CMOC to Acquire Four Brazilian Gold Mines for $1B

Dec. 16 — A major nonferrous metals company plans to acquire four gold mines in Brazil for up to $1 billion, as it aims to increase its gold production amid record-high gold prices.

The company intends to fully acquire the Aurizona gold mine, the RDM gold mine, and the Bahia integrated mining area, which encompasses the Fazenda and Santa Luz gold mines, from a Canadian mining firm. These acquisitions are projected to boost the company’s annual gold output to approximately eight metric tons.

The purchase will involve an initial cash payment of $900 million upon closing, with additional sales commissions of up to $115 million payable a year later. Brazil’s rich gold resources and stable political environment make it an attractive location for expansion, it was noted.

This move follows just five months after the company invested $419 million in another South American project, Ecuador’s Cangrejos Project, part of its strategy to expand gold mining operations across the continent.

Located in Maranhão state in northeastern Brazil, the Aurizona mine is expected to produce between 70,000 and 90,000 ounces of gold this year, with the potential to reach 160,000 ounces in the future. The RDM mine in southeastern Minas Gerais state is forecasted to produce between 50,000 and 60,000 ounces annually, while the Bahia complex in eastern Brazil is expected to deliver between 125,000 and 145,000 ounces.

The company, primarily known for copper, cobalt, molybdenum, and tungsten, is actively transforming into a more diversified mining enterprise. An investment expert from Atta Capital explained that increasing gold assets will help diversify its product portfolio as copper’s contribution to revenue rises.

Gold prices are at historic highs, and although short-term market fluctuations are possible, medium- to long-term risks appear limited given declining confidence in the US dollar and ongoing central bank purchases of gold, the analyst noted.

This year, spot gold prices have increased over 60%, reaching an all-time high of approximately $4,381.48 per ounce on October 20. As of today’s afternoon, gold was trading at around $4,289 an ounce.

Amid soaring metal prices, the company’s net profit jumped 73% during the first three quarters compared to the previous year, reaching a record CNY 14.3 billion (about $2 billion), despite a 6% decline in revenue to CNY 145.5 billion (around $20.7 billion).

The company’s shares listed in Shanghai closed down 2.4% today at CNY 17.50 (roughly $2.48), although they have gained 173% over the year. Its Hong Kong-listed shares finished the day down 1.3% at HKD 18.04 (approximately $2.32), marking a 263% increase for the year.