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Monday, 28 March 2016, 20:42 HKT/SGT

Source: Zhaojin Mining
Zhaojin Breaks the Record High for Yield; Innovation and Efficiency are greatly Enhanced

HONG KONG, Mar 28, 2016 - (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 annual results for the year ended 31 December 2015 (the "year under review").

In 2015, under the pressure of strong US dollars, the price of gold decreased during the whole year. The Group actively respond to the challenges brought by the sluggish gold price, by optimizing the reconstruction of production capacity and advancing enterprise management, which helps to enhance quality and improve efficiency of development. For the year ended 31 December 2015, the Group's revenue amounted to RMB 5,886,845,000. Net profit and profit attributable to owners of the parent amounted to RMB399,583,000and RMB308,140,000, respectively. Gross profit margin was 37.90%. Basic and diluted earnings per share were RMB0.10. The Board of Directors proposed the payment of a cash dividend of RMB0.04 (tax included) per share to all shareholders. Cash dividend payout ratio is up to 40%.

Mr. Weng Zhanbin, Chairman of Zhaojin Mining Industry Company Limited, remarke, "In 2015, the overall US economy is positive, which promotes a stronger dollar and makes gold prices continue to hit new lows. Due to the volatility of global economy and regional disturbance, the gold market is unsteady. By adopting various measures to actively cope with the pressure of gold prices, the Company steadily completed the production technology indicators, increased the effort on inventory reduction, scientifically and steadily promoted product sales, achieved breakthroughs in terms of cost efficiency. At the same time, the Company strengthened the quality and efficiency of infrastructural project and technological reformation, which improved potential resources, implemented the innovation strategy, advanced the technology on key fields and explored new profit growth point. In terms of resource reserve, the Company successfully acquired the Haiyu Gold Mine Project, the largest single pit gold mine in China, which enlarged the room for value creation in the future."

During the year under review, under the challenge of various unfavorable factors, the Company recorded an increase in production. Annual target of gold and smelted and processed gold was achieved ahead of time. Its total output of gold amounted to 1,091,779.38ozs (approximately 33,958.16 kg), representing an increase of approximately 3.20% as compared to the same period of last year. Among which, 651,849.79ozs (approximately 20,274.81kg) of gold was mine-produced gold, representing an increase of approximately 0.88%, as compared to the same period of last year; 439,929.59ozs (approximately 13,683.35 kg) of gold was smelted and processed gold, representing an increase of approximately 6.84% as compared to the same period of last year.

As for resource reserve, the Company invested RMB134 million for geological mine exploration, 69.20 tons of gold resources and reserve were added to our portfolio. In particular in terms of resource possession, the Company successfully acquired the Haiyu Project, the largest single pit gold mine in China, which expanded the future values and added 470 tons reserves. As at 31 December 2015, the Company owned 36 mining rights and 41 exploration rights in total, with areas of 137.3281 km2 and 745.6 km2 respectively. According to Australian JORC, the Company's gold resource amounted to 1228.01 tons (approximately 39.4814 million ozs), and the mineable reserves amounted to 544.13 tons (approximately 17.4942 million ozs), representing an increase of 51.40% and 46.08% respectively as compared to the same period of last year.

As for infrastructure and technology reform, the Company invested RMB802 million to improve the quality and speed of infrastructure construction and technology innovation projects. At the same time, a group of key projects including chlorination and volatilization, calcined capacity expansion, smelting technology improvement and construction of demonstrative base were carried forward as scheduled, which accumulated strength for the improvement of production and efficiency.

As for management and technology innovation, the Company commenced management innovation compliant and upgrade activity, implemented an assessment mechanism to identify red-light, yellow-light and green-light projects, promoted Zhaojin E office system and TOPS management system to raise the science, information and standardization level of management. In addition, the Company carried out cost and consumption reduction activities in terms of projects construction, geological exploration, device purchase and energy management, which helps to maintain the advantage of low-cost operation. The Company insisted on innovation-driven operation, completed RMB52,370,000 of R&D investment, launched 25 technological innovations, applied for 46 patents and 37 achievement awards, and obtained 5 invention patents and 11 practical and new patents.

As for safety and environmental protection, the Company adheres to the three "red lines" for safety, ecology and environmental protection with accumulative injection of RMB180 million. The Company deepened the governance of hidden danger investigation and consolidation of safety awareness to ensure safety and stability continuously.

Looking forward to the future, the year of 2016 is a crucial year for the Company to accelerate the transformation from a traditional mining company to a mining investment company, while improving quality and efficiency. The Company will adhere to the working principle of "reform and innovation, maintenance of positive evolution", enhance the quality and efficiency and accelerate the transformation.

The Company will enhance the market-oriented reform and introduce the market-oriented concept into internal management. In accordance with the separation principle of ownership and management rights, it will deliver part of the management right of the enterprise to the contractor within a certain period of time, set the contract-based data so that the contractor can operate independently and assume sole responsibility for the profits and losses, which will fully motivate staff to achieve high benefits. Meanwhile, the Company will implement the innovation-driven strategy and conduct innovation in the investment, establish and improve the new investment model of the strict decision-making, efficient information and risk control, and set up a specialized investment committee.

Regarding project investment, the Company will invest RMB789 million to implement 27 construction projects; with regard to science and technology investment, it will invest RMB78.68 million to implement 56 scientific research and innovation projects, and put more efforts in the research of the mineralization pattern, safe and efficient mining technology, new cyanide flotation smelting technology, comprehensive utilization technology of tailings, and green environmental protection technology; with regard to exploration investment, it will put prospecting funds of RMB104 million to accomplish prospecting newly-added gold reserves of 50 tons, copper resources reserves of more than 2,000 tons. At the same time, the Company will expand counter-cyclical mining investment; based on domestic and foreign resource markets. The Company will screen and capture the low-lying land of valuable investment and plan to acquire the gold resource reserves of more than 20 tons at a consideration of RMB500 million.

Meanwhile, with regard to innovation in the combination of industry and finance, the Company will strengthen equity financing, debt financing and the construction of financial company, further optimizing the capital structure, reducing financing cost, and accelerating the development of the Company by taking the opportunity of China's financial market reform, RRR and interest rate cuts, liberalization of the interest rate marketization.

Besides, the Company will adhere to the value orientation of "engaging in the right business", persist in the development strategy of pure gold, strengthen main business investment in the mining industry, expand the backbone enterprise, and plan to complete the total gold production of 1.082 million ozs in 2016. At the same time, it will pay close attention to cost reduction, quality, efficiency, management innovation, technological innovation, personnel training, prospecting for reserves increase, safety production, and improve core competitiveness of the quality and efficient development of the Company.

Mr. Weng Zhanbin concluded, "Facing the downturn of gold price and commodity, the gold industry is still in the winter period, which brings profound challenges and changes to the whole industry. Yet the gold industry maintains a reasonable profit level as compared to other mining industries. Looking into the future, focusing on quality and efficiency, the Group will actively seize important strategic opportunities of industry adjustments, achieve the breakthrough in terms of production, scientific research and project construction, as to further enhance the Company's reserves and overall strength. We will fully utilize the advantages we possess in aspects such as technology, management, shareholders' resources and region, thus enhancing our position in the industry and striving to become the leading gold mining company in China and the globe, to create the maximum value to shareholders and the society."

Mar 28, 2016 20:42 HKT/SGT
Topic: Press release summary
Sectors: Daily News
From the Asia Corporate News Network

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