Why the same gold deposit can sparkle in Australia but merely shimmer in China as study reveals how valuation rules reshape what a mine is truly worth

If gold is the world’s most universal currency, it’s also one of its most misunderstood. A recent paper delivered by SRK Consulting, The East–West Divide in Valuation of Mineral Assets with Specific Emphasis on Gold Market Transactions, at the International Mineral Asset Valuation Hybrid Conference 2025, reveals that while an ounce of gold may be the same in any language, the rules for valuing that ounce can vary widely between China and Australia.

Co-authored by Shaun Barry and Gavin Chan, principal consultants at SRK Consulting, the study explores why comparable gold projects can yield dramatically different valuations, and what that says about the competing philosophies behind how nations measure, classify, and value mineral wealth.

“It’s not that the geology changes,” Shaun says. “It’s that the systems, the rules, and the philosophies behind valuation do.”

A project more revealing than expected

As the analysis unfolded, what began as a technical exercise in comparative valuation became a deeper examination of how political structures, regulatory intent, and investor expectations collide in modern mining markets.

“The story turned out to be far more complex and more revealing than we anticipated,” Shaun reflects.

“Once we began unpacking the regulatory frameworks that sit behind valuation, the divide between East and West became obvious, not in the data but in the design.”

To compare systems meaningfully, SRK needed a commodity common to both markets, actively traded, and globally standardised. Gold was the logical choice.

“Gold is fungible,” Shaun says.

“It’s 99.99% pure wherever it’s produced. There are no quality variables like coal or iron ore. So when valuations differ, you know it’s not about the metal, it’s about the method.”

Two systems, two philosophies

The study’s central finding is deceptively simple: China’s GB/T 17766-2020 standard is rules‑based, while Australia’s JORC Code (2012) is principles-based.

“In China, it’s about regulation,” Shaun explains. “It’s a government-managed system designed to ensure consistency. In Australia, the JORC Code emphasises professional judgement on what the market needs to make an informed decision.”

Under JORC, a competent person determines assumptions based on geological confidence and modifying factors. In China, those assumptions are prescribed by government standards, including drill hole spacings, cut-off grades, and estimation formulae. The result is two frameworks built for entirely different purposes.

When the same deposit yields two values

These philosophical differences play out in valuation outcomes. Under Australia’s VALMIN Code (2015), valuations are market-oriented, using current or forecast commodity prices, discount rates that reflect risk, and analyst discretion. In China, appraisers must use historical gold price averages and regulator-specified discount rates.

“You end up with two completely different answers for the same asset,” Shaun says. “The Chinese approach gives you a technical value, useful for regulatory compliance. The Western approach gives you a market value, reflecting what an investor would likely pay.”

That divergence is compounded by structural differences. “A mineral valuation in China often feeds into state resource management or tax assessment,” he explains. “In Australia, it feeds investor confidence and market disclosure (transparency and materiality). They serve different masters.”

The transparency problem

SRK’s comparative study analysed 201 gold-asset transactions between 2015 and 2025 – 196 in Australia and only five in China.

“The disparity says a lot,” Shaun notes. “It’s not that China’s mining industry is smaller. It’s that transactions there are rarely disclosed. Without transparency, it’s almost impossible to establish a consistent valuation benchmark.”

Because of this, the study stops short of declaring a definitive premium or discount. Still, the limited data suggest that advanced exploration assets in China may transact at higher multiples, averaging US$130 per ounce compared with US$53 per ounce in Australia.

“It’s only a hint, not proof,” Shaun cautions. “It could be due to overstated resources, different price assumptions, or simply less liquidity. When assets don’t trade often, perceived value becomes distorted.”

State oversight and market freedom

The study also underscores how ownership structures drive divergence. In China, most producing gold mines are owned or partly owned by state-owned enterprises. Even when listed on exchanges in Shanghai or Shenzhen, they remain tethered to state reporting rules.

“For investors, that means dual reporting,” Shaun explains. “A company might publish results under the Chinese system for domestic compliance and under JORC or NI 43-101 for its Hong Kong listing. Those reports can look very different, not because anyone’s wrong, but because the systems serve different purposes.”

That duality, he says, creates discrepancies for cross-border investors. “It doesn’t inspire confidence when you can’t reconcile the data. The Chinese system is about consistency and regulation; the Western system is about market disclosure. That’s a fundamental philosophical split.”

Premiums that aren’t really premiums

When SRK compared listed gold producers across the ASX, HKEx, and SSE, Chinese giants such as Zijin Mining, Shandong Gold, and Zhaojin Mining appeared to trade at higher enterprise‑value multiples than Australian peers like Northern Star and Regis Resources.

At first glance, it looks like a premium. In practice, Shaun says, it reflects business model differences more than market perception.

“They’re not pure-play gold miners,” he explains. “They’re vertically integrated businesses involved in everything from refining and jewellery manufacturing to recycling and finance. That diversification supports higher valuations, but it makes direct comparison meaningless.”

Signs of convergence

While the divide remains clear, there are early signs of alignment. In August 2025, the China Association of Mineral Resources Appraisal (CAMRA) issued new reporting rules accepted by  Committee for Mineral Reserves International Reporting Standards (CRIRSCO), the global umbrella body that underpins the JORC Code.

“China’s regulators are acknowledging the importance of compatibility with international standards,” Shaun says. “That’s encouraging. As these frameworks begin to align, cross-border understanding will improve.”

Beyond geology: a matter of governance

Ultimately, SRK’s research isn’t about whether Chinese or Australian methods are right. It’s about context, understanding why valuations differ and what those differences reveal about each system’s priorities.

“The divide isn’t geological,” Shaun concludes. “It’s philosophical. China’s framework is designed for consistency and regulation, Australia’s for market transparency. Until those purposes converge, valuations will continue to diverge.”

Or, as he puts it more succinctly, “The rocks may look the same, but the rules certainly don’t.”