Financial Services Association, May 31 (Reporter Liang Xiangcai) Jin Chengxin (603979.SH), which started out as a mining service, is working hard on the resource side. At the performance briefing held today, the company's chairman Wang Qinghai said that the company's resource sector business has made great progress. The business achieved sales revenue for the first time last year. The level of participation in the Alacran copper, gold and silver mine in Colombia is also further increasing. The company is also planning to acquire the Lubambi copper mine in Zambia.

At the meeting, some investors expressed concern that some overseas mining giants were “half way in” interested in bidding for some shares in the Lubambi copper mine. Wang Qinghai said that the company has now advanced the settlement of this acquisition with EMR, the seller of Lubambi copper, and is not worried about “joining the queue halfway.”

In January of this year, Jin Chengxin announced the acquisition of 80% of the shares in LCML, a company belonging to Lubambi Copper Mine. According to the announcement, as of September 30, 2023, the amount of resources in the Lubambi copper mine was 86.6 million tons, copper grade 1.95%, and acid-soluble copper 0.35%; LCML's net assets were -15.1469 million US dollars, revenue for the same period was 89.565 million US dollars, and net profit was -603.167 million US dollars.

The Lubambi mine was a customer of the company still carrying out mining services business at the time. When LCML was insolvent due to reasons such as not being able to achieve production, Jin Chengxin planned to pocket the target revenue with 1 US dollar.

According to the announcement, Jin Chengxin plans to reform the Lubambi copper mine technology and is expected to achieve an average annual copper concentrate output of 77,500 tons and 32,500 tons of copper-containing metals in the future. Based on the current copper price of 8,300 US dollars/ton and a production period of 14 years, the total annual profit of the project was US$15.8815 million, profit after tax of US$126.88,200, and the payback period of 7.4 years after tax.

Although the price of copper has now reached a high of 10,000 US dollars, Wang Qinghai is still optimistic about future prices. At the performance conference, he said that in the future, as the average grade of global copper mines falls and continues to be low in capital expenditure, the supply of copper is expected to be limited; at the same time, infrastructure construction in the global new energy sector and some emerging markets will generate continuous demand for copper, and the supply and demand sides will join forces to support the medium- to long-term trend of copper metal prices.

Regarding the Alacran copper, gold and silver mine, Wu Bangfu, director of the company, said that the environmental impact assessment report for the Alacran deposit has been submitted to the Colombian National Environmental Licensing Authority and is yet to be approved. According to the Alacran deposit feasibility study, the mine has 131.3 million tons of ore, 0.36% copper grade, 0.24 g/ton gold grade, and 2.27 g/ton silver grade.

It is worth noting that when investors asked about the company's future resource expansion plans, Wang Qinghai said that if it is possible to increase reserves through exploration, it is a more economical way to obtain resources. In the long run, more attention will be paid to copper and precious metal targets that match the size of the company.

As of the first quarter of this year, the two major businesses of Jin Chengxin Mining Services and Mine Resource Development had revenue of 1,551 billion yuan and 389 million yuan respectively, and gross profit of 406 million yuan and 169 million yuan respectively.