Gold and Antimony Price Increases Combined with Overseas Projects Reaching Full Production, Huayu Mining Expects Net Profit in 2024 to Be Up Over Threefold YoY

Benefiting from the rise in gold and antimony prices, as well as the gradual ramp-up of production at the company's joint venture in Tajikistan, Huayu Mining (601020.SH) achieved significant growth in net profit in 2024, with both the volume and price of its main products increasing.

On the evening of January 23, Huayu Mining announced that in 2024, the company is expected to achieve a net profit attributable to shareholders of publicly listed firms of 275 million to 335 million yuan, up 272.19% to 353.39% YoY. The net profit excluding non-recurring gains and losses is expected to reach 270 million to 330 million yuan, up 271.95% to 354.60% YoY.

The company stated that the significant growth in performance is mainly due to the overall positive demand for its domestic projects' main metal mineral products, with prices fluctuating at highs. Additionally, the operational capacity of its overseas subsidiary, Talco Gold Closed Joint-Stock Company, in the Konchoch gold and antimony project improved, benefiting from both volume and price increases, thereby enhancing profitability.

Previously, Talco Gold's antimony ore production fell short of expectations. In 2023, the planned antimony production was 5,200 mt (metal content), but only 469.21 mt (metal content) was achieved. However, the situation improved significantly in 2024. In July 2024, the Tajikistan Satellite News Agency reported that from January to April 2024, Talco Gold's gold and antimony mining output was valued at 298.7 million somoni (approximately $27.4 million), up 188.8 million somoni ($17.3 million) or 1.7 times YoY. The increase in output value was attributed not only to higher production but also to the rise in international gold and antimony prices.

A company staff member previously told a reporter from Cailian Press, who called as an investor, that if this year's ore processing volume is calculated at 1.5 million mt, under the conditions of meeting raw ore mining volume, ore grade, and technical requirements, the antimony output would be approximately 4,000 mt (metal content), with the final figure subject to actual production.

In addition to the growth brought by the improved operational capacity of Talco Gold, the prices of the company's main products, gold and antimony, both rose significantly in 2024.

The international spot gold price rose from a low of $1,985/oz in February 2024 to a peak of around $2,800/oz. The annual increase in London spot gold prices and COMEX gold futures prices was 27.23% and 27.39%, respectively, marking the largest annual increase since 2010.

As a scarce strategic minor metal, antimony saw a sharp price surge in H1 2024 due to overall growth in downstream manufacturing demand. The average price of #1 antimony ingot at the beginning of the year was approximately 82,000 yuan/mt, reaching a peak of around 157,000 yuan/mt by the end of June, with a half-year increase of over 90%. Prices remained high in H2.

Meanwhile, under the influence of the domestic export ban, overseas antimony prices were higher than domestic prices. In early January this year, overseas antimony prices were approximately $42,000/mt. According to a research report by Huayuan Securities, the price spread between domestic and overseas markets exceeded 160,000 yuan/mt, with overseas antimony prices more than double domestic prices.

It is worth noting that during the Q3 earnings briefing last year, the company stated that antimony products from Talco Gold were previously sold domestically, so the national restrictions on the export of antimony-related items had not yet impacted Talco Gold's business. The company will reasonably select customers and conduct business cooperation based on historical contract arrangements to maximize corporate interests.