Incident: The company issued an announcement to increase reserves. The Tibet Julong Copper Mine and Heilongjiang Tongshan Copper Mine, a subsidiary of Zijin Mining, obtained mineral resource reserves review opinions issued by the natural resources authorities. A total of 18.377 million tons of copper resources and 5.777 million tons of copper metal reserves were added, accounting for 14.2% of China's copper reserves at the end of 2022.
Tibet Julong Copper Mine: The copper mine with the most registered resources in China. The amount of copper and metal in the Julong Copper Mine that has been filed this time reached 25.884 million tons, the copper reserves reached 15.3573 million tons, the amount of equity resources was 129.66 million tons, and the equity reserves were 7.694 million tons. Compared with 2022, the amount of additional copper metal resources was 14.726 million tons, the additional copper reserves were 5.777 million tons, the additional equity resources were 7.378 million tons (accounting for 17.4% of the company's copper equity resources in 2023), and the additional equity reserves were 2,894 million tons (accounting for 23.0% of the company's copper equity reserves in 2023). It is worth noting that this increase in storage was accompanied by a drop in the marginal grade of copper from 0.3% to 0.17%, indicating that the company's harvesting capacity can already recover minerals as low as 0.17% with a high recovery rate. To a certain extent, technology has enabled this additional storage.
Heilongjiang Tongshan Copper Mine: The only large-scale monomer copper mine discovered in Northeast China in nearly 40 years. The addition of the V ore body is the only very large copper ore discovered in northeastern China in nearly 40 years. The amount of copper metal in the Tongshan copper mine registered this time reached 3.833,300 tons. Of these, the V ore body is a newly discovered Banyan-type blind ore (mainly distributed 639-2049 meters underground), and the amount of copper metal resources reached 2.81 million tons. 3.651 million tons of copper resources were added (accounting for 5.1% of the company's copper equity resources in 2023). In addition to the amount of additional copper metal resources mentioned above, the Tongshan Copper Mine also added 130,000 tons of molybdenum metal, 55 tons of gold metal, and 1,104 tons of silver as associated resources.
Independent geological prospecting and exploration to achieve endogenous mineral growth. The company's independent geological survey has competitive advantages in the industry, and the unit survey cost is far lower than the global industry average. Focusing on existing mines and mine prospecting, we actively lay out strategic constituencies for green areas and brownfield minerals, carry out risk investigation and investment operations, and obtain more than 50% of gold and copper resources and more than 90% of zinc (lead) resources through independent exploration.
Core highlights: The three major copper mining clusters continue to blossom, and the lithium and molybdenum strategic metal sector is creating a new growth curve.
The copper sector, Timok+Bor, Kamoa, and Julong, will continue to contribute to growth in 2024-2026; in the gold sector, multiple projects go hand in hand, and marine gold mines, Rosebel, and Sabayalton form new growth, and gold production continues to grow. The strategic metals sector grabs the high-quality lithium resources of the “Two Lakes and Two Mines” and expects resource advantages to be transformed into production advantages. At the same time, the strategic mineral molybdenum was added.
Investment advice: The company's copper and gold production continues to grow. Considering the rise in copper and gold prices, we expect the company to achieve net profit of 28.2 billion yuan, 34.5 billion yuan, and 39.6 billion yuan in 2024-2026. The PE corresponding to the closing price on June 28 is 17x, 14x, and 12x, maintaining the “recommended” rating.
Risk warning: Project progress falls short of expectations, falling prices of metals such as copper, gold, lithium, etc., geopolitical risks, exchange rate risks, etc.