MONGOL MINING (00975) saw its shares rise more than 15% during the trading session. At the time of writing, the stock was up 11.31%, trading at HK$13.39, with a turnover of HK$78.8975 million.
A research report noted that by 2025, with the sequential development of new mines including for gold, the company is evolving from a single coking coal producer into a multi-mine producer of gold and copper, preliminarily fulfilling the strategy implied by its name "Mining." The company holds a 50% stake in EM Company, which has substantial gold resource reserves. Its Black Hills gold mine commenced production in the fourth quarter of 2025 and is expected to reach its designed capacity of 85,000 ounces by 2026. Based on projected production of 76,500 ounces from the Black Hills mine in 2026, an achieved gold price of $5,200 per ounce, and an All-In Sustaining Cost of $1,200 per ounce, the mine is estimated to contribute $97 million in net profit attributable to shareholders, accounting for approximately 40% of the 2024 profit. Even under a pessimistic scenario, the contribution would still be around $70 million.
The report further stated that the company's balance sheet has been gradually recovering since its debt restructuring in 2017. The repayment of perpetual securities and the replacement of high-interest notes between 2023 and 2025 have further removed obstacles to dividend distribution and reduced financing costs. The company has now entered a period of "low net debt," and the peak capital expenditure for the Black Hills project has passed. Considering the potential for synergistic profit improvement from both coal and gold in 2026, the company may meet the restrictive covenants for dividends linked to its priority notes, potentially initiating dividend payments. Based on a forecasted net profit attributable to shareholders of $274 million for 2026, assumed dividend payout ratios of 30% and 50%, and the market capitalization as of February 6, 2026, the dividend yield could reach 5.2% and 8.7%, respectively.
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