New | China’s Zhaojin Mining to spend 1.85 billion yuan to bring gold mine to production

Zhaojin Mining Industry, one of the mainland’s largest gold miners, plans to spend 1.85 billion yuan (HK$2.31 billion) in the next three years to bring China’s largest gold mine  to production.  

The Shandong-based company agreed at the weekend to buy a controlling stake in the mine,  which Zhaojin chairman Weng Zhanbin said on Monday  was likely be the mainland’s largest and most profitable gold mine.

“With (the) gold price trading at a relatively low level, the mine’s acquisition price is very favourable,” he said. Zhaojin said the mine had around 470 tonnes of gold resource, resulting in an acquisition price of US$55.49 per ounce of resource.  

Weng said some 250 tonnes of the 470 tonnes had been proven to be economically extractable, while at least 90 per cent of the rest was expected to eventually be proven, although more drilling was required. He said the 470 tonnes of resource was also expected to rise further with more drilling.  

The mine is undergoing construction design and land preparation, and could start trial production as soon as the second half of 2018, Wang said, while adding that delays could not be ruled out.

When fully ramped up, the Haiyu gold mine in Shandong is expected to have an annual output of 15.6 tonnes, and be able to maintain that level for around 22 years. Zhaojin’s gold output from its own mines was 20 tonnes last year.  

Hong Kong-listed Zhaojin said on Sunday it had agreed to buy a 53 per cent stake in the mine for 2.72 billion yuan. It has already paid 1.2 billion yuan and the firm’s general manager of finance, Fang Jisheng, said the remainder would be financed by bond issuance and bank loans.