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Zangge adjusts deal for Julong
Posted on Friday, 03 August 2018 13:12
Zangge Holding has downwardly revised the acquisition of Tibet Julong Copper Industry from a 100.0 per cent purchase for CNY 28.00 billion (USD 4.09 billion) to 51.0 per cent at an estimated CNY 9.18 billion, subject to appraisal and evaluation.
Currently, there are no plans to change the supporting financing proposal, comprising an issue of shares to no more than ten investors to raise CNY 1.50 billion to bankroll construction of the copper explorer’s mines.
Zangge invests in the exploration and mining of mineral resources, such as potassium chloride, which can be used for the production of agricultural fertiliser and for electroplating, among other things.
In August last year, the company decided to expand its business into the lithium carbonate space by announcing plans to build a facility in Chaerhan Salt Lake with annual output of 20,000 tons.
Established in 2006, Julong explores, mines, processes and smelts copper, and currently has three mines with a total of 9.85 million tons of copper metal and 495,500 tons of associated ore.
The group has been bleeding red ink at its bottom line in recent years, with losses widening to CNY 154.93 million in the 12 months ended 31st December 2017 from CNY 133.49 million in FY 2016, and amounting to CNY 95.24 million in H1 2018.
As of 30th June 2018, it had total assets valued at CNY 31.20 billion and estimated debt of CNY 8.10 billion.
Once all the mines are up and running, output is expected to bridge a gap in the market between insufficient production to meet supply and demand by China and high dependence on foreign countries.
The statement indicated there are good opportunities for mergers and acquisitions in the mineral resource space considering international copper prices are beginning to recover and a bullish outlook.
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