Xingye Silver & Tin: After the 2.97 million mt/year expansion project reaches full production, the silver and tin production of Yinman Mining is expected to double

In response to the question, "At the 2024 performance briefing held by the company on May 22nd this year, it was mentioned that after the completion of Phase II of the Yinman Mine, the production of silver and tin is expected to double. Does this refer to the doubling of silver and tin production at the Yinman Mine or the doubling of silver and tin production for the entire publicly listed firm, Xingye Silver & Tin? Could specific figures be provided?", Xingye Silver & Tin responded on the investor interaction platform on July 2nd: The current production scale of the Yinman Mine is 1.65 million mt/year. After the completion of the 2.97 million mt/year expansion project, the silver and tin production at the Yinman Mine is expected to double. The Phase I ore processing at the Yinman Mine is divided into a copper-tin system and a lead-zinc system. These two systems can be interchanged or used entirely for processing copper-tin ore. Phase II of the Yinman Mine is planned to mainly process copper-tin ore. As the ore processing system can be flexibly applied based on the actual conditions of the ore, the metal content of each metal is not fixed.

On July 1st, Xingye Silver & Tin issued an announcement stating that 122 million shares held by its controlling shareholder, Inner Mongolia Xingye Gold Smelting Group Co., Ltd., were released from judicial freeze on June 30th, 2025, accounting for 25.13% of its held shares and 6.87% of the company's total share capital. As of the announcement date, Xingye Group held 485 million shares, accounting for 27.33% of the total share capital, with a cumulative of 363 million shares frozen, accounting for 74.87% of its held shares and 20.46% of the company's total share capital.

Previously, when asked about "The current production scale of the Yinman Mine is 1.65 million mt/year. After the completion of the 2.97 million mt/year expansion project, the silver and tin production at the Yinman Mine is expected to double. The Phase I ore processing at the Yinman Mine is divided into a copper-tin system and a lead-zinc system. These two systems can be interchanged or used entirely for processing copper-tin ore. Phase II of the Yinman Mine is planned to mainly process copper-tin ore. As the ore processing system can be flexibly applied based on the actual conditions of the ore, the metal content of each metal is not fixed," Xingye Silver & Tin responded on the investor interaction platform on June 17th: 1. Currently, Yubang Mining adopts the filling method. For the future 8.25 million mt expansion project mining plan, based on the feasibility study report prepared by China ENFI Engineering Corporation, the mining method selected for the thick and concentrated ore veins in the southern part of the mining area is natural caving method, while the filling method is selected for the northern part of the mining area. The adoption of the natural caving method has fully considered the caving reserves of low-grade ore and mining dilution, combined with the comprehensive resource recovery through the photoelectric dry separation (intelligent waste rejection) process, which will not lead to a decrease in the company's cut-off grade. 2. The latest resource reserve verification report of Yubang Mining has passed the review and filing. According to the "Review Opinion on the Verification Report of Silver Polymetallic Ore Resources in the Shuangjianzishan Mining Area, Balinzuoqi, Inner Mongolia Autonomous Region" (Chizi Storage Evaluation Letter (2025) No. 52), after the verification of resource reserves this time, as of March 31st, 2025, the cumulative identified resource quantity (TM+KZ+TD) is 295 million mt of ore, with 21,621 mt of Ag metal, 789,600 mt of Pb metal, and 2.3653 million mt of Zn metal. Upon comparison, this resource reserve verification, when compared with the most recent report, indicates a cumulative increase of 134 million mt in ore reserves, with an increase of 6,146.58 mt in Ag metal content, 397,400 mt in Pb metal content, and 842,300 mt in Zn metal content. For detailed information, please refer to the "Xingye Silver & Tin: Announcement on the Review and Filing of the Resource Reserve Verification Report for Subsidiary Yubang Mining" (Announcement No.: 2025-46) released by the company on designated information disclosure media on June 12, 2025.

