Zijin Mining Announces RMB18.26 Billion Acquisition for Controlling Stake in Chifeng Gold

Key Transaction Highlights and Strategic Implications for Investors

Zijin Mining Group Co., Ltd. (“Zijin Mining”) has announced a significant acquisition that is set to reshape the company’s gold portfolio and potentially impact share value. On 22 March 2026, Zijin Mining’s wholly-owned subsidiary, Zijin Gold (Group) Co., Ltd. (“Zijin Gold”), entered into agreements to acquire a controlling stake in Chifeng Jilong Gold Mining Co., Ltd. (“Chifeng Gold”) via a combination of A share purchase and H share subscription.

Transaction Structure

• Share Transfer Agreement: Zijin Gold will acquire 241,925,746 A shares of Chifeng Gold from Ms. Li Jinyang (the largest shareholder) and Zhejiang Hanfeng Venture Capital Partnership at RMB41.36 per share, a 1.3% premium to the last trading price before suspension. The total consideration amounts to RMB10.006 billion.
• Strategic Investment Agreement: Zijin Gold will subscribe to 310,902,731 new H shares of Chifeng Gold at HKD30.19 per share (about 83% of the 60-day average pre-suspension price), for a total of HKD9.386 billion (approx. RMB8.252 billion).
• Total Transaction Size: The aggregate consideration is approximately RMB18.258 billion, making this a highly material transaction in the Chinese mining sector.

Impact on Shareholding and Control

Upon completion of the transactions, Zijin Mining and its subsidiaries will collectively hold 571,661,877 shares, or approximately 25.85% of Chifeng Gold’s enlarged share capital. This confers controlling power to Zijin Mining, and Chifeng Gold will be consolidated into Zijin’s group financial statements.

Strategic Rationale

• Resource Expansion: The acquisition significantly boosts Zijin’s resource base, adding producing gold assets and extensive reserves in China, Laos, and Ghana.
• Immediate Production and Profit Contribution: All Chifeng Gold’s mines are in production, providing immediate output and income potential for Zijin.
• Further Growth Potential: Zijin plans to leverage its advanced exploration and mining technologies to unlock further value from Chifeng Gold’s under-explored assets.

Details of Chifeng Gold’s Assets

• Resource Base: As of end-2025, Chifeng Gold’s assets include 583 tonnes of gold resources, 590,000 tonnes of copper, 560,000 tonnes of zinc/lead, 80,000 tonnes of molybdenum, and 60,000 tonnes of rare earths.
• Major Mines: Six gold mines and one polymetallic mine in China, the Sepon Mine in Laos (90% owned), and the Wassa Mine in Ghana (55.8% owned).
• Production Growth: Chifeng Gold’s mine-produced gold output grew from 8.1 tonnes in 2021 to 14.51 tonnes in 2025, a 26% CAGR over 5 years. Copper, zinc, lead, molybdenum, and rare earths provide additional revenue streams.

Financial Performance

• 2025 Revenue: RMB12.639 billion (up from RMB7.221 billion in 2023)
• 2025 Net Profit (attributable): RMB3.082 billion (up from RMB0.804 billion in 2023)
• 2025 Gross Margin: 52.46%
• Healthy Cash Flow: Net operating cash flow of RMB5.556 billion in 2025
• Improving Financial Position: Gearing ratio reduced from 54.36% in 2023 to 33.91% in 2025

Transaction Mechanics and Safeguards

• Payment Terms: 80% of the A share transfer consideration is paid upon closing, 14% the next business day, and the remaining 6% (plus interest) within 12 months, subject to certain conditions and possible withholding for unresolved obligations.
• Board Control: Zijin Mining will nominate at least two-thirds of Chifeng Gold’s board members post-acquisition.
• Lock-up: Zijin Gold cannot transfer the acquired shares within 18 months post-closing.
• Regulatory Approvals: Completion depends on anti-monopoly and stock exchange approvals, and Chifeng Gold’s shareholder approval for the H share issue.
• Penalties: Delays or breaches by either party attract liquidated damages, ensuring compliance with agreed timelines.

Undertakings by Zijin Mining

• Connected Transactions: Zijin commits to minimize related-party transactions, follow fair pricing, and disclose them per regulations.
• Competition in the Same Industry: Zijin undertakes to resolve any intra-group competition with Chifeng Gold within 60 months through restructuring or other means.
• Independence: Zijin will ensure Chifeng Gold’s independence in assets, personnel, finance, and business, and not abuse its controlling stake.

Risks and Shareholder Considerations

• Completion Uncertainty: The deal is subject to multiple regulatory and shareholder approvals and carries execution risk.
• Commodity Price Fluctuations: Returns depend on metal prices, especially gold, copper, and rare earths.
• Exploration Risks: Future reserve increases are not guaranteed and may fall short of expectations.
• Cost Pressures: Chifeng Gold’s unit costs for overseas operations, especially the Wassa mine in Ghana, increased in 2025, which may impact margins.

Share Price Sensitivity and Potential Impact

This acquisition is a transformative transaction for Zijin Mining, positioning it as a stronger gold producer with enhanced resource reserves, production capacity, and international footprint. The scale and structure of the deal, the consolidation of Chifeng Gold, and Zijin’s stated intention to optimize and integrate gold assets are all potentially price sensitive and could catalyze a rerating of Zijin Mining shares, subject to successful completion and realization of expected synergies.

Conclusion

This acquisition reflects Zijin Mining’s commitment to its “resources first” strategy, focusing on global expansion, value creation, and industry leadership in gold mining. Shareholders should closely monitor regulatory developments and further disclosures as the transaction progresses.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Completion of the described transactions remains subject to regulatory and shareholder approvals and other conditions, and the actual outcome may differ from current expectations. Investors should consider their individual circumstances and seek professional advice before acting on the information provided.

View ZIJIN MINING Historical chart here