On July 26, Zhaojin Mining Co., Ltd. announced that the gold mine in the northern part of Sanshan Island, a subsidiary of Laizhou Ruihai Mining Co., Ltd., had obtained a mining license issued by the Department of Natural Resources of Shandong Province on July 20. the licensed production scale of the gold mine in the sea area is 3.96 million tons / year, the mining area is 5.828 square kilometers, and the validity period is 15 years. The successful handling of the mining license indicates that the construction of gold mines in the sea area has entered the fast track of all-round development.
The gold deposit in the sea area is located in the Sanshandao-Cangshang fault metallogenic belt of the first-class metallogenic belt in Jiaodong area, which is the most important gold metallogenic belt in China. The surrounding special, large and medium-sized gold deposits are enriched, and the ore-forming geological conditions are extremely superior. The future resource potential is unlimited and the development space is huge. As of December 31, 2020, according to the standards set out in the JORC code, the amount of mineral resources retained by gold deposits in the sea area is 562.37 tons, and the average grade is as high as 4.20g / ton, far exceeding the national average level, and it is the largest single gold deposit discovered in the world in the past 20 years. Moreover, the geographical location of the gold mine is only 45 kilometers away from the company's local city of Zhaoyuan, and it is adjacent to the mines and infrastructure in the company's existing Zhaoyuan port. The supporting infrastructure and transportation network around the project have been well developed, and the development environment is ideal. It is conducive to expanding production capacity, giving full play to synergy and improving efficiency.
The total investment of the sea area project is about 7.3 billion yuan, and the design scale is 12000 tons per day. After the mining right license is obtained, the company will adhere to the high standard and high starting point, and organize the construction and production of world-class intelligent mines as soon as possible with the aim of "safety, high efficiency, green and intelligence". After the project reaches production, it will produce more than 510000 ounces of gold a year, increasing the company's gold production by nearly 50 per cent. Due to the large reserves, high grade and low cost of gold deposits in the sea area, with the growth of the scale in the future, the company's profit margin will also be improved, which will undoubtedly become the company's biggest performance growth engine, enhance the company's influence and competitiveness in global gold resources, and accelerate to become a world-class gold mining company with international competitiveness. Societe Generale Securities has released a research report that due to the low mining cost, high grade and large reserves of gold in the sea area, some brokers expect the gold mine to become the main driver of the company's growth after 2023.
At present, in the context of inflation expectations, major investment banks are optimistic about the trend of gold prices. Goldman Sachs, a world-famous investment bank, expects gold prices to be $1977 / oz in 2021 and $2000 / oz in 2022. Gold prices will continue to rise in the future. The company's current PB/PE is only 1.15x / 14.8x, which is far lower than 2.8x / 49x of Hong Kong gold and precious metal plates. After entering the fast lane, the sea project will reshape the valuation of Zhaojin Mining and usher in the development trend of rising volume and price.
Weng Zhanbin, chairman of Zhaojin Mining Co., Ltd., said that the acquisition of the mining license for gold mines in the sea area is another milestone following the company's acquisition of the project, and marks a solid step towards the overall construction of the gold project in the sea area. After the sea gold mine is put into production in the future, it will significantly expand the company's existing production capacity, increase the company's own gold production, optimize the existing production costs, and help the company to achieve the strategic goal of medium-and long-term development.
