Annual Report 2023

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# Annual Report 2023

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# Annual Report 2023
整合資源 INTEGRATE RESOURCES,
創造價值 CREATE VALUES,
創造效益
BUILD BENEFITS AND
回報社會
CONTRIBUTE
TO THE SOCIETY
中期報告 Interim Report
2023 2023
Content
2 Corporate Information
3 Management Discussion and Analysis
13 Corporate Governance Practices
14 Other Information
17 Condensed Consolidated Statement of
Profit or Loss and Other Comprehensive Income
18 Condensed Consolidated Statement of Financial Position
20 Condensed Consolidated Statement of Changes in Equity
21 Condensed Consolidated Statement of Cash Flows
22 Notes to the Condensed Consolidated Financial Statements
Corporate Information
DIRECTORS REGISTERED OFFICE
Executive Directors: 3rd Floor, Queensgate House
Gao Mingqing (Chairman, Chief Executive Officer) 113 South Church Street
Liu Zhichun P.O. Box 10240
Wang Renxiang Grand Cayman, KY1-1002
Wang Nan Cayman Islands
Independent non-executive Directors: CAYMAN ISLANDS SHARE REGISTRAR
Tsang Wai Hung AND TRANSFER OFFICE
Wong Chi Ming Ming Maples Fund Services (Cayman) Limited
Wang Xin PO Box 1093, Boundary Hall
Cricket Square Grand Cayman KY1-1102
AUDIT COMMITTEE Cayman Islands
Tsang Wai Hung (Chairman)
Wong Chi Ming Ming HONG KONG BRANCH SHARE REGISTRAR
Wang Xin Tricor Investor Services Limited
17/F, Far East Finance Centre
REMUNERATION COMMITTEE 16 Harcourt Road
Wong Chi Ming Ming (Chairman) Hong Kong
Liu Zhichun
Wang Xin AUDITOR
KTC Partners CPA Limited
NOMINATION COMMITTEE Certified Public Accountants
Tsang Wai Hung (Chairman) Room 617, Seapower Tower
Wong Chi Ming Ming Concordia Plaza
Wang Xin 1 Science Museum Road
Tsimshatsui East
COMPANY SECRETARY Hong Kong
Wong Chi Wah (HKICPA, FCCA)
LEGAL ADVISER
HEADQUARTER AND PRINCIPAL PLACE as to Hong Kong Law
OF BUSINESS IN THE PRC Dentons Hong Kong LLP
Xinzhuang Township Yifeng County 3201 Jardine House
Jiangxi Province 1 Connaught Place
PRC Central
Hong Kong
PRINCIPAL PLACE OF BUSINESS
IN HONG KONG PRINCIPAL BANKER
Unit 1, 28/F Bank of China, Yifeng Branch
Singga Commercial Centre 239 Xinchang West Street
144-151 Connaught Road West Yifeng County
Hong Kong Jiangxi Province
PRC
STOCK CODE
3939
COMPANY WEBSITE
www.wgmine.com
2 Wanguo International Mining Group Limited Interim Report 2023
Management Discussion and Analysis
BUSINESS REVIEW
Wanguo International Mining Group Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”)
is principally engaged in the business of mining, ore processing and sale of concentrates products in the PRC and Solomon
Islands.
Currently, we, through our wholly-owned subsidiaries, own the entire equity interest in Jiangxi Province Yifeng Wanguo
Mining Company Limited (“Yifeng Wanguo”) which in turn owns the Xinzhuang copper-lead-zinc mine, an operating mine
located in Jiangxi Province, the PRC (“Xinzhuang Mine”) in which we conduct underground mining. The Xinzhuang Mine
has a substantial volume of non-ferrous polymetallic mineral resources. Products of our Group primarily include copper
concentrates, iron concentrates, zinc concentrates, sulfur concentrates, lead concentrates as well as by-products of gold and
silver.
The Group has, on 13 July 2017, completed acquisition of 51% attributable interest of Xizang Changdu County Dadi Mining
Company Limited (“Xizang Changdu”), which owns the lead-silver mine in Walege of Changdu Country, the PRC (“Walege
Mine”) in which we may further exploit for open-pit and underground mining. The Walege Mine has a significant volume of
mineral resources of lead and silver.
