Zijin Mining Group, with a market capitalization exceeding 850 billion yuan, plans to acquire CHIFENG GOLD, valued at nearly 70 billion yuan, for approximately 18.3 billion yuan.

According to a disclosure by Zijin Mining on March 23, its subsidiary Zijin Gold intends to gain control of CHIFENG GOLD through a combination of an agreement to acquire A-shares and a subscription to a private placement of H-shares.

The agreed acquisition price for the A-shares represents a 1.3% premium over CHIFENG GOLD's last A-share closing price of 40.82 yuan per share before trading was halted. The subscription price for the privately placed H-shares is set at approximately 83% of the average price of CHIFENG GOLD's H-shares over the sixty full trading days prior to the halt, indicating a discounted rate.

Public records show that Li Jinyang is the current actual controller of CHIFENG GOLD, having assumed the role in 2021 following the passing of her husband, Zhao Meiguang. Li Jinyang, featured again on the 2026 Hurun Global Rich List released earlier this March with an estimated wealth of 13 billion yuan, will completely exit CHIFENG GOLD if the transaction proceeds smoothly.

However, the market's immediate reaction to this multi-billion-yuan merger appears unfavorable. By the close of trading on the day the acquisition plan was announced, CHIFENG GOLD's A-shares hit the downward limit, while its H-shares plummeted over 25.1%. Zijin Mining's A-shares and H-shares also fell by 3.38% and 4.97%, respectively.

Zijin Mining's Ambitious 18.3 Billion Yuan Bid for CHIFENG GOLD

As per Zijin Mining's announcement, on March 22, its wholly-owned subsidiary Zijin Gold entered into a Share Transfer Agreement with Li Jinyang, the controlling shareholder of CHIFENG GOLD, and her concert party, Zhejiang Hanfeng.

Zijin Gold plans to acquire a total of 242 million CHIFENG GOLD A-shares held by them at a price of 41.36 yuan per share, amounting to a transaction value of approximately 10.006 billion yuan.

On the same day, Zijin Gold also signed a Strategic Investment Agreement with CHIFENG GOLD, proposing to subscribe to 311 million H-shares via a private placement at 30.19 Hong Kong dollars per share, with a subscription amount of roughly 9.386 billion Hong Kong dollars (equivalent to about 8.252 billion yuan).

Zijin Mining stated that this transaction is a package agreement aimed at obtaining control of CHIFENG GOLD.

Upon completion, Zijin Mining's subsidiary will collectively hold approximately 572 million shares of CHIFENG GOLD, representing about 25.85% of its total shares post-capital increase, and will achieve financial consolidation of CHIFENG GOLD.

Li Jinyang and Zhejiang Hanfeng will no longer hold any shares in CHIFENG GOLD, marking a complete exit from the "gold empire" she inherited from her late husband.

Regarding the acquisition, Zijin Mining noted that leveraging its flexible and efficient decision-making mechanism, it seized the market window following a significant short-term correction in gold prices after a previous sharp rise to proactively advance this deal. Compared to typical premiums for listed company control transfers, the pricing is prudent and reasonable, aligning with the interests of the company and all shareholders.

Background checks reveal that Zijin Mining, the suitor for CHIFENG GOLD, is a significant player. In the Forbes 2025 Global 2000 list, ranked comprehensively by revenue, profit, assets, and market value, Zijin Mining ranked first among global listed gold companies and fourth among global metals and mining companies.

Its 2025 annual report showed outstanding results: annual revenue reached 349.079 billion yuan, a 14.96% year-on-year increase; net profit attributable to shareholders surged 61.55% to 51.777 billion yuan, a record high since the company's inception.

During the reporting period, Zijin Mining's mineral product output steadily increased, achieving 90 tonnes of mined gold, 1.09 million tonnes of mined copper, 25,500 tonnes of lithium carbonate equivalent, 400,000 tonnes of mined zinc (lead), and 439 tonnes of mined silver.

Notably, its mined gold growth rate ranked among the top globally, and mined copper output exceeded one million tonnes for the third consecutive year.

