High-quality gold reserves have a promising future, ZHAOJIN MINING is highly regarded by major banks

According to the Wise Finance APP, in recent days, several major banks have collectively issued research reports "bullish" on Zhaojin Mining (01818). Institutions have pointed out that Zhaojin Mining has a large amount of high-quality gold reserves, its internationalization strategy has shown results, and it continues to explore new gold-producing areas, including important global gold-producing regions such as the Abuja gold mine and the Sierra Leone gold mine. Coupled with the current strong and stable gold price, institutions believe that Zhaojin's future prospecting outlook is huge, and its performance is promising.

Specifically, UBS pointed out that with the upcoming production of the offshore gold mine project and the acquisition of the Australian-listed mining company Tietto, Zhaojin's gold production is expected to reach 46 tons in 2028, with a compound annual growth rate from 2023 to 2028 of 27%, making it the third largest gold producer in China. The bank predicts that the company's annual compound growth rate from 2023 to 2026 will reach 85%.

UBS expects the gold price to remain strong and stable from 2024 to 2026, and has raised its gold price forecast to $2365 to $2775 per ounce. The bank's model also shows that over the past three years, Zhaojin has been the most sensitive stock to gold prices among all AH gold stocks. UBS initiated coverage on Zhaojin Mining (01818) with a "buy" rating and a target price of HKD 17.9.

Haitong Securities initiated coverage with a "outperform the market" rating for Zhaojin Mining. On the resource side, Haitong Securities mentioned that Zhaojin Mining's core producing mines include Xiadian gold mine and Dayingezhuang gold mine, with the core under-construction mine being the offshore gold mine, and recent acquisitions include the Abuja gold mine and the Sierra Leone gold mine. As of the end of 23, the company had a total gold resource of 1185.01 tons, with an average grade of 3.54 grams; and an equity resource of 949.09 tons, with an average grade of 3.47 grams per ton.

Haitong Securities further pointed out that the future growth points for Zhaojin lie in the fact that some of the company's main producing mines have been included in the Zhaoyuan City mineral resource integration and optimization plan, mainly including Canzhuang gold mine, Dayingezhuang mining area, Xiadian mining area, etc. In addition, the offshore gold mine is about to start production. The company holds a 70% stake in Ruihai Mining, with the main asset of Ruihai Mining being the mining rights in the northern sea area of Sanshan Island. The mine has a cumulative ore resource of 134 million tons, a gold resource of 562 tons, and an average gold grade of 4.20 grams per ton. The total investment in the offshore gold mine project is approximately 6 billion yuan, and it is expected to be completed and put into production in 25 years. After reaching full production, the average unit ore dressing cost per ton is estimated to be 340 yuan, with an annual gold production of about 15-20 tons.

Furthermore, the company's internationalization strategy has shown results, as Zhaojin Mining successfully acquired 100% equity of Tietto Mineral through a tender offer, indirectly holding an 88% stake in the Abujar mine. As of the end of 23, the mine has ore reserves of 124 million tons, with a grade of 1.0 gram per ton, and a gold metal content of 119 tons. The expected average annual gold production during the mine's service period is 5.3 tons, with a total sustaining cost of $982 per ounce First Shanghai also stated that based on the high gold prices and the continuous release of the company's future gold production capacity, the company's target price for the next 12 months is HKD 17.46, corresponding to a 35x PE valuation center in 2025, with a 27.60% upside potential from the current price. It is the first coverage with a buy rating.

First Shanghai believes that on June 6, the Australian Stock Exchange announced that Iron Ore Mining would be officially delisted from the ASX at the end of the trading day, marking the successful completion of Zhaojin Mining's comprehensive tender offer for Iron Ore Mining. Its flagship asset is the Abujagold mine located in Cote d'Ivoire, West Africa.

It is worth noting that this gold mine is expected to become one of the top 20 gold mines in West Africa, a globally important gold-producing region. With a mining area of 1,114 square kilometers, it has gold reserves of 1.36 million ounces and resources of 3.83 million ounces. Currently, less than 10% of the area has been explored, indicating huge future exploration prospects. The Abujagold mine started production in July 2023, with an estimated annual production of about 94,000 ounces in 2023, indicating a further increase in the company's resource reserves.

Currently, institutions generally give positive ratings and high target prices to Zhaojin Mining, indicating a consistent market judgment on its future development. Zhaojin Mining is expected to continue to maintain a favorable position in the future gold market competition