Production and Operations - In the first half of 2022, the company produced approximately 6,600 tons of mined copper, a decrease of about 51.10% year-on-year[10] - The production of cathode copper reached approximately 242,700 tons, an increase of about 3.28% compared to the same period last year[10] - The company produced approximately 326.68 tons of precious metal products, representing a year-on-year increase of about 17.23%[10] - The production of sulfuric acid and other chemical products was approximately 522,900 tons, a decrease of about 0.85% year-on-year[10] - The company is actively conducting deep exploration in its own mines to ensure resource levels do not decline[10] - The company has implemented measures to stabilize and increase the production of main and by-products, with a focus on improving the output of copper and other beneficial products[21] - The company faced temporary production halts at the Fengshan Copper Mine due to environmental inspections, impacting overall production levels[45] Financial Performance - The company's revenue increased by 6.72% year-on-year to approximately RMB 17,954,197,000, up from RMB 16,824,358,000[45] - Gross profit for the first half of 2022 was approximately RMB 426,771,000, a decrease of 29.37% compared to RMB 604,220,000 in the same period last year[45] - The net profit for the period was RMB 26,087 thousand, significantly lower than RMB 134,308 thousand in the previous year, reflecting a decline of approximately 80.6%[87] - Basic and diluted earnings per share were both RMB 0.28, compared to RMB 0.71 in the same period of 2021, a decrease of approximately 60.4%[87] - The company reported a net profit of RMB 24,813 thousand for the six months ended June 30, 2022, down from RMB 67,008 thousand in the same period of 2021, indicating a decline of approximately 63.0%[122] - The company's profit attributable to shareholders for the six months ended June 30, 2022, was RMB 50,579,000, a decrease of 60.2% compared to RMB 126,963,000 for the same period in 2021[129] Costs and Expenses - Financial costs decreased by 3.23% to approximately RMB 151,863,000 from RMB 156,933,000 in the previous year[45] - Employee costs for the first half of 2022 totaled approximately RMB 364,961,000, a slight decrease from RMB 368,513,000 in the same period last year[55] - The cost of sales and services provided was RMB 17,527,426 thousand, an increase from RMB 16,220,138 thousand, reflecting a rise of about 8.1%[123] - The company incurred a total finance cost of RMB 151,863 thousand for the six months ended June 30, 2022, compared to RMB 156,933 thousand in the same period of 2021, showing a decrease of approximately 3.2%[121] Debt and Liquidity - The total debt of the group as of June 30, 2022, was approximately RMB 10,218,815,000, an increase from RMB 9,247,453,000 in the previous year[52] - The asset-liability ratio increased to 322.98% from 286.97% at the end of 2021, primarily due to an increase in net debt[51] - The current ratio is 1.06, slightly down from 1.09 at the end of 2021, indicating a stable liquidity position[51] - The group’s cash and cash equivalents, including pledged bank deposits, amounted to approximately RMB 545,085,000, down from RMB 814,997,000 at the end of 2021[51] - The group reported a total of RMB 4,998,126,000 in current bank and other borrowings as of June 30, 2022[102] - The company has sufficient working capital to support normal operations for the next twelve months based on future cash flow estimates[102] Capital Expenditures and Investments - The total expenditure for exploration, development, and mining activities for the six months ended June 30, 2022, was approximately RMB 620.27 million, down from RMB 717.90 million in the same period last year[39] - The group acquired property, plant, and equipment at a cost of approximately RMB 793,598,000 during the current interim period, significantly higher than RMB 292,993,000 for the same period in 2021[135] - The company reported a capital expenditure commitment of RMB 1,924,364 thousand for property, plant, and equipment as of June 30, 2022, down from RMB 2,527,961 thousand as of December 31, 2021[174] Environmental and Technological Initiatives - The company is implementing various environmental protection projects, including upgrades to wastewater treatment systems and tailings storage facilities[13] - The company aims to enhance its environmental management system and promote green production processes[17] - The company aims to achieve 80% of its carbon reduction targets by the end of the year[17] - The company is focusing on technological innovation, particularly in the research and development of new materials and products[13] - The company is advancing the construction of a digital mine and promoting the use of automated equipment to transition towards unmanned, mechanized, and digital production[26] - The company is investing in technological innovation, focusing on key projects such as the "high oxygen high-grade ice copper production technology" to enhance core competitiveness[25] Shareholder and Governance Information - Major shareholder Zhongshi Development holds 11,962,999,080 shares, representing 66.85% of the company's total shares[72] - The board of directors consists of four executive directors and three independent non-executive directors as of June 30, 2022[67] - The company has established an audit committee to review and supervise the financial reporting process and internal controls[76] - The company confirmed compliance with the corporate governance code throughout the reporting period[78] - The group did not declare or propose any dividends for the current interim period or the previous interim period[127] Market Conditions and Challenges - Due to global economic downturns, the prices of cathode copper and sulfuric acid have decreased, with copper prices falling below $7,000 per ton for the first time in 20 months, creating uncertainties for the company's annual operational goals[24] - The company aims to