Zijin News – On the evening of October 12, 2022, Zijin Mining announced it will acquire a 30% equity interest in Shandong Ruiyin Mining Industry Development Co., Ltd. (“Shandong Ruiyin”) for RMB 3.9845 billion through an equity transfer agreement. It will become the second-largest shareholder of the largest gold-only deposit in China following the completion of the acquisition.
Situated to the north of the Sanshan Island in Shandong province, the Haiyu Gold Mine is the largest gold-only deposit discovered in the world in the past 20 years. It is also a rare undeveloped, high-grade gold mine in China. The deposit has reported JORC compliant gold resources of approximately 562.37 tonnes grading 4.20 g/t on average, of which 212.21 tonnes are reserves grading 4.42 g/t on average.
The Haiyu Gold Mine is 100% owned by Shandong Ruiyin. Upon completion of the proposed transaction, Zijin will hold a 30% interest in the mine, adding 168.71 tonnes of attributable gold resources and bringing the group’s total gold resources to more than 2,600 tonnes.
Construction of the mine is scheduled to complete in 2025. After it reaches steady-state production, the mine is expected to produce 15 to 20 tonnes of mined gold per annum over a 23-year mine life, which will position it as the largest gold mining project in China and increase Zijin’s attributable gold production by 4.5 to 6 tonnes.
Situated in the Sanshan Island-Cangshang Fracture Zone, a highly prospective metallogenic belt in the Jiaodong Pennisula of Bohai Bay, the Haiyu Gold Mine is the first seabed gold mine discovered in China. Thanks to good metallogenic conditions, a number of ultra-large and large gold mines have been discovered in the area, which is renowned for gold mining and is one of the important gold production bases in China.
With a thick and large orebody, the Haiyu Gold Mine has seen its gold resources increase by approximately 100 tonnes in just a few years since its discovery. The mine, also known as the Kingdom of Gold 2,000 Meters Beneath the Ocean Surface, enjoys significant potential for further increase in reserves, as the orebody remains open at depth.
The project will be developed as an underground mine, with a throughput of 12,000 tonnes per day. It is expected to achieve a recovery of up to 97% at low costs, thanks to its high-grade gold ore.
The project has obtained almost all necessary approvals and permits, including those for mining, project construction, environmental assessment, energy conservation and safety facilities. According to its 2021 preliminary development plan, the project requires a total investment of around RMB 6 billion, of which RMB 1.4 billion has been already invested.
Based on past gold-mining experience in the region and the geological report of the mine, the undersea muddy sediments around the deposit serve as the hanging wall of the orebody, separating it from seawater and providing it with good stability. This creates favorable conditions for future mining activities.
As the ballast of national financial security, gold resources are significant strategic assets and also serve as a hedge against risks. An S&P report shows that in the last decade, finding gold has become more difficult across the world; and there are much fewer newly discovered gold deposits, especially near-surface ones. Major global gold miners have thus turned more of their attention to deep underground zones for gold resources.
Zijin’s foray into deep-sea gold mining will boost its gold resources and help it achieve an annual production of 80 to 90 tonnes of gold by 2025. The project will also give Zijin new experience in mining development, thereby increasing its competitiveness in the global gold mining industry.
The controlling shareholder of Shandong Ruiyin is Zhaojin Mining Industry Co., Ltd., a large gold mining company with a wealth of experience in the operation of gold mines and deep-sea mining. Zhaojin supports Zijin’s proposed acquisition of stakes in the seabed mine.
The two companies will leverage each other’s expertise in the construction and operation of the Haiyu Gold Mine, to create synergy and strive to develop it into the largest, deepest, and most profitable modern gold mine in China.
Translator: Shang Yutong Reviser: Li Yuanxing Editor-in-Chief: Wang Jie