(Yicai) March 23 -- Shares of China’s Chifeng Jilong Gold Mining sank after it was announced that rival Zijin Mining Group will take a controlling stake for CNY18.3 billion (USD2.6 billion).

Chifeng’s shares [SHA: 600988] fell by their 10 percent daily trading limit in Shanghai today to close at CNY36.74 (USD5.31) each. Its Hong Kong-listed stock [HKG: 6693] tumbled 25 percent to HKD31.52 (USD4.03). Trading in Chifeng’s shares had been halted on March 19 and 20 pending the announcement of a change in actual controller.

A Zijin subsidiary will buy 242 million of Chifeng’s Shanghai shares from Li Jinyang and parties acting in concert for CNY41.36 each, a premium of 1.3 percent on the closing price on March 18, for a total of about CNY10 billion, they said today.

Zijin will also subscribe to 311 million new Hong Kong shares of Chifeng at HKD30.19 apiece, a discount of about 17 percent over the average price in the 60 trading days prior to March 18, for a total of nearly HKD9.4 billion (USD1.2 billion).

Zijin’s stake in Chifeng will rise to 25.9 percent from 0.9 percent, making it the largest shareholder and actual controller. The sellers will no longer have a stake in the company.

Chifeng’s principal mines lie within globally significant gold belts and benefit from strong resource endowments, but underinvestment has slowed exploration, Zijin said, noting that its advanced geological and deep prospecting capabilities offer substantial upside for Chifeng's reserves.

The proceeds of the private placement will go to fund overseas projects, including the construction of new power plants, exploration, the expansion of mining operations, the upgrade of existing processing facilities, and the acquisition of high-quality assets, as well as other general corporate purposes.

Thanks to the sharp rise in gold prices last year, Chifeng had record operating revenue of CNY12.6 billion and record net profit of CNY3.1 billion (USD445 million), up 40 percent and 75 percent, respectively, from the previous year. About 71 percent of the revenue came from overseas operations.

Net cash flow generated from operating activities surged 70 percent to CNY5.6 billion in the year, another record. As of Dec. 31, Chifeng’s total gold resources stood at 512 tons, with proven and extractable reserves of 105.8 tons. About 80 percent is located abroad, mostly in Laos and Ghana.

The firm produced 14.5 tons of gold in 2025, a 4 percent annual decline, and sold the metal for an average of about CNY785 (USD113) per gram, a 50 percent increase. Its electrolytic copper production climbed 9.1 percent to 6,754 tons.

Zijin's shares [SHA: 601899; HKG: 2899] fell 3.4 percent to CNY30.58 in Shanghai, and 4.9 percent to HKD32.54 in Hong Kong.

Editor: Futura Costaglione