On November 22, 2023, Jihai Resources Group Co., Ltd., from Qiansongjiao Village, Wanggezhuang Town, Muping District, Yantai, Shandong, once again submitted a prospectus to the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board. Jihai Resources, previously known as CICC Resources Holding Group Co., Ltd., is another application after its submission failed three times: March 30, 2022, September 30, 2022, and May 22, 2023.
Jihai Resources received an international and overseas listing filing notice from the China Securities Regulatory Commission on October 23.
Link to the prospectus of Gahai Resources:
Main business
Jihai Resources, founded in 2005, is a gold exploration, mining and processing company that sells gold ingots made from gold concentrate processed by the company, mainly Au99.95 gold ingots.
Shandong is the largest gold producing province in China. According to the Frost & Sullivan report, in terms of mining output, Jihai Resources was the third largest gold mining company in Shandong Province in 2022, with a market share of 2.6%.
Gahai Resources operates two active gold mines (Songjiagou Open Pit Mine and Songjiagou Underground Mine). The two mines are located in the Muping-Rushan Gold Metallurgical Belt, one of the three major gold-forming belts in Yantai, about 400 meters apart. In addition, the company operates a beneficiation plant with an annual ore processing capacity of about 2 million tons. The plant is 4 kilometers from the mine. The company's mines and beneficiation plants are close to roads and are easily accessible.
According to the SRK report, on June 30, 2023, the total approximate ore reserves, controlled ore resources, and estimated ore resources were about 23.13 million tons, 35.84 million tons, and 39.71 million tons of ore resources, respectively.
The average production cost of Jihai Resources in the first half of 2023 was about 220.7 yuan/gram (average price of gold ingots is 420.1 yuan/gram), and the average production cost in fiscal year 2022 was about RMB 186.3 per gram (average price of gold ingots was 385.7 yuan/gram), lower than the 2021 industry average of RMB 298 per gram as reported in Frost & Sullivan's report.
Shareholder structure
According to the prospectus, in the shareholder structure of Jihai Resources before listing, the controlling shareholder was Majestic Gold, listed on the Venture Exchange of the Toronto Stock Exchange in Canada, holding 94% of the shares.
Cheung Yuen Man, Ms. Rosa, through Richard's Resource, holds 6% of the shares.
Directors and Executives
The board of directors of Jihai Resources consists of 7 directors, including 4 executive directors and 3 independent non-executive directors.
Board of Directors (7 members)
Executives (6)
Executives include Chairman of the Board, CEO and Executive Director Dr. Shao Xuxin, Executive Director, Mr. Mackie James Thomas, Executive Director, Mr. Lu Zhuoguang, Executive Director, Financial Director and Company Secretary, Mr. Chen Shaohui, Executive Director, Mr. Huang Yong, Head of Mining Operations, and Mr. Zhou Shufeng, Chairman of the Board of Directors and General Manager of Yantai Zhongjia.
Company performance
According to the prospectus, in the past 2020, 2021, 2022 and the first half of 2023, the operating income of Gahai Resources was 361 million yuan, 248 million yuan, 418 million yuan and 198 million yuan respectively, and the corresponding net profit was 114 million yuan, 59 million yuan, 121 million yuan and 53 million yuan respectively.
Intermediary team
The intermediary team of Jihai Resources for this IPO mainly includes: Chuangsheng Finance as its exclusive sponsor and overall coordinator; Ernst & Young as its auditors; Jin Cheng Tongda and Li Weibin are the company's Chinese lawyers and the company's Hong Kong lawyers respectively; Dacheng and He Wei are their brokerage firm Chinese lawyers and brokerage firm Hong Kong lawyers respectively; Srocco Resources Technology as qualified persons; and Frost Sullivan as independent industry advisors.