the overall resource exploration progress has lagged, and the potential value of resources has not yet been fully released. With subsequent efforts to increase systematized exploration investment, there is substantial potential for resource additions and reserves.

It is worth noting that in this transaction, Zijin Mining also participates in the targeted placing of Chifeng Gold’s H shares. The funds raised, about HK$9.386 billion, will be used for the latter’s overseas business, specifically including constructing new power plants, exploration projects, underground works, equipment procurement, upgrading and refurbishing processing plants, and potential acquisitions of mining resources. As of the end of 2025, Zijin Mining’s balance of cash and funds was RMB 65.577 billion, which is sufficient to cover the transaction consideration of RMB 18.258 billion.

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