After posting a 179% jump in net profit for the first half of 2017, Zijin Mining Group Co. Ltd. is actively seeking M&A opportunities in overseas markets to boost its gold and copper reserves, according to Vice President Fang Qixue.
The Chinese gold producer has maintained a relatively low profile in the global M&A market since it made a string of gold and copper acquisitions in 2015.
Fang said during an Aug. 21 press briefing in Hong Kong that the company is in talks with potential sellers for over 10 projects.
"Now, we are in negotiations for over 10 projects," he said. "We prefer producing projects with healthy cash flow and we also hope that these acquisitions could create positive synergies for our existing mines."
Fang added that the company continues to focus on gold and copper assets but remains open to opportunities for other metals.
Gold and copper operations contributed 45% and 26%, respectively, to the 37.52 billion Chinese yuan operating income recorded in the first half, according to board secretary Liu Qiang.
Chairman Chen Jinghe expects revenues from the copper segment to significantly rise in the next few years, as the Kamoa copper project in the Democratic Republic of the Congo, where it operates a joint venture with the government and Ivanhoe Mines Ltd., will reach designed annual production capacity of 400,000 tonnes in 2019 before it ramps up to 800,000 tonnes in 2023.
"Our annual copper output will be close to 300,000 tonnes in 2018. Revenues from copper will significantly increase in next few years and account for a larger portion of total revenues."
"Without further acquisitions, we expect gold production to remain stable at current levels," he said.
Chen added that the company also plans to increase lead and zinc output through ongoing exploration programs and further acquisitions. The company is diversifying away from gold as it completes acquisitions and continues to seek opportunities in other metals.
With more acquisitions expected, Liu said the board is working on financing plans for large-scale deals. "We may raise money from the capital market through equity financing, convertible debt or other options," Liu said.
As of Aug. 18, US$1 was equivalent to 6.68 Chinese yuan.