Zijin Mining with a $1.2 billion deal for the Raygorodok gold project

Zijin Mining, one of the world’s foremost gold and copper producers, has just made a monumental move in the global gold market. Ahead of the anticipated listing of its international unit, Zijin Gold International, on the Hong Kong Stock Exchange, the company has secured a $1.2 billion deal to acquire the Raygorodok gold project in Kazakhstan.

A Strategic Leap for Global Leadership

This acquisition isn’t just another addition to Zijin’s portfolio, it’s a strategic play to elevate its global ranking in gold production. The company aims to move from its current position as the 6th largest gold producer to a spot in the top three by 2028.

Why This Matters for the Gold Market

The Raygorodok project, based in northern Kazakhstan, promises an economic ore reserve of 94.9 million tonnes and the potential to produce 100.6 tonnes of gold. With current gold prices hovering near record highs, spot gold recently rebounded to $3,301 per ounce, Zijin plans to optimize the mine’s potential, unlocking even greater reserves and production capacity.

The mine project has a newly built carbon-in-leach (CIP) plant and it is currently operating above nameplate capacity of 5 Mtpa, at a run-rate of ~6 Mtpa. The 2 Mtpa heap leach plant provides redundancy if required. The existing operation employs approximately 1100 own personnel, in addition to more than 800 people employed by various contractors.

Impact Beyond the Deal

This acquisition significantly boosts Zijin Gold International’s asset scale and profitability, setting the stage for its forthcoming Hong Kong IPO. The Raygorodok project, acquired from Cantech (a Resource Capital Funds-backed firm), brings substantial revenue and profit potential, adding to Zijin’s already robust global operations spanning Australia, Colombia, Ghana, and more.

Gold Market Dynamics

Gold prices have surged by 26% over the past year, driven by increased demand from investors and central banks amid global economic uncertainty. This favorable market environment enhances the value of Zijin’s strategic investment and positions the company for long-term growth.

Key Highlights:

• Deal Value: $1.2 billion
• Target: Raygorodok gold mine project, Kazakhstan
• Projected Gold Output: 100.6 tonnes
• Zijin’s Production Goal: 100-110 tonnes annually by 2028
• Market Impact: Enhanced reserves, profitability, and global standing
• Information about parties to the Transactions: 65% and 35% of Cantech’s shares are held by V Group International S.A. (under management of VERNY CAPITAL, one of the largest equity investment companies in Kazakhstan, acting as an investment advisor to V Group International S.A.) and RCF VII-RG Gold S.à.r.l.

Zijin Mining’s bold vision and strategic investments underscore its commitment to reshaping the global gold mining landscape. This acquisition is not just a win for Zijin but also a significant development for the gold industry.