Shandong has discovered a world-class gold mine! Resources | Mineral Resources | Production | Shandong Gold Group | Xiling | Gold Mine | Shandong | Gold

Shandong not only has Zibo barbecue, but also gold!

On August 10th, Shandong Gold Group held a press conference on the exploration results of the Xiling Gold Mine in Jinan, announcing that it had discovered the largest single giant gold deposit in China, the Xiling Gold Mine, in Shandong Province. On the basis of a detailed investigation and record of 382.58 tons of gold metal in 2017, it added 209.606 tons of gold metal, with a cumulative exploration of 592.186 tons of gold metal and 590 tons of associated silver, and an estimated potential economic value of over 200 billion yuan.

It is worth mentioning that Shandong Gold announced in May that when the exploration rights of Xiling Gold Mine meet the transfer conditions, Shandong Gold Group will urge Shandong Gold Geological Exploration Company to inject the exploration rights of Xiling Gold Mine into Shandong Gold according to the promised procedures.

The world's largest single gold deposit in China

Public information shows that Shandong Gold Group was established in 1996 and is a large state-owned enterprise under the provincial jurisdiction. The group is currently an official member of the World Gold Council. In 2019 and 2020, its gold production ranked 10th among global gold enterprises for two consecutive years. Shandong Gold Mining Co., Ltd., a listed company controlled by the group, is listed in Shanghai and Hong Kong.

Li Hang, Deputy Secretary of the Party Committee, Director, and General Manager of Shandong Gold Group, introduced at a press conference that the Xiling Gold Mine is located in Laizhou City, Shandong Province. The Jiaodong mineralization area is the third largest gold mine area in the world and an important gold enrichment area and national level integrated exploration area in China. Its gold storage and production both rank first in the country.

Li Hang pointed out that the resources of Xiling gold deposit are mainly distributed between elevations of -1000 meters to -2500 meters, and it is currently the deepest single gold deposit discovered in China. The maximum strike of the ore body is 2085 meters, the maximum oblique depth is 2057 meters, the average thickness is 8.13 meters, and the thickest point reaches 66.52 meters. It has been found that the amount of gold ore is 147 million tons, with an average grade of 4.02 grams per ton. If the production scale of the mine is 3.3 million tons per year, it can serve the mine for more than 40 years.

Li Hang stated that the discovery and exploration of the Xiling gold mine have significant economic and scientific value. It not only enriches and improves the theory of gold mineralization in the Jiaodong region, but also provides a reference and model for deep mineral exploration and the expansion of existing gold enriched areas in China. It also provides strong support for building a "world-class gold production base" and consolidating safe and reliable strategic mineral resource reserves.

It is understood that the Xiling Gold Mine took 23 years from the census to the exploration stage. During this period, Shandong Gold Group invested approximately 880 million yuan in total, drilled 180 holes, and completed over 300000 meters of mechanical core drilling. Among them, 50 holes were drilled at depths of over 2000 meters, and the "China's first deep drilling for rock and gold exploration" was designed and implemented, with a final hole depth of 4006.17 meters.

It is reported that in recent years, Shandong Gold Group has explored numerous regions in China, South America, Africa, and other regions, successfully discovering four super large gold deposits of over 100 tons, including Dongfeng, Xinli, Nanlu Xinmu, and Xiling, providing high-quality resource guarantees for building a "world-class gold production base". As of the end of June 2023, Shandong's proven and controlled gold resources have reached 2860 tons, with a controlled and inferred gold resources exceeding 3200 tons. In addition, there are also 9966 tons of silver, 4.24 million tons of lead and zinc, 780000 tons of molybdenum, 30.23 million tons of iron ore, and 190000 tons of copper, mainly distributed in provinces and regions such as Shandong, Inner Mongolia, Henan, Gansu, Qinghai, Yunnan, Jilin, Heilongjiang, Xinjiang, as well as multiple countries such as Argentina, Ghana, and Australia.

Exploration rights will be injected into listed companies

It is understood that the exploration rights holder of Xiling Gold Mine is Shandong Gold Geological and Mineral Exploration Co., Ltd., a wholly-owned subsidiary of Shandong Gold Group. Shandong Gold Geological Exploration Company has been conducting exploration work within the exploration rights scope of Xiling Gold Mine since 2000.

Regarding the issue of exploration rights for the Xiling gold mine, Shandong Gold announced on May 18th that, in accordance with the commitment to avoid industry competition between Shandong Gold Group and Shandong Gold, when the exploration rights of the Xiling gold mine meet the transfer conditions, Shandong Gold Group will urge Shandong Huangjin Geological Exploration Company to inject the exploration rights of the Xiling gold mine into Shandong Gold according to the procedure as promised.

Shandong Gold also stated that it has organized and implemented the relevant exploration of gold resources. When the exploration rights of Xiling Gold Mine of Shandong Gold Geological Exploration Company meet the conditions, they will be injected into the company according to the procedure, and the specific time of injection is not yet determined.

The annual report shows that in 2022, Shandong's gold mining production was 38.67 tons, a year-on-year increase of 56.06%, accounting for 13.09% of the total domestic mineral gold in 2022. The production of 7 mines under the company has reached a new high, with Jiaojia Gold Mine's annual gold production exceeding 10 tons, becoming the largest gold production mine in the country.

Shandong Gold released a performance forecast announcement in July, predicting a net profit of 800 million to 950 million yuan in the first half of 2023, an increase of 244 million yuan to 394 million yuan compared to the same period last year, a year-on-year increase of 43.9% -70.88%. During the reporting period, the company's gold sales price was higher than the same period last year.

Guoxin Securities previously released a research report stating that Shandong Gold is backed by Shandong Gold Group and based in Shandong, with continuous growth both internally and externally. From 2005 to 2022, the company's mineral gold production compound growth rate reached 12.8%. Reviewing the stock price trend of Shandong gold, its rise and fall are closely related to the gold price trend, as the business is pure and the stock price is highly elastic. As of the end of 2022, the company has 1431.40 tons of gold resources and completed a mineral gold production of 38.67 tons throughout the year, making it the listed company with the highest mineral gold production in China.

Guoxin Securities believes that Shandong Gold focuses on its main gold business and is expected to see a significant increase in gold production in the coming years. The company is expected to have an annual net profit attributable to shareholders of 2.74 billion yuan, 3.26 billion yuan, and 4.75 billion yuan in 2023, 2024, and 2025, with annual growth rates of 119.8%, 18.9%, and 45.9%, respectively. Through multi angle valuation, it is expected that the company will have a reasonable valuation of 27.6-30.6 yuan and maintain a "buy" rating.