Shandong Gold's Argentine Gold Mine Project: RIGI Approval Probability and Impact Analysis

• Extremely High Policy Adaptability
  : RIGI requires an initial investment of no less than 200 million USD and provides a 30-year stability period in terms of taxation, customs, and foreign exchange. Shandong Gold’s 400 million USD expansion plan not only meets the threshold but also covers the policy priority area of mining, complying with the “strategic large-scale investment” standard, so it is a “high-priority” project in terms of policy matching. [1][2][3]
• Actual Approval Rhythm
  : The law stipulates a 45-day review period, but extension of approval is not unusual for large projects requiring more technical reviews and inter-departmental coordination—recently, large mining companies like BHP are still waiting for government detailed checks after submitting RIGI applications, indicating the process is currently in a phase of “intensive evaluation and public waiting”. [4]
• Judgment
  : Considering the project scale, bilateral cooperation (50% equity), and the fact that the Argentine government just launched this system in 2024 and is in urgent need of demonstration cases, the approval probability is expected to be over 70%. The key variable is whether a sustainable development plan can be submitted in the technical/financial filing required by the government. It is recommended to continue closely tracking the approval feedback window and the official approval bulletin from the Ministry of Finance/Ministry of Mining, while preparing supplementary materials to respond to possible “technical report” requirements.

Indicator	Explanation
Project total increment	1.6 million ounces of gold (to be launched during the construction period from 2025 to 2028, expected to extend to 2031-2033)
Shandong Gold’s equity	50% ⇒ 800,000 ounces increment, approximately 25 tons (metal)
Comparison with 2024 equity production	7.85 tons (=≈252 thousand ounces), the expansion will increase equity production by about 320%

• Substantial Impact
  : Assuming the project reaches full production from 2029 (averaging 320,000 ounces per year), Shandong Gold’s equity production can increase from the current 252 thousand ounces to about 572 thousand ounces in the next 5 years, with an annualized growth rate of over 127%. Even considering the capacity ramp-up period, the expansion will continue to contribute at least 0.25-0.35 million ounces of new output annually, forming a doubling effect on the group’s total volume in terms of magnitude.

• Revenue Contribution (Rough Estimate)
  : Based on the current gold futures price of approximately 4,311 USD per ounce, the theoretical sales corresponding to the additional 800,000 ounces of equity production are ≈3.45 billion USD (≈24 billion RMB) [0]. If this production is distributed over 4 years, the equivalent annual revenue is about 860 million USD.
• Profit Leverage
  : The group’s current net profit margin is about 4.9% (financial summary data), but the new project is an expansion-type capacity, and marginal costs are usually lower than the existing average price; if estimated by subtracting the industry average AISC (about 1,200-1,400 USD per ounce, also an industry public range) from the 2025 gold price, the marginal gross profit is in the range of 2,900-3,100 USD per ounce. Compared with Shandong Gold’s equity production, the new project can contribute 230-250 million USD (≈1.6-1.8 billion RMB) of gross profit annually after reaching full production; after deducting depreciation and management fees, the net profit contribution can still remain at 150-200 million USD, significantly improving ROE and cash flow.
• Cash Flow/Capital Recovery
  : If the 400 million USD investment is borne equally by the two partners (Shandong Gold: about 200 million USD), the aforementioned gross profit level indicates an investment payback period of less than 3 years; even considering no output during the development period, the project itself still has strong capital efficiency.

1. Approval Extension Risk
   : The 45-day statutory period has passed; it is necessary to determine whether it is for document supplementation, technical evaluation, or a package of projects queuing. If the government requires supplementary documents, priority should be given to providing detailed environmental, infrastructure, and foreign exchange settlement arrangements to reduce non-technical delays. [1][4]
2. Macroeconomics and Exchange Rate
   : The foreign exchange settlement mechanism and tariff exemption provided by RIGI significantly reduce the cost of overseas capital expenditure, which is particularly critical for imported equipment priced in USD. At the same time, the 30-year stability period can avoid periodic changes in Argentine policies and reduce the uncertainty of long-term operations. [2][3]
3. Execution and Cost Control
   : To achieve the above profit forecast, it is necessary to strictly control expansion costs and ensure the capacity ramp-up period is completed on schedule. It is recommended to establish a fund release and performance appraisal mechanism triggered by project milestones (such as completion of the concentrator, capacity verification), and share cost transparency with partners.

If further quantification of cash flow, valuation impact, or sensitivity analysis is needed, you can enable the

at any time, using Jinling AI to access broker-level databases to complete scenario simulations and chart displays.

[0] Jinling API Data (Company Overview and Real-Time Gold Quotes)
[1] BDO Global, “Argentina generous new incentive regime for large investments”, https://www.bdo.global/en-gb/insights/tax/world-wide-tax/argentina-generous-new-incentive-regime-for-large-investments
[2] PwC, “Argentina adopts new promotional regime for large investments”, https://www.pwc.com/us/en/services/tax/library/argentina-adopts-new-promotional-regime-for-large-investments.html
[3] Argentine Investment and International Trade Agency, “5. LARGE INVESTMENT INCENTIVE SCHEME (RIGI)”, https://cnyor.cancilleria.gob.ar/en/5-large-investment-incentive-scheme-rigi-guide-investors
[4] Sharecafe, “BHP’s Vicuna JV Applies for Argentinian Regime”, https://www.sharecafe.com.au/2025/12/12/bhps-vicuna-jv-applies-for-argentinian-regime/