On June 11, 2025, Xingye Silver & Tin announced that its holding subsidiary, Yubang Mining, had recently received a reply letter from the Chifeng Natural Resources Bureau regarding the review and filing of mineral resource reserves, marking the successful review and filing of Yubang Mining's "Resource Reserve Verification Report for the Silver Polymetallic Ore Deposit in Shuangjianzishan Mining Area, Balin Left Banner, Inner Mongolia Autonomous Region". As of March 31, 2025, the cumulative verified resource reserves (TM+KZ+TD) amounted to 295 million mt of ore, with 21,600 mt of Ag metal content; 164 million mt of Pb ore, with 789,600 mt of Pb metal content; and 280 million mt of Zn ore, with 2.37 million mt of Zn metal content. The average grades were 73.29 g/t for Ag, 0.48% for Pb, and 0.85% for Zn.

Xingye Silver & Tin disclosed its 2025 Q1 report on April 28, 2025, showing that in the first quarter, 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 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. 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 net profit attributable to the parent company's owners 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.

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

1. The company's acquisition of an 85% stake in Yubang Mining : The company acquired an 85% stake 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 the transaction. On January 14, 2025, the equity transfer was completed with the registration of industrial and commercial changes at the market supervision and administration department. Since then, the company has held an 85% stake in Yubang Mining, which has become a controlled subsidiary of the company and has been included in the company's consolidated financial statements.

2. The 2.97 million mt expansion project of Yuman Mining, a subsidiary, received project approval : In January 2025, Yuman Mining, a wholly-owned subsidiary of the company, obtained the "Approval from the Development and Reform Commission of Inner Mongolia Autonomous Region on the 2.97 million mt/year Expansion Project of the Copper, Lead, Tin, Silver, and Zinc Mine in the Baiyinchagan Dongshan Mining Area of Xiwuzhumuqinqi Yuman Mining Co., Ltd." (Nei Fa Gai Chan Ye Fa Zi (2025) No. 24) issued by the Development and Reform Commission of Inner Mongolia Autonomous Region to the Development and Reform Commission of Xilingol League. Yuman Mining will implement the zinc, lead, silver, copper, and tin mine expansion project 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 mining method, and 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 of Yuman Mining. Before the project commences, it will handle the relevant procedures for land use, environmental protection, energy conservation review, work safety, soil and water conservation, etc., in accordance with relevant laws and administrative regulations, to ensure that the project commences with all necessary procedures in place as planned. After the project is completed and put into operation, the mining and beneficiation capacity of Yuman 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. A safety accident occurred at Yuman Mining, a subsidiary: At 16:18 on March 9, 2025, a safety accident occurred during the mining preparation work at the Yuman Mining Engineering Project Department of Henan Jinyuan Construction Co., Ltd., the mining contractor of Yuman Mining, a wholly-owned subsidiary of the company. The accident resulted in one death and no injuries. After the accident, the mining area of Yuman Mining halted production on March 9, while the beneficiation plant continued normal operations. Currently, Yuman Mining has completed the relevant rectification work in accordance with the rectification requirements of the regulatory authorities, and the mining area resumed production on April 16, 2025. This accident did not have a significant impact on the company's production and operation, nor did it have a major adverse impact on the company's performance in 2025.

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

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

In its annual report, Xingye Silver & Tin stated that during the reporting period, the company's main products included non-ferrous and precious metals such as silver, tin, zinc, lead, iron, copper, antimony, and gold. Xingye Silver & Tin indicated that in 2024, the company steadily advanced various tasks and successfully completed all annual production and operation tasks. Relying on its high-quality operating mines, the company achieved dual growth in production and efficiency , with the effectiveness of its strategic layout becoming prominent.

