China Gold experienced a significant uptick in Q1 2025 performance, led by strong operational performance at both the CSH and Jiama mines, coupled with favourable market conditions. Jiama mine, which resumed operations in May 2024, operated at a daily processing capacity of 34,000 tpd during Q1 2025. The mine produced 16,911 tonnes of Cu, nearly 8x versus 2,093 tonnes in 01 2024. Gold production at the CSH mine increased by 37% to 23,737 oz.
Looking ahead, the open-pit operations at CSH mine are nearing the end of the mine life. CGG is actively pushing forward with the development of underground resources at the CSH Gold Mine to prolong its operational life.
With both mines operating normally, we expect the Company to meet its FY 2025 production guidance of 139-148 MIb of copper and 146,286 to 157,539 oz of gold. The guidance clearly suggests a declining output at the CSH mine, while Jiama operates at full capacity. With increasing gold and base metals prices, we expect the Company to post a significant jump in net profit for 2025. Further, improvement in operating cash flow in Q1 signals enhanced ability to repay debt, manage capital expenditures and pursue future growth opportunities.
Investment Highlights
- China Gold International Resources Corp Ltd (TSX: CGG) (“CGG”, or “Company”) is a polymetallic miner with two producing assets in the Greater China Region – the CSH mine and the Jiama mine. The Company has delivered a return of 553% since our initiation report on August 27, 2020.
- Jiama Mine delivers impressive Q1: Jiama Mine delivered impressive Q1 2025 results registering an 8x jump in revenues to US$194.0 million. Gross profit jumped to US$83.0 million in Q1 2025, compared to a loss of $19.5 million in Q1 2024. For 2025, we expect copper production at the Jiama mine to be 143.5 Mib. We model 2025E copper revenue at US$452.0 million, assuming a realized price of US$3.15/lb. In addition, we model by- products credit (gold, silver, lead, zinc and molybdenum) at US$260.4 million for 2025.
- Strong gold prices to support profitability at CSH: We expect the strength in gold prices to offset volume decline and rising production costs in 2025 at CSH. The full-year 2025 CSH gold production guidance of 77,162 to 83,592 oz is well below the average run rate of 145,000 oz realized during the period 2018-2022 and also below the 108,188 oz produced in 2024. We view the lower gold production guidance as an indication that the open-pit operations at the CSH gold mine are nearing the end of their mine life.
- Reiterate BUY. With increasing gold and base metals prices, we expect the Company to post a significant jump in net profit for 2025. Further, improvement in operating cash flow in Q1 signals enhanced ability to repay debt, manage capital expenditures and pursue future growth opportunities. We roll forward our valuation to 2026 estimates and adjust our fair value per share estimate to C$13.80 per share (earlier C$9.50). We reiterate our BUY rating on the stock.
