Zijin Mining Group has agreed to buy Kazakhstan’s Raygorodok gold mine for $1.2-billion. The deal, announced on Monday, marks the Chinese company’s first major entry into the Central Asian country.

Developed by Verny Capital and its partner Resource Capital Funds (RCF), the mine includes the operations of RG Gold and the associated processing plant owned by RG Processing. The deal will be executed through Zijin Gold International, a subsidiary the Chinese miner plans to spin off and list in international capital markets.

“If the transaction of acquisition of the Raygorodok gold mine can be completed smoothly, it can significantly enhance the asset scale, profit level and global industry position of Zijin Gold International, and promote the listing and offering of Zijin Gold International in the international capital market,” Zijin Mining said in a statement.

Verny Capital, which has managed RG Gold since 2014, has invested heavily in modernising the project, commissioning a $424-million processing plant in 2022 and tripling the resource base to 7.6-million ounces.

“We succeeded in implementing a unique project – transforming a small-scale operation into one of the country’s leading gold producers. Now, ten years later, we are planning to hand it over to a major international player with an impressive track record in managing mining assets,” said Verny Capital CEO Aidan Akanov.

“This reflects Verny Capital’s standard business model: developing an asset and exiting under optimal market conditions.”

RG Gold has become one of Kazakhstan’s largest taxpayers, contributing more than 160-billion tenge to the State budget and creating about 1 200 jobs. It has also supported regional development through social initiatives.

“Our investment in RG Gold was our first project in Kazakhstan, and we are proud to have contributed to the successful growth of one of the country’s leading production facilities,” said Martin Valdes, partner at RCF. “We also welcome the entry of a major international company – Zijin Mining Group – into the country’s market. It is a strong testament to Kazakhstan’s long-term investment appeal.”

Zijin, which has a market capitalisation of about $70-billion and operates more than 30 mining projects in 17 countries, said it intends to apply international best practices in Kazakhstan and contribute to economic growth and job creation.