Loss reversal in the third quarter: In the first three quarters of 2024, the company achieved revenue of 0.463 billion US dollars, an increase of 19% year on year; net loss was 3 million US dollars, a year-on-year loss of 2.5 million US dollars.

The company's sales costs increased 30% year over year, mainly due to the fact that mining rights for the past 7 years confirmed a one-time expenditure of $54.4 million in the third quarter. Thanks to the sharp rise in the volume and price of gold and copper in the third quarter, the company achieved revenue of 0.255 billion US dollars, an increase of 309% over the previous year; net profit of 27.9 million US dollars, reversing a loss of 58.7 million US dollars.

Copper and gold prices remained high in the third quarter: As the Federal Reserve determined the direction of interest rate cuts, gold prices continued to operate at a high level in the third quarter. By the end of September, the closing price of London spot gold reached $2629.95 per ounce, up 12.8% from the end of June. The continued rise in gold prices contributed to the company's performance growth in the third quarter; the average price of Changjiang non-ferrous copper has now reached 0.0742 million yuan/ton. Due to the tightening of supply-side expectations and the development of new energy sources driving copper demand, copper prices are still operating at historically high levels. We expect copper and gold prices to continue to rise in the future, which will form a strong support for the company's profit level.

Continued progress in the resumption of production in the Jiama mine led to a decrease in costs: Production and operation activities were suspended at the Jiama mine due to the tailings spill incident at the Guolanggou tailings depot. In May 2024, with the approval of the Tibet Autonomous Region Government and relevant departments of the central government, the second phase of the mineral processing plant resumed operation, with a daily mineral processing capacity of 34,000 tons. Thanks to the operation of the Jiama Mine Phase II mine plant, the company's total cash production cost in the third quarter fell to 3.85 US dollars/pound, down 4.9% from the second quarter. Currently, the company has issued production guidelines for 2024. It is estimated that the gold production range of the Changshanchou Gold Mine will be 3.3 to 3.5 tons in 2024; the copper production range of the Jiama mine will be 0.0432 million tons to 0.0445 million tons, and the gold production range is 1.32 tons to 1.41 tons. The company is actively promoting the construction of the Phase III tailings depot, which is expected to be completed and put into operation in the first half of 2027. Once the Phase III tailings depot is completed, the total daily beneficiation capacity is expected to increase to 44,000 tons/day.

The target price is HK$63.42, maintaining the purchase rating: Based on the gradual recovery of production in the company's Jiama mining area and the maintenance of high copper and gold prices, the company's future performance will enter a rapid growth channel. The company's overall valuation is low in the copper and gold sector, and there is still plenty of room for repair. We adjusted our 2024-26 revenue forecast to 0.76 billion/1.08 billion/1.13 billion US dollars; adjusted the net profit forecast to mother to 0.09 billion/0.36 billion/0.39 billion US dollars, and gave a target price of HK$63.42, corresponding to 9 times PE in 2025, maintaining the purchase rating.