Investment Value Assessment of Shandong Gold's Veladero Gold Mine US$400 Million Expansion Project and the RIGI Incentive Regime

Veladero Gold Mine (Veladero) is a large-scale gold mine located in San Juan Province, Argentina, jointly operated by Barrick Gold (Barrick) and Shandong Gold, each holding a 50% stake [2]. The mine plans to carry out a US$400 million expansion project and has applied to join Argentina’s RIGI Large Investment Incentive Regime [3]. After the expansion is completed, it is expected to add 1.6 million ounces of gold production [1].

RIGI (Régimen de Incentivo para Grandes Inversiones) is an investment incentive framework launched by the Argentine government in mid-2024, aiming to attract large-scale mining investments [5]. The regime offers the following core advantages:

• Corporate income tax reduced from 35% to 25%
• 30-year tax stability guarantee [4]

• Full currency convertibility guarantee
• Addresses concerns about Argentina’s historical capital controls [4]

• Comprehensive import tariff exemption
• Has obvious advantages over competing countries such as Chile and Peru [4]

The RIGI framework provides legal certainty guarantees for foreign investment, through the ICSID international arbitration mechanism, which is superior to Argentina’s domestic court system [4]. This policy shows the government’s recognition of the importance of mining in the coming decades, and builds foreign investment confidence through institutional guarantees [3].

Shandong Gold (600547.SS) is a leading gold producer in China, with a current market capitalization of US$166.79 billion and a stock price of US$36.18 [0]. The company has performed strongly in 2025, with a year-to-date increase of 56.29% and a one-year increase of 53.50% [0].

• ROE (Return on Equity): 13.00%
• Net Profit Margin: 4.88%
• Operating Profit Margin: 10.24% [0]

• P/E Ratio: 36.92
• P/B Ratio: 5.48
• Market Capitalization/Operating Cash Flow: 15.49 [0]

• Current Ratio: 0.53
• Quick Ratio: 0.42
• Debt Risk Classification: High Risk [0]

According to professional valuation models, Shandong Gold is significantly undervalued:

• Conservative Scenario: Fair Value US$61.18 (+69.1%)
• Base Scenario: Fair Value US$53.90 (+49.0%)
• Optimistic Scenario: Fair Value US$93.52 (+158.5%) [0]

69.53 USD, with a 92.2% upside potential from the current stock price [0].

Gold has performed strongly in 2025, with the current price around US$4,361 per ounce [6]. Market forecasts show:

• Expected to reach US$4,514 by the end of 2025
• Expected to hit the range of US$4,702-US$5,466 in 2026 [6]

Argentina’s mining exports may increase fivefold by 2033, exceeding US$25 billion, mainly driven by lithium and copper [3]. Currently, the mining industry accounts for less than 1% of Argentina’s GDP, but the country has one of the world’s largest portfolios of critical mineral projects [3].

1. Policy Dividend:
   Tax, foreign exchange, and tariff incentives provided by the RIGI regime will significantly reduce project operating costs
2. Resource Increment:
   The additional 1.6 million ounces of production will significantly increase the company’s gold reserves
3. Location Advantage:
   Veladero is located in Argentina’s “Lithium Triangle” area, enjoying resource agglomeration effects

1. Approval Uncertainty:
   The project is still in the approval process, with risks of rejection or delay [1]
2. Policy Stability:
   Argentina has a history of frequent policy changes, so there is uncertainty about the long-term implementation of RIGI
3. Financial Pressure:
   Shandong Gold’s current ratio is low (0.53), and large-scale investment may exacerbate financial pressure [0]
4. Foreign Exchange Risk:
   Although RIGI provides foreign exchange guarantees, Argentina’s overall economic environment still has volatility risks

Given that the project is still in the approval stage, it is recommended to wait for the approval result to become clear before making investment decisions.

If the project is approved, combined with the RIGI policy dividend and the upward trend of gold prices, this project will significantly enhance Shandong Gold’s intrinsic value.

It is recommended to adopt a phased investment strategy, control the proportion of investment in a single project, and closely monitor policy changes in Argentina and project approval progress.

Shandong Gold’s Veladero Gold Mine US$400 million expansion project has high investment value after obtaining RIGI qualification. Combined with the company’s current undervalued status and the long-term upward trend of gold prices, this project is expected to become an important growth driver for the company in the future. However, investors need to fully evaluate approval risks and policy uncertainties, and it is recommended to adopt a cautiously optimistic investment strategy.

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[0] Jinling API Data
[1] Xueqiu - “Shandong Gold’s Veladero Gold Mine US$400 Million Expansion Plan and Argentina’s Large Investment Incentive Regime (RIGI)” (https://xueqiu.com/S/SZ000975)
[2] Wikipedia - Barrick Mining Company Information (https://en.wikipedia.org/wiki/Barrick_Mining)
[3] Panorama Minero - “RIGI: Veladero Submits Application Valued at Around US$400 Million” (https://www.panorama-minero.com/en/news/category/gold)
[4] Discovery Alert - “BHP Argentina Copper Incentives: RIGI Benefits & Ventures” (https://discoveryalert.com.au/argentina-mining-investment-2025-bhp-copper-incentives/)
[5] Buenos Aires Herald - “Top San Juan copper, silver and gold mining project asks to join rigi” (https://buenosairesherald.com/business/mining/top-san-juan-copper-silver-and-gold-mining-project-asks-to-join-rigi)
[6] Longforecast - “Gold Price Trend Forecast: Tomorrow, Week, Month, 2025, 2026-2028” (https://longforecast.cn/金价格走势预测-2017-2018-2019)