Zijin Mining Expands Capital Footprint Again: Plans to Invest 18.2 Billion Yuan to Acquire Chifeng Gold

Zhongjing reporter Li Zhe reports from Beijing

After Chifeng Gold (600988.SH, 06693.HK) disclosed the intention to transfer equity of its actual controller, Zijin Mining (601899.SH, 02899.HK) announced just four days later that it plans to acquire control for a consideration of 18.258 billion yuan.

According to Zijin Mining’s announcement, on March 22, its wholly-owned subsidiary Zijin Gold (Group) Co., Ltd. (hereinafter referred to as “Zijin Gold”) signed a share transfer agreement with Li Jinyang, the controlling shareholder and actual controller of Chifeng Gold, and his concerted actors, for a transaction amount of approximately 10.006 billion yuan. On the same day, Zijin Gold also signed a “Strategic Investment Agreement” with Chifeng Gold, intending to subscribe to 311 million newly issued H shares at a price of 30.19 HKD per share (approximately 83% of the average price of Chifeng Gold’s H shares over the last sixty full trading days before suspension). The subscription amount is about 9.386 billion HKD (equivalent to approximately 8.252 billion yuan), bringing the total transaction consideration to about 18.258 billion yuan.

Upon completion of the above transactions, Zijin Mining’s wholly-owned subsidiaries will hold approximately 572 million shares of Chifeng Gold, accounting for 25.85% of the total share capital after the increase. Zijin Mining thus gains control of Chifeng Gold and will include it in its consolidated financial statements.

Speed of the transaction draws market attention

The rapid advancement of this transaction has garnered significant market attention.

On the evening of March 18, Chifeng Gold announced that it had received notice from its controlling shareholder and actual controller Li Jinyang regarding plans to transfer shares held by him and his concerted actors, which may result in a change of the company’s actual controller. The company’s stock was suspended from trading from the morning of March 19, with the suspension expected to last no more than five trading days.

Just four days later, on March 22, Chifeng Gold disclosed in an announcement that Li Jinyang and his concerted actor, Zhejiang Hanfeng Venture Capital Partnership (Limited Partnership) (hereinafter referred to as “Zhejiang Hanfeng”), signed the “Share Transfer Agreement for Chifeng Jilong Gold Mining Co., Ltd.” (hereinafter referred to as the “Agreement”) with Zijin Mining’s wholly-owned subsidiary Zijin Gold.

According to the “Agreement,” Zijin Gold intends to acquire 242 million A shares of Chifeng Gold held by Li Jinyang and his concerted actors at a price of 41.36 yuan per share, with a transaction amount of approximately 10.006 billion yuan, representing a 1.3% premium over the closing price of Chifeng Gold’s A shares before the suspension.

Furthermore, Zijin Gold also signed a “Strategic Investment Agreement” with Chifeng Gold, intending to subscribe to 311 million newly issued H shares at a price of 30.19 HKD per share, with a subscription amount of approximately 8.252 billion yuan, with the H share subscription price being about 83% of the average price of Chifeng Gold’s H shares over the last sixty full trading days before the suspension.

After this transaction is completed, Zijin Mining’s wholly-owned subsidiaries will hold a total of 572 million shares of Chifeng Gold, approximately 25.85% of the total shares after the increase. Zijin Mining will gain control of Chifeng Gold and achieve consolidated financial reporting.

Zijin Mining stated that this transaction is a package agreement aimed at acquiring control of Chifeng Gold, making timely use of the market window following the significant rise and subsequent short-term correction in gold prices. The pricing of this transaction is prudent and reasonable, aligning with the interests of the company and all shareholders.

With the framework of this transaction finalized, the influence of Chifeng Gold’s former founder, Zhao Meiguang, is gradually fading. Zhao Meiguang, the former controlling shareholder and actual controller of Chifeng Gold, passed away on December 11, 2021, holding 237 million shares of Chifeng Gold, accounting for 14.27% of the company’s total share capital. According to Zhao Meiguang’s will, and notarized by the Beijing Chang’an Notary Office, these shares were inherited by his spouse, Li Jinyang.

Subsequently, on December 12, 2021, Li Jinyang wrote to the board of directors of Chifeng Gold, expressing full cooperation with the management team led by Chairman Wang Jianhua and compliance with Chifeng Gold’s strategic development plans.

Since December 21, 2019, Wang Jianhua has been serving as the chairman of Chifeng Gold. Based on his work history, Wang Jianhua previously held positions as a director and president of Zijin Mining. Additionally, among the executive team of Chifeng Gold, the company’s executive director and vice president Yang Yifang, as well as vice president and CFO Huang Xuebin, have all previously worked at Zijin Mining.