In 2025, revenue from gold operations accounted for 44.43% of Zijin Mining's total revenue (post-elimination), with a gross profit contribution of 40.89%, solidifying gold as the company's primary cash cow.

Last year, Zijin Mining also achieved successive successes in capital operations. It completed the acquisition and交割 of two major producing gold mines overseas: the Akyem mine in Ghana and the Ridgeway mine in Kazakhstan, adding a total of 483 tonnes of attributable gold resources.

Domestically, it acquired control of Zangge Mining, adding 2.07 million tonnes of attributable copper resources and strategic potash reserves, and completed the acquisition of the Shapinggou molybdenum mine in Anhui, adding 1.32 million tonnes of attributable molybdenum resources.

Furthermore, in September last year, Zijin Mining successfully completed the spin-off and listing of its subsidiary ZIJIN GOLD INTL, raising 28.7 billion Hong Kong dollars, marking the largest IPO globally in the gold mining sector and the largest overseas IPO for a Chinese mining company to date.

CHIFENG GOLD's Strong 2025 Performance, But Gold Output Misses Target

Shifting focus to the target, CHIFENG GOLD, it currently operates six gold mines and one polymetallic mine, with businesses spanning China, Southeast Asia, and West Africa.

In terms of resource reserves, CHIFENG GOLD's appeal to Zijin Mining is clear. As of December 31, 2025, CHIFENG GOLD had consolidated gold resources of 583 tonnes, with an average grade of 1.54 grams per tonne, and copper resources of 590,000 tonnes, averaging 0.35%.

Zijin Mining itself holds total resources exceeding 4,600 tonnes of gold, about 110 million tonnes of copper, over 12 million tonnes of zinc (lead), and over 18 million tonnes of lithium carbonate equivalent. Successfully integrating CHIFENG GOLD would significantly expand its resource portfolio.

Financially, this period represents a highlight in CHIFENG GOLD's history. According to its latest 2025 annual report, annual revenue surged 40% year-on-year to 12.639 billion yuan, while net profit attributable to shareholders jumped 74.7% to 3.082 billion yuan.

This significant growth is directly linked to the historic bull market in gold during 2025.

In an earlier earnings forecast, CHIFENG GOLD mentioned that the average selling price of its primary gold products rose about 49% year-on-year in 2025, significantly enhancing the profitability of its domestic and international mining operations.

Concurrently, net cash flow from operating activities increased by 69.97% from 3.268 billion yuan in 2024 to 5.556 billion yuan in 2025.

Additionally, CHIFENG GOLD's financial structure improved further. Its asset-liability ratio was 33.91% at the end of 2025, down 13.34 percentage points from the start of the year, with interest-bearing debt balances of approximately 878 million yuan, a decrease of 67.45%.

However, behind these impressive figures lie challenges. In its 2025 interim report, CHIFENG GOLD revised its full-year gold production and sales target down from 16.7 tonnes to 16 tonnes, expressing confidence in meeting this revised goal during investor communications.

Yet, according to a January 2026 earnings forecast, the actual annual production was finalized at 14.4 tonnes, achieving only 90% of the target.

It was noted that under the third phase of its employee stock ownership plan, if the unlock conditions were met, participants could apply to unlock all plan shares on February 24, 2026. However, the annual report stated that the year-on-year gold production growth in 2025 was below 5%, failing to meet the unlock conditions, and thus no equity-settled share-based payment expenses were recognized for the year.

CHIFENG GOLD disclosed that its 2026 gold production and sales target is 14.7 tonnes, with 11,000 tonnes of electrolytic copper. The company plans to focus on safety, production increases, reserve growth, and quality and efficiency improvements to achieve these goals.

Zijin Mining believes that CHIFENG GOLD's gold mining projects are all in production, capable of contributing to output and profit immediately upon acquisition, with potential for further operational and capacity improvements, suggesting significant expected investment returns.

Zijin Mining also pointed out that CHIFENG GOLD's core mines are located in globally significant gold belts with favorable geological conditions and excellent resource endowment. However, due to previous insufficient investment in geological exploration, overall resource exploration progress has lagged, leaving potential resource value unrealized. Subsequent systematic exploration investments, combined with Zijin Mining's leading expertise in geology and deep-level prospecting, are expected to unlock substantial resource addition potential.

