The company was put on file for investigation! Lithium mining insurance has been shut down! Material leader 2 billion "counter-killing"

Published: Apr 10, 2022 08:40 (GMT+8)
[the company was put on file for investigation! Lithium mining insurance has been shut down! Material leader 2 billion "anti-killing"] on the evening of April 7, Jiangte Motor (002176) issued an announcement that it plans to work with its wholly-owned subsidiary Jiangxi Jiangte Mining Development Co., Ltd. (hereinafter referred to as: Jiangte Mining) to build an annual lithium mining and separation project with an annual production capacity of 3 million tons and an annual output of 20, 000 tons of lithium salt, with a total investment of about 2 billion yuan. At the same time, Jiangte Mining signed an investment project contract with the Yifeng county government to protect the smooth development of the project.

On the evening of April 7, Jiangte Motor (002176) announced that it plans to build an annual lithium mining and separation project with an annual production capacity of 3 million tons and 20, 000 tons of lithium salt with a wholly-owned subsidiary, Jiangxi Jiangte Mining Development Co., Ltd. (hereinafter referred to as: Jiangte Mining). The total investment of the project is about 2 billion yuan.

At the same time, Jiangte Mining signed an investment project contract with the Yifeng county government to protect the smooth development of the project.

Before introducing the key information contained in the project, let's review the two major negative news of Jiangte Motor last year and this year, because it has a lot to do with this new project.

The company was filed for investigation by the Securities Regulatory Commission.

In the past year or so, the share price of Jiangte Motor has frantically risen more than 20 times, making it a big bull stock of Lithium Electric.

On December 9, 2021, Jiangte Motor was put on file for investigation by the China Securities Regulatory Commission on suspicion of illegal information disclosure. The company is still in the stage of filing and investigation, and the CSRC has not yet issued the results of the investigation.

This has also directly caused two major losses to Jiangte Motor, one is direct compensation, and the other is the limitation of financing channels.

On the one hand, damaged investors can file claims. According to the Securities Law and the judicial interpretation of misrepresentation by the Supreme people's Court, listed companies and their intermediaries, controlling shareholders and actual controllers who cause damage to the rights and interests of securities investors due to misrepresentation fraud shall bear civil liability for compensation.

As a result, damaged investors who bought Jiangte Motor before December 9, 2021 and sold or held it after December 10, 2021 can file a claim and recover the loss through judicial channels. At present, some investors are making claims one after another.

On the other hand, share issuance is limited. According to the conditions of issuing additional shares, it requires that listed companies do not have the behavior that the company or its current directors and senior managers are put on file for investigation by judicial organs or by the Securities Regulatory Commission for suspected crimes, while Jiangte Motor has been put on file and the results have not yet been issued, so it is difficult to raise funds by issuing additional shares for a period of time. This has also laid a hidden danger for the new project.

The lithium mine was nearly shut down.

On the evening of March 22, Jiangte Motor announced that on the same day, the company received a "civil order" from the people's Court of Yuanzhou District, Yichun City, Jiangxi Province, mainly aimed at the dispute over the contract for the transfer of exploration rights. The applicant was Zhao Weidong and the preserved was Jiangte Motor.

The details are as follows:

On March 17, according to Zhao Weidong's application, the Yuanzhou District people's Court made (2022) Civil ruling No. 1824 of Jiangxi 0902 at the beginning of the Republic of China: to seal up the exploration rights of Xikeng Lithium Mine in Yifeng County, Jiangxi Province, owned by Jiangte Motor, stop all related formalities such as transfer of mining rights, transfer, alteration, merger, division, continuation, reservation, mortgage and cancellation of the exploration rights of the mine. Seize the mining rights of lithium-bearing porcelain stone in Shiziling mining area, Yifeng County, Jiangxi Province, held by Jiangte Motor, and stop all related formalities, including the transfer, modification, merger and mortgage of mining rights.

