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Western Mining Plans to Further Invest RMB 449.5 million In Its Subsidiary Yulong Copper

Western Mining announced in the evening of December 13 that the company's Board of Directors approved the Proposal for Further Investing in the Company's Subsidiary Yulong Copper and agreed that the company, along with Yulong Copper's shareholders Zijin Mining and Changdu Investment will make an additional investment in the same equity ratio at a price of RMB 1 per share, where the company will subscribe RMB 449.5 million for Yulong Copper's new registered capital of RMB 449.5 million. After the capital increase, the proportion of equity the company holds in Yulong Copper will remain unchanged at 58%.

According to the announcement, Yulong Copper specializes in the exploration, mining, dressing, smelting and processing of copper ores and associated metal ores, and the sales of their products. By October 31, 2017, Yulong Copper's total assets were RMB 5.898 billion, including net assets of RMB 1.335 billion. From January to October this year, Yulong Copper generated operating revenue of RMB 1.185 billion and a net profit of RMB 257 million.

The announcement said that after the capital increase, Yulong Copper will gain greater development in its business sectors, further reduce its asset-liability ratio, and improve its financing ability and business performance, which is in line with the company's overall development strategy and planning and will help to enhance the company's overall core competitiveness.

An insider said, "Western Mining is mainly engaged in the dressing, smelting and trade of basic nonferrous metals and black metals such as copper, lead, zinc and iron. The company has four business divisions - mining, smelting, trade and finance. Its main products in the mining division are lead concentrate, zinc concentrate and copper concentrate, and its main products in the smelting division are zinc ingots, crude lead, refined lead and refined copper." In the first three quarters of this year, Western Mining recorded revenue of RMB 22.16 billion with year-on-year decline of 10.52%, and a net profit attributable to the parent company of RMB 318 million with year-on-year growth of 164.09%. The considerable increase in earnings is mainly attributed to rising prices brought by continuous market recovery. Since the beginning of this year, the London futures price of Western Mining's main products - lead, zinc and copper has grown by about 21.24%, 24.6%, and 24.8% respectively. The company plans to complete the acquisition of Daliang Mining by the end of 2017. Huidong Qianxin Mining, a company owned by Daliang Mining, has rich reserves of metal ores such as zinc ore and lead ore. Daliang Mining's 660,000-ton technical transformation and expansion project will be completed in 2017 and is expected to achieve designed capacity in 2018. After completion of the acquisition, Western Mining's reserves of metal resources will be further increased and its sales are expected to rise dramatically given the upward trend in lead and zinc prices. This additional investment in Yulong Copper will enhance its capital strength, promote its further development and help to improve the business performance of its listed parent company Western Mining.