Analysis of RIGI Policy Application for Shandong Gold's Veladero Gold Mine

The expansion project of the Veladero Gold Mine in Argentina, operated as a joint venture by Shandong Gold and Barrick Mining, formally submitted an application for RIGI (Large Investment Incentive System) to the Argentine government in early August 2025 [1]. The project plans to invest 400 million US dollars, mainly for developing a new mining phase and increasing ore processing capacity by 89.2 million tons, with an expected cumulative increase of 1.6 million ounces (approximately 49.77 tons) of gold production throughout its life cycle [1].

According to the latest information, the Veladero Gold Mine produced 504,000 ounces of gold in 2024, and the expected production in 2025 is 380,000 to 440,000 ounces [1]. The expansion project will be invested in during 2025-2028 to increase production capacity by building a new mining phase.

Argentina’s RIGI policy provides significant tax incentives for large-scale investment projects, including:

• Corporate income tax rate reduced from 35% to 25%
• Dividend tax rate set at 7%
• Provides foreign exchange and tariff stability guarantees
• Policy validity period up to 30 years

The application threshold for the RIGI policy is an investment of over 200 million US dollars. As of now, 8 projects have been approved with a total investment of approximately 15.7 billion US dollars, but no Chinese enterprise projects have been approved yet [1].

The Argentine government is actively promoting mining development. Recently, BHP Group and Rio Tinto Group are also advancing large-scale mineral projects in Argentina [2]. The government hopes to make Argentina an important producer of critical minerals, and this policy orientation is conducive to the approval of RIGI applications.

1. Project Scale Meets Requirements
   : The 400 million US dollar investment far exceeds the 200 million US dollar threshold
2. Strategic Resource Importance
   : Gold is Argentina’s main mining export commodity, accounting for 68% of total mining exports in 2024 with a value of 3.14 billion US dollars [1]
3. International Cooperation Background
   : The joint venture relationship with Barrick Mining provides technical and operational guarantees
4. Policy Support
   : Argentina actively attracts foreign investment to develop mining

1. Chinese Enterprise Identity
   : No Chinese enterprises have been approved for projects under the RIGI framework so far
2. Geopolitical Considerations
   : Sino-US relations may affect the approval process
3. Environmental and Social Responsibility
   : Argentina’s environmental protection requirements for mining projects are increasingly strict

Based on the Argentine government’s urgent need to develop mining and the strategic importance of the project, the Veladero Gold Mine’s RIGI application has a high probability of approval, but it may require a longer approval cycle.

• After the expansion is completed, the additional 1.6 million ounces of production will significantly increase Shandong Gold’s gold reserves
• Based on current gold prices, the additional production is worth approximately 4.2 billion US dollars
• Helps the company achieve its goal of sustained production growth

• The 400 million US dollar investment will be phased in from 2025 to 2028
• RIGI tax incentives will reduce project operating costs and enhance profitability
• A 10 percentage point reduction in corporate income tax rate will significantly improve cash flow

Shandong Gold’s stock performed strongly in 2025, rising 60.22% year-to-date [0], with a market capitalization of 170.98 billion US dollars [0]. The company’s current valuation levels:

• P/E ratio: 37.85x
• P/B ratio:5.62x
• ROE:13.00%

1. Gold Price Support
   : Gold prices performed strongly in 2025, providing price security for investment [3]
2. Cost Advantage
   : Tax incentives from the RIGI policy will reduce operating costs
3. Capacity Expansion
   : The additional 1.6 million ounces of production will significantly increase the company’s scale
4. International Layout
   : The Argentina project enhances the company’s overseas asset allocation

1. Policy Approval Risk
   : There is uncertainty in the RIGI application
2. Geopolitical Risk
   : Changes in China-Argentina relations may affect the project
3. Exchange Rate Risk
   : Fluctuations in the Argentine peso may affect investment returns
4. Operational Risk
   : Overseas mining projects face changes in local policies and social environments

Based on the current analysis, the RIGI application for Shandong Gold’s Veladero Gold Mine has a high probability of approval, which will significantly enhance the company’s gold production and profitability. Investors are advised to:

1. Hold Long-Term
   : Be optimistic about the company’s performance during the gold price uptrend cycle
2. Follow Approval Progress
   : Closely track the RIGI application approval status
3. Risk Management
   : Pay attention to geopolitical and exchange rate risk exposures
4. Valuation Consideration
   : The current valuation level is moderate, and it still has investment value considering the production growth prospects

[1] Reuters - “Barrick, Shandong Gold aim for $400 million investment in Argentine mine” (https://finance.yahoo.com/news/barrick-shandong-gold-aim-400-181032519.html)
[2] Bloomberg - “BHP Venture Seeks Argentina Incentives for Major Copper Project” (https://www.bloomberg.com/news/articles/2025-12-12/bhp-venture-seeks-argentina-incentives-for-major-copper-project)
[3] Wall Street Journal - “Chinese Gold Miners Extend Rally as Gold Soars Past $4000” (https://www.wsj.com/finance/stocks/chinese-gold-miners-extend-rally-as-gold-soars-past-4-000-3c94ae0a)
[0] Gilin API Data