On the evening of May 26, Zijin Mining announced a preliminary plan to spin off its subsidiary, Zijin Gold International Co., Ltd. (hereinafter referred to as Zijin Gold International), for listing on the Hong Kong Stock Exchange (HKEX).
The assets proposed for the spin-off and listing are a major focus of market attention, comprising eight world-class large-scale gold mines located in South America, Central Asia, Africa, and Oceania. These mines are the Buriticá gold mine, Norton Gold Fields, Rosebel gold mine, Aurora gold mine, Jilau/Talo gold mine, Akim gold mine (transaction completed on April 16, 2025), Left Bank gold mine, and Porgera gold mine. The total resources amount to 1,799.79 mt, with total reserves of 696.83 mt, and a 2024 production of 46.22 mt.
It should be noted that Zijin Mining's gold mine resources total 3,973 mt, with reserves of 1,487 mt, and a total gold production of 73 mt in 2024. Based on the data from the aforementioned eight gold mines, the corresponding proportions within the company are approximately 45%, 47%, and 63%, respectively.
For the Buriticá gold mine in Colombia, which has long been subject to illegal mining, the company has made special arrangements. The company stated that due to ongoing international arbitration related to the mine, there is uncertainty regarding the injection of equity in the Buriticá gold mine into Zijin Gold International before the resolution of the arbitration.
To ensure the smooth progress of this restructuring and spin-off, the company currently plans to indirectly restructure the gold mine through entrusted operations and yield swaps. Upon completion of these arrangements, Zijin Gold International is expected to include the Buriticá gold mine in its consolidated financial statements, thereby integrating the revenue from this gold mine asset into Zijin Gold International.
The Buriticá gold mine is one of Zijin Mining's largest gold mines in terms of gold production and is the only project among the company's 16 major gold mines in 2024 with a gold production exceeding 10 mt.
Financial data disclosed by Zijin Mining show that Zijin Gold International achieved revenues and net profits of 21.268 billion yuan and 4.458 billion yuan (unaudited) in 2024 (pro forma data), accounting for 7% and 14%, respectively, of the company's figures for the same period. This highlights the profitability of the assets proposed for the spin-off and listing.
In the context and objectives of this spin-off, Zijin Mining mentioned that it would broaden access to high-quality international investors, reduce overseas operational risks, enhance the competitiveness and flexibility of Zijin Gold International in overseas capital market financing and M&A transactions, and, given the upward cycle of gold prices, facilitate the revaluation of the company's gold assets.
According to the disclosed plan, Zijin Gold International will remain a controlled subsidiary within Zijin Mining's consolidated financial statements after listing. It is initially proposed to issue no more than 15% of the total share capital of Zijin Gold International after the issuance on the main board of the HKEX, and to grant the underwriters an over-allotment option of no more than 15% of the shares issued. The issuance targets include overseas institutional investors, enterprises, and natural persons.
In terms of equity structure, Zijin Mining holds 24% and 76% of the equity in Zijin Gold International through two wholly-owned subsidiaries, Zijin Mining Northwest and Jinshan (Hong Kong), respectively.
The company has not disclosed the issuance price, stating that it will consider the interests of existing shareholders of Zijin Gold International, the acceptability of potential investors, and the issuance risks, with the pricing process following internationally accepted pricing mechanisms.
Established in 2007 and headquartered in Hong Kong, China, Zijin Gold International's main business is the exploration, mining, processing, and sale of gold. Its main products for sale are gold bullion, dore gold, and gold concentrate. Zijin Gold International focuses on the exploration and development of high-quality gold assets globally and integrates high-quality overseas mine resources through its leading exploration and reserve augmentation capabilities.
It is worth mentioning that, as stated in the company's risk disclosure, as of the date of this announcement, the injection of the aforementioned eight gold mine assets into its subsidiary, Zijin Gold International, has not yet been fully completed. If the subsequent progress of injecting these eight gold mine assets does not meet expectations, it may have an adverse impact on this transaction.
