Zhejiang Hailiang to Buy Stake in Mining Firm

HANGZHOU, May 26 -- Zhejiang Hailiang Co Ltd today announced that it has inked an agreement to purchase a 6.9% stake or 24 million shares in Henghao Mining for RMB 4.5 apiece or RMB 108 million in total.

The target firm, which owns exploration rights on four nickel mines, one navajoite mine, two manganese mines and two copper and molybdenum mines, has nickel reserves of 422,400 tons, navajoite reserves of 420,300 tons, manganese reserves of 166,100 tons, copper reserves of 147,800 tons, cobalt reserves of 17,400 tons and molybdenum reserves of 686 tons.

Henghao Mining reaped RMB 557 million in operating revenue and RMB 30.87 million in net profit last year. As of Dec. 31, 2009, the firm's net asset value per share was RMB 2.

Zhejiang Hailiang's operating revenue for the first quarter of this year was RMB 1.96 billion, up 47.06% year on year, but its net profit declined 27.19% to RMB 24 million. Earnings per share were RMB 0.06 and net asset per share was RMB 3.64.