[HK]中国黄金国际(02099):截至2023年6月30日止六个月之管理层讨论与分析及财务报表
原标题:中国黄金国际:截至2023年6月30日止六个月之管理层讨论与分析及财务报表 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不會就因本公告全部或任何部分內 容而產 生或因依賴該等內容而引致的任何損失承擔任何責任。 CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD. 中國黃金國際資源有限公司 （根據加拿大英屬哥倫比亞法例註冊的有限公司） （香港股份代號：2099） （多倫多股份代號：CGG） 海外監管公告 2023年8月15日溫哥華消息－中國黃金國際資源有限公司（多倫多股份代號：CGG，香港股份代號：2099）已於溫哥華時間2023年8月14日在SEDAR (www.sedar.com)提交截至2023年6月30日止六個月的管理層討論與分析及財務報表。 詳情請參閱隨附的公告。 承董事會命 中國黃金國際資源有限公司 童军虎先生 董事會主席兼首席執行官 香港，2023年8月15日 於本公告日期，本公司董事會由執行董事童军虎先生、傅渊慧先生、張維濱先生及田娜女士，非執行董事王万明先生，及獨立非執行董事赫英斌先生、邵威先生、史別林先生及韓瑞霞女士. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Management’s Discussion and Analysis of Financial Condition and Results of Operations Three and six months ended June 30, 2023 (Stated in U.S. dollars, except as otherwise noted) Suite 660, One Bentall Centre, 505 Burrard Street, Box 27, Vancouver, BC, V7X 1M4 Tel: 604-609-0598 Fax: 604-688-0598 E-mail: info@chinagoldintl.com, www.chinagoldintl.com MANAGEMENT’S DISCUSSION AND ANALYSIS Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2023. (Stated in U.S. dollars, except as otherwise noted) FORWARD-LOOKING STATEMENTS 2 THE COMPANY 3 OVERVIEW 3 PERFORMANCE HIGHLIGHTS 3 OUTLOOK 3 RESULTS OF OPERATIONS 4 SELECTED QUARTERLY FINANCIAL DATA 4 SELECTED QUARTERLY PRODUCTION DATA AND ANALYSIS 4 REVIEW OF QUARTERLY DATA 5 NON-IFRS MEASURES 7 MINERAL PROPERTIES 8 THE CSH MINE 8 THE JIAMA MINE 10 LIQUIDITY AND CAPITAL RESOURCES 13 CASH FLOWS 14 OPERATING CASH FLOW 14 INVESTING CASH FLOW 14 FINANCING CASH FLOW 14 EXPENDITURES INCURRED 15 GEARING RATIO 15 SIGNIFICANT INVESTMENTS, ACQUISITIONS AND DISPOSAL OF SUBSIDIARIES. ASSOCIATES AND JOINT VENTURES, AND FUTURE PLAN FOR MATERIAL INVESTMENTS OF CAPITAL ASSETS 15 CHARGE ON ASSETS 15 EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES 15 COMMITMENTS 15 RELATED PARTY TRANSACTIONS 16 PROPOSED TRANSACTIONS 17 CRITICAL ACCOUNTING ESTIMATES 17 CHANGE IN ACCOUNTING POLICIES 17 FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS 17 OFF-BALANCE SHEET ARRANGEMENTS 17 DIVIDEND AND DIVIDEND POLICY 17 OUTSTANDING SHARES 18 DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING 18 RISK FACTORS 18 QUALIFIED PERSON 18 The following Management Discussion and Analysis of financial condition and results of operations (“MD&A”) is prepared as of August 14, 2023. It should be read in conjunction with the consolidated financial statements and notes thereto of China Gold International Resources Corp. Ltd. (referred to herein as “China Gold International”, the “Company”, “we” or “our” as the context may require) for the three and six months ended June 30, 2023 and the three and six months ended June 30, 2022, respectively. Unless the context otherwise provides, references in this MD&A to China Gold International or the Company refer to China Gold International and each of its subsidiaries collectively on a consolidated basis. The following discussion contains certain forward-looking statements relating to the Company’s plans, objectives, expectations and intentions, which are based on the Company’s current expectations and are subject to risks, uncertainties and changes in circumstances. Readers should carefully consider all of the information set out in this MD&A, including the risks and uncertainties outlined further in the Company’s Annual Information Form (“Annual Information Form” or “AIF”) dated March 30, 2023 on SEDAR at www.sedar.com, www.chinagoldintl.com and www.hkex.com.hk. For further information on risks and other factors that could affect the accuracy of forward-looking statements and the result of operations of the Company, please refer to the sections titled “Forward-Looking Statements” and “Risk Factors” and to discussions elsewhere within this MD&A. China Gold International’s business, financial condition or results of operations could be materially and adversely affected by any of these risks. FORWARD-LOOKING STATEMENTS Certain statements made herein, other than statements of historical fact relating to the Company, represent