Shandong Gold: plans to acquire Xiling Gold Mine for 10.33 billion yuan

Recently, Shandong Gold (01787. HK; 600547. SS) announced that it plans to acquire the exploration rights of the Xiling Village gold mine in Laizhou City, Shandong Province, held by Shandong Gold Geological and Mineral Exploration Co., Ltd., a wholly-owned subsidiary of Shandong Gold Group, for a price of 10.33 billion yuan. After the completion of this acquisition, the reserve resources of Shandong Gold will increase by 45%, and the production of mineral gold is expected to increase by 36%. This strategic measure will not only enhance the resource reserves and market share of Shandong gold, but also bring considerable profits to it.

The Xiling Gold Mine is currently the largest single gold deposit discovered in China, with a resource of 147 million tons of gold ore, 592.186 tons of gold metal, and an average grade of 4.02 grams per ton. This acquisition will provide a stable source of gold for Shandong Gold and further enhance its position in the global gold market.

According to the project plan, the production scale of Xiling Gold Mine is 3.3 million tons/year, corresponding to a mineral gold production of 14.2 tons/year. According to the forecast, the project is expected to achieve a net profit of 2.302 billion yuan, 2.301 billion yuan, and 2.294 billion yuan respectively from 2031 to 2033. This prediction indicates that Xiling Gold Mine has high profitability and will provide strong support for the sustainable development of Shandong Gold.

This acquisition is of great significance to Shandong Gold. Firstly, it will increase the company's resource reserves, enhance its market share and competitiveness. Secondly, the profitability of Xiling Gold Mine is strong, which will help improve the company's profitability and shareholder returns. In addition, this acquisition will also drive the company's strategic transformation and upgrading, enhancing its sustainable development capabilities