Leju Finance Wang Min
According to the prospectus, Jihai Resources was founded in 2005 and is a gold exploration, mining and processing company headquartered in Yantai, Shandong Province, China. The company mainly sells gold ingots made from processed gold concentrate.
In terms of performance, in 2020, 2021, 2022, the first six months of 2022, and the first six months of 2023, Jihai Resources achieved total revenue of approximately RMB 361 million, RMB 248 million, RMB 418 million, RMB 217 million, and RMB 197 million respectively. During the same period, the company achieved annual profit of RMB 114 million, RMB 587.16 million, RMB 121 million, RMB 72.472 million, and RMB 52.769 million respectively.
According to Frost & Sullivan's report, the company is the third largest gold mining company in Shandong Province in 2022, with a market share of 2.6% (in terms of mine output), but in terms of gold production, the combined market share of the two major participants is about 78.3%.
Furthermore, Shandong Province is the largest gold producing province in China, with gold production of about 41.4 tons, accounting for 14.0% of China's total gold production in 2022. Yantai also accounted for more than 90% of Shandong's gold production in 2022. Jihai Resources believes that since it is in Yantai, the company will continue to enjoy growth opportunities.
According to the SRK report, as of June 30, 2023, the company's 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, respectively.
Jihai Resources operates two active gold mines, namely the Songjiagou Open-Pit Mine and the Songjiagou Underground Mine. They are strategically located in one of Yantai's three major gold-forming belts, the Muping-Rushan Gold Metallogenic Belt, about 400 meters apart. In addition, the company also operates a beneficiation plant with an annual ore processing capacity of about 2 million tons. The plant is 4 km from the company's mine. The company's mining assets and beneficiation plants have received strong support from the upstream and downstream gold supply chain industries in Yantai City. The mine and beneficiation plant are close to the highway, and the transportation is very convenient.