Did these executives facilitate the rapid agreement on the transaction between Zijin Mining and Chifeng Gold? In response, reporters from China Business Journal sought verification from both Zijin Mining and Chifeng Gold, but no response was received by the time of publication.

It is noteworthy that Chifeng Gold’s A-share stock fell to the daily limit on the day of its resumption of trading on March 23.

Transferring control at a high stock price

Looking back at 2025, the upward cycle of gold prices brought significant performance growth for Chifeng Gold.

The financial report shows that Chifeng Gold achieved operating revenue of 12.639 billion yuan in 2025, a year-on-year increase of 40.03%; net profit of 3.082 billion yuan, a year-on-year increase of 74.70%; and non-net profit increased by 79.87% year on year.

Driven by performance growth, Chifeng Gold’s debt ratio continued to decline—from 54.36% at the end of 2023 to 33.91% at the end of 2025. The net assets attributable to shareholders of the listed company increased from 6.152 billion yuan at the end of 2023 to 13.415 billion yuan at the end of 2025.

In this context, Chifeng Gold’s stock price rose from 14 yuan per share at the beginning of 2025 to 31.24 yuan per share at the end of the year and reached a historic high of 51.5 yuan per share on January 29, 2026. Li Jinyang chose this point to transfer control.

Chifeng Gold operates six gold mines and one polymetallic mine, with business covering China, Southeast Asia, and West Africa. As of December 31, 2025, Chifeng Gold’s consolidated gold resource amount is 583 tons, with an average grade of 1.54 grams per ton; copper resource amount is 590,000 tons, with an average grade of 0.35%; zinc (lead) resource amount is 560,000 tons, with an average grade of 2.91%; molybdenum resource amount is 80,000 tons, with an average grade of 0.12%; and rare earth resource amount is 60,000 tons, with an average grade of 286.17 grams per ton.

In recent years, through capital operations, Chifeng Gold has successively acquired the Laos Vientiane Mining’s Seiban Mine in 2018 and the Ghana Wassa Gold Mine in 2022. Among them, Laos Vientiane Mining enjoys exclusive rights for mineral resource exploration and mining within a total area of 1,127 square kilometers, including the Seiban mine; the Ghana Wassa Gold Mine is located in a favorable mineralization area on the world-renowned Ashanti Gold Belt, with significant exploration potential in the mine area and surrounding areas.

Currently, the Laos Seiban Gold-Copper Mine project combines open-pit and underground mining methods, with independent production lines for gold and copper, designed to have a mining capacity of approximately 3.5 million tons per year, primarily producing quality gold (containing 30%-80% gold and 10%-70% silver) and electrolytic copper. In 2025, this project processed 3.554 million tons of ore. The Ghana Wassa Gold Mine project also adopts a combination of open-pit and underground mining methods, with a designed mining capacity of 3 million tons per year and a milling capacity of 4 million tons per year, primarily producing quality gold with a gold content of over 80%. In 2025, this project processed 3.262 million tons of ore.

The production of these two mines has driven the performance growth of Chifeng Gold. From 2021 to 2025, Chifeng Gold’s gold production increased from 8.1 tons to 14.51 tons, with an average annual compound growth rate of 26%. Furthermore, Chifeng Gold’s 2025 annual report indicates that the target for gold production and sales in 2026 is 14.7 tons and 11,000 tons of electrolytic copper.

Regarding this acquisition, Zijin Mining stated that it adheres to a resource-first strategy, actively seeking merger and acquisition opportunities with high-quality listed companies in the same industry globally in recent years. This acquisition model helps to radiate more project resources at a lower acquisition cost, diversify investment risks, and enhance the level of asset securitization. All gold mine projects under Chifeng Gold are in production status and can contribute production and profits in the acquisition year, with further potential improvements in production and operational levels expected, anticipating significant economic benefits from the investment. At the same time, Chifeng Gold’s core mines are located in globally important gold mineralization belts, with favorable mineralization conditions and excellent resource endowments. However, due to insufficient prior geological exploration investment, the overall resource exploration progress is lagging, and potential resource value has not been fully released. Through increasing systematic exploration investment, there is significant potential for resource reserve growth.

It is worth mentioning that in this transaction, Zijin Mining is also participating in Chifeng Gold’s H-share private placement, with the raised funds of approximately 9.386 billion HKD being directed towards the latter’s overseas business, specifically for the construction of new power plants, exploration projects, underground engineering, equipment procurement, upgrading and transformation of processing plants, and potential mining resource acquisitions. As of the end of 2025, Zijin Mining’s cash balance was 65.577 billion yuan, sufficient to cover the transaction consideration of 18.258 billion yuan.