Hunan Chenzhou Mining to Invest in Two Gold Mines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hunan Chenzhou Mining Group Company Limited plans to raise $19.2 million to invest in two gold mines. Hunan Chenzhou estimates that upon production, the mines will bring in a net profit of no less than $10 million.

Among the $19.2 million of investment, $8.2 million will be used on No. 8 Dadibaobei Gold Mine Company in Tuoli County in the Xinjiang Autonomous Region. Hunan Chenzhou will purchase about 70% of Dadibaobei's shares for $4.8 million. The remaining $3.4 million will be Chenzhou's net capital investment into Dadibaobei. Afterward, Chenzhou's hold of Dadibaobei will go up to 80%. Shareholder Xie Hao will still hold 20%.

Chenzhou has full mining rights to the Dadibaobei gold mine, covering an area of 1.04 square kilometers. The mine now has a 500,000-ton-per-day ore-dressing plant. The $3.4 million will go toward a 50,000-ton-per-annum gold mine project. The total investment equals $6.8 million for a total processing capacity of 320,000 tons of ores. Upon completion, Hunan Chenzhou will be able to produce 376 kilograms of gold every year and achieve $7.5 million in sales and $5.7 million in gross profit. Based on the seven-year service life, the project's profit-return rate is 23%.

About $11 million of the $19.2 million investment will go toward Xinda Gold Mining Company Limited, also in Tuoli County. The company will spend $7.16 million to purchase all shares at Xinda, and further invest $3.84 million to the company. Chenzhou has exclusive mining rights to the gold mine at East Gezigou in Tuoli County, covering an area of 1.44 square kilometers. Presently, Xinda has a 200-ton-per-day ore-dressing plant. Same as with Dadibaobei, Chenzhou's $3.84 million at Xinda will be used to carry out a 50,000-ton-per-annum gold mine resource integrated utilization project. The project will cost $8.85 million and process a total of 410,000 tons of ores. Upon completion, 470 kilograms of gold will be produced from the project every year, achieving annual sales of $9.34 million with $7.58 million being gross profit. Based on an 11-year life span, the profit-return rate of this project is 32%.

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