Xingye Silver & Tin: Verification Report on Mineral Resource Reserves of Budun Yingen Mine Passes Review

The stock price of Xingye Yinxi Mining saw a significant increase on the first trading day after the Dragon Boat Festival holiday. As of 9:59 a.m. on June 3, Xingye Yinxi Mining was up 4.16%, trading at 13.78 yuan per share.

In an announcement on the evening of June 2, Xingye Yinxi Mining stated that Xiwuqimuqin Banner Budun Yingen Mining Co., Ltd. (Budun Yingen Mining) is a controlled subsidiary of Inner Mongolia Xingye Gold Smelting Group Co., Ltd., the controlling shareholder of Inner Mongolia Xingye Yinxi Mining Co., Ltd. On December 30, 2024, the company signed a "Trusteeship Agreement" with Xingye Group, under which Xingye Group entrusted Budun Yingen Mining to the company for operation and management. On May 30, 2025, Budun Yingen Mining received a "Reply on the Review and Filing of Mineral Resource Reserves for the Verification Report on Silver Mine Resource Reserves in the Budunwula Mining Area, Xiwuqimuqin Banner, Inner Mongolia Autonomous Region" (Xi Ziran Zi Chu Bei Zi (2025) No. 006) from the Xilingol League Natural Resources Bureau. After review, the relevant materials for the review and filing of mineral resource reserves of Budun Yingen Mining were found to comply with relevant regulations and were approved for review and filing. The specific situation is as follows:

According to the "Review Opinion on the Verification Report on Silver Mine Resource Reserves in the Budunwula Mining Area, Xiwuqimuqin Banner, Inner Mongolia Autonomous Region" (Xi Ziran Zi Chu Ping Zi (2025) No. 006), through this verification of resource reserves, as of January 31, 2025, the cumulative identified ore quantity of silver mine resources was 70.325 million mt, with a metal content of 11,114 mt and an average grade of Ag 158.07 g/t. This includes: measured resources with an ore quantity of 14.243 million mt, a metal content of 3,546 mt, and an average grade of Ag 248.95 g/t; indicated resources with an ore quantity of 22.512 million mt, a metal content of 3,573 mt, and an average grade of Ag 158.74 g/t; and inferred resources with an ore quantity of 33.57 million mt, a metal content of 3,995 mt, and an average grade of Ag 119.05 g/t.

Through this verification of resource reserves, as of January 31, 2025, the identified associated resources of Pb, Zn, Ga, and Cd were as follows: Pb ore quantity of 39.571 million mt with a metal content of 95,643 mt; Zn ore quantity of 59.565 million mt with a metal content of 180,818 mt; Ga ore quantity of 70.271 million mt with a metal content of 3,603 mt; and Cd ore quantity of 10.913 million mt with a metal content of 1,092 mt. The average grades of these associated metals were Pb 0.24%, Zn 0.30%, Ga 0.0051%, and Cd 0.0100%, respectively.

Regarding the increase in reserves after this review and filing,the announcement from Xingye Yinxi Mining indicates that the most recent report for Budun Yingen Mining was the "Verification Report on Silver Mine Resource Reserves in the Budunwula Mining Area, Xiwuqimuqin Banner, Inner Mongolia Autonomous Region" compiled in March 2024. Upon comparison, this resource reserve verification indicates an increase of 65.316 million mt in ore volume and 10,273.1 mt in silver metal content compared to the most recent previous report on silver mine resources. For associated elements: Pb ore volume increased by 34.998 million mt, with a metal content increase of 84,142 mt; Zn ore volume increased by 55.033 million mt, with a metal content increase of 158,441 mt; Cd ore volume increased by 6.008 million mt, with a metal content increase of 601 mt; Ga ore volume increased by 65.422 million mt, with a metal content increase of 3,381 mt.

Xingye Silver & Tin disclosed its Q1 2025 report on April 28, showing that in Q1, the company achieved a total operating revenue of 1.149 billion yuan, up 50.37% YoY; and a net profit attributable to the parent company's shareholders of 374 million yuan, up 63.22% YoY.

