Zijin Mining Launches Streaming Fund Amid Rising Gold Prices

China’s Zijin Mining Group is venturing into precious metals streaming with a planned investment of up to $400 million. This strategic move aligns with the company's bullish outlook on gold prices, which have surged significantly this year.

Date: 30-05-2025

AI Rating: 7

Zijin Mining's New Streaming Fund
Zijin Mining is making a notable entrance into the precious metals streaming sector by planning to invest between US$200 million and US$400 million this year through its Hong Kong subsidiary, Gold Mountains Asset Management. This strategic shift is propelled by the ongoing bullish sentiment surrounding gold prices, which have increased by 27% since the start of the year amid geopolitical tensions and economic uncertainty.

The model of streaming allows Zijin to partner with miners by providing upfront capital in exchange for future production at predetermined prices. This lowers operational risks and avoids ownership and mining liabilities, making it an attractive alternative financing route for miners.

Impact on Financial Metrics
The report does not specify direct earnings or financial metrics such as Earnings Per Share (EPS), Net Income, or specific Profit Margins. However, the anticipated investment and business model can potentially enhance Zijin's revenue growth over time as the streaming agreements mature and gold prices remain elevated.

The value proposition lies in Zijin’s ability to leverage its mining expertise to identify quality resources while mitigating risks associated with declining ore grades and underinvestment in new development projects. Should Zijin successfully execute these streaming deals, they could see an increase in Free Cash Flow (FCF) and may strengthen their Return on Equity (ROE) in the longer term as revenues from streaming contracts contribute positively.

In a competitive landscape dominated by established players like Franco-Nevada and Wheaton Precious Metals, Zijin's entry signifies an important diversification and an elevation of China’s standing in the global precious metals market, which could lead to a positive reassessment of their stock among investors.

Stocks: FNV WPM