reduce costs and increase efficiency by enhancing the smelting process and managing metal loss points to improve copper recovery rates[24] - The company aims to increase the copper recovery rate by over 2.5 percentage points through accelerated technological breakthroughs[25]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $1.2 billion for the fiscal year, representing a 15% year-over-year growth[1]. - The company's revenue for the year ended December 31, 2021, was approximately RMB 35.68 billion, an increase of about 21.40% compared to RMB 29.39 billion in 2020[20]. - The net profit for the year was approximately RMB 336.58 million, reflecting an increase of about 11.58% from RMB 301.64 million in the previous year[20]. - The company reported a net profit margin of 18%, up from 15% in the previous year[1]. - The net profit attributable to the owners of the company for the year was RMB 286,436,000, compared to RMB 306,415,000 in 2020, indicating a decrease of about 6.4%[159]. - Gross profit reached approximately RMB 1.27 billion, up about 26.97% from RMB 1.00 billion in the same period of 2020, driven by the increase in sulfuric acid prices[41]. - The cost of sales and services amounted to approximately RMB 34.41 billion, an increase of about 21.21% from RMB 28.39 billion in 2020, mainly due to higher procurement prices of cathode copper[40]. - Gross profit margin increased to 3.56% in 2021 from 3.41% in 2020[113]. User and Market Growth - User data showed a 20% increase in active users, reaching 5 million by the end of the fiscal year[1]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[1]. - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to $1.32 billion[1]. Product Development and Innovation - New product launches included two innovative mining technologies expected to enhance operational efficiency by 25%[1]. - Research and development expenses increased by 12%, reflecting the company's commitment to innovation[1]. - The company has formed a technology innovation consortium with leading research institutions to enhance technological support for green and high-quality development[30]. - The company has obtained 20 patent authorizations and has made significant progress in key research projects related to digital mining and smelting technology innovation[30]. - The company is actively working on the digitalization of mining operations in collaboration with research institutions[121]. Safety and Sustainability - The company has achieved zero work-related fatalities for two consecutive years, demonstrating a strong commitment to safety management[23]. - The board emphasized a focus on sustainable mining practices, aiming for a 40% reduction in carbon emissions by 2025[1]. - The company invested approximately RMB 1.6 billion in environmental protection projects in 2021[116]. - The company achieved a wastewater recycling rate of 82% and an industrial water reuse rate of 98.35% in 2021[115]. - The company is focusing on green development and aims to complete 85% of environmental rectification by the end of 2022[83]. Financial Management and Debt - The company has strengthened financial management and cost control, reducing interest-bearing liabilities by RMB 978 million compared to budget and lowering comprehensive financing costs by 0.32%[31]. - The total debt of the company as of December 31, 2021, was approximately RMB 9,247,453,000, compared to RMB 8,049,175,000 in 2020[102]. - The company has sufficient funds to meet all outstanding liabilities and operational funding needs as of December 31, 2021[101]. - The company is committed to enhancing its cash flow management to address the volatility in raw material prices and ensure liquidity safety[134]. Production and Operational Targets - The company aims to produce 21,400 tons of copper, 610,000 tons of cathode copper, and 6.76 tons of gold in 2022, among other production targets[82]. - The company plans to ensure that the total production of crude copper is not less than 280,000 tons for the year[86]. - The company is advancing a key project with a capacity of 400,000 tons, which is expected to be completed and put into operation this year, aiming for significant industrial scale development[27]. Resource Management - The total ore reserves for the CuEq≥0.5% category are 31.22 million tons, with a copper grade of 1.17% and iron grade of 20%[56]. - The company holds a 95.35% ownership in major mining locations, including Daye City and Yangxin County[52]. - The total estimated copper resources at the Cuanshankou project are 2.1 million tons with a copper grade of 0.52%[62]. Employee and Training - Employee demographics show a total of 5,036 employees, with 4,307 males and 716 females, indicating a predominantly male workforce[151]. - Training participation rates are high, with 94.5% of male employees and 85.2% of female employees receiving training, averaging 32.6 hours per employee[155]. - The internal promotion rate is higher than external hiring, reflecting the company's commitment to employee development and succession planning[155]. Risk Management - The company is facing currency exchange risks due to potential depreciation of the RMB and is implementing measures to manage foreign exchange exposure[129]. - The company faces significant market risk due to the continuous rise in commodity prices, particularly copper, which may impact profitability[135]. - Supply chain management risks include extended transportation and customs clearance times for imported raw materials and equipment, which could disrupt supply[138]. Customer and Supplier Relations - The company has a strong customer relationship strategy, focusing on understanding and meeting customer needs, with most major clients being large enterprises with long-term partnerships[143]. - The largest customer contributed 14.27% to the group's revenue, while the top five customers accounted for 35.47%[193]. - The largest supplier represented 18.68% of the group's procurement, with the top five suppliers making up 49.15%[193].

