– Jinchuan International Announces Placing of 11.10% Stake of New Shares to A Wholly-owned Subsidiary of SD Hi-Speed Huanbohai (Tianjin) Equity Investment Fund (Limited Partnership);
– At Share Price of HK$0.80 Per Share;
– To Raise Net Proceeds of HK$384,400,000;
– To Fund its Core Business
HONG KONG — Jinchuan Group International Resources Co. Ltd (the “Company”, together with its subsidiaries, collectively referred to “the Group” or “Jinchuan International”, Stock Code: 2362.HK) today announced its annual results for the year ended 31 December 2016 (“Year Under Review”). The revenue for the year ended 31 December 2016 was US$364.8 million, representing a decrease of 22.5% compared with US$470.7 million for the year ended 31 December 2015. Revenues from two business segments, namely Mining Operations and Trading segment both recorded decrease. Profit attributable to the owners of the company was US$8.3 million (2015: loss of US$291.8 million). Basic earnings per share was 0.19 US cents (2015: loss of 6.71 US cents). The Directors do not recommend final dividend for the year ended 31 December 2016 (2015: Nil).
Mr. Yang Zhiqiang, the Chairman of Jinchuan Group and the Chairman of the Board of the Directors of Jinchuan International said, “As a result of disappointing China macro-economic data and a strong US dollar, the copper price sustained at low levels during first half of 2016 which strongly affected our Mining Operations section. Less affected by the copper price, the Trading of Mineral and Metal Products business was nevertheless faced with a lack of new business opportunities amid unfavorable market conditions in the non-ferrous metal sector. A gross loss was recorded during the first half of 2016. However, we managed to recover from such gross loss during the second half and presented an annual profit for the year attributable to owners of the company of US$8.3 million.”
The Group’s Mining Operations is represented by the Metorex Group, which is headquartered in South Africa. The Metorex Group has majority control over two operating mines in Africa which are the Ruashi Mine, a copper and cobalt mine located in the DRC; and the Chibuluma South Mine (including the Chifupu copper deposit), a copper mine located in Zambia. For the year ended 31 December 2016, the Group produced 42,587 tonnes of copper (2015: 47,782 tonnes) and 3,391 tonnes of cobalt (2015: 4,344 tonnes), and sold 43,083 tonnes of copper (2015: 48,400 tonnes) and 3,264 tonnes of cobalt (2015: 4,331 tonnes) which generated sales of US$205.2 million and US$58.0 million respectively (2015: US$257.7 and US$75.8 million respectively).
The Metorex Group also has control over the Kinsenda Project, a development copper project under trial production and located in the DRC, and two advanced stage exploration projects located in the DRC, namely the Musonoi Project, which is a copper and cobalt project; and the Lubembe Project, which is a copper project.
Trading of Mineral and Metal Products
For the year ended 31 December 2016, the Group’s wholly-owned trading subsidiary purchased and sold a total of 19,969 tonnes (2015: 18,521 tonnes) of copper blister, and 6,136 tonnes (2015: 43,315 tonnes) of copper concentrates. The revenue from sales of copper blister and copper concentrates for the year ended 31 December 2016 amounted to US$96.3 million and US$5.4 million respectively (2015: US$95.6 million and US$41.6 million respectively).
The copper blister was sourced from a Zambian producer under a renewed annual contract for 20,000 tonnes in 2016. The volume of blister shipped during 2016 was similar to that of 2015.
The annual contract of Mongolian origin copper concentrates sourced from a European supplier lapsed since beginning of 2016. There was one shipment of 6,136 tonnes recorded in January 2016 which was due to the delay in dispatch of the last shipment under the previous annual contract in 2015.
