We are principally engaged in the mining, processing, and sales of gold. As of the Latest Practicable Date, we owned and operated seven gold and polymetallic mines across the world, including China, Southeast Asia, and West Africa. According to Frost & Sullivan:
‧ we experienced the fastest growth among major gold producers in China. From 2021 to 2023, our gold production achieved a CAGR of 33.1%, which was higher than the 16.4% average growth rate of major gold producers in China;
‧ we ranked fifth among gold producers in China in terms of gold Resources, with gold Resources of 12.5 million oz as of September 30, 2024, and we ranked fifth among gold producers in China in terms of gold production, with gold production of 461.5 koz in 2023;
‧ our operational efficiency enhancement surpassed the worldwide industry average and we positioned lower in terms of gold all-in sustaining costs (“AISC”) than that of the global average. For the year ended December 31, 2023, our gold AISC stood at only US$1,179.1 per ounce, placing us in the first quartile in the worldwide gold mining industry, while the global average for the same period was approximately US$1,348.5, which is 14.4% higher than ours. In 2023, we beat the global trend of increased costs, as we reduced our gold AISC by 12.0%, whereas the average AISC for international gold producers increased by 7.2% during the same period; and
‧ among gold producers in China, we had the greatest overseas presence in terms of both total assets and revenue contribution derived from business activities outside of the PRC as of December 31, 2023 and in 2023, respectively. In 2023, approximately 76.9% of our total gold production and 71.9% of our total revenue was generated from our overseas business. As of September 30, 2024, approximately 65.2% of our total assets were contributed by our overseas business.
We conducted our gold production business primarily through six gold mines, including: (i) four mines in the PRC, namely the Jilong Gold Mine, Wulong Gold Mine, Jintai Gold Mine and Huatai Gold Mine; (ii) one mine in Laos, namely the Sepon Gold and Copper Mine; and (iii) one mine in Ghana, namely the Wassa Gold Mine. Furthermore, we operate one polymetallic mine in Jilin Province, China, namely the Hanfeng Polymetallic Mine, the principal products of which are zinc, lead, copper and molybdenum concentrate powder. Also, we are planning to develop rare earth Resources in Laos. In addition to our mining business, we have a resource recycling business, where we recycle waste electronic products and electrical appliances.
As of the Latest Practicable Date, we held a total of 12 valid mining licenses in the PRC, including (i) one mining license for Wulong Mining, (ii) two mining licenses for Jilong Mining, (iii) six mining licenses for Huatai Mining, (iv) one mining license for Jintai Mining, and (v) two mining licenses for Hanfeng Mining. In addition, as of the Latest Practicable Date, we held 5 valid exploration permits in the PRC, including (i) one exploration permit for Jilong Mining, (ii) two exploration permits for Wulong Mining, (iii) one exploration permit for Jintai Mining, and (iv) one exploration permit for Hanfeng Mining. Moreover, as of the Latest Practicable Date, we held one valid mining license and one valid exploration permit in Laos. In addition, as of the Latest Practicable Date, we held two valid mining licenses and three valid exploration permits in Ghana for GSWL, with one mining license having been renewed by the Ministry of Lands and Natural Resources and in the process of being ratified by Parliament. It is stipulated in the subsection 44(4) of the Mining Act of Ghana that if a holder of a mining lease has made an application for extension of the term, the lease shall continue in force in respect of the subject of the application before the outcome of the application is determined. As advised by our Ghana Legal Advisor, this means the lessee is able to continue its ongoing mining operations under the old lease before the new lease is ratified by the Parliament. For details, see “Business — Our Gold Production Business in Ghana — Mining Licenses and Exploration Permits.”
We have high visibility and certainties in our production expansion plans for our gold mines and aim to achieve Resources and Reserve enhancement through exploration activities as set out below:
‧ in terms of our overseas gold assets, we are accelerating the construction of the open-pit and underground mining projects of the Sepon Gold and Copper Mine, which is expected to increase the annual underground mining capacity to 806,000 tonnes by 2025 from the current capacity of 536,000 tonnes. We plan to also commence copper production in 2025 at Khanong area of Sepon Gold and Copper Mine, which has over 6,000,000 tonnes of copper ore, and over 57,000 tonnes of copper metal contained according to the resource model. Meanwhile, we are accelerating modelling and study of exploration prospects of Discovery West Deeps and Phavat North of the Sepon Gold and Copper Mine with open-pit and underground mining potentials. The annual underground mining capacity is expected to be further increased after 2026 and 2027. A high-level resource range assessment of Discovery West Deeps and Phavat North prospects estimated a total tonnage of 5,000,000 tonnes, with an average Au grade of 3.5g/t of gold resources expected to be added.
‧ in terms of our domestic gold assets, we have been undergoing several rounds of technological transformation and we are still working on several technological improvement projects. We have also initiated an expansion project at Jilong Mining to increase its annual mining capacity to approximately 300,000 tonnes by the end of 2025.
Plan for Exploration and Development of Rare Earth Resources
Apart from our core gold business, our planned exploration and development of rare earth resources in Laos also create new growth opportunities. Anomalies in rare earth elements were discovered at the Sepon Gold and Copper Mine during exploration in early 2021. Following further studies, according to SRK report, as of September 30, 2024, the Mineral Resources for rare earth oxides are estimated to be about, 26.78 million tonnes of Indicated Mineral Resource with an average grade of 383.75 g/t TREO, equivalent to 10.28 thousand tonnes of total rare earth oxides within the Project area, and 63.79 million tonnes of Inferred Mineral Resource with an average grade of 339.22 g/t TREO, equivalent to 21.64 thousand tonnes of total rare earth oxides within the Project area. In October 2022, together with Xiamen Tungsten we established a joint venture, Chijin Xiawu, where we hold a 51% equity interest. Chijin Xiawu focuses on the development of rare earth Resources in Laos. The collaboration with Xiamen Tungsten is expected to improve our competitiveness in the development of rare earth and generate new growth opportunities for our business. Our subsidiaries’ applications for licenses or permits for rare earth exploration or mining right in Laos submitted to the relevant governmental authorities are currently put on hold by the relevant governmental authorities, as the Laos government has suspended review of all rare earth pilot project applications.
Source: Chifeng Gold (06693) Prospectus (IPO Date : 2025/02/28) |