Carry Wealth suspends trading in Hong Kong

Carry Wealth suspends trading in Hong Kong

Zijin Mining Group, China's largest gold producer, is set to spin off its international gold-mining operations through a $3 billion initial public offering (IPO) in Hong Kong. This move coincides with gold prices hitting record highs, with the metal's value exceeding $3,500 an ounce. The IPO is expected to create Zijin Gold International, a standalone entity responsible for the group's overseas portfolio.

Zijin Mining's international operations, which account for around 60% of its total output, have been a significant driver of growth. Last year, the company produced 73 tons of gold, with a substantial portion coming from mines in Colombia, Australia, and Suriname. The company aims to expand its production to over 100 tons by 2028, solidifying its position as a top global player.

The timing of the IPO aligns with favorable market dynamics. Gold prices have surged due to central-bank purchases, mounting geopolitical risks, and investor demand for diversification. Hong Kong, too, is experiencing a resurgence in listings, with IPO proceeds expected to more than double this year. The Zijin listing would solidify this trend, providing investors with direct access to one of the world's fastest-growing gold portfolios and the company with the capital it needs to ride out the market momentum.

Zijin's flagship gold assets include the Buriticá mine in Colombia, one of the world's largest high-grade underground deposits, and the Norton Gold Fields in Western Australia. The company has also secured a $1.2 billion gold mine in Kazakhstan and has a 95% stake in Suriname's Rosebel mine. These assets contribute significantly to the company's annual output.

The IPO is expected to be a strategic move for Zijin, allowing it to access Hong Kong's equity markets, where gold miners trade at a premium to their U.S. counterparts. By leveraging higher valuation multiples, the company aims to fund growth projects, such as expanding operations in Africa and South America and developing the Raygorodok mine in Kazakhstan.

Analysts project that Zijin Gold International could command a $12–$15 billion valuation post-IPO, a 40% premium to its current standalone market capitalization. This valuation is underpinned by a robust asset base and the broader gold sector's momentum. Spot gold prices have surged to record highs, driven by U.S.-China tensions, central bank purchases, and inflationary pressures.

The IPO's timing is critical, as Hong Kong-listed gold miners have outperformed global peers. Zijin's strategic repositioning aligns with the sector's structural re-rating, driven by geopolitical tensions, inflationary pressures, and surging central bank demand.

References:
[1] https://www.benzinga.com/markets/commodities/25/09/47502880/zijin-mining-plans-3-billion-hong-kong-listing-as-gold-hits-record-highs
[2] https://www.ainvest.com/news/zijin-gold-3-billion-hong-kong-ipo-strategic-move-global-gold-market-dominance-2509/