In addition, the Group has on 30 April 2020, completed acquisition of 77.78% interest of AXF Gold Ridge Pty Limited,
which owns 90% interest of a gold ridge mine located in the Solomon Islands (“Gold Ridge Mine”) in which we may further
exploit for open-pit and underground mining. The Gold Ridge Mine has a substantial volume of mineral resources of gold.
Operating performance
The following tables set forth the volume of respective products sold at the Xinzhuang Mine and Gold Ridge Mine during the
six months ended 30 June 2023 compared to the corresponding period in 2022.
Xinzhuang Mine
Six months ended 30 June
2023 2022
Type of products sold Volume Volume Changes
(tonnes) (tonnes) (approximate %)
Copper in copper concentrates 1,338 2,275 (41.2)
Zinc in zinc concentrates 3,728 1,765 111.2
Iron concentrates 38,295 48,615 (21.2)
Sulfur concentrates 116,626 117,182 (0.5)
Lead in lead concentrates 734 323 127.2
Sulfur and iron concentrates 16,794 16,360 2.7
Gold in concentrates (kg) 95 79 20.3
Silver in concentrates (kg) 4,780 5,497 (13.0)
Copper in concentrates (kg) 139 69 101.4
Zinc in concentrates (kg) 286 – N/A
Gold Ridge Mine
Six months ended 30 June
2023 2022 Changes
Type of products sold Volume Volume (approximate %)
Gold Doré (kg) 608 – N/A
Gold Concentrates (tonnes) 8,448 – N/A
Wanguo International Mining Group Limited Interim Report 2023 3
Management Discussion and Analysis
The following table sets forth the volume of ores mined and processed at our Xinzhuang Mine and Gold Ridge Mine during
the six months ended 30 June 2023 and 2022 respectively.
Xinzhuang Mine Gold Ridge Mine
Six months ended 30 June Six months ended 30 June
2023 2022 2023 2022
Volume Volume Changes Volume Volume Changes
(approximate (approximate
(tonnes) (tonnes) %) (tonnes) (tonnes) %)
Volume of ores mined 491,437 506,320 (2.9) 613,655 – N/A
Volume of ores processed 481,598 495,602 (2.8) 721,269 – N/A
During the six months ended 30 June 2023, the production of copper-iron processing plant in Xinzhuang Mine was
temporarily disrupted due to the upgrading of wastewater treatment facilities to satisfy new emission requirement, which
resulted in drop in sales volume of copper in copper concentrates and iron concentrates. This has been offset by the surge
in zinc in zinc concentrates and lead in lead concentrates sold, following the completion of upgrade in lead-zinc processing
plant in last year.
Gold Ridge Mine has commenced trial production and exported gold dore in the fourth quarter of 2022 so there were no gold
products sold or ore processed during the six months ended 30 June 2022.
EXPANSION IN EXISTING MINES
Xinzhuang Mine
We had completed our expansion plan as disclosed in the prospectus of the Company dated 28 June 2012 in Xinzhuang Mine,
reaching 600,000 tpa in both mining capacity and processing capacity. We are now in the progress of upgrading its capacity
to 900,000 tpa.
During the first half of 2023, Yifeng Wanguo has improved wastewater treatment facilities, resulting in emission
concentrations of thallium fluoride below 2 microgram/L (well-below industry standard). It has obtained a 900,000 tpa safety
production permit issued by the Jiangxi Provincial Department of Emergency Management（江西省應急管理廳）in May
2023, with the mine’s mining permit extended to the deep level of -500m.
Walege Mine
During the first half of 2023, the Group organised several rounds of panel discussion in reviewing the draft Environmental
Protection and Land Reclamation Programme of Walege Mine prepared by the external consultant. The Group launched and
appointed consultants to prepare a soil and water conservation programme（水土保持方案） and a safety pre-evaluation
report（工程安全預評價報告）etc for its intended mining and processing activities.