Production and Operations - In the first half of 2021, the company produced approximately 13,500 tons of copper, an increase of 39.55% year-on-year[9]. - The production of cathode copper was about 235,000 tons, a decrease of 2.46% year-on-year[9]. - The company achieved a total output of 515,000 tons of sulfuric acid, exceeding the production plan by 51,600 tons, with a daily increase of 269 tons compared to the previous year[11]. - The iron ore production reached 105,400 tons, reflecting a year-on-year increase of 46.94%[9]. - The company reported copper concentrate production of 3,931 tons and gold production of 205 kilograms from the Copper Green Mountain mine[24]. - At the Fengshan mine, 5,018 cubic meters of development work was completed during the first half of 2021[24]. - The company completed 3,160.2 meters of horizontal drilling and 678 meters of pit exploration at the Copper Green Mountain mine[24]. - The company has made significant progress on the 400,000-ton project, with procurement of related equipment completed and ongoing construction of an intelligent factory[36]. Financial Performance - The company's revenue increased by 39.55% to RMB 16,824,358,000 compared to RMB 12,055,577,000 in the same period last year[34]. - Gross profit for the six months ended June 30, 2021, was approximately RMB 604,220,000, a 117.07% increase from RMB 278,347,000 in the previous period[34]. - The net profit for the period was RMB 134,308,000, compared to a loss of RMB 50,469,000 in the previous year, indicating a turnaround in financial performance[81]. - Basic and diluted earnings per share were RMB 0.71, a recovery from a loss of RMB 0.08 per share in the prior year[81]. - The company reported a pre-tax profit of RMB 201,316 thousand, a significant increase from RMB 67,008 thousand in the previous year[81]. - The company reported a profit attributable to ordinary shareholders of RMB 126,963,000 for the six months ended June 30, 2021, compared to a loss of RMB 13,514,000 in the same period of 2020[122]. Cost Management and Expenditures - The company aims to improve cost control through refined management and has established a cost control working group to enhance budget management[17]. - Total expenditure on exploration, development, and mining activities was approximately RMB 717,896,000, up from RMB 524,751,000 in the previous year[28]. - Employee costs for the six months ended June 30, 2021, totaled approximately RMB 368,513,000, compared to RMB 295,166,000 for the same period in 2020[42]. - The total cost of sales and services provided was RMB 16,220,138,000, compared to RMB 11,777,230,000 in the prior year, reflecting an increase of 37.8%[118]. Assets and Liabilities - As of June 30, 2021, total assets amounted to RMB 8,877,050 thousand, an increase from RMB 8,523,233 thousand as of December 31, 2020, representing a growth of approximately 4.14%[84]. - The company's total equity reached RMB 3,865,106 thousand, up from RMB 3,470,798 thousand, marking an increase of around 11.36%[84]. - The group's total debt as of June 30, 2021, was approximately RMB 8,589,824,000, up from RMB 8,049,175,000 as of December 31, 2020[40]. - The current ratio remained stable at 1.01, with current assets of approximately RMB 8,054,658,000 and current liabilities of approximately RMB 7,995,079,000[39]. - The total liabilities of the company were RMB 5,011,944 thousand, slightly down from RMB 5,052,435 thousand, indicating a decrease of approximately 0.8%[84]. Cash Flow and Financing - The net cash generated from operating activities for the six months ended June 30, 2021, was RMB 1,228,724,000, an increase of 28.6% compared to RMB 955,155,000 for the same period in 2020[95]. - The net cash used in investing activities for the six months ended June 30, 2021, was RMB 911,659,000, compared to a net cash inflow of RMB 251,518,000 in the same period of 2020[95]. - The group has unutilized bank financing of not less than RMB 6,785,930,000 due after June 30, 2022, indicating strong liquidity for future operations[100]. - The group’s total borrowings as of June 30, 2021, were approximately RMB 3,346,537,000, with a current portion of RMB 1,074,504,000[100]. Corporate Governance and Compliance - The company has established an audit committee to oversee financial reporting and internal controls, enhancing corporate governance[67]. - The company has complied with the corporate governance code throughout the reporting period, ensuring adherence to regulatory standards[71]. - The group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2021[44]. - The group did not declare any interim dividends for the six months ended June 30, 2021, consistent with the previous year[49]. Market and Strategic Initiatives - The company is focused on expanding domestic raw material sources and monitoring international market conditions to ensure stable supply chains[17]. - The rare and precious metals sector is expected to become a new profit growth highlight for the company in the future[20]. - The company plans to develop a cobalt salt project with an annual target of 10,000 tons of cobalt metal production, leveraging its current production advantages[13]. - The company has plans for market expansion and new product development, although specific figures were not disclosed in the provided documents[86].

