Chifeng Jilong Gold Mining, one of China’s largest private gold producers, is actively seeking acquisition targets worldwide. Despite recent market volatility caused by global trade tensions, the company remains cautious and strategic in its approach to acquisitions.
In an online interview with Bloomberg on Thursday, CEO Lydia Yang revealed that the company has seen an increase in available projects, with many owners willing to sell. She also mentioned that the number of potential acquisition opportunities this year appears greater than in previous years.
The company has been rapidly expanding its production both domestically and internationally. Its gold output has surged from approximately 2 tons in 2019 to 15.2 tons in 2024. Chifeng Jilong now operates five gold mines in China, and one each in Ghana and Laos, the latter two of which were acquired in 2021.
Driven by the record surge in gold prices over the past three years, Chinese mining companies, led by Chifeng, are increasingly competing with international giants for acquisitions. As part of its global expansion strategy, Chifeng Jilong listed on the Hong Kong Stock Exchange in March, raising HK$2.82 billion (US$361 million). Since its listing, its stock price has skyrocketed by 80%.
“Holding a listing in Hong Kong provides us with direct access to capital, allowing us to act swiftly when we find attractive investment opportunities,” Yang explained.
With global gold production stagnating at 2018 levels and exploration activities slowing down, some companies with aging assets are turning to mergers and acquisitions (M&A) as the best path to growth. Chifeng Jilong’s cautious approach reflects broader trends within the sector. Alongside companies like China’s Luoyang Molybdenum, Australia’s Polar Resources, and South Africa’s gold miners, there has been a recent surge in M&A activity in the precious metals sector.
According to Bloomberg’s calculations, the value of completed and proposed precious metal transactions in 2024 has grown by nearly a quarter, representing over half of all metals-related M&A activity.
However, despite the increasing opportunities, Yang stated that Chifeng Jilong will maintain a measured approach to acquisitions due to the current fluctuations in gold prices. After reaching a record high of approximately $3,500 per ounce last month, gold prices have fallen by around 8%, fueled by optimism over improved US-China relations, which has diminished gold’s appeal as a safe-haven asset.
“We’re facing high valuations, and sellers’ expectations are increasingly inflated,” Yang said. “It’s better to wait until the situation stabilizes before making any moves.”
In conclusion, while Chifeng Jilong is aggressively exploring global acquisition opportunities, it remains cautious in its approach due to price volatility and shifting market conditions. The company’s careful strategy reflects the broader challenges and opportunities facing the global mining sector as it adapts to an increasingly complex economic environment.
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