Gold Ridge Mine
Flotation production has been steadily ramping up towards its design capacity during this trial production phase. Further
plant modification and upgrade is underway to improve the metallurgy process. We anticipate additional circuits installation
to be completed in the second half of this year. In consultation with Golder Associates, construction of the tailings dry stack
facility is progressing well, with the first phase completed and operational, and the second phase expected to be completed by
the end of the year.
4 Wanguo International Mining Group Limited Interim Report 2023
Management Discussion and Analysis
FINANCIAL REVIEW
Six month ended 30 June
Trading of Trading of
Concentrates electrolytic electrolytic
products, copper copper
gold doré and other and other
and gold concentrate Concentrates concentrate
concentrates (sourced products (sourced
(own mined) outside) 2023 Total (own mined) outside) 2022 Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue 537,538 43,648 581,186 293,967 36,523 330,490
Cost of sales (259,037) (43,517) (302,554) (134,537) (36,500) (171,037)
Gross profit 278,501 131 278,632 159,430 23 159,453
Gross profit margin 51.8% 0.3% 47.9% 54.2% 0.1% 48.2%
Revenue, cost of sales, gross profit and gross profit margin
The Group’s overall revenue reported an increase by approximately 75.9% from approximately RMB330.5 million for the six
months ended 30 June 2022 to approximately RMB581.2 million for the six months ended 30 June 2023, which was primarily
due to the increase in sales generated by Gold Ridge Mine. Our cost of sales increased by 77.0% from approximately
RMB171.0 million for the six months ended 30 June 2022 to approximately RMB302.6 million for the six months ended 30
June 2023 which was mainly driven by the corresponding increase in sales from Gold Ridge Mine.
The overall gross profit of the Group increased by approximately 74.7% from approximately RMB159.5 million for the six
months ended 30 June 2022 to approximately RMB278.6 million for the six months ended 30 June 2023. The overall gross
profit margin decreased from approximately 48.2% for the six months ended 30 June 2022 to approximately 47.9% for the six
months ended 30 June 2023. Such slight decrease was mainly resulted from the decrease in gross profit margin of Xinzhuang
Mine.
(i) Concentrates products, gold doré and gold concentrates (own mined)
Six month ended 30 June
Gold Ridge Gold Ridge
Xinzhuang Mine Xinzhuang Mine
Mine gold doré Mine gold doré
Concentrates and gold Concentrates and gold
products concentrates 2023 Total products concentrates 2022 Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue 230,832 306,706 537,538 293,967 – 293,967
Cost of sales (124,593) (134,444) (259,037) (134,537) – (134,537)
Gross profit 106,239 172,262 278,501 159,430 – 159,430
Gross profit margin 46.0% 56.2% 51.8% 54.2% N/A 54.2%
Wanguo International Mining Group Limited Interim Report 2023 5
Management Discussion and Analysis
Xinzhuang Mine – concentrates products
Revenue from sales of concentrates products decreased by approximately 21.5% from approximately RMB294.0
million for the six months ended 30 June 2022 to approximately RMB230.8 million for the six months ended 30 June
2023.
For the six months ended 30 June 2023, we sold 1,338 tonnes of copper in copper concentrates, 38,295 tonnes of iron
concentrates and 3,728 tonnes of zinc in zinc concentrates, compared to 2,275 tonnes, 48,615 tonnes and 1,765 tonnes
respectively for the six months ended 30 June 2022, representing decreases of approximately 41.2% and 21.2% for
copper in copper concentrates and iron concentrates respectively which were principally attributable to the suspension
of copper-iron processing plant, and an increase of approximately 111.2% for zinc in zinc concentrates due to the
completion of the reconstruction of lead-zinc processing plant in relation to the 900,000 tpa expansion plan.
The average prices of copper in copper concentrates, iron concentrates and zinc in zinc concentrates for the six months
ended 30 June 2023 were RMB54,167, RMB716 and RMB12,457 per tonne respectively, compared to RMB57,405,
RMB844 and RMB16,748 per tonne respectively for the six months ended 30 June 2022, representing decreases of
approximately 5.6%, 15.2% and 25.6% respectively. Despite China easing its zero-COVID policies, signs of e

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