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Monday, 17 August 2015, 10:43 HKT/SGT
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Source: Zhaojin Mining
Timely Increase Resources Reserves; Zhaojin Mining Maintained Steady and Healthy Operating Performance

HONG KONG, Aug 17, 2015 - (ACN Newswire) - Zhaojin Mining Industry Company Limited ("Zhaojin Mining" or the "Company", stock code: 1818, together with its subsidiaries, the "Group"), a leading gold enterprise in the PRC, announced its interim results for the six months ended 30 June 2015 (the "period under review").

In the first half of 2015, the growth of global economic and the actual needs of gold were weak, the Group actively coped with the challenges brought by weak global economic growth and disappointing gold demand, and increased reserves in a timely manner in order to maintain a steady and healthy operating performance. For the six months ended 30 June 2015, the Group's revenue was approximately RMB2,677,384,000. Gross profit was RMB1,110,195,000, and gross profit margin was 41.47%. Net profit was RMB220,900,000. Profit attributable to owners of the parent amounted to RMB 225,127,000. Basic and diluted earnings per share were RMB 0.08.

Mr. Weng Zhanbin, Chairman of Zhaojin Mining Industry Company Limited, remarked, "In the first half of 2015, influenced by various factors including economic recovery in the United States, postponement of increase in interest rate by the US Federal Reserve as well as better-than-expected economy within the Euro Zone, obvious capital distributions were seen, and the actual needs of gold were weak. International gold market and bulk commodity market are in deep ice age, maintaining its fluctuations and the trend of depression and downturn. The Group took initiative in coping with the gold price pressure by several measures, including continuous and steady promotion of output indicators, application of cost reduction and efficiency improvement in main segments and proceeding infrastructure & technological renovation and key projects. Besides, the Group actively seized the market opportunity, achieved a major breakthrough in resource integration in Shandong region and obtained remarkable result in mine exploration and reserve replenishment to further enhance the strength of the Group."

During the period under review, the Group insisted the core values of "quality, efficiency, regulation and stability" and further expanded and enhanced key mines. The scheduled plan of production and operation was smoothly completed in the Group. As at 30 June 2015, the Group's total gold output amounted to 16,568.66 kg (approximately 532,694.39 ozs), representing an increase of approximately 10.70% as compared to the same period last year. Among which, 10,424.40 kg (approximately 335,151.99 ozs) of gold was mine-produced gold, representing a rise of approximately 7.61%; gold output from smelting and tolling arrangement accounted for approximately 6,144.26 kg (approximately 197,542.40 ozs), representing an increase of approximately 16.37% as compared to the corresponding period of last year. Facing the negative situation of decreasing gold price and increasing labor costs, the Group emphasized cost-reduction and efficiency increasing as a key work and effectively controlled integrated cost of gold. The Group arranged price-reduction tasks in main scopes in project development, material procurement, construction work and geological exploration. Over a hundred million RMB was saved accumulatively in terms of capital expenditure. The Group's integrated cost of gold was approximately RMB135.21 per gram, positioning as the low-end in the whole industry. The productivity scale of enterprises outside Shandong region was further increased with refined and more regular management accounting for a larger proportion of output efficiency in the whole Group and becoming a major force to promote the stable development of the Group.

As for infrastructure and technology reform, the Group completed a total investment of RMB278 million. Key projects were carried out smoothly and according to schedule such as the demonstrative base for integrated utilization of gold resources in Shandong Province and gold extraction project with smelting and chlorinating in Gansu. As for technology innovation, the total investment completed in the first half of the year was RMB 20.896 million. The scientific research results of the Group were also fruitful. In the first half year, the Group successfully applied for 11 results awards, applied for 15 patents and published 13 papers and 364 quarterly innovative results.

The Group insisted on counter-cyclical deployment to and implemented prudent and stable investment strategies. In the first half year, 18 exploration projects and 11 exploitation projects were accumulatively examined. In particular, successful merger and acquisition of Haiyu Gold Mine project in Laizhou achieved a substantial breakthrough in exploration and increase in reserves. Currently, Haiyu Gold Mine has the reserves reviewed and filed with Ministry of Land and Resources has reached over 470 tonnes, becoming the unique and tremendously large scale of gold mine worth over hundreds of billions with reserves over tens of millions in recent decades discovered in the world, as well as becoming high-profile in the global gold mine industry. In the first half year, for against the new normal of the continuous downturn in gold price, the Group strengthened geological prospection and management. A total contribution of RMB 53.02 million was invested as prospecting funds and 18.025 tonnes of gold and 2,412 tonnes of copper were newly mined.

As for safety and environmental situation, in the first half of 2015, the Group withdrew over RMB 46.97 million of safety expenditure and vigorously implemented the strategy of realizing safety with technology. The Group actively promoted the application of new equipment, technique and technology, developed mechanized exploration and digging, automatic support and digital monitoring and control so as to improve modern standard of mining equipment. In addition, the Group organized ecological green activities with a theme of "preserving for ecological environment, jointly establishing beautiful Zhaojin" and adhered to the principle of "developing a new mine, preserving a green land" for development, creating green, harmonious and beautiful ecological atmosphere. Meanwhile, the Group carried out activities in relation to staff caring, community building and further promotion of corporate culture to ensure a harmonious and stable environment for the development of the enterprise.

Looking forward into the second half of 2015, the Group will continue to insist quality and efficiency as the principles. The planned annual total output of gold amounts to 29,562.5 kg (950,500 ozs), mined gold amounts to 20,117.9 kg (646,800 ozs).The Group will strengthen the adjustment of production organization of key and hardcore enterprises, and make great efforts in "Two Deductions" tasks of both inventories and costs, where the key point was to realize a new breakthrough on five core parts, namely reduction of construction fees, depreciation fees, labor cost, material fees and power rates. The Group will also accelerate the transformation of key projects, forming pulling effect for the enhancement of productivity. Besides, the Group will advance management innovation and technology innovation with all strength, to release innovation, drive energy and enhance the Group's core competiveness. In addition, according to the overall development tendency of mining rights at home and abroad, the Group will follow up the progress of quality mining right projects and continue exploration and increasing resources to strengthen reservation capability.

Mr. Weng Zhanbin concluded, "In the second half of 2015, to cope with the challenges in gold market, the Group will continue to optimize the resources and further enhance the integrated strength to lay a solid foundation for Group's long term development. In the second half of 2015, bearing the Group's core principle of persisting in the quality efficiency, driven by management innovation, technological innovation and performance appraisal and based on the principle of compliance operation and institutional construction, the Group will strengthen its efforts in production organization, key projects, cost reduction and efficiency enhancement, reserve replenishment by mine exploration to accomplish and exceed the target throughout the year. The Group strives to become the leading gold mining company in China as well as worldwide, to bring satisfactory returns to shareholders and create more values for the society."


Aug 17, 2015 10:43 HKT/SGT
Topic: Press release summary
Sectors: Metals/Mining, Daily Finance
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