The company is rich in copper, lead and zinc resources, participates in the third largest platinum company in the world, and is currently acquiring Lonmin, one of the largest platinum and gold mines in the world. Platinum is one of the important raw materials for fuel cells, and the company's valuation is relatively safe, covering it for the first time and giving it a "prudent recommendation-A" rating.
The company's two major shareholders, CITIC Guoan and Gansu SASAC, own 32% and 30% respectively. The company's main business is the mining, smelting, processing and trading of copper, lead, zinc, gold, silver and other non-ferrous and precious metals.
The domestic company maintains mine resources reserves of 9.04 million tons of copper, lead and zinc metals, including 370000 tons of copper, 1.75 million tons of lead, 6.92 million tons of zinc, 11 tons of gold, 1845 tons of silver and 25400 tons of molybdenum. In 2017, the concentrate contained 25000 tons of copper, 20,000 tons of lead and 100000 tons of zinc; 135000 tons of cathode copper, 23000 tons of electric lead, 260000 tons of zinc products, 8180 kilograms of gold (including the first gold output of 4309 kilograms), 160 tons of silver and 960000 tons of sulfuric acid.
Based in Gansu, the integration of high-quality non-ferrous metal resources at home and abroad, through the implementation of the "going out" strategy, mergers and acquisitions of overseas gold, uranium and other rare mineral resources, has become a veritable leader of China's platinum resources. The company intends to buy 100% equity in China African Gold at a price of 2.197 billion yuan. After the success of the acquisition, the company will hold a 100% stake in first Gold.
Australia, the first place where gold is registered, was delisted from the Australian and South African stock exchanges in early 2014. The gold resource reserves of the first gold are equivalent to 809 tons. Through the acquisition, the company holds a 34.07% stake in Barrow, which is domiciled in Canada, and has two production mines and two exploration projects in Congo Gold. Barrow has 408 tons of gold resources and 97 tons of gold reserves.
The company holds 19.82% of the shares in Span I through first Gold. Spanyi is listed on both Johannesburg and the New York Stock Exchange. In May 2017, Spanyi acquired the American still Water Company, making it the first gold company in South Africa, the ninth largest gold company in the world and the third largest platinum metal company. Mr Spanyi is in the process of acquiring a 100 per cent stake in Lonmin plc, one of the world's largest platinum producers, which will become the world's second-largest platinum producer after the merger.
Spanyi has 2647 tons of gold resources and 801 tons of gold reserves. The platinum series metal resources are 3798 tons, and the platinum series metal reserves are 695 tons. In 2018, 36.6 tons of gold and 55 tons of platinum group elements were produced, including 23 tons of platinum and 23 tons of palladium. The total uranium resources are 72000 tons, with reserves of 51000 tons.
According to estimates, the company has 659 tons of platinum group element equity resources, 1366 tons of gold, a total of 2024 tons; platinum group equity reserves of 121tons, gold 209tons, a total of 330tons; equity output of platinum group 9.7tons, gold 11.6tons, a total of 21.3tons. In other words, the precious metal resources of silver and non-ferrous metals are more than double those of Shandong Gold Mining, and their reserves are equal to those of Shandong Gold Mining. The output is 58% of that of Shandong Gold Mining. The resource quantity / market value ratio and reserves / market value ratio of silver nonferrous metals are better than those of Shandong Gold Mining.
Platinum is a rare and precious metal, and Silver Nonferrous, as the only listed company producing platinum and gold in A share, has strong comparability with cobalt, lithium, molybdenum and rare earth. Silver non-ferrous precious metal resource value / market value ratio 14.8, resource income / market value ratio 0.16, are much better than other rare metal leading companies.
The company is valued by price-to-book ratio and enterprise value / EBITDA respectively. For the bid gold leader, the company's valuation range (market capitalization) is 248 and 20.1 billion yuan; for rare and new energy metals companies, the company's valuation (market capitalization) ranges from 386 million to 40.8 billion yuan. Considering the obvious advantages of the company's resources and output, platinum group elements are one of the upstream elements of fuel cell vehicles, and there is a serious shortage of platinum group resources in China, so we tend to think that the valuation level between 386 and 408 billion yuan is more reasonable.
As a very important development direction of new energy vehicles, fuel cell vehicles are strongly supported by our government. at present, the subsidy for bicycles is much stronger than that of plug-in vehicles. Platinum is an irreplaceable catalyst metal for fuel cells. with the rapid development of fuel cell vehicles in the future, the supply and demand of platinum will be reversed rapidly. However, there is a serious shortage of platinum resources in China, with proven reserves of nearly 300 tons, accounting for about 0.4% of the world. The proportion of output is negligible. As the only listed company with platinum mass production in A shares, Baiyin Nonferrous has a certain degree of scarcity.
Considering that the company has abundant resources, especially platinum and gold, and its production ranks among the top in the world. The current valuation is relatively safe, covered for the first time, and given a "prudent recommendation-A" rating.
Risk tips: lead, zinc, copper, gold, silver and other main products price fluctuation risk; industry policy risk; exchange rate risk; construction and production schedule of projects under construction is not as expected; stable operation risk; M & A project progress is not as expected mine production safety risk.