TSX:
CGG
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2099
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China Gold International Reports 2020 Second Quarter and First Half Financial Results

VANCOUVER, August 14, 2020 - China Gold International Resources Corp. Ltd. (TSX: CGG; HKEx: 2099) (the “Company” or “China Gold International Resources”) reports on the Company’s financial and operational results for the three months (“Q2”, or “second quarter 2020”) and six months (“first half” or “six months 2020”) ended June 30, 2020.  This news release should be read in conjunction with the Company’s Financial Statements, Notes to the Financial Statements and Management’s Discussion and Analysis.

Selected Production and Financial Highlights: Q2 2020 Compared to Q2 2019

  • Revenue increased to US$209.2 million compared to US$163.2 million for the same period in 2019.
  • Mine operating earnings increased by 386% to US$35.5 million from US$7.3 million for the same period in 2019.
  • Net income of US$18.5 million increased by US$41.5 million from a net loss of US$23.0 million for the same period in 2019.
  • Cash flow from operation decreased by 4% to US$54.5 million from US$56.6 million for the same period in 2019.
  • Total gold production increased by 14% to 63,043 ounces from 55,503 ounces for the same period in 2019.
  • Total copper production increased by 31% to 46.5 million pounds (approximately 21,103 tonnes) from 35.6 million pounds (approximately 16,126 tonnes) for the same period in 2019.
CSH Mine Three months ended June 30,
  2020 2019
Total production cost (US$ per ounce) 1,358 1,329
Cash production cost(1) (US$ per ounce) 889 805

(1)    Non-IFRS measure.

Gold production at the CSH Mine slightly decreased by 3% to 38,850 ounces for the three months ended June 30, 2020 compared to 39,875 ounces for the three months ended June 30, 2019. The total production cost of gold for the three months ended June 30, 2020 increased to US$1,358 per ounce compared to US$1,329 for the three months ended June 30, 2019.  The cash production cost of gold for the three months ended June 30, 2020 increased to US$889 per ounce from US$805 for the same period in 2019.  Changes in total production cost and cash cost are mainly due to higher stripping ratio and waste removal costs.

Jiama Mine Three months ended June 30
  2020 2019
Total production cost(1) (US$) of copper per pound after by-products credits(2) 1.00 2.39
Cash production cost(3) (US$) of copper per pound after by-products credits(2) 0.40 1.70

(1)    A discount factor of 18.6% to 29.6% is applied to the copper benchmark price to compensate the refinery costs incurred by the buyers.  The discount factor is higher if the grade of copper in copper concentrate is below 18%.  The industry standard of copper in copper copper concentrate is between 18-20%.
(2)    Production costs include expenditures incurred at the mine sites for the activities related to production including mining, processing, mine  site G&A and royalties etc.

(3)    Non-IFRS measure. See ‘Non-IFRS measures’ section of this MD&A

Both total production cost of copper per pound after by-products and cash production cost of copper per pound after by-product decreased as compared to the same period in 2019 due to higher mined tonnes, higher head grade, higher recovery rates, and more by-products recovered of lead and zinc.

Selected Production and Financial Highlights: First Half 2020 Compared to First Half 2019

  • Revenue increased to US$357.8 million compared to US$308.8 million for the same period in 2019.
  • Mine operating earnings increased by 138% to US$53.7 million from US$22.6 million for the same period in 2019.
  • Net income of US$9.9 million increased by US$37.4 million from a net loss of US$27.5 million for the same period in 2019.
  • Cash flow from operation increased by 11% to US$70.5 million from US$63.5 million for the same period in 2019.
  • Total gold production increased by 15% to 114,872 ounces from 99,527 ounces for the same period in 2019.
  • Total copper production increased by 20% to 82.2 million pounds (approximately 37,288 tonnes) from 68.3 million pounds (approximately 30,959 tonnes) for the same period in 2019.

Mr. Liangyou Jiang, the Chairman and CEO of the Company, stated, “The Company turned losses into profits in the first half of the year, with the net profit reaching its highest level since the second half of 2018.  We achieved encouraging and outstanding results as production continued to increase steadily, costs continued to be optimized through improved management.  Since the beginning of the year, the Company overcame the adverse impacts of the COVID-19 epidemic, actively organized production and optimized operations, with the great efforts devoted by the management team and all the staff.  The Company’s gold and copper production increased significantly in the first half of 2020 compared to the same period in 2019, and  the unit production costs decreased significantly; especially at Jiama mine.  The total production cost of copper per pound and the cash production cost of copper per pound decreased by 46% and 67%, respectively.  Our operating cash flow continues to look strong.  In the second half of the year, the Company will continue to do a solid job on production and operation, and work hard to keep our work cost-effective, and improve the Company's profitability, aiming to create more value for our stakeholders.”

Analysts, investors, media and general public are encouraged to visit the Company’s website at www.chinagoldintl.com, The Stock Exchange of Hong Kong Limited’s website at www.hkex.com.hk or SEDAR at www.sedar.com to view the complete set of the financial statements and MD&A or contact the Company with any questions.

About China Gold International Resources

China Gold International Resources Corp. Ltd. is registered in Vancouver, BC, Canada and operates both profitable and growing mines, the CSH Gold Mine in Inner Mongolia, and the Jiama Copper-Polymetallic Mine in Tibet Autonomous Region of the People’s Republic of China. The Company’s objective is to continue to build shareholder value by growing production at its current mining operations, expanding its resource base, and aggressively acquiring and developing new projects internationally. The Company is listed on the Toronto Stock Exchange (TSX: CGG) and the Main Board of The Stock Exchange of Hong Kong Limited (HKEx: 2099).

For further information on the Company, please refer to its SEDAR profile at www.sedar.com or: Telephone: 604-609-0598, Email: [email protected], Website: www.chinagoldintl.com.

Cautionary Note About Forward-Looking Statements

Certain information regarding China Gold International Resources contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although China Gold International Resources believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. China Gold International Resources cautions that actual performance will be affected by a number of factors, most of which are beyond its control, and that future events and results may vary substantially from what China Gold International Resources currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration results, continued availability of capital and financing and general economic, market or business conditions. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date.