Stock Prices Fall on Announcement Day; Billion-Dollar Merger Faces Challenges

Following the announcement, the capital market's short-term reaction to this deal worth over ten billion yuan seemed pessimistic.

On the morning of March 23, CHIFENG GOLD's A-shares and H-shares resumed trading simultaneously. However, by the close, its A-shares hit the downward limit, while H-shares fell over 25.1%. Meanwhile, Zijin Mining's A-shares dropped 3.38%, and H-shares fell 4.97%.

Industry analysis cited by media suggested that CHIFENG GOLD's sharp decline was related to the relatively low acquisition pricing, particularly the discounted H-share placement price. Additionally, recent significant drops in gold prices led some investors facing liquidity issues to deleverage by selling gold assets, with expectations of further short-term adjustment pressure on gold prices.

Reports indicated that since March, the international gold market experienced intense selling pressure, with a particularly sharp decline on March 23.

Data showed spot gold falling through the $4,500, $4,400, $4,300, $4,200, and $4,100 per ounce thresholds, dropping below $4,100 for the first time since late November the previous year, plunging up to 8.7% intraday and erasing all gains for the year.

The precious metals sector led declines in the A-share market that day, with the sector index falling 8.3%. Stocks like CHIFENG GOLD and Sichuan Gold hit the downward limit, while others fell over 9%. Gold jewelry prices from major brands also retreated to around 1,370 yuan per gram.

In its recent annual report, CHIFENG GOLD had explicitly stated that prices for gold, electrolytic copper, and other products are influenced by global supply and demand, geopolitics, monetary policies, inflation, and exchange rates, leading to significant volatility that directly impacts profitability and cash flow stability. Rising costs for energy and materials further squeeze profit margins.

To address these challenges, CHIFENG GOLD's strategies include cost control, efficiency gains, scale benefits, and technological improvements through production expansion, centralized procurement,智能化 transformation, and management optimization. It also plans to use hedging instruments to manage commodity price risks and enhance operational stability.

In the opening of Zijin Mining's annual report, the newly appointed Chairman Zou Laichang wrote about the complex global situation, risks to supply chains, the renewed recognition of mining's fundamental role, disorder in the global governance system pushing gold prices higher, expectations of worsening copper supply-demand imbalances supporting high prices, and energy transition driving demand for critical metals like lithium.

Zijin Mining also mentioned that looking ahead to 2026, the macroeconomic fundamentals supporting gold prices remain solid, suggesting continued enhancement of gold's allocation value.

However, the company noted that amid profound global macroeconomic changes, currency system competition and supply chain restructuring are intensifying. Central banks are expected to maintain gold purchasing to diversify foreign exchange risks and address geopolitical uncertainties.

Zijin Mining believes that persistent macro uncertainty, coupled with concerns about US debt safety and strengthening consensus on gold's strategic allocation, should lead to a sustained recovery in gold ETF investment demand, synergizing with central bank buying. It advised close attention to potential short-term disruptions from US inflation pressures, localized liquidity risks, and policy uncertainty.

Notably, Zijin Mining disclosed its 2026 production targets in the 2025 report: 105 tonnes of mined gold, 520 tonnes of mined silver, 1.2 million tonnes of mined copper, and 120,000 tonnes of lithium carbonate equivalent.

CHIFENG GOLD's 2026 target of 14.7 tonnes of gold could represent a significant contribution to Zijin Mining's overall production goal.

It is important to note that in the acquisition announcement, Zijin Mining included several risk disclosures.

The final交割 depends on fulfilling or obtaining waivers for several conditions, including antitrust review by the State Administration for Market Regulation, compliance review by the stock exchange, and approval of the H-share private placement by CHIFENG GOLD's shareholders, all of which are uncertain. Risks also include exploration results falling short of expectations, and project economics being affected by metal price fluctuations.

Whether this massive acquisition will proceed smoothly remains to be seen.