HONG KONG, Apr 1, 2011 - (ACN Newswire) - China Kingstone Mining Holdings Limited ("China Kingstone" or the "Company", SEHK: 1380), the leading marble operator in China, today announces the audited consolidated results of the Company for the year ended 31 December 2010 ("the Report Period").
In the Report Period, the Company's revenue amounted to RMB6.615 million. Gross profit reached RMB4.592 million. Loss for the year attributable to owners of the Company was RMB21.055 million.
Financial Highlights
(In RMB'000) For the year ended 31 December
2010 2009
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Revenue 6,615 -
Gross profit 4,592 -
Loss for the year (21,055) (5,369)
China Kingstone commenced commercial production at Zhangjiaba Mine in September 2010 and began generating revenue in October 2010. From September to December 2010, the Company mined 1,145 m3 blocks and produced 12,452 m2 marble slabs, sold 12,000 m2 marble slabs and recorded total revenue of approximately RMB6.6 million. The VAT inclusive Average Selling Prices (ASP) was RMB842 per m2 for pure beige slab and RMB570 per m2 for mixed beige slab. The equivalent marble slab production cash cost was significantly decreased from RMB577 per m2 for the period from September to November to RMB196 per m2 in December, mainly due to the economy of scale of production.
Unit Production Cost Sept-Nov 2010 Dec 2010
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Marble block mining cash cost (RMB/m3) 14,670 2,655
Marble block mining total cost (RMB/m3) 14,917 2,939
Equivalent marble slab production cash cost (RMB/ m2) 577 196
Equivalent marble slab production total cost (RMB/ m2) 585 204
The gross margin was 59.5% from September to November 2010 due to the low production volume, and significantly increased to 73.0% in December 2010 as production volume went up. As the Company continues the ramp-up plan and increases the production volume, the gross margin is expected to further increase.
Moreover, besides robust ramp-up plan for its existing marble mine, China Kingstone also expands marble resources through selective acquisitions. On 26 March 2011, the Company announced Guangzhou Kingstone, an indirect wholly-owned subsidiary of the Company signed an intent agreement to acquire a marble mining right or the entire equity interests of Beichuan Lida Mining Co., Ltd. for an adjacent beige marble mine - the Tujisi Mine at a Consideration not exceeding the amount of RMB6.0 million (equivalent to approximately HK$7.1 million). Tujisi Mine currently has estimated resources of 6.1 million m3 with potential to upgrade the resource in the mine based on the preliminary assessment of the mine. The Tujisi Mine is located in the same mineral vein as the Company's Zhangjiaba Mine and contains premium beige marble resources of similar quality to that of the Zhangjiaba Mine. The commercial production is expected to commence in 2013 and full mining capacity 50,000 m3 per annum is expected to be reached in 2015. A marble processing facility is also planned for Tujisi Mine with a full processing capacity of 1 million m2 per annum expected in 2015. The Company will utilize existing expertise, infrastructure and facilities to develop the required mine and achieve synergies and economy of scale. The acquisition will better position the Company for more future acquisition opportunities and allow the Company to generate income from the exploration and mining of the mine.
Looking ahead, Ms. Chen Tao, Chairman & CEO of China Kingstone, said, "With the largest and high quality beige marble mine in China, China Kingstone will fully capture favorable industry dynamics. We will ramp up our mining and processing capacities, establish a strong customer base and strengthen customer relationships, develop high product recognition and strengthen pricing power; and expand our marble resources through further expansion and selective acquisitions to become a leading integrated marble business operator in China."
Topic: Earnings
Source: China Kingstone Mining
Sectors: Metals & Mining
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