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| Net Loss Further Narrowed; Improving Operations and Seeking Accretive Acquisition Opportunities |
HONG KONG, Nov 28, 2011 - (ACN Newswire) - Sino Prosper State Gold Resources Holdings Limited ("Sino Prosper" or the "Company", together with its subsidiaries, the "Group", HKSE:0766), a Chinese precious metals company, announces its unaudited condensed consolidated results for the six months ended 30 September 2011 (the "Period").
During the Period, Sino Prosper's revenue increased by 10.3% to approximately HK$32.9 million which was mainly attributable to the generation of turnover from the sales of gold concentrates. Net loss attributable to shareholders further narrowed to approximately HK$16.1 million (2010: approximately HK$28.6 million), which was mainly due to the absence of loss on early redemption of promissory note. The Board of Directors did not recommend the payment of any interim dividend for the six months ended 30 September 2011 (2010: Nil).
Sino Prosper has been concentrating on its core gold mining business, which has become the Group's main source of revenue. The Group recorded revenue of approximately HK$32.9 million, of which 82.5% was from the sales of gold (2010: 93.0%); 16.3% from sales of gold concentrate (2010: Nil).
During the Period, various facilities upgrades and remedial works have been carried out since the completion of the acquisition of 70% stake in Aohanqi Xinrui En Industry Co., Ltd in Inner Mongolia ("Aohanqi"). Remedial construction and safety upgrades of processing plant have been completed effective 12 August 2011. Stage I work for reconstruction of tunnels has also been completed and Stage II work is in progress. Nevertheless, production has been restarted since 20 September 2011 with current processing capacity of 500 tonnes per day ("tpd") but with lower grade material. As Stage II work is completed, normal production is expected to be restored within the first half of 2012 with higher grade feedstock utilized. The previously announced expansion of processing plant and construction of refinery has been postponed to allow for evaluation of expansion options in light of the Aohan Agreement described in the next paragraph.
On 10 April 2011, Sino Prosper signed a Framework Cooperative Agreement ("Aohan Agreement") with the People's Government of Aohan Banner to allow the Group to conduct preliminary exploration of unencumbered areas with gold and copper mineral prospects within the Aohan Banner region. Upon signing, the Group has started to examine data and opportunities provided by the Aohan Agreement. As more and more small to medium-scale mining and processing plants are available for sale in the area, the Group is considering acquiring more "in-production" projects introduced by the government as a more cost effective way to increase its production in the region.
Sino Prosper currently has a 92% interest in Heilongjiang Zhongyi Weiye Economic & Trade Co., Ltd ("Zhongyi") and its 5 contiguous exploration licenses covering over 360km2. During the Period, unusual weather conditions and local flooding have presented challenges to exploration work. Nonetheless, 4,000m of exploration work had been completed and over 1,400 samples collected. However new high potential targets have been identified and a newly designed drilling program totalling 3,000m is under way. The Group's objective is to develop PRC standard resource reports, apply for mining licenses and to commence initial production by the end of 2012.
Mr Richard Sung, CEO of Sino Prosper said, "During the Period, the Group's mining facilities at Aohanqi and Zhongyi have undergone intense upgrades for higher efficiency and safety. Management always places safety of its workers and long-term sustainable operation above short-term profits, and considers these updates to be crucial even though they resulted in delays in reaching our production and profit objectives. We continue to strive to deliver expected performance and expect to see the benefits become apparent in the new year."
On 7 April 2011, Sino Prosper entered into a framework agreement with respect to the potential acquisition of a company in Zhuolu County, Heibei Province, PRC that owns mines containing mineral reserves of approximately 422 tons of silver and 129,685 tons of manganese. During the Period, due diligence was completed, but results did not meet the expectations. Accordingly, the Group decided not to proceed.
On 3 May 2011, a top-up placing of 1,100,000,000 ordinary shares was completed, with aggregate net proceeds of approximately HK$400 million, which are intended to be used as general capital of the Group and to finance any possible future acquisitions by the Group.
As at 30 September 2011, Sino Prosper maintained a strong financial position with cash and bank balances of approximately HK$644.3 million (as at 31 March 2011: HK$311.8 million), a significant increase mainly arising from the top-up placing completed on 3 May 2011. The Group's gearing ratio calculated as a ratio of net debt to total equity was Nil (as at 31 March 2011: Nil). The Group's net asset value as at 30 September 2011 increased by 25% to approximately HK$2,068.4 million (as at 31 March 2011: approximately HK$1,660.3 million).
During the six months period ended 30 September 2011, the Company repurchased 67,400,000 of its own ordinary shares for an aggregate consideration of HK$11,820,000 of which 45,480,000 ordinary shares have been cancelled as at 30 September 2011 and the remainder are in the process of being cancelled.
Mr Sung concluded, "The past half year has been a challenging one for Sino Prosper. However, with the expected completion of initial expansion at Aohanqi and the expectations for future contributions from the Aohan Agreement and our Zhongyi project, we expect the coming year to begin to reflect the benefits of our operational activities and management improvements. Market conditions are also presenting the Group with a number of opportunities to enhance shareholder value. As one of a very few junior mining companies in Hong Kong, we are at a stage of growth and still have extensive room for improvement. The Group will continue to consider prudent allocation and preservation of capital resources and building long term sustainable operations as its strategy for development."
Contact:
Sino Prosper State Gold Resources Holdings Limited
Mr Garry Stein
Director, Corporate Development
Tel: +852-2829-8911 / +852-6051-8659
E-mail: garrystein@sinoprosper.com
Quam IR
Ms Anita Wan
Tel: +852-2217-2811
E-mail: anita.wan@quamgroup.com
Ms Sharon Au
Tel: +852-2217-2812
E-mail: sharon.au@quamgroup.com
Ms Venus Lam
Tel: +852-2217-2813
E-mail: venus.lam@quamgroup.com
Topic: Earnings
Source: Sino Prosper State Gold Resources
Sectors: Gas & Oil, Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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