Xingye Silver & Tin's Q1 report indicates that the current period's operating revenue increased by 50.37% compared to the previous period, operating costs increased by 51.55%, taxes and surcharges increased by 59.56%. The main reasons are the increase in production and sales volume of the company's main mineral products and the YoY increase in product selling prices during the reporting period. The current period's operating profit increased by 61.99% compared to the previous period, total profit increased by 63.25%, income tax expenses increased by 65.49%, and the net profit attributable to the parent company's shareholders increased by 63.22%. The main reasons are the increase in production and sales volume of the company's main mineral products, the YoY increase in product selling prices, and the increase in operating revenue during the reporting period.

Other important matters announced by Xingye Silver & Tin in its Q1 report include:

1. The company's acquisition of 85% equity in Yubang Mining: The company acquired 85% equity in Chifeng Yubang Mining Co., Ltd., held by Guocheng Mining Co., Ltd., Li Zhenshui, and Li Ruiyang, for a total of 2.388 billion yuan using its own funds and self-raised funds. On January 6, 2025, the company held its first extraordinary general meeting of shareholders in 2025, which approved this transaction. On January 14, 2025, the equity transfer was completed with the industrial and commercial change registration procedures at the market supervision and administration department. Since then, the company has held 85% equity in Yubang Mining, which has become a controlled subsidiary of the company and is included in the company's consolidated financial statements.

2. Approval obtained for the 2.97 million mt expansion project of the subsidiary Yinman Mining: In January 2025, Yinman Mining, a wholly-owned subsidiary of the company, obtained the "Approval from the Development and Reform Commission of the Inner Mongolia Autonomous Region on the Expansion Project of the 2.97 Million mt/Year Copper-Lead-Tin-Silver-Zinc Mine in the Baiyinchagan Dongshan Mining Area of Xiwuqi Yinman Mining Co., Ltd." (Nei Fa Gai Chan Ye Fa Zi (2025) No. 24) issued by the Development and Reform Commission of the Inner Mongolia Autonomous Region to the Development and Reform Commission of the Xilingol League. Yinman Mining is implementing an expansion project for zinc, lead, silver, copper, and tin ore in the mining area (mining license number: C1500002015013210136961). The project's construction scale will be expanded from 1.65 million mt/year to 2.97 million mt/year, with underground mining as the extraction method. The project is classified as a renovation and expansion project. The company will actively promote the construction of the 2.97 million mt/year expansion project at Yinman Mining. Prior to the project's commencement, the company will handle the relevant procedures for land use, environmental protection, energy conservation review, work safety, water and soil conservation, etc., in accordance with relevant laws and administrative regulations, to ensure that the project commences with all necessary permits as planned. After the project is completed and put into operation, the mining and beneficiation capacity of Yinman Mining will increase from 1.65 million mt/year to 2.97 million mt/year, further enhancing the company's profitability and market competitiveness.

3. Safety incident at subsidiary Yinman Mining:At 16:18 on March 9, 2025, a safety incident occurred during development work at the Yinman Mining project department of Henan Jinyuan Construction Co., Ltd., the mining contractor of Yinman Mining, a wholly-owned subsidiary of the company. The incident resulted in one fatality and no injuries. Following the incident, mining operations at Yinman Mining were suspended on March 9, while the beneficiation plant continued normal operations. Currently, Yinman Mining has completed the relevant rectification work in accordance with the regulatory authorities' requirements, and mining operations resumed on April 16, 2025. This incident did not have a significant impact on the company's production and operations, nor did it have a material adverse impact on the company's 2025 performance.

In addition, the 2024 annual report released by Xingye Yinxi shows that in 2024, the company achieved operating revenue of 4,270.3872 million yuan, representing a year-on-year increase of 15.22%; total profit was 1,765.2261 million yuan, a year-on-year increase of 64.69%; and net profit attributable to shareholders of the publicly listed firm was 1,529.8586 million yuan, a year-on-year increase of 57.82%.