On March 21, Jiangte Motor sued Zhao Weidong for a profit and loss value of only 20%, totaling more than 19 million yuan, and provided equivalent guarantee property to the people's Court of Yuanzhou District, requesting to change the subject matter of preservation.

In response, the Yuanzhou District people's Court ruled to freeze 19.5 million yuan in bank deposits under Jiangte Motor's name, while lifting the civil ruling made on March 17.

Jiangte Motor stressed in the announcement that the dispute between the company and Zhao Weidong is due to differences over the follow-up development, construction and investment confirmation of the mining area, which will not affect the work arrangement and progress of the "exploration and conversion mining" of the Xikeng Lithium Mine, nor will it affect the orderly development of the normal work of the "Shiziling" mining area.

2 billion of the rapid "counter-killing"

Temporary security is far from reassuring.

In order to avoid "long dreams", Jiangte Motor quickly announced an investment of 2 billion yuan to build a new lithium mine project within a period of less than half a month after receiving the civil ruling. Taking a closer look at yesterday's latest announcement, we have to say that Jiangte Motor's "anti-kill chess" is extremely ingenious.

Jiangte Motor has two mining rights and five exploration rights in Yichun area, and the total lithium ore resources held or controlled are more than 100 million tons, ranking first in China, and the Li2O grade is more than 0.55%, which is much higher than the common grade of 0.38% in Yichun area.

In this new project, Jiangte Motor is to be divided into two parts: a new lithium mining and separation project of no less than 3 million tons per year in Tongan Township, Yifeng County, and a new lithium salt project with an annual production capacity of 20, 000 tons in Yifeng Industrial Park.

Interestingly, the planning and supporting of this project exactly corresponds to the Xikeng lithium mine, which is 20% of the income right held by Zhao Weidong, while the mining area is mainly distributed in Yifeng County, which is conducive to shortening the transportation mileage of raw materials and reducing operating costs.

According to the plan, the project will be built and implemented by the newly established branch, which will be completed and put into production within 24 months after it is approved and has the conditions to start. It is not difficult to see the sense of urgency of Jiangte Motor to implement the project. After all, the income from the development of a pile of stones is always greater than stagnation. And in case the dispute with Zhao Weidong starts again, the worst result is that Jiangte Motor loses the case, but at least it still owns 80% of the interest in Xikeng Lithium Mine, and Zhao Weidong also needs to repay more than 20 million and interest paid by Jiangte Motor.

With regard to the source of funding for the project, the announcement shows that the annual output of this investment is 20,000 tons of lithium salt project, and Jiangte Motor may introduce downstream head customers and strategic investors to participate in joint ventures. And the total investment of 2 billion yuan will be solved by self-financing, including but not limited to its own funds, bank loans or raising through the capital market.

In addition, according to the agreement, Jiangte Motor needs to introduce a lithium power enterprise to settle in Yifeng to invest in lithium salt downstream projects.

Combined with these information points, as well as the situation of the company, it is basically impossible for Jiangte Motor to raise funds through stock issuance. The most important thing is that the company has not been put on file for investigation.

In that case, the probability is to introduce war investment or to borrow money from banks. If a war vote is introduced, who will it be?

Vike Lithium noted that on September 13, 2021, Jiangte Motor announced that the company and Guoxuan Hi-Tech signed a "Strategic Cooperation Framework Agreement" in Yichun, Jiangxi Province, to cooperate in the field of battery-grade lithium carbonate.

Prior to this, Guoxuan Hi-Tech has invested 11.5 billion yuan in Yichun Economic Development Zone to build a lithium new energy project industrial cluster, which has already started construction.

At present, the strategic agreement between Jiangte Motor and Guoxuan Hi-Tech is being implemented. From this point of view, there is a basis for cooperation, Jiangte Motor has lithium ore resources, Guoxuan Hi-Tech has supply and demand, and there is a great possibility of marriage between the two sides.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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