forward-looking information. In some cases, this forward-looking information can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “contemplates”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to”, “should” or the negative of these terms, or other similar expressions intended to identify forward-looking information. This forward-looking information includes, among other things; China Gold International’s production estimates, business strategies and capital expenditure plans; the development and expansion plans and schedules for the CSH Mine and the Jiama Mine; China Gold International’s financial condition; the regulatory environment as well as the general industry outlook; general economic trends in China; and statements respecting anticipated business activities, planned expenditures, corporate strategies, participation in projects and financing, and other statements that are not historical facts. By their nature, forward-looking information involves numerous assumptions, both general and specific, which may cause the actual results, performance or achievements of China Gold International and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward–looking information. Some of the key assumptions include, among others, the absence of any material change in China Gold International’s operations or in foreign exchange rates, the prevailing price of gold, copper and other non-ferrous metal products; the absence of lower-than-anticipated mineral recovery or other production problems; effective income and other tax rates and other assumptions underlying China Gold International’s financial performance as stated in the Company’s technical reports for its CSH Mine and Jiama Mine; China Gold International’s ability to obtain regulatory confirmations and approvals on a timely basis; continuing positive labor relations; the absence of any material adverse effects as a result of political instability, terrorism, natural disasters, pandemics such as COVID-19, litigation or arbitration and adverse changes in government regulation; the availability and accessibility of financing to China Gold International; and the performance by counterparties of the terms and conditions of all contracts to which China Gold International and its subsidiaries are a party. The forward-looking information is also based on the assumption that none of the risk factors identified in this MD&A or in the AIF that could cause actual results to differ materially from the forward-looking information actually occurs. Forward-looking information contained herein as of the date of this MD&A is based on the opinions, estimates and assumptions of management. There are a number of important risks, uncertainties and other factors that could cause actual actions, events or results to differ materially from those described as forward-looking information. China Gold International disclaims any obligation to update any forward-looking information, whether as a result of new information, estimates, opinions or assumptions, future events or results, or otherwise except to the extent required by law. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking information in this MD&A is expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on forward-looking information. THE COMPANY Overview China Gold International is a gold and base metal mining company registered in British Columbia Canada. The Company’s main business involves the operation, acquisition, development and exploration of gold and base metal properties. The Company’s principal mining operations are the Chang Shan Hao Gold Mine (“CSH Mine” or “CSH”), located in Inner Mongolia, China and the Jiama Copper-Gold Polymetallic Mine (“Jiama Mine” or “Jiama”), located in Tibet, China. China Gold International holds a 96.5% interest in the CSH Mine, while its Chinese joint venture (“CJV”) partner holds the remaining 3.5% interest. The Company owns a 100% interest in the Jiama Mine, which hosts a large scale copper-gold polymetallic deposit containing copper, gold, molybdenum, silver, lead