Introduction to Xingye Yinxi: In 2024, the proportion of operating revenue from the company's main business of various mineral products in the company's total operating revenue was as follows: tin ore contributed 1,415.3906 million yuan, accounting for 33.14%; silver ore contributed 1,165.409 million yuan, accounting for 27.29%; zinc ore contributed 981.0361 million yuan, accounting for 22.97%; iron ore contributed 234.7111 million yuan, accounting for 5.50%; lead ore contributed 230.3635 million yuan, accounting for 5.39%; copper ore contributed 129.711 million yuan, accounting for 3.04%; antimony ore contributed 62.8116 million yuan, accounting for 1.47%; and gold ore contributed 13.7186 million yuan, accounting for 0.32%. Among these, the combined operating revenue from tin ore and silver ore accounted for 60.43%.

In its annual report, Xingye Yinxi introduced: During the reporting period, the company's main products included non-ferrous metals and precious metals such as silver, tin, zinc, lead, iron, copper, antimony, and gold. Xingye Silver & Tin stated: In 2024, the company made solid progress in various tasks and successfully completed all annual production and operation objectives. Relying on its high-quality operating mines, the company achieved dual growth in production and profitability, with the effectiveness of its strategic layout becoming evident.

Xingye Silver & Tin stated: In 2024, the company produced 8,901.85 mt of mineral tin, up 14.58% YoY; 228.93 mt of mineral silver, up 14.68% YoY; 59,740.98 mt of mineral zinc, up 8.67% YoY; 16,958.57 mt of mineral lead, up 8.05% YoY; 2,906.43 mt of mineral copper, up 4.94% YoY; 1,351.70 mt of mineral antimony, up 32.58% YoY; and 339,100 mt of mineral iron, down 3.74% YoY. From 2022 to 2024, the production of the company's main products (excluding bismuth, iron, and gold) increased year by year.

Xingye Silver & Tin introduced: As of the end of 2024 (including Yubang Mining), the company's proven reserves of various metals within the scope of mining licenses for each mine are as follows:

A research report on Xingye Silver & Tin published by Guosen Securities on May 16 pointed out: In recent years, the company's production of major minerals has steadily increased. In 2024, the prices and volumes of silver and tin both rose, leading to a significant year-on-year increase in the company's profits. The acquisition of an 85% stake in Yubang Mining has further elevated the company's silver reserves. Considering the company's reliance on the resource-rich location advantage in Inner Mongolia and its proactive approach to reserving high-quality mineral resources through external mergers and acquisitions while pursuing endogenous development, Guosen Securities maintains an "Outperform" rating. Risk warnings: Risks of the company's resource development progress falling short of expectations; risks of volatile metal prices.

A research report on Xingye Silver & Tin by Huaxin Securities showed: In 2024, the prices and volumes of mineral tin and silver both rose. The expansion of the Yinman Mine and the external acquisition of Yubang Mining indicate promising long-term growth. First overseas takeover bid for tin mine, marking the company's initial foray into going global: On May 6, 2025, the company announced that it had signed the "Offer Implementation Agreement" with Atlantic Tin Limited on April 30, 2025. The company intends to designate its wholly-owned subsidiary, Xingye Gold (Hong Kong) Mining Co., Ltd., to make an off-market conditional takeover offer to shareholders holding all the issued shares of the target company at a price of AUD 0.24 per share through an off-market takeover bid. Atlantic Tin is an unlisted public company founded in 2005 and headquartered in Perth, Australia. The target company's main business activity is the development of the Achmmach tin mine project in Morocco. As of August 12, 2024, the Achmmach tin mine had proven ore reserves of 39.1 million mt, with an average tin grade of 0.55% and a tin metal content of 213,300 mt. Since 2025, silver and tin prices have maintained a high trend, and the company has completed two mergers and acquisitions. The long-term capacity growth is expected, and we maintain an "Overweight" investment rating. Risk warnings: 1) Downstream demand falls short of expectations; 2) Risk of metal price decline; 3) The release of the company's expanded capacity falls short of expectations; 4) The company's acquisition progress falls short of expectations, etc.