SMM News: to enhance sustainable profitability, Guocheng Mining Co., Ltd. (hereinafter referred to as "Guocheng Mining" or "the Company") deliberated and passed the "motion on the acquisition of 65% equity interest in Chifeng Yubang Mining Co., Ltd." at the company's second interim shareholders' meeting in 2020 on July 30, 2020, agreeing that the company would acquire 65% stake in Yubang Mining at a price of 979.69 million yuan.
On July 30, 2020, the signing ceremony of Guocheng Mining's acquisition of 65% stake in Yubang Mining was successfully held in Beijing. Guocheng Group Chairman Wu Cheng, Vice Chairman Li Wubo and other relevant leaders were invited to attend the signing ceremony. Wu Jianyuan, Chairman of Guocheng Mining, Ying Chunguang, General Manager, Li Zhenshui, representative of Yubang Mining shareholders, and relevant personnel of Yubang Mining jointly attended and signed the Supplementary Agreement to the Equity transfer Agreement (II).
Before this transaction, the company plans to acquire a 34% stake in Yubang Mining; after the completion of this transaction, the company will hold a 65% stake in Yubang Mining, achieving absolute control. After the completion of the acquisition, it will help the company to lay a certain industry foundation in the production of precious metal silver in the future, and help to enhance the company's core competitiveness and sustainable development ability, which is in line with the company's development strategic planning and the interests of all shareholders. The acquisition funds will be paid by the company with its own funds and self-raised funds, which is not expected to affect the normal operation of the company's cash flow.
The recorded reserves of the Yubang mining silver polymetallic deposit project is 158.9787 million tons, which is the largest silver deposit found in China at present, and its reserves rank first in Asia. The scope of silver-lead-zinc mineralization of the mine is wide, and the prospect of increasing reserves in the future is good. Silver has many unique physical and chemical properties, its ductility is second only to gold, and it has good electrical conductivity, thermal conductivity and reflection. in addition, silver also has antibacterial activity. With the above excellent performance, silver is widely used in electronic and electrical, photovoltaic, imaging, brazing, chemical, environmental protection and other industrial fields, as well as silver jewelry, silverware, silver coins, silver bars and other areas of consumption and investment. The global supply of silver mainly comes from mineral silver and recycled silver. At present, 40% of global silver consumption is spent on jewelry, silver coins, silver bars and silverware, and the remaining 60% is in industrial applications. The electronic industry accounts for the highest proportion in the industrial application scenario, and the downstream demand is mainly in the field of photovoltaic new energy and electronic communications, and the electronic information industry is also one of the core driving forces of global economic growth in the future. the demand for silver metal will also show an increasing trend.
The successful completion of the acquisition agreement further shows the strategic measures of the company's business diversification development, the company's development has achieved multi-category upgrading, industrial pattern multi-line growth, multi-pole support, cluster effect and comprehensive benefits are more obvious.