“Zijin Gold has definitely picked the best time to go IPO,” said Michelle Leung, an analyst at Bloomberg Intelligence. “The continuous surge in gold prices has driven up valuations across global gold miners.”
Zijin Gold’s IPO valuation was at a 26% discount to its peers as of Sept. 28, she said.
Gold Producers Get Boost From Metal's Rally | Bullion has more than doubled over the past two years
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The prospect of buying into an undervalued blue-chip stock attracted a marquee list of cornerstone investors that included the likes of Singapore sovereign-wealth fund GIC Pte, Hillhouse Investment, BlackRock Inc, Fidelity International and Millennium Management. These buyers, which get IPO allocations in exchange for holding the stock for at least six months, agreed to buy about half of the shares on sale.
The company and its parent Zijin Mining Group Co aren’t the only ones to have benefited from the rally in gold. PT Merdeka Gold Resources began trading in Jakarta this month after raising more than US$280 million in Indonesia’s largest IPO this year, and Shandong Gold Mining Co sold about US$500 million of stock.
As for Zijin Gold, the company plans to use some of the IPO proceeds to pay for the acquisition of a mine in Kazakhstan, as well as funding upgrades and construction of mines over the next five years, it said.
See also: Gold rebounds above US$5,000 as historic retreat tempts dip buyers
The company, which operates Zijin Mining Group’s overseas gold assets, is one of the world’s fastest-growing gold producers, with mines spanning from Central Asia to Australia, Africa and South America.
The only company to have had a bigger listing this year was Contemporary Amperex Technology Co’s US$5.3 billion mega deal, which was also in Hong Kong. After years of struggling through a drought of deals, the Asian financial hub is poised to see IPO proceeds surge to a four-year high of more than US$26 billion, according to BI estimates.
The company’s trading debut, originally scheduled for Monday, was delayed by Super Typhoon Ragasa. Morgan Stanley and Citic Securities Co were joint sponsors for the IPO.