Mr. Yang Zhiqiang, the Chairman of Jinchuan Group and the Chairman of the Board of the Directors of Jinchuan International concluded, “Although the global economy remains depressed, recent improvements in both the copper and cobalt price has provided a glimmer of light for the mining operations. Following the success in reducing operation cost in 2016, the Group will continue to focus on operation discipline and cost control. Stripping activities commenced at Kinsenda in the DRC in late 2016, and the final commissioning is to be commenced in second quarter of 2017. As a key component for the medium term growth for the Group, early works to secure the site have commenced at the Musonoi Project in the DRC, and initial collection of geotechnical and geohydrological data essential for Front End Engineering Design (FEED) of the surface and underground mining infrastructure were adequately funded. The Group also undertakes trading activities. Recently, the Group has enhanced its trading resources with an intention to grow the new line of business whilst taking an appropriate cautious risk management approach. With a vision to grow a sustainable and competitive international mining business, the Group strives to bring maximized return to our shareholders.”
Jinchuan Group International Resources Co. Ltd (the “Company”, together with its subsidiaries, collectively referred to “the Group” or “Jinchuan International”, Stock Code: 2362.HK) today announced that on 20 March 2017, the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Company conditionally agreed to allot and issue and the Subscriber conditionally agreed to subscribe in cash for a total of 483,000,000 Subscription Shares at the Subscription Price of HK$ 0.80 per Subscription Share. The net proceeds amount to HK$384,400,000.
The Subscription Shares represent (i) approximately 11.10% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 9.99 % of the total enlarged issued share capital of the Company immediately following completion of the Subscription, assuming there are no other changes in the issued share capital of the Company from the date of this announcement and up to the Completion Date. The shares will be locked up for 12 months and the Subscriber will appoint a representative as a non-executive director of the Company. Immediately after the issue of the Subscription Shares, Jinchuan Group Co., Ltd?s stake will be decreased to 67.50%.
The Subscriber is an investment holding company and a wholly-owned subsidiary of SD Hi-Speed Huanbohai (Tianjin) Equity Investment Fund (Limited Partnership), which is managed by SD Hi-Speed Huanbohai (Tianjin) Equity Investment Fund Management Limited. As Shandong Hi-Speed Group Co., Ltd holds 45% equity interest in SD Hi-Speed Huanbohai (Tianjin) Equity Investment Fund Management Limited, it is the indirect single largest shareholder of the management company. Shandong Hi-Speed Group Co., Ltd is a state-owned company established in Shandong Province, the PRC which engages in various segments of business including the investment, construction and management of expressways, bridges, railways, ports and airports.
Mr. Yang Zhiqiang, the Chairman of Jinchuan Group and the Chairman of the Board of the Directors of Jinchuan International said, “We are thrilled to welcome such a reputable and scalable fund to be our strategic shareholder. With its support, Jinchuan will develop in good shape along with the expected recovery curve of copper price as well as the continued commencement of mines in operation.”
Mr. Zhang Wei, the Secretary of Party Committee and Deputy General Manager of Shandong Hi-Speed Investment Holdings Group Co., Ltd said, “We have strong confidence in Jinchuan International as it is a government back-company for overseas mining acquisition and operations. The mining assets in hand of Jinchuan International are of high potential and values. We will continue to support Jinchuan International to become a major overseas mining company in the global field.”
The Subscription Shares will be allotted and issued under the Specific Mandate to be sought from the Shareholders at the EGM. An application has been made by the Company to the Stock Exchange for resumption in trading of its Shares with effect from 9:00 a.m. on 21 March 2017.
About Jinchuan Group International Resources Co. Ltd
Jinchuan International is a Hong Kong listed company established by the Jinchuan Group Co., Ltd for the purposes of accelerating the establishment of the mining group’s multinational operational strategy and elevating Jinchuan Group’s global investing, financing and operating capabilities. By virtue of Hong Kong’s advantages as an international financial and trade center, and through the Company’s focus on an internationalized operating strategy, the Company has established itself as the flagship platform for the Jinchuan Group to develop its overseas non-ferrous metal mining business. The Company is primarily engaged in the development of overseas mining resources projects, capital operation and assets management of overseas mining resources projects, as well as trading of raw materials and products of nickel, copper, cobalt and precious metals.