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HONG KONG, Sept 1, 2011 - (ACN Newswire) - China Precious Metal Resources Holdings Co., Ltd. ("CPM" or "the Group"; Stock code: 1194) primarily engaged its business in Mainland China which focus in gold ore mining, processing and sales of gold, the board is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries for the six months ended 30 June 2011.
Financial Highlights
-- Profit for the period was approximately HK$111.2 million, representing an increase of approximately 40.12 times
-- The basic earnings per share amounted to approximately HK 3.34 cents
-- Turnover was approximately HK$ 300 million, representing an increase of approximately 6.38 times
-- Profits for the period from continuing operations was approximately HK$94.7 million, representing an increase of approximately 11.62 times
-- As at 30 June 2011, the Group owned and controlled a total gold reserves and resources of not less than 161.2 tonnes.
As at 30 June 2011, the Group's turnover from the gold mining operations was approximately HK$300.0 million, a gross profit of HK$194.8 million, Cash in hand amounted to HK$94.7 million, basic earnings per share amounted to approximately HK 3.34 cents. The significant increase of Group's turnover was mainly due to winding down of operations in the production and sale of small-pack edible oils and the trading of edible oils and related products. As at 30 June 2011, profit for the period was approximately HK$111.2 million. During the period under review, the Group's EBITDA from gold mining operations was approximately HK$226.6 million, representing a significant increase of approximately 10.21 times, this is mainly attributable to the substantial increase in the sales volume of gold products.
The Group has been specialized in gold mining since being duly established in 2009. As at 30 June 2011, the Group owned and controlled a total of about 152 tonnes of gold resource and reserves in the Inner Mongolia, Yunnan and Henan. In the first half of the year, the Group, through Henan Luanchuan Jinxiang Mining Co., Ltd., acquired a gold mine in its proximity for a consideration of RMB 160 million. The mine has gold reserves and resources of about 9.2 tonnes. Subsequent to this acquisition, the Group owned gold reserves and resources of not less than 161.2 tonnes as at 30 June 2011. Going into the second half of the year, the Group will embark on a substantial acquisition plan to increase its gold reserves and resources significantly by the end of 2011.
As at 22 July 2011, Mojiang County Mining Co.,Ltd., being a wholly-owned subsidiary of the Group, entered into the Letter of Intent with the Vendor regarding a possible acquisition. The letter of intent has a significant impact on expansion of gold mining operations and the mine has high grade gold resources which will bring in more revenue and improve profit margins. The vendor holds a gold mining permit and an exploration permit covering a gold mine located in Yunnan Province, the PRC; and the reserves and resources of gold in the gold mine shall be not less than 40 tonnes. The parties to the Letter of Intent intend that the Consideration shall not exceed RMB2.0 billion (or the HK$ equivalent), 50% of which shall be settled by cash and the remaining 50% shall be settled by consideration Shares to be issued by the Company. The issue price of the Consideration Shares shall be HK$1.9 per Consideration Share, which represents a premium of approximately 17% over the average closing price of the Shares of HK$1.628 for the five trading days up to and including the date of the Letter of Intent. The gold resources are expected to have significantly growth by the end of 2011.
In light of growing fears that the debt woes of the United States and Greece would worsen the sovereign debt saga, market participants did not rule out the possibility of the third round of quantitative easing. Given huge budget deficit and fiscal pressure, it would be unlikely for the United States to tighten its monetary policy. That says, a loosened monetary base will continue to support a bullish metal market. In addition, China's accelerating inflation rate has made gold the best option for investors as a store of investment- a safe haven for capital. Since the beginning of the year, the gold price has hit record highs. Since the beginning of 2011, the national spot gold price had reach approximately US$1,381 per ounce and climbed up further to US$1,900 per ounce in August 2011, it's highest in history. On 15 June 2011, the China Gold Association expressed that the gold output in China for the year increased by at least more than 10% over last year. The international gold price is expected to linger at high levels in the second half of the year and China's demand for gold will remain inexorable in the coming few years. A soaring gold price and strong market demand is set to drive profitability of the Group in the next few years.
Topic: Earnings
Source: China Precious Metal
Sectors: Metals & Mining, Daily Finance, Daily News
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From the Asia Corporate News Network
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