U.S. Coin Price Guide

Coin Collecting

Buy Coin Supplies

Gold miner eyes more acquisitions
by China Daily

Zhaojin Mining Industry, a gold miner in Shandong province, plans to make two more acquisitions in the second half to capitalize on the growing demand and surging gold prices.

The gold miner plans to add 53 tons of gold resources to the 192 tons it owns through acquisitions in 2008, said chairman Lu Dongshang yesterday at a press conference. The company has made five acquisitions in the first half, acquiring 31 tons of gold resource.

It also added 18.9 tons of mined gold resources in these acquisitions, spending 1.03 billion yuan in total. Meanwhile, the company acquired 11 exploration rights and six mining rights, boosting the total areas to 1,444 sqkm and 54 sq km.

Lu said the company will adhere to its production and acquisition target as he is positive about the gold prices even though the market has weakened recently. He, however, did not forecast on the gold prices.

Gold price has dropped to about $790 recently from over $1000 per ounce at the beginning of the year due to a rebound in US dollar. The company's average sale price surged 29.51 percent year-on-year to 209.35 yuan per gram during the period.

Zhaojin Mining is likely to complete seven acquisition deals this year, thanks to rising demand and surging gold prices. AFP

"The US economy and US dollar, which greatly affect gold prices, are not very positive in the long term," said Lu. "Meanwhile, gold's strong demand in Southeast Asia and its speculative demand have outpaced supply."Talking about the planned acquisitions, chief financial officer Zhang Banglong said the company does not have any liquidity pressure as it currently has 590 million yuan in cash and 3 billion yuan in bank credit.

Zhaojin's net profits in the first half increased 34.6 percent to 214.4 million yuan while revenue jumped 41.8 percent to 751.4 million yuan. The company hasn't declared any interim dividend.

The company's gross profit margin dropped to 54 percent from 63 percent due to rising production costs amid surging energy and labor costs, lower margins of newly acquired resources and unsold bullion stock in June.

The company's total gold output dropped 10 percent to 8,423 kg due to the 13-day suspended production in its non-coal mine in Yantai, the consolidation of mineral resources in China and the temporary restrictions imposed by the government on explosives and chemicals.

Zhang said that the unsold stock that amounted to 784 kg was sold at a higher price in July compared to June. Cost control measures will be the company's first priority in the second half, including upgrading

© 1992-2018 DC2NET™, Inc. All Rights Reserved