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Zijin Mining aims to strike more gold overseas

(China Daily)
Updated: 2008-03-12 09:53

Zijin Mining, the mainland's largest gold miner in terms of market value, expects its capital spending to reach 5 billion yuan this year as it seeks overseas acquisitions to boost its gold output.

Chen Jinghe, chairman of Zijin Mining, said yesterday that the firm will increase its mineral resources reserves on the mainland and in overseas markets through those acquisitions - which will account for half of the capital spending.

The forecast was given during the company's annual news briefing yesterday.

Last year, the firm acquired three projects directly or through its associates in Peru and Tajikistan.

Chen said the firm plans to increase its gold output by 9.6 percent, from 52.29 tons last year to 57.3 tons this year.

For other precious metals, the miner plans to increase its copper output by 24.9 percent to 59,000 tons, but it will reduce its zinc output to 149,000 tons due to an oversupply this year.

In 2007, the group's average selling price of gold bullion rose 8.9 percent, to 171.14 yuan per gram - about $728.76 an ounce.

Chen said the price of gold may hit a record of $1,000 an ounce, or 200 yuan per gram, in the near future.

"The weak US dollar will further shoot up gold prices," Chen said, adding that the subprime crisis may lead to a global economic slowdown and financial risks, and that gold will become an important shelter for investors' money.

Zijin Mining reported a 49.7 percent increase in net profit to 2.55 billion yuan for 2007.

The total turnover rose 39.3 percent to 14.87 billion yuan.

But shareholders shouldn't expect a divident payout from the profits.

Chen said the firm is waiting for the China Securities Regulatory Commission's approval on the gold company's A-share listing.

So "at this sensitive stage, we propose no dividend payout", he said.

Chen said the firm has submitted required information to the regulator, however, it has no timetable for the A-share listing.

He said the firm has adequate liquidity, so the A-shares' delayed initial public offering will not impact the group's acquisition plans.


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