and zinc metals. China Gold International’s common shares are listed on the Toronto Stock Exchange (“TSX”) and The Stock Exchange of Hong Kong Limited (“HKSE”) under the symbol CGG and the stock code 2099, respectively. Additional information about the Company, including the Company’s Annual Information Form, is available on SEDAR at sedar.com as well as Hong Kong Exchange News at hkexnews.hk. Performance Highlights Three months ended June 30, 2023 ? Revenue decreased by 75% to US$73.0 million from US$292.0 million for the same period in 2022. ? Mine operating loss of US$6.2 million, decreased by 105% from mine operating earnings of US$117.7 million for the same period in 2022. ? Net loss of US$53.3 million decreased by 165% or US$135.0 million from net income of US$81.7 million for the same period in 2022. ? Cash flow used in operation of US$73.5 million, decreased by 168% from cash flow from operation of US$107.6 million for the same period in 2022. ? Total gold production decreased by 44% to 36,490 ounces from 65,527 ounces for the same period in 2022. ? Total copper production was nil as all production was halted at the Jiama mine during Q2 2023. Copper production was 47.1million pounds (approximately 21,356 tonnes) for the same period in 2022. Six months ended June 30, 2023 ? Revenue decreased by 45% to US$325.8 million from US$596.0 million for the same period in 2022. ? Mine operating earnings decreased by 57% to US$96.6 million from US$223.2 million for the same period in 2022. ? Net income of US$25.3 million decreased by 84% or US$128.2 million from US$153.5 million for the same period in 2022. ? Cash flow from operation decreased by 80% to US$54.2 million from US$268.4 million for the same period in 2022. ? Total gold production decreased by 28% to 89,317 ounces from 124,110 ounces for the same period in 2022. ? Total copper production decreased by 54% to 44.1 million pounds (approximately 20,019 tonnes) from 95.4 million pounds (approximately 43,279 tonnes) for the same period in 2022. The decrease in production and profit was mainly attributed to the suspension of operations of the Jiama Mine as of March 27, 2023 due to the overflow at the Guolanggou tailings pond. As a result of the suspension, the Company did not record any product sales from the Jiama Mine during Q2 2023, with the exception of a minor amount of molybdenum. OUTLOOK On March 27, 2023, an overflow occurred at the Guolanggou Tailings Dam at Jiama Mine (the “overflow”). The Company quickly contained and repaired the breach to ensure no damage to the environment or neighbouring communities. Subsequent to The overflow occurred at the top 19th subsequent dyke of the Guolangou Tailings Dam. However, other levels of subsequent dykes and the starter dyke were also damaged to varying degrees. The Company is conducting a comprehensive inspection and assessment of all 19 levels of subsequent dykes and the starter dyke of the tailings dam and is making permanent repairs and reinforcements of the dam. As at the date of this MD&A, the overall progress is on schedule. The dam's repair and major reinforcement works have been completed and some reinforcement works are still in the final stage. The Company is working towards submitting a safety assessment report to the regulatory authority on or around the end of August 2023. The Company is adopting various active measures to promote the resumption of production of the Jiama Mine. Due to the uncertainty of the date of resumption of production at Jiama Mine, the Company has withdrawn its annual production guidance for 2023 as set out in the announcement of the Company dated January 20, 2023. Once the impact of the overflow on the operation can be more clearly evaluated, the Company will re-issue the production guidelines. However, the Company notes that production operations at the Company's CSH gold mine remain normal and stable. RESULTS OF OPERATIONS Selected Quarterly Financial Data
