[SMM Analysis] Latest Progress Update on the Jianxiawo Mine in Jiangxi Province

On November 6, 2025, the assessment report of the mining rights transfer income for the undeveloped lithium ore resources in the Zhankouli-Fengxin County Jianxiawo mining area in Yifeng County, Jiangxi Province, was published on the official website of the Jiangxi Provincial Department of Natural Resources. The following is part of the original content:

Evaluation Method:

At the evaluation base date, this mine was a proposed exploration right and at the time of this evaluation, it was a production mine with a large production scale. However, the service life of the utilized resources was short, and the investment and costs corresponding to the evaluation object could not be easily separated from the joint investment and production costs associated with porcelain clay mines. Therefore, it did not meet the conditions for using the cash flow method to evaluate the mining rights transfer income for the undeveloped lithium ore resources. According to the "Guidelines for the Application of Mining Rights Transfer Income Assessment (2023)" and the purpose and characteristics of this evaluation, the income rights method was adopted for this assessment. The income rights method is an indirect estimation method based on the principle of substitution, which adjusts the present value of sales revenue through a mining rights equity coefficient as the value of the mining rights. The mining rights equity coefficient is a parameter set by the income rights method, representing the ratio of the assessed value of the mining rights to the present value of sales revenue, mainly reflecting the cost level of the mine, including all aspects of the profit pathway.

Given that the ore body of this mine is shallow and suitable for open-pit mining; the geological structure of the mining area is simple; the hydrogeological and engineering geological conditions are simple, and the environmental geological conditions are moderate; and the difficulty of ore processing is low, after considering all these factors, the equity coefficient for the rare metal concentrate mining rights for this evaluation was determined to be 7.00% (this is the mining rights equity coefficient and does not represent the yield).

Evaluation Conclusion: In accordance with relevant national laws and regulations, adhering to the principles of independence, objectivity, and fairness, and based on the verification of property rights of the evaluated mining rights, as well as a thorough investigation, understanding, and analysis of the actual situation and market of the evaluation object, and following a scientific evaluation procedure, reasonable evaluation methods and parameters were selected. After evaluation and estimation, the assessed value of the "mining rights transfer income for the undeveloped lithium ore resources in the Zhankouli-Fengxin County Jianxiawo mining area in Yifeng County, Jiangxi Province (utilized recoverable reserves of 25.4436 million mt of ore)" at the evaluation base date was determined to be ￥246.6231 million.

At the evaluation base date, this mining right was a proposed reconnaissance exploration right. According to the "Notice on Issuing the Market Benchmark Price for Mining Rights Transfer Income in Jiangxi Province" (Gan Guotu Zi [2018] No. 58) issued by the Jiangxi Provincial Department of Land and Resources, the market benchmark price for the undeveloped lithium ore resources exploration right at the evaluation base date was ￥69.3 million.

In summary, the assessed value of the mining rights transfer income for the undeveloped lithium ore resources in the Zhankouli-Fengxin County Jianxiawo mining area in Yifeng County, Jiangxi Province, exceeded the market benchmark price for the exploration right transfer income in Jiangxi Province at the evaluation base date, complying with the principle stipulated in the "Notice of the State Council on Issuing the Reform Plan for Mineral Resource Equity Fund System," where the mining rights transfer income should be determined based on the higher of the assessed value or the market benchmark price.

There is still no official statement regarding when the Jianxiawo mine will resume production. Please treat market rumors with caution!