Zijin Mining to confirm overseas acquisition next month

Aug. 9, 2006 (China Knowledge) – Zijin Mining Group Co. Ltd., a mining conglomerate in China engaged primarily in the production of gold, yesterday announced that it expects to confirm an overseas acquisition by next month, according to an AFX report.

Speaking to reporters at a media briefing to discuss the group’s recently-released first half results, Chairman Chen Jinghe said that the company will undertake an overseas acquisition deal next month.

According to Chen, the company currently has cash on hand of about RMB 1.1 billion, which will be sufficient for the acquisition. However, Chen did not provide further details.

The company reported on Tuesday a net profit of RMB 662.09 million, double its RMB 330.95 million profit in the second quarter of 2005. Turnover rose more than three fold to hit RMB 3.95 billion from RMB 1.07 billion in the previous year.

Zijin Mining profited on the back of an increase in the international prices of gold. For the first half of 2006, the price of gold rose by 15.8% to US$614 per ounce on Jun. 30, 2006 from US$530 per ounce on Jan. 1, 2006. An insufficient global supply of copper also served to boost earnings for the company.

Looking forward, the company estimated that the global political and economical situation will remain unchanged through the year. Due to geopolitical tensions, high oil prices, and the trend of the U.S. dollar, the price of gold is expected to stay high.

A capital expenditure of between RMB 300 million and RMB 500 million is planned for the second half of the year and the company expects to expand and grow through acquisitions and investments.

Zijin Mining operates in the business of gold and copper mining as well as geological studies in China.