K-2012-1001-009-A Silver-copper project in Yunnan

 四、Silver-copper project in Yunnan

Categories: mining (N); subcategories: 2012; rating: Independant filing (1001); A: overseas listed
 
(一)、Place of listing: Hong Kong main board
(二)、Time of listing: 2016
(三)、Project Description: 
The company was founded in 2005 with a registered capital of RMB100 million. The company is headquartered in Dali, Yunan and it is mainly engaging in exploiting of mineral resources, mining and sales and marketing of mineral products.

1、 Industry: Mining
2、Main business: Mineral resources development, co-operation and marketing of mineral products
3、Qualification: Key supporting enterprise of Dali, VIP mining enterprises
4、Turnover / net profit in the latest three years: Not available
5、Analysis of the valuable points :
 (1) Scarcity of natural resources
 Over the past decade, with the sustained and rapid development of China's national economy, and the impact of the international division of labor has resulted on the transformation from manufacturing sector to Asia especially China, the rapid growth on the production and consumption of domestic copper made products, , China has become the world's largest copper products production and consumption country. Driven by the development of the power, automobiles, home appliances, industrial machinery industry, the domestic copper consumption growth has increased significantly.
 
Meanwhile China is short of raw copper. In 2009 copper consumption in China accounts for 26.4% in the global copper consumption and it is the largest copper consumer and refined copper ore importer. At present, China's dependence on copper ore has listed on the second place being next to iron ore, 2/3 of the refined copper are imported.


Due to the further development of urbanization and industrialization, there is a long term demand of copper ore, which is important for the increase of the GNP growth.
 
(2) The condition of the project
Ore types: open-air copper project.
Location / authorized area: Located in Dali, Yunnan with a approximate area of 12.5 hectares
Estimate quantity of the ore: More than 1 million tons. The total storage of ore and metal is about 256,300 tons and 815,000 tons respectfully.
Initial exploration: There are three sections including north, central and south, based on 12.62% drilling data of the completed surface of the ground, around 164,900 tons of resources are under controlled..


Other information: Open air resource and good mining conditions, easy to exploit; low mining costs per ton and functioning capital.
 

License: Obtained all the necessary permits, mineral rights and license from the regulation authorities.

There are three mines to be listed, nine mining permits, several manufacturing factories including one electrolytic copper factory with 5,000 tons of yearly production, one lead and silver grading factory with 1,000 tons of daily production, one electrolytic copper factory with 300 tons of yearly production.

(3) Production Forecast

According to the current design of the above three mining exploration program (not including ore grading), if we invest RMB 20 TO RMB30 million per year started from 2010, after three years of exploration, all three miner can submit a detailed and reliable storage report and achieve mining production stage. The estimated production of copper, silver, lead and zinc ore is about 300,000 tons at a yearly basis, the figure is based on the minimum production ability (45%) of three mines started from the early of 2013. The calculation based on the price of ore in October 2009 (Respectively historic low record) with an estimated yield of RMB0.6 billion started from 2013. According to our survey, the preliminary judgment can be drawn that all the three above mines has reached medium or large-scale deposits.

(4) The comparative advantages of the project

The advantages of the project including institutional, technology, resources and management has contributed to the rapid development of the project. The company has established a flexible mechanism by introducing private capital; it has its own technology of exploiting low grading copper ore and rich experiences on the ore selecting and separating, smelting of copper and its associated ore, with a leading copper and associated minerals fining separation technology, the economic and technical indicators of copper and silver elections has obtained a leading level among its industry. In its management, the company has created a "Free of responsibility" system and a new management mode for the outsourcing of mine construction, the profit has intensively increased. 

6、Investment type: Strategic investment.

7、The use of funds:

The project has been targeted by the fund, with the implementation of fund raised project, the storage of minerals owned by the company will be greatly improved and in the coming years, the production will be lifted by large amount.

Meanwhile, by listed overseas or Hong Kong capital market, insist on M&A plus exploit expansion, explore the storage ways, increase investment on technology, it will achieve a long term and high speed on its sales outcome.