Selected Quarterly Production Data and Analysis CSH Mine Three months ended June 30, Six months ended June 30 2023 2022 2023 2022 Gold sales (US$ million) 72.17 71.33 137.75 141.90 Realized average price (US$) of gold per ounce 1,977 1,868 1,935 1,870 Gold produced (ounces) 38,607 36,069 75,884 71,360 Gold sold (ounces) 38,636 36,079 75,902 71,179 Total production cost (US$ per ounce) 1,442 1,354 1,489 1,346 (1) Cash production cost (US$ per ounce) 798 913 814 878 (1) Non-IFRS measure. See ‘Non-IFRS measures’ section of this MD&A Gold production at the CSH Mine decreased by 7% to 36,069 ounces for the three months ended June 30, 2023 compared to 38,607 ounces for the same period in 2022 due to lower grades of ore. The total production cost of gold for the three months ended June 30, 2023 decreased by 6% to US$1,354 per ounce compared to US$1,442 for the same period in 2022. The decrease in total for the three months ended June 30, 2023 increased by 14% to US$913 per ounce from US$798 for the same period in 2022. The increase in cash production cost is mainly due to higher stripping ratio and waste ore mined in order to ensure the stability of the open pit slope in Q2 2023. Jiama Mine Three months ended June 30, Six months ended June 30, 2022 2022 2023 2023 Copper sales (US$ in millions) 159.11 337.78 - 134.40 1 Realized average price (US$) of copper per pound after smelting fee discount 3.72 3.68 - 3.27 Copper produced (tonnes) 21,356 43,279 - 20,019 Copper produced (pounds) - 47,080,848 44,133,380 95,412,864 Copper sold (tonnes) 19,860 41,638 - 18,656 Copper sold (pounds) 43,782,721 91,795,712 - 41,129,646 Gold produced (ounces) 26,920 48,226 - 17,957 Gold sold (ounces) 24,369 45,473 - 17,729 Silver produced (ounces) 890,888 1,696,631 - 740,652 Silver sold (ounces) 824,791 1,635,158 - 709,096 Lead produced (tonnes) - - - - Lead produced (pounds) - - - - Lead sold (tonnes) - - - - Lead sold (pounds) - - - - Zinc produced (tonnes) - - - - Zinc produced (pounds) - - - - Zinc sold (tonnes) - - - - Zinc sold (pounds) - - - - Moly produced (tonnes) 253 466 - 232 Moly produced (pounds) 558,541 1,026,403 - 510,760 Moly sold (tonnes) 210 475 69 247 Moly sold (pounds) 152,004 463,477 544,942 1,046,553 2 Total production cost (US$) of copper per pound 3.00 3.13 - 4.32 2 Total production cost (US$) of copper per 4 pound after by-products credits 1.66 1.91 - 3.09 4 Cash production cost (US$) per pound of copper 2.28 2.43 - 3.26 3 Cash production cost (US$) of copper per 4 pound after by-products credits 0.94 1.21 - 2.03 1 A discount factor of 13.5% to 24.4% 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 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 4 By-products credit refers to the sales of gold and silver during the corresponding period. Due to the overflow of the tailings dam on March 27, 2023, production at the Jiama Mine was suspended during Q2 2023.. Review of Quarterly Data in 2022. Realized average gold price increased by 6% from US$1,868/oz in Q2 2022 to US$1,977/oz in Q2 2023. Gold sold by the CSH Mine was 36,079 ounces (gold produced: 36,069 ounces), compared to 38,636 ounces (gold produced: 38,607 ounces) for the same period in 2022. Revenue from the Jiama Mine was US$1.7 million, a decrease of US$218.1 million, compared to US$219.8 million for the same period in 2022. No production occurred during Q2 2023 due to the operational suspension from the tailings dam overflow, with a minor amount of molybdenum sales. Cost of sales of US$79.2 million for the quarter ended June 30, 2023, a decrease of US$95.1 million from US$174.3 million for the same period in 2022, mainly due to the suspension of operations at the Jiama Mine. Mine operating loss of US$6.1 million for the three months ended June 30, 2023, a decrease of US$123.8 million from mine operating earnings of US$117.7 million for the same period in 2022, mainly due to the suspension of operations at the Jiama Mine. General and administrative expenses decreased by US$0.4 million, from US$8.3 million for the quarter ended June 30, 2022 to US$7.9 million for the quarter ended June 30, 2023. Research and development expenses of US$1.4 million for