Xingye Silver & Tin stated that 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 that as of the end of 2024 (including Yubang Mining), the company's metal reserves within the scope of each mining license were as follows:

Guosen Securities' research report on Xingye Silver & Tin, released on May 16, pointed out that in recent years, the company's production of major minerals has steadily increased. In 2024, both the volume and price of silver and tin increased, leading to a significant YoY increase in the company's profits. The acquisition of an 85% stake in Yubang Mining further elevated the company's silver reserves. Considering the company's reliance on the resource-rich Inner Mongolia region and its proactive approach to reserving high-quality mineral resources through external mergers and acquisitions while also focusing on endogenous development, Guosen Securities maintains an "Outperform" rating. Risk warnings: Risks of the company's resource development progress not meeting expectations; risks of volatile metal prices.

Minsheng Securities' research report on Xingye Silver & Tin showed that both volume and price increased, improving profitability. Volume: In 2024, the company's mineral tin production was 8,902 mt, up 14.58% YoY, mineral silver production was 229 mt, up 14.68% YoY, mineral zinc production was 59,741 mt, up 8.67% YoY, mineral lead production was 16,959 mt, up 8.05% YoY, mineral copper production was 2,906 mt, up 4.94% YoY, mineral antimony production was 1,352 mt, up 32.58% YoY, and mineral iron production was 339,100 mt, down 3.74% YoY. The different degrees of change in metal production were due to the YoY increase in the processing volume of lead-zinc ore and the YoY decrease in the processing volume of copper-tin ore at Yinman in 2024. Price: In 2024, the average price of silver was $28/ounce, up 21.0% YoY. In Q1 2025, the average price was $31.7/ounce, up 39.1% YoY and 1.0% MoM. In 2024, the average price of tin was 248,000 yuan/mt, up 16.9% YoY. In Q1 2025, the average price was 261,000 yuan/mt, up 20.2% YoY and 3.9% MoM. In 2024, the average price of antimony was 130,000 yuan/mt, up 59.33% YoY. In Q1 2025, the average price of antimony was 156,000 yuan/mt, up 73.69% YoY and 8.54% MoM. In 2024, the average prices of lead and zinc were 17,300 yuan/mt and 23,300 yuan/mt, respectively, up 10.3% and 9.8% YoY. In Q1 2025, the average prices of lead and zinc were 17,000 yuan/mt and 24,000 yuan/mt, respectively, up 4.9% and 15.3% YoY, and changed by +0.1% and -5.8% MoM, respectively. Profitability: Benefiting from the rise in metal prices, the gross profit margins of the company's zinc, tin, and silver sectors in 2024 were 51.29%, 72.50%, and 65.98%, respectively, up 10.5, 7.9, and 13.8 percentage points (pct) YoY. The gross profit margin of the mineral sector was 62.98%, up 10.1 pct YoY. The company's overall gross profit margin and net profit margin were 62.95% and 35.17%, respectively, up 10.13 and 9.45 pct YoY. In Q1 2025, the company's overall gross profit margin and net profit margin were 55.57% and 31.86%, respectively, down 0.34 pct and up 2.44 pct YoY, and down 2.79 pct and up 9.09 pct MoM, respectively. Core Highlights: Leading silver producer with abundant resources: After acquiring Yubang Mining in 2025, the company's silver reserves increased to 24,537 mt, accounting for 34.56% of the total domestic reserves and 4.46% of the global silver reserves. As of the end of 2023, the company ranked first in Asia and eighth globally among silver companies. Continuous progress in the construction of Yiman Phase II: The company's Yiman Phase II project received approval for establishment in January 2025. According to the feasibility study, Yiman Phase II is a renovation and expansion project with a construction period of approximately two years, scheduled for completion in H2 2026. Currently, the daily processing capacity of Yiman Phase I is 5,000 mt. After the completion and operation of Yiman Phase II, the mining and beneficiation capacity of Yiman will increase from 1.65 million mt/year to 2.97 million mt/year, further enhancing the company's profitability. Risk warnings: Volatile metal prices, project progress falling short of expectations, production safety risks, etc.