On October 21, 2025, the international gold market experienced significant volatility, with spot gold prices plunging to $4,080.87 per ounce intraday, marking a single-day drop of over 6%—the steepest percentage decline since August 2020. While Standard Chartered attributed the turbulence to investors retreating from safe-haven assets, J.P. Morgan remained bullish, forecasting an average gold price of $5,055 per ounce by late 2026, with Goldman Sachs raising its projection to $4,900 for the same period. Amid this tug-of-war between bulls and bears, WANGUO GOLD GP (03939) stood out.

The company, which holds core assets in the Gold Ridge Mine in the Solomon Islands, reported H1 2025 revenue of RMB 1.24 billion, up 33.7% YoY, and net profit attributable to shareholders of RMB 600 million, surging 136% YoY. Despite short-term gold price fluctuations, WANGUO GOLD GP continues to advance the expansion of Gold Ridge Mine and was successfully included in the Stock Connect program in April 2025, boosting stock liquidity by over threefold. What underpins its steady growth trajectory?

**Resource Buffer: A Trio of Mines Anchoring Counter-Cyclical Strength** The value of a mining company ultimately hinges on its resources. WANGUO GOLD GP’s two-decade strategy has built a mine portfolio spanning "domestic stability, overseas growth, and strategic reserves," forming a robust shield against short-term gold price swings.

The Gold Ridge Mine, located in the Pacific Rim metallogenic belt, is the crown jewel. As of July 2024, its gold resources totaled 227 tons—a 121.2% increase from the initial 103 tons—with an average grade of 1.17 g/t and recoverable reserves of 40 tons, supporting a projected 20-year mine life. Since commencing production in November 2022, the mine yielded 1,143 kg of gold and 29,361 tons of gold concentrate in 2023, achieving a unit gross profit of RMB 225.7/g. Current annual design capacity stands at 3 million tons, with gold output exceeding 4 tons post ramp-up. Expansion plans aim to boost open-pit capacity to ~13 million tons, lifting annual gold production to ~15 tons—potentially placing it among the global top 20 gold mines. Notably, the acquisition cost was just one-third of industry averages, providing ample room for cost control.

The Xinzhuang Mine in Jiangxi serves as a cash flow stabilizer. Originally a polymetallic (copper, zinc, silver) operation, it contributes RMB 600–800 million in annual revenue. In H1 2025, copper accounted for 13.5% of revenue, diversifying earnings amid gold volatility. Despite a temporary shutdown for upgrades, it resumed full production in H2 2025, swiftly restoring profitability.

The Walage Mine in Tibet, a strategic reserve asset, is part of the region’s 14th Five-Year Plan key projects. With planned annual capacity of 1.2 million tons, it hosts 159,450 tons of lead and 1,937.2 tons of silver (avg. grade: 45 g/t), alongside significant gold by-products. Once operational, it will enhance WANGUO GOLD GP’s "gold + precious metals + base metals" portfolio.

**Synergy Boost: ZIJIN’s Stake Ignites Efficiency Revolution** ZIJIN Mining’s strategic investment in September 2024 marked a turning point. The RMB 1.249 billion deal (50% earmarked for Gold Ridge’s development) brought not just capital but also technical expertise and supply chain synergies.

Cost optimization followed swiftly. A May 2025 ore-dressing tech contract with ZIJIN slashed H1 2025 production costs by 16.1% YoY to RMB 372 million. Leveraging ZIJIN’s low-cost mining prowess, Gold Ridge is poised to further reduce costs through scale and innovation.

Expansion accelerated too. With ZIJIN’s involvement, feasibility studies for mine upgrades began, targeting annual output of 8–10 tons (CITIC Securities estimate). ZIJIN’s global smelting network also ensures swift distribution, mitigating sales risks—gold revenue share rose to 65% in 2024.

Capital market access improved post-Stock Connect inclusion, with mainland investors flocking in. As of November 10, 2025, the stock traded at 28x P/E and 8x P/B, reflecting growth potential despite premium to peers.

**Sector Positioning: Anchored in Structural Gold Demand** Central bank buying remains a key pillar. Global net purchases are projected to exceed 1,200 tons in 2025, with China extending its 12-month accumulation streak. Gold Ridge’s high-purity bars, distributed via ZIJIN, align perfectly with this trend. Goldman Sachs estimates annual central bank demand at 75 tons for 2025–26.

Private investment demand is equally robust. Global gold ETF inflows and strong holiday-season bullion sales in China underscore gold’s safe-haven appeal. WANGUO GOLD GP’s diversified products—gold concentrate for refiners, bars for investors, and polymetallics for hedging—create a "demand buffer."

Valuation logic is shifting from "gold price leverage" to "reserves + growth certainty." As one of few HK-listed miners with "high-grade overseas assets + industry leader backing + Stock Connect liquidity," WANGUO GOLD GP is uniquely positioned. The 2025–27 capacity ramp-up could catalyze a re-rating from "expectation-driven" to "value-driven."

**Risk Mitigation: Resilience Amid Challenges** While a 20% gold price correction (to $3,800–4,000) is possible, cost controls provide a safety net. Geopolitical risks at Gold Ridge are mitigated by local government support and ZIJIN’s overseas expertise. Progress on Walage’s permits and Gold Ridge’s expansion, though uncertain, benefits from policy prioritization and ZIJIN’s oversight.

In sum, WANGUO GOLD GP’s resilience stems from "resource depth + cost discipline + synergy." The recent gold price correction has stripped away speculative froth, spotlighting fundamentals. Backed by 227 tons of gold resources, ZIJIN’s operational lift, and strategic demand positioning, the company is transitioning from a mid-tier miner to a global contender. For long-term investors, this may be an opportunity to capitalize on volatility.