the three months ended June 30, 2023, decreased from US$5.5 million for the comparative 2022 period. The decrease in the second quarter of 2023 was mainly due to suspension of operations at the Jiama Mine. Loss from operations of US$15.5 million for the second quarter of 2023, decreased by US$119.2 million, compared to an income of US$103.7 million for the same period in 2022. Finance costs of US$6.9 million for the three months ended June 30, 2023, decreased by US$1.0 million compared to US$7.9 million for the same period in 2022. The decrease was primarily due to the reduction in the total amount of borrowings outstanding. Foreign exchange loss of US$11.7 million for the three months ended June 30, 2023, increased from US$11.5 million for the same period in 2022. The loss was attributed to changes in the RMB/USD exchange rates and the revaluation of monetary items held in Chinese RMB. Interest and other income of US$3.8 million for the three months ended June 30, 2023, decreased from US$5.9 million for the same period in 2022, primarily due to the less dividends received from China Nonferrous Mining Corporation Limited in the current quarter compared to last year. Other expense of US$22.6 million was recognized in Q2 2023. In the current quarter, the Company recognized estimated litigation compensation of US$22.6 million arising from the litigation between Huaxin Construction Group Co., Ltd., Zhongxinfang, and the Company's subsidiary, Tibet Huatailong Mining Development Co. Ltd. Refer to Note 17 Contingencies of the condensed consolidated financial statements for details. . Income tax expense of US$0.4 million for the quarter ended June 30, 2023, decreased by US$8.0 million from US$8.4 million for the comparative period in 2022. During the current quarter, the Company had US$15.1 million of deferred tax credit compared to US$7.5 million for the same period in 2022. Net loss of US$53.3 million for the three months ended June 30, 2023, decreased by US$135.0 million from an income of US$81.7 million for the three months ended June 30, 2022. Six months ended June 30, 2023 compared to six months ended June 30, 2022 Revenue of US$325.8 million for the first half of 2023, decreased by US$270.2 million from US$596.0 million for the same period in 2022. Revenue from the CSH Mine was US$137.7 million, a decrease of US$4.2 million from US$141.9 million for the same period in 2022. Realized average gold price increased by 4% from US$1,870/oz in the first six months of 2022 to US$1,935/oz in 2023. Gold sold by the CSH Mine was 71,179 ounces (gold produced: 71,360 ounces), compared to 75,902 ounces (gold produced: 75,884 ounces) for the same period in 2022. Revenue from the Jiama Mine was US$188.0 million, a decrease of US$266.1 million, compared to US$454.1 million for the same period in 2022. Realized average price of copper decreased by 11% from US$3.68/pound in the first six months of 2022 to for the same period in 2022. Cost of sales as a percentage of revenue for the Company increased from 63% to 70% for the six months ended June 30, 2022 and 2023, respectively, primarily due to the suspension of operations at the Jiama Mine. Mine operating earnings of US$96.6 million for the six months ended June 30, 2023, a decrease of 57%, or US$126.6 million, from US$223.2 million for the same period in 2022. Mine operating earnings as a percentage of revenue decreased from 37% to 30% for the six months ended June 30, 2022 and 2023, respectively, primarily due to the suspension of operations at the Jiama Mine. General and administrative expenses decreased by US$0.7 million, from US$18.2 million for the six months ended June 30, 2022 to US$17.5 million for the six months ended June 30, 2023. Research and development expenses of US$6.1 million for the six months ended June 30, 2023, decreased from US$11.4 million for the comparative 2022 period, mainly due to the suspension of operations at the Jiama Mine. Income from operations of US$72.9 million for the six months ended June 30, 2023, decreased by US$120.4 million, compared