· Zijin Mining offers to pay RMB 499 million to acquire the Sawaya’erdun gold mine in Wuqia County, Kezilesu Autonomous Prefecture, Xinjiang.

· With 119.5 tonnes of gold resources, Sawaya’erdun is an ultra-large, undeveloped gold deposit rarely seen in China.

· Sawaya’erdun’s throughput is designed at 8,000 tonnes per day and it is expected to produce 2.76 tonnes of gold per annum after reaching its nameplate capacity.

A sketch map of the mineralized belts of Sawaya’erdun

Zijin News - On the evening of July 14, Zijin Mining announced it offers to acquire the Sawaya’erdun gold mine for RMB 499 million. The mine is situated in Wuqia County, Kezilesu Autonomous Prefecture, Xinjiang, China.

Sawaya’erdun is a rare ultra-large, undeveloped gold deposit in China. It has 119.5 tonnes of gold resources grading 1.56 g/t. Of which, 60.07 tonnes of gold grading 2.59 g/t can be extracted on an industrial scale; 59.43 tonnes are low-grade gold, with an average of 1.12 g/t. Upon the completion of the deal, Zijin will have about 2,500 tonnes of gold resources.

The mine has been granted a 140 Ktpa mining permit and a peripheral exploration right. It is expected to initiate project construction soon and prepare for project expansion later. Based on the pre-feasibility study by Zijin’s technical team, the project’s throughput is set at 8,000 tonnes per day, with an overall throughput of 2.64 Mtpa per annum, and construction will be completed in 2 years.

It has a LOM of 25 years and will produce 2.76 tonnes of gold per year at its full capacity. The mine will start with open-pit mining and then proceed to underground mining. The project will benefit from Zijin’s expertise in recovering metal from low-grade, refractory ores. Biological pre-oxidation, a method that is simple, high in investment returns, and environmentally friendly, will be used.

Situated in China’s northwest border region, at the well-known Central Asian Orogenic Belt, the Sawaya’erdun deposit is a shallow metamorphic, medium-low temperature, infiltration hydrothermal (Carlin-type) gold deposit. The belt enjoys good metallogenic conditions, with proven large and extra-large gold deposits discovered, including Zijin’s Taldybulak Levoberezhny Gold Mine in Kyrgyzstan.

Twenty-one mineralized belts have been discovered in the Sawaya’erdun mine, among which the main orebody is 3,660 meters long and 6.22 meters thick on average. As inferred from exploration results, there is still potential for discoveries in the deep and surrounding areas of the deposit.

Zijin will complete the acquisition in two steps. It will acquire 100% of the equity interest in Xinjiang Weifu Mining Co., Ltd. for RMB 461 million. It will also pay RMB 38.2361 million to acquire the debt interests in Weifu Mining and Tongyuan Mining held by Alexis Investments and other creditors. After the acquisition, Zijin will hold a 70% interest in Tongyuan Mining and RMB 263 million worth of debt interest in the company, which holds a 100% interest in the Sawaya'erdun gold mine.

Analysts suggest that by nature gold is an instrument for hedging against risks and inflation. In a world with increasing uncertainties, the value of gold is being reassessed.

Gold is among Zijin’s key business segments and important sources of profit growth. In 2021, Zijin produced about 48 tonnes of mined gold. And its production of mined gold grew by 22% year-on-year in the first half of 2022.

Zijin operates world-class gold projects like the Buriticá Mine in Colombia, and projects in China such as Longnan Zijin, Guizhou Zijin and Shanxi Zijin. With the production capacity of these operations increasing, Zijin is expected to produce around 60 tonnes of mined gold in 2022.

Translator: Shang Yutong  Editor: Liu Xing  Reviser: Li Yuanxing  Editor-in-Chief: Wang Jie