With the international gold price entering a strong upward cycle, China Cobalt Group Co., Ltd. (CMOC), which is facing the test of cyclical fluctuations in its base metal business, has decisively turned its attention to the precious metal field, expanding its growth boundaries through a series of strategic actions and building a dual wheel drive pattern of "base metals+precious metals". Acquisition of four ongoing gold mining assets located in Brazil under Canadian mining company Equinox Gold Corp. In the market frenzy where global gold prices have reached over 50 historical highs and accumulated gains of over 60% this year, this cross-border merger not only breaks the investment record of Chinese enterprises in the South American gold mining field, but also marks a crucial step in Luoyang Molybdenum's strategic transformation from basic metals to precious metals, adding another heavyweight to its global resource layout.

Four high-quality gold mines support new growth engines

According to the announcement, the subject matter of this transaction covers core gold mining assets in three major states of Brazil: Aurizona gold mine in Maranh ã o state, RDM gold mine in Minas Gerais state, and Bahia integrated mining area in Bahia state (including Fazenda and Santa Luz gold mines). By acquiring 100% equity of LatAm and LGC, two wholly-owned subsidiaries of Equinox Gold, Luoyang Molybdenum Industry will gain complete control over these assets. The transaction is expected to be completed in the first quarter of 2026 and still requires approval from relevant regulatory authorities and antitrust agencies in China and Pakistan.

In terms of asset quality, these four gold mines can be called "gold rich mines": they have a total gold resource of 5.013 million ounces (about 155.90 tons), with an average grade of 1.88 grams/ton; Among them, the proven reserves are 3.873 million ounces (about 120.47 tons), with an average grade of 1.45 grams/ton, significantly higher than the global average of 1.06 grams/ton of gold mines in production. In terms of production capacity, these assets have formed a stable output scale, with a total production of 247300 ounces (about 7.69 tons) of gold in 2024, and a further increase in production capacity guidance to 250000-270000 ounces (about 7.78-8.40 tons) in 2025. After the transaction is completed, the annual gold production of Luoyang Molybdenum Industry will soar to a new level, and the proportion of precious metal business in the company's revenue will significantly increase.

More noteworthy is the potential for asset appreciation. Luoyang Molybdenum Industry stated that the Aurizona gold mine is currently mainly open-pit mining. If it switches to underground mining in the future, the service life of the mine is expected to nearly double to 11 years, and the peak annual output will exceed 160000 ounces (about 4.98 tons), doubling the current production capacity; The service life of Fazenda mine will also be extended to 2033, providing a guarantee for long-term stable income. These high-quality assets with room for expansion and longevity will become the core engine for the company's future performance growth.

Grasp the gold price dividend and hedge against cyclical risks

Behind this acquisition is Luoyang Molybdenum's precise analysis of global market trends and firm promotion of strategic transformation. Since 2025, influenced by multiple factors such as intensified global geopolitical conflicts, rising economic uncertainty, weakening of the US dollar, and declining interest rates, gold has become one of the strongest performing asset classes. According to data from the World Gold Council, gold prices have risen by over 60% throughout the year, marking the fourth best annual performance since 1971. At the same time, global investors and central banks have increased their allocation of gold, with global gold demand reaching a historic high of 3640 tons in the first three quarters. The demand for gold coins, gold bars, and gold ETFs in the Chinese market is particularly strong.

In this context, Luoyang Molybdenum Industry is accelerating its precious metal layout and forming a business pattern driven by both basic metals and precious metals. As a leading global producer of copper, cobalt, and molybdenum, Luoyang Molybdenum Industry has global competitiveness in the field of base metals, but the prices of base metals are greatly affected by industry cycles. By laying out precious metal assets such as gold, the company can effectively diversify the cyclical risk of a single variety, and leverage the hedging and anti inflation capabilities of gold to smooth the company's revenue and profit curves.

This Brazilian merger is not an isolated case. In April 2025, Luoyang Molybdenum Industry acquired Lumina Gold Corp. of Canada for CAD 581 million (approximately USD 422 million), obtaining equity in the Cangrejos gold mine, one of the largest undeveloped gold mines in Ecuador. In just eight months, the company has successively launched precious metal projects in Latin America, gradually building a Latin American gold asset portfolio covering Brazil and Ecuador. In addition, Brazil's geopolitical stability is relatively stable, and Luoyang Molybdenum already has niobium and phosphorus assets locally. This acquisition will form a regional synergy effect, reduce operating costs, and enhance overall competitiveness.

Global layout of capital+technology+collaboration

The cross-border mergers and acquisitions of Luoyang Molybdenum Industry also reflect the mature transformation of Chinese mining enterprises' overseas investment. Unlike early simple resource acquisitions, this transaction demonstrates a new feature of "capital injection+technology empowerment+regional collaboration". The transaction structure design balances security and flexibility, with a cash advance payment of $900 million to ensure the smooth progress of the transaction. The maximum contingent consideration of $115 million is linked to the first year's sales after delivery, which not only locks in core costs but also reserves space for future appreciation of the underlying assets.

At the operational level, Luoyang Molybdenum Industry will rely on its mature experience in mining development, equipment operation and maintenance, cost control, and other aspects to optimize and upgrade Brazil's gold mining assets. The company plans to introduce advanced mining technology and environmental standards, improve resource recovery rates, reduce unit production costs, and focus on localized operations to create employment opportunities and economic value for the local area. Previously, in overseas projects, Luoyang Molybdenum Industry has achieved a win-win situation of efficient project operation and harmonious community development through the model of "technology output+talent cultivation". This experience will be further replicated and promoted in the Brazilian gold mine project.

From the perspective of industry impact, the layout of Chinese enterprises in the overseas gold mining field is reshaping the global gold resource landscape. Previously, companies such as Zijin Mining, Chifeng Gold, and China Gold Group have completed multiple gold mining project layouts in South America, Africa, Russia, and other regions. The addition of Luoyang Molybdenum further strengthens the voice of Chinese companies in the global gold market. With the continuous output of capital, technology, and management advantages of Chinese enterprises, the global allocation of gold resources is developing towards a more diversified and balanced direction, injecting new vitality into the sustainable development of the industry.

Looking ahead to 2026, the World Gold Council predicts that although gold prices may exhibit range fluctuations due to different macroeconomic scenarios, factors such as geopolitical uncertainty and central bank demand for gold purchases will still provide support for gold prices. For Luoyang Molybdenum Industry, the merger of four gold mines in Brazil will not only significantly enhance its gold resource reserves and production capacity, but also improve its diversified business structure of "basic metals+precious metals", laying a solid foundation for the company to cross industry cycles and achieve long-term stable growth. Against the backdrop of increasingly fierce global resource competition, this 7.2 billion yuan cross-border merger and acquisition is not only a strategic breakthrough for Luoyang Molybdenum Industry, but also another milestone in the global layout of Chinese mining enterprises.Editor/Bian Wenjun