to US$193.3 million for the same period in 2022. Finance costs of US$13.6 million for the six months ended June 30, 2023, decreased by US$2.5 million compared to US$16.1 million for the same period in 2022. The decrease was primarily due to the reduction in the total amount of borrowings outstanding. Foreign exchange loss of US$8.4 million for the six months ended June 30, 2023, decreased from US$9.9 million for the same period in 2022. The loss was attributed to changes in the RMB/USD exchange rates and the revaluation of monetary items held in Chinese RMB. Interest and other income of US$5.9 million for the six months ended June 30, 2023, decreased from US$6.7 million for the same period in 2022, mainly due to the less dividends received from China Nonferrous Mining Corporation Limited in the second quarter of 2023 compared to last year. Other expense of US$22.6 million was recognized in Q2 2023. In the current quarter, the Company recognized estimated litigation compensation of US$22.6 million arising from the litigation between Huaxin Construction Group Co., Ltd., Zhongxinfang, and the Company's subsidiary, Tibet Huatailong Mining Development Co. Ltd. Refer to Note 17 Contingencies of the condensed consolidated financial statements for details. Income tax expense of US$8.9 million for the six months ended June 30, 2023, decreased by US$11.6 million from US$20.5 million for the comparative period in 2022. During the period, the Company had US$17.8 million of deferred tax credit compared to US$8.6 million for the same period in 2022. Net income of US$25.3 million for the six months ended June 30, 2023, decreased by US$128.2 million from US$153.5 million for the six months ended June 30, 2022. NON-IFRS MEASURES The cash cost of production, cash cost after by-product credits and cash cost per ounce and per pound are measures that are not in accordance with IFRS. The Company has included these metrics to supplement its consolidated financial statements, which are presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance, operating results or financial condition prepared in accordance with IFRS. The Company has included cash production cost per ounce and per pound data because it understands that certain investors use this information to determine the Company’s ability to generate earnings and cash flow. The measures are not necessarily indicative of operating results, cash flow from operations, or financial condition as determined under IFRS. The following tables provide a reconciliation of cost of sales to the cash costs of production in total dollars and in dollars per gold ounce for the CSH Mine or per copper pound for the Jiama Mine: Cash production cost for gold is calculated as total cost of sales adjusted by depreciation and depletion and amortization of Six months ended June 30, Three months ended June 30, 2022 2022 2023 2023 US$ US$ US$ US$ US$ Per Per ounce US$ Per US$ ounce US$ Per ounce ounce 1 Total Cost of sales 55,729,581 1,442 112,993,791 1,489 48,850,423 1,354 95,842,023 1,346 Adjustment – Depreciation & depletion (24,405,716) (632) (45.474,215) (599) (15,646,311) (434) (37,251,952) (523) Adjustment – Amortization of intangible assets (469,635) (12) (886,243) (12) (264,987) (7) (636,227) (9) Total cash production costs 30,854,230 798 66,633,333 878 32,939,125 913 57,953,844 814 Total Gold sold ounces 38,636 75,902 36,079 71,179 Cash production cost of gold US$ per ounce calculated as total cash production cost divided by total gold sold ounces Cash Production cost for copper is calculated as production costs (total cost of sales adjusted by General and administrative expenses and Research and development expenses) adjusted by depreciation and depletion and amortization of intangible assets. Cash production cost of copper pound is calculated as total cash production cost divided by total copper sold (pounds). Note that production and cash costs were not calculated for Q2 2023 as production was halted at the Jiama mine during this period. Jiama Mine (Copper with by-products