Zhaojin Mining Industry Co. Ltd. plans to double its annual gold output from 650,000 ounces by as early as 2024 through overseas acquisitions, Reuters reported Aug. 26, citing Leo Zhao, managing director of company unit Zhaojin International Mining Co. Ltd.
Half of the company's targeted 1.3-million-ounce production will come from overseas, compared to currently zero output.
Zhaojin will look for assets valued at less than US$500 million, mainly in Australia, with Zhao saying project deals worth "a billion is too big."
"What we like most is a small project at a very low price with a big potential. In Australia there are lot of big projects with big potential, so you will pay more money, especially for producing mines," Zhao said.
The company wants to look for assets in Canada as well, but the ongoing political tensions between China and Canada may prove to be a hindrance, Zhao said. "We are looking for M&A opportunities in Australia, as well as in Canada but the problem in Canada is the political tension."
Zhaojin International targeted Australia as its key overseas expansion platform with the recent launch of the Golden Gateway joint venture in Perth, Australia, with corporate advisory PCF Capital Group Pty Ltd.
Perth-based PCF Managing Director and founder Liam Twigger told S&P Global Market Intelligence the joint venture would firstly focus on Australian gold projects and companies for Zhaojin Mining as part of the Chinese group's plans to match its Chinese production with overseas production.
