MONGOL MINING Shares Surge Over 15% as Black Hills Gold Mine Ramps Up Production and Dividend Restrictions Ease

Stock News
02/11

MONGOL MINING (00975) saw its shares rise more than 15% during the trading session. At the time of writing, the stock was up 11.8%, trading at HK$13.45, with a turnover of HK$64.33 million. A research report noted that by 2025, with the development of new mines including gold, the company is transitioning from a single coking coal producer to a multi-mine producer of gold and copper, initially fulfilling the vision implied by its name, "Mining." The company holds a 50% stake in EM Company, which has substantial gold resources. Its Black Hills gold mine commenced production in the fourth quarter of 2025 and is expected to reach its designed capacity of 85,000 ounces by 2026. Based on projected 2026 production of 76,500 ounces from the Black Hills mine, a realized gold price of $5,200 per ounce, and an all-in sustaining cost of $1,200 per ounce, the mine is estimated to contribute $97 million in net profit attributable to the parent company, representing about 40% of the 2024 profit. Under a pessimistic scenario, the contribution would still be around $70 million. The report further stated that the company's balance sheet has been gradually repaired following a 2017 debt restructuring. The repayment of perpetual securities and the replacement of high-yield notes between 2023 and 2025 have further removed obstacles to dividend payments and lowered financing costs. The company has now entered a period of "low net debt," and the peak capital expenditure for the Black Hills project has passed. Considering the synergistic profit improvement from both coal and gold in 2026, the company may meet the restrictive covenants for dividends associated with its priority notes, potentially initiating dividend distributions. Based on a forecasted 2026 net profit attributable to the parent company of $274 million, dividend payout ratios of 30% and 50%, and the market capitalization as of February 6, 2026, the dividend yield could reach 5.2% and 8.7%, respectively.

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