credits) Three months ended June 30, Six months ended June 30, 2022 2023 2023 2022 US$ US$ US$ US$ Per Per Per US$ Per Pound US$ Pound US$ Pound US$ Pound Total Cost of sales 118,575,000 2.71 259,803,450 2.83 30,315,573 - 133,391,585 3.24 General and administrative expenses 7,230,471 0.17 16,216,993 0.18 6,779,160 - 15,461,330 0.38 Research and development expenses 5,470,289 0.12 11,355,013 0.12 1,442,235 - 6,084,084 0.15 Total production cost 38,536,968 - 131,275,760 3.00 154,936,999 3.77 287,375,456 3.13 Adjustment – Depreciation & depletion (21,592,060) (0.49) (43,730,305) (0.48) (13,922,110) - (34,050,478) (0.83) Adjustment – Amortization of intangible assets (10,100,897) (0.23) (20,173,129) (0.22) (432,947) - (9,503,436) (0.23) Total cash production costs 99,582,803 2.28 223,472,022 2.43 24,181,911 - 111,383,085 2.71 By-products credits (58,719,227) (1.34) (112,415,527) (1.22) (717,537) - (50,446,098) (1.23) Total cash production costs after by-products 40,863,576 0.94 111,056,495 1.21 credits 23,464,374 - 60,936,987 1.48 Total Copper sold pounds 43,782,721 91,795,712 - 41,129,646 Cash production cost of copper US$ per pound calculated as total cash production cost divided by total copper sold pounds MINERAL PROPERTIES The CSH Mine The CSH Mine is located in Inner Mongolia Autonomous Region of China (Inner Mongolia). The property hosts two low-grade, near surface gold deposits, along with other mineralized prospects. The main deposit is called the Northeast Zone (the “Northeast Zone”), while the second, smaller deposit is called the Southwest Zone (the “Southwest Zone”). updated its mine plan based on a result of latest ultimate limit optimization, in which the production rate was reduced to 40,000 t/d with a life of mine (“LoM”) of seven years as of 2019. The run-of-mine ore is heap leached with cyanide solution to extract gold and electro-winned to produce a gold dore which is sold to refiners. In June 2020, the operation of southwest pit ended. The major new contracts entered into during the six months ended June 30, 2023:
Production Update CSH Mine Three months ended June 30, Six months ended June 30, 2022 2022 2023 2023 Ore mined and placed on pad (tonnes) 4,344,499 7,930,782 3,459,258 8,273,642 Average ore grade (g/t) 0.49 0.65 0.56 0.63 Recoverable gold (ounces) 33,072 54,097 89,450 96,362 Ending gold in process (ounces) 180,718 180,718 190,674 190,674 Waste rock mined (tonnes) 5,506,015 9,058,907 8,726,411 12,021,446 For the three months ended June 30, 2023, the total amount of ore placed on the leach pad was 3.5 million tonnes, with total contained gold of 33,072 ounces (1,029 kilograms). The overall accumulative project-to-date gold recovery rate has remained at approximately 55.09% at the end of June 30, 2023 from 54.95% at the end of March 31, 2023. Of which, gold recovery from the phase I and phase II heap leach pads were 59.77% and 52.11% at June 30, 2023, respectively. Exploration As of June 2023, CSH Mine has completed three drill holes with the total meterage of 3,261.53m in its exploration program which takes up 77.66% of the annual drilling plan of 4,200m on June 15, 2023. A verification report of the mineral resources and reserves of the CSH Mine (the MRR Report) has passed the preliminary review and was continually approved by the Reserve Evaluation Center of the Geology and Survey Institute of Inner Mongolia Autonomous Region. The preparation of the final approval of the evaluation to the amended MRR Report is undergoing currently. The Evaluation and Achieving Prove of the Mineral Resources and Reserves of CSH Mine will be issued next. CSH Mine Mineral Resources by category, at December 31, 2022 under NI 43-101 are listed below: Location Metal Mineral Resource Tonnage (x1000 Au (g/t) Au (t) Au (Moz) Category t) Measured 17,088 0.64 10.96 0.35 Remaining within the open Indicated 19,990 0.68 13.56 0.44 pit limit at a cut-off grade of M+I 37,078 0.67 24.52 0.79 0.28 g/t Au Inferred 5,395 0.42 2.28 0.07 Underground at Measured 88,200 0.67 58.66 1.89 a cut-off grade Indicated 89,850 0.58 52.07 1.67 of 0.30 g/t Au M+I 178,050 0.62 110.73 3.56 Inferred 62,090 0.49 30.68 0.99 Note: Mineral Resources are reported in relation to a conceptual open-pit mining and underground block caving mining. