First Shanghai has issued a research report maintaining a "buy" rating on China Gold International (02099) while raising the target price to HK$167.07. The firm believes that the resumption of Jiama mine operations represents not only a turning point for the company's performance but also the beginning of a new growth cycle. The company's "three-step" plan is key to unlocking production capacity bottlenecks in the next phase, directly driving substantial growth in copper, gold, and other major metal production. Combined with expectations of sustained high copper and gold prices under the current global macroeconomic environment, along with Jiama mine's significant low-cost advantages, the firm anticipates explosive growth in the company's future profitability. The enormous potential of peripheral exploration opens up longer-term opportunities for the company.

First Shanghai's main viewpoints are as follows:

**Copper and Gold Price Upward Cycle Provides Strong Tailwinds**

As the company's "cash cow," Jiama mine's stable operations form the foundation of the company's value. The Phase II processing plant of Jiama mine successfully resumed operations on May 30, 2024, and quickly reached a stable level of processing 34,000 tons of ore per day. In the first half of the year, the company's gold and copper production increased by 69% and 230% year-over-year respectively, demonstrating exceptionally strong recovery momentum that exceeded expectations. Combined with expectations of sustained high copper and gold prices under the current global macroeconomic environment, along with Jiama mine's significant low-cost advantages, the company's future profitability is expected to experience explosive growth.

**Jiama Mine's "Three-Step" Expansion Plan Offers High Visibility for Medium to Long-term Growth**

Company management recently announced a clear "three-step" development strategy for Jiama mine. In the first phase, processing capacity will recover from the current 34,000 tons to 50,000 tons per day by mid-2027. In the second phase, normal daily processing capacity will increase from 50,000 tons to 80,000 tons, with enhanced low-grade ore heap leaching processes adding 30,000 tons per day in heap stacking, bringing total daily processing capacity to 100,000-120,000 tons per day. This phase is preliminarily planned for completion during the 15th Five-Year Plan period. In the third phase, daily processing capacity will increase from 80,000 tons to 200,000 tons per day. This strategy focuses on short-term stable production, medium-term capacity expansion, and long-term exploration, aiming to fully unleash the enormous potential of Jiama mine's world-class mineral resources.

**Peripheral Exploration Expected to Create Another Jiama Mine**

The company's Jiama mine has enormous resource expansion potential. Currently, the company's exploration projects at Zegulang North and Bayi Pasture are progressing systematically. Both mining areas have demonstrated tremendous resource potential, with 2-kilometer connecting roads and 5.9 square kilometers of soil sampling completed as of July 8, 2025. Following resource updates, expansion and increased production may become the primary drivers of future performance growth.