紫金矿业（2899.HK）终止Allied Gold收购；拟通过私募配售收购9.2%股权

Zijin Mining (2899.HK) Termination of Allied Gold Acquisition; Proposed Acquisition of 9.2%Equity Interest Through Private Placement CITI'S TAKE On 29th Jul, Zijin announced that it terminates the proposed acquisitionof 100% equity shareholding in Allied Gold (see our note) as there is noreasonable likelihood that all conditions to completion of the acquisitionwill be satisfied or waived by the outside date or within a reasonable timethereafter and no termination fee is owed or payable by either party.Meanwhile, Zijin Gold International entered an agreement with Allied Goldto subscribe 12.8mn shares with price of CAD32.55/sh (vs. CAD44/sh inthe previous plan of 100% acquisition). The total consideration isCAD416.6mn (US$295mn) and Zijin Gold International will own 9.2% ofequity interest in Allied Gold after the private placement. We expect theequity investment in Allied Gold implies potential cooperation in thefuture and Zijin could relaunch the acquisition if geopolitical risks in Maliare reduced. Maintain as Top Pick. Jack Shang, CFAAC+852-2501-2441jack.shang@citi.com Anna Wang+852-2501-2739anna.d.wang@citi.com Jimmy Fengjimmy.feng@citi.com Cynthia Wucynthia.d.wu@citi.com Zijin Mining Valuation We value Zijin-H at HK$51.80/share. In our DCF, we assume 2.5% terminal growth and a WACC of 8.2% (a 3.5% risk free rate,1.05 beta and a 7% market risk premium) to reach a value of HK$48.2/sh. We also estimate Kamoa NPV at HK$3.6/sh. As aresult, our NPV for Zijin-H works out to HK$51.80/sh. Risks Major downside risks that could prevent the shares from reaching our target price include: 1) lower-than-expected gold andcopper prices; 2) capex overruns in projects under development; 3) cost inflation that erodes profitability; and 4) lower thanexpected gold and copper output. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside theUS +1-210-677-3788 Appendix A-1 ANALYST CERTIFICATION The research analysts primarily responsible for the preparation and content of this research report are either (i) designatedby “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the reportfor which they are responsible: (1) that the views expressed therein accurately reflect their personal views about eachissuer and security referenced and were prepared in an independent manner, including with respect to Citigroup GlobalMarkets Inc. and its affiliates; and (2) no part of the research analyst's compensation was, is, or will be, directly orindirectly, related to the specific recommendations or views expressed by that research analyst in this report. IMPORTANT DISCLOSURES The Firm has made a market in the publicly traded equity securities of Zijin Mining Group Co Ltd on at least one occasion since1 Jan 2025. Citigroup Global Markets Inc. or its affiliates received compensation for products and services other than investment bankingservices from Zijin Mining in the past 12 months. Citigroup Global Markets Inc. or its affiliates currently has, or had within the past 12 months, the following as clients, and theservices provided were non-investment-banking, non-securities-related: Zijin Mining.Analysts’ compensation is determined by Citi Research management and Citigroup’s senior management and is based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates (the “Firm”).Compensation is not linked to specific transactions or recommendations. Like all Firm employees, analysts receivecompensation that is impacted by overall Firm profitability which includes investment banking, sales and trading, andprincipal trading revenues. One factor in equity research analyst compensation is arranging corporate access events betweeninstitutional clients and the management teams of covered companies. Typically, company management is more likely toparticipate when the analyst has a positive view of the company.For financial instruments recommended in the Product in which the Firm is not a market maker, the Firm is a liquidity provider in such financial instruments (and any underlying instruments) and may act as principal in connection with transactions insuch instruments. The Firm is a regular issuer of traded financial instruments linked to securities that may have beenrecommended in the Product.