Chinese miner joins rush to tap lure of gold in bond market
One of China’s biggest gold miners is planning its second dollar bond offering in two weeks, the latest in a slew of global companies looking to tap growing investor interest in the precious metal.
Shandong Gold Group is considering issuing a roughly $100-million perpetual bond as soon as this week, according to people familiar with the matter, who asked not to be identified as the matter is private. The potential sale comes after it already raised $300-million via a three-year bond offering earlier this month.
Shandong Gold Group didn’t immediately respond to an email seeking comment.
The offerings come as gold miners’ profits and cash flows have ballooned over the past few years, boosted by gold prices that have hit successive record highs, briefly surpassing $3 500 an ounce in April. While the metal has pulled back as trade tensions have eased somewhat, lingering US fiscal concerns and robust central bank demand could mean it has more room to rise.
The sector’s rising fortunes have spurred a flurry of bond issuance activity among gold miners, with Endeavour Mining and Gold Fields among the firms taking recent steps to enter the market.
Another Chinese miner, Zijin Mining Group, is planning a Hong Kong initial public offering for its overseas gold business, Bloomberg News reported earlier.
Shandong Gold Group posted first-quarter net income of 1.3-billion yuan ($181-million), a 17.2% jump from the year-earlier period. Separately, the company’s Hong Kong-listed unit is seeking a $300-million syndicated loan arranged by China Construction Bank (Asia), Bloomberg reported last month.
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