Zijin Mining Shares Rise as Goldman Raises Target

Zijin Mining Group Co., owner of China's largest gold mine, rose to its highest since November in Hong Kong trading after Goldman Sachs Group Inc.'s analysts raised the stock price target 11 percent on record bullion prices.

The brokerage, which has a "buy" rating on Zijin, increased its target to HK$15 from HK$13.50 in a report today. Gold for immediate delivery soared to a record $868.89 an ounce yesterday on speculation rising oil costs and a weakening dollar will boost demand for an inflation hedge.

"We remain positive on gold due to its countercyclical nature," analysts Song Shen and David Pow said in the report. "Potential further Fed rate cut could keep the U.S. dollar in weak territory, a key positive for gold."

Zijin rose as much as 64 Hong Kong cents, or 5.1 percent, to HK$13.18, the highest since Nov. 9, and traded at HK$13.16 at 10:37 a.m. local time on the exchange.

Goldman analysts valued Zijin Mining's stock on the expectation that the gold price will average $800 an ounce.

Zijin plans to sell as many as 1.5 billion yuan-denominated shares in Shanghai this year to fund expansion. The share sale could take place by the end of the month, Goldman said.