China Nonferrous Gold Limited 中国有色黄金有限公司
(‘CNG’ or the ‘Company’)
Interim Results for the Six-Month Period Ended 30 June 2019
China Nonferrous Gold Limited (AIM:CNG), the gold producer with the operational Pakrut Gold Project (‘the Pakrut Project’) in the Republic of Tajikistan, today announces its interim results for the six-month period ended 30 June 2019.
The results below are available on the Company's website at www.cnfgold.com.
- From January to June 2019, a total of 300,300 tons of ore was extracted from the Pakrut gold mine; 309,600 tons of ore was processed; and 15,557.04oz gold ingots was poured
- From January to June 2019, the Group sold 15,557.04oz of gold ingots, achieving sales revenue of US$20.881 million
- the Group intends to carry out a technical renovation of the carbon in leach (“CIL”) process and equipment; an optimization of the current mining methods used by the Group; a review of the local staff ; and will review other matters to seek to reduce costs and increase efficiencies at site.
For further information please visit the Company’s website (www.cnfgold.com) or contact:
China Nonferrous Gold Limited
Yu Lixian, Managing Director
Tel: +86 10 8442 6681
WH Ireland Limited (NOMAD & Broker)
Katy Mitchell, James Sinclair-Ford
Tel: +44 (0)207 220 1666
Tim Blythe, Camilla Horsfall
Tel: +44 (0)20 7138 3224
The Pakrut Gold Project, of which CNG has 100 per cent ownership, is situated in Tajikistan approximately 120km northeast of the capital city Dushanbe. Pakrut is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and Western China, and which hosts a number of multi-million ounce gold deposits.
CNG has entered the stage of steady state production.
Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminum smelter in Central Asia. CNG's management team has extensive experience in the mining industry in Tajikistan.
As CEO of the board, it gives me great pleasure to present the CEO’s statement of the Interim Results for the Six-Month Period Ended 30 June 2019. Following the successful trial production in 2018, the Pakrut gold mine entered steady state production and full operation in 2019, making the Group a gold producer.
From January to June 2019, a total of 300,300 tons of ore was extracted from the Pakrut gold mine During that same six month period:
- 309,600 tons of ore was processed;
- the average grade of the raw ore was 2.10g/t;
- the recovery rate of processing was 87.85%;
- 11,480 tons of concentrate was produced from the processing plant; and
- 8,210.7 tons of concentrate among them was treated in the smelter (the recovery rate of smelting was 88.82%) and 15,557.04oz gold ingots were poured.
From 2019, the gold price began to rise, especially after May 2019, which has benefited the Group. From January to August 2019, the Group sold 20,907.53oz of gold ingots, achieving sales revenue of US$27.87million (unaudited), with an average sales price of US$1,333.10 / oz.
Going forward, the Group intends to carry out a technical renovation of the carbon in leach (“CIL”) process and equipment; an optimization of the current mining methods used by the Group; a review of the local staff ; and will review other matters in order to reduce costs and increase efficiencies at site.
The Company continued its development and construction work during the first six months of 2019, Administration expenditure was US$8,164,099(30 June 2018: US$2,179,000). The big increase was due to the depreciation of the property, plant and equipment, more details of which are set out in note 5 below. The operating profit for the Group was US$278,000 (30 June 2018: loss US$3,363,000). Total cash equivalents at the end of the period for the Group amounted to US$16,147,939 (30 June 2018: US$61,896,000). As at 30 June 2019, there was a net liability of $1,363,000 (30 June 2019: net assets of $9,318,000). The net liability position has arisen due to CNG’s Pakrut project entering into production from 1 January 2019, therefore the expenses relating to the project have not been capitalized but instead have been expensed, which includes borrowing costs. It is expected that after the production stage has stabilized, the associated increase in sales revenue will alleviate the negative net asset position.
To date the Group has been reliant on support from its major shareholder, CNMC, and its associates. In January 2019, the Group drew down US$20 million on a US$100 million loan facility with China Construction Bank Corporation Macau Branch.
The Group commenced production in January 2019 and accordingly is now cash generative. As mentioned in previous announcements, in order to facilitate the repayment of existing loans, a broader refinancing package will be required. Discussions are ongoing and further updates will be provided in due course .
With the normal production and operation of Pakrut gold mine restored, the Group remain confident of achieving the production target of 660,000 tons of ore set at the beginning of this year. In addition, with the implementation of a series of measures to reduce costs and increase efficiencies including the technical renovation of CIL, the production capacity could be improved and the associated outputs and benefits could be increased and improved.
The Group has long been dedicated to becoming a significant gold producer in Central Asia and participating in the “Belt and Road Initiative” with the substantial support and advantages of major shareholders. The Group has also established a strong relationship with the government of Tajikistan and other Central Asian countries and the directors believe the Company is well positioned to make acquisitions of more gold resources and gold mines in the future, so as to create greater benefits for our shareholders in the future.
I would like to take this opportunity to thank all our employees, management and advisors for their continued efforts in 2019 and thank our shareholders for their continued support. I very much look forward to updating our shareholders further on the mine developments, production levels, new strategy and direction.
26 June 2019