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. Raw assays have been capped. Mineral Resources include Mineral Reserves. Mineral Resources are reported at a cut-off grade of 0.28 g/t Au for open-pit mining, based on the following parameters; the heap leaching & metallurgical recovery of 60% and gold bullion market price of USD 1,980 per ounce. Additional Mineral Resources are reported at a cut-off grade of 0.30 g/t Au for underground block caving mining, based on the following parameters: the heap leaching & metallurgical recovery of 60% and gold bullion market price of USD 1,980 per ounce. USD 1.0000=RMB 6.3457 dated in April 2022, and one troy ounce is equal to 31.1035 grams. Resource Estimate by CGME Consulting Limited on August 19, 2022 and updated by Gerald Guo, P.Eng., a qualified person as defined by NI 43-101. Mineral Reserves Update CSH Mine Mineral Reserves by category at December 31, 2022 under NI 43-101 are summarized below: Metal Diluted Type T (x 1,000) Au g/t Au t Au Moz Proven 17,088 0.62 10.52 0.34 Probable 19,990 0.65 13.02 0.42 37,078 0.63 23.54 0.76 Total Note: Mineral Reserves are reported based on the optimized ultimate open pit limit. All figures are rounded to reflect the relative accuracy of the estimate. Mineral Reserves are included in Mineral Resources. Mineral Reserves are reported at a cut-off grade of 0.28 g/t Au for open-pit mining, based on the following parameters: the heap leaching & metallurgical recovery of 60% and gold bullion market price of USD 1,568 per ounce. USD 1.0000=RMB 6.3457 dated in April 2022, and one troy ounce is equal to 31.1035 grams Reserve Estimate by CGME Consulting Limited on August 19, 2022 and updated by Gerald Guo, P.Eng., a qualified person as defined by NI 43-101. The Jiama Mine Jiama is a large copper-gold polymetallic deposit containing copper, gold, silver, molybdenum, lead and zin, located in the Gandise metallogenic belt in Tibet Autonomous Region of China. The Jiama Mine has both underground mining and open-pit mining operations. Phase I of the Jiama Mine commenced operation in the latter half of 2010 and reached its design capacity of 6,000 tpd in early 2011. Phase II of the Jiama Mine commenced mining operations in 2018 with 44,000 tpd design capacity. The combined mining and processing capacity at the Jiama Mine is 50,000 tpd.
Production Update Jiama Mine Three months ended June 30, Six months ended June 30, 2022 2022 Ore processed (tonnes) - 4,291,104 4,236,835 8,739,722 Average copper ore grade (%) - 0.58 0.56 0.58 Copper recovery rate (%) - 85 85 85 Average gold grade (g/t) - 0.26 0.20 0.24 Gold recovery rate (%) - 74 63 71 Average silver grade (g/t) - 9.49 9.42 9.19 Silver recovery rate (%) 68 66 - 56 Average Moly grade (%) 0.027 0.025 - 0.029 Moly recovery rate (%) 22.11 21.58 - 15.03 Production was halted during the Q2 2023 period at the Jiama Mine. In 2023, Tibet Huatailong Mining Development Co., Ltd. plans to implement two geological exploration projects, namely detailed exploration of copper and lead project outside the current mining area of the Jiama Mine and prospecting of copper project in Bayi 2 2 Farm, with a designed workload of 15,370 m of 20 holes for surface drilling, 37.31 km for geological prospecting, 26 km for soil 2 sampling and 26 km for rock sampling with an estimated total budget of RMB 34.47 million. The temporary land usage permit for geology prospecting has been issued, however, the geological prospecting program has been temporarily suspended due to the impact of the tailings dam overflow. Mineral Resources Estimate Jiama Mine resources by category at December 31, 2022 under NI 43-101: Jiama Project - Cu, Mo, Pb, Zn ,Au, and Ag Mineral Resources under NI 43-101 Reported at a 0.3% Cu Equivalent Cut off grade*, as of December 31, 2022
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