In 2024, China’s economy showed a trend of high first, low second, and rising last. The iron ore concentrate and high-purity iron business of the Company have also been affected by macroeconomic fluctuations and are facing various operational pressures. Facing a trend of fluctuation and overall weakening of the price of iron ore concentrate and high-purity iron, the Company, taking reduction in production costs and fees as the guiding principle, conducted work in various aspects including organizing production, purchasing raw materials, internal management and finding new customers. Benefiting from the increase in gross profit of the high-purity iron business and decrease in management fees and other fees, the Company eventually realized an increase in operating results. In 2024, the revenue of the Company amounted to RMB2,480 million, representing a year-on-year decrease of 18%. Net profit attributable to shareholders of the parent company was RMB180 million, representing a year-on-year increase of 19%.
Value creation has always been the work concept insisted on by the Company. While properly conducting various types of operational work, we also continuously implement various tasks that are beneficial for the Company’s long-term growth in value. In 2024 and as of the date of this report, we are pleased to note that we have achieved a series of milestones based on our work in the past few years. Such achievements also help shareholders understand the true value of the Company.
In 2021, the Company commenced systematic exploration in Shangma mining area. Through innovative exploration approaches and exploration of nearly four years, the resources in Shangma Mine increased by approximately 79,760 thousand metric tons or approximately 265%, with the total resources of approximately 110 million metric tons. The scale of resources of Shangma Mine has been expanded to a large level, solidifying a foundation for the sustainable development of the Company’s iron ore business.
The Company acquired the Mt Bundy Gold Project in 2018. After the acquisition, the Company conducted much work in exploration, feasibility studies, and various government approvals and other aspects and realized many achievements.For example, compared to that as at the time of acquisition, the latest resources and reserves of the Mt Bundy Gold Project increased by 67% and 837% respectively, and the environmental protection approvals for open-pit mining and underground-pit mine have been obtained, and the mining plan and processing have been continuously optimized. To concentrate limited manpower and financial resources of the Company to the development and construction of the Cygnet Gold Project of the Company located in Western Australia for faster realizing the goal of the Company to become a gold producer, in July 2024, the Company disposed of the Mt Bundy Gold Project at a consideration of AUD300 million,with an environmental bond of approximately AUD3,120 thousand. Such disposal presents a recognition by the market for the value created by us in the Mt Bundy Gold Project during the past five years.
The Company acquired a major equity interest in the Cygnet Gold Project in Western Australia through capital increase in 2023. In 2024, the Company focused on exploration for the Cygnet Gold Project. The exploration obtained an outstanding result, making the resources of the project increase by 17% to 1,380,000 ounces of JORC Code gold at an average grade of 3.9 gram/ton. In October 2024, the Company further acquired 36.64% of the shares of the company that owns the Cygnet Gold Project, increasing the shareholding to 93.37%. The increase in resources and shareholdings laid a beneficial foundation for us to create greater value in the Cygnet Gold Project.
Although the above three achievements were obtained in 2024, they are the fruits generated from continuous efforts by all staff of the Company during the past few years. We firmly believe that the Company’s value will eventually be embodied through different means so long as we keep conducting work beneficial for the Company’s long-term development.
We have always adhered to the principle of “safety, harmony and green”. China Hanking has been focusing on safety and environmental protection. Our development history aligns with ESG concept. We have prioritized safety and environmental protection and have established a top-to-bottom ESG management system. Facing the uncertainties of global economy and social development, we further adjusted the Board composition during the year, to satisfy the requirements of the governance system of international companies. We also increased the percentage of green resources usage, making contributions to the “dual carbon” goal. As of the end of 2024, China Hanking has achieved zero fatalities, casualties, environmental pollution incidents, occupational morbidity, and fire accidents for eight consecutive years. We insist on the concept of mutual prosperity, striving to realize win-win and mutual development through cooperation with interested parties.
In 2024, rise and fall as well as trading amount in Hong Kong stock segment increased as compared to the corresponding period of 2023. Head companies still held a large proportion, and there was a high market concentration. We, situated in this divergent market, place significant importance on communication with investors. While striving to enhance the Company’s profitability and internal value, we actively communicate with the market, continuously optimize the investor communication mechanism and expand communication channels, aiming to enable market participants have a prompt understanding of the Company, and pay attention and respond to the enquiries from the market. This, in turn,is intended to promote value enhancement of the Company and win-win together with investors.
OUTLOOK
As we are optimistic about the prospects of gold, the Company will devote more resources to the development of gold projects. In 2025, the Company will focus on exploration, feasibility studies and government approval processes required for mining construction at the Cygnet Gold Project in Western Australia. The Company aims to become a gold producer within two years. Meanwhile, we will also pay attention to potential opportunities of merger and acquisition, to support better growth of the Company’s gold business.
Our Maogong Mine received a renewed mining license from the Natural Resources Department of Liaoning Province at the end of October 2023. The previously surveyed 16.32 million tons of iron ore resources through exploration rights have been included in the mining license. In 2024, in respect of the newly discovered resources of Maogong Mine,the Company completed the underground-pit design and approval required for construction and other work. In 2025,Maogong Mine will initiate the construction work of underground-pit for the newly discovered resources, which willensure the productivity of Maogong Mine of producing approximately 1 million tons of iron concentrates annually in thenext ten years and extend the lifetime of the Maogong Mine, a “longevity mine”. Shangma Mine will advance feasibility studies for mine development based on newly discovered resources. Simultaneously, efforts will be made to convert exploration licenses with completed exploration work into mining licenses.
We still hold a prudent attitude toward the iron ore concentrates and high-purity iron market in 2025. We will continue to take reduction in production costs and fees as the guiding principle and conduct work in various aspects including organizing production, purchasing raw materials, internal management and finding new customers, so as to meet the operation target of 2025, and achieve better management benefits from two aspects of revenue increase and expense reduction.
APPRECIATION
In 2024, while excelling in our production and operations, the Company also achieved a series of milestones, laying a solid foundation for our future development. On behalf of the Board, I would like to express my sincere gratitude to the management team and all staff of the Group for their efforts and dedication, as well as to the Shareholders and partners of the Company for their continuous support to the Company.
In order to thank the Shareholders for their support to the Company, the Company has paid an interim dividend of HKD0.02 per share for 2024, and recommended the payment of a final dividend of HKD0.02 per share.
Mr. Yang Jiye
Chairman of the Board