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion HKD, representing a 15% year-over-year growth[1]. - The company has provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 1.32 billion HKD[3]. - For the year ended December 31, 2020, the company's revenue was approximately RMB 29,387,562,000, a decrease of about 10.42% compared to RMB 32,805,685,000 in 2019[19]. - The net profit for the year was approximately RMB 301,636,000, an increase of about 73.81% from RMB 173,548,000 in 2019, primarily due to rising prices of non-ferrous metals, copper cathodes, gold, and silver[19]. - The gross profit for the year was approximately RMB 1.00 billion, a decrease of about 1.67% from RMB 1.02 billion in the previous year, mainly due to a significant drop in sulfuric acid prices[42]. - The company reported a total of 1,147,504,000 in operating expenses for the Cuprum Mountain Mine, a decrease from the previous year's total of 1,755,756,000[78]. - The company reported retained earnings available for distribution to shareholders amounting to RMB 1,646,311,000 as of December 31, 2020[144]. User and Market Growth - User data indicates a rise in active users by 20%, reaching 500,000 users in the latest quarter[2]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by 2025[5]. Production and Operations - New product launches are expected to contribute an additional 200 million HKD in revenue, with a focus on innovative mining technologies[4]. - A strategic acquisition of a smaller mining firm is anticipated to enhance operational efficiency and increase copper production by 30%[6]. - The total production of copper from mines was approximately 25,100 tons, a decrease of about 14.77% year-on-year, while the production of cathode copper was approximately 510,000 tons, down about 4.33%[20]. - The company aims to produce 28,000 tons of copper, 510,000 tons of cathode copper, 6.8 tons of gold, and 750 tons of silver in 2021[81]. - The total excavation volume at the Fengshan Copper Mine was 17,744 cubic meters, with a production output of 5,114 tons of copper[75]. Cost Management and Efficiency - The company has set a goal to reduce operational costs by 15% through improved resource management and automation[8]. - The company implemented 23 measures for cost control, resulting in a reduction of unit cash costs and management expenses for major products[23]. - The company aims to optimize its procurement and management processes to reduce costs and improve overall efficiency[85]. Research and Development - Research and development investments have increased by 40%, focusing on sustainable mining practices and technology[7]. - The company achieved 40 patent authorizations and received provincial and ministerial-level awards for two technological innovations, indicating strong results in technological innovation[1]. Environmental and Safety Initiatives - The company established a new environmentally friendly copper mud storage facility and obtained hazardous waste operation permits[30]. - The group has invested approximately RMB 23 million in environmental protection projects in 2020, focusing on sulfuric acid tail gas treatment and environmental monitoring systems[112]. - The group has established an ISO45001 occupational health and safety management system and did not experience any major production safety incidents in 2020[116]. Financial Position and Ratios - As of December 31, 2020, the company's cash and bank balances were approximately RMB 420,784,000, a significant decrease from RMB 1,546,660,000 in 2019[94]. - The current ratio as of December 31, 2020, was approximately 1.01, unchanged from 2019, indicating stable liquidity[94]. - The company's debt-to-equity ratio decreased to approximately 288.83% as of December 31, 2020, down from 380.75% in 2019, due to reduced net debt and profit during the year[94]. - The total debt of the company as of December 31, 2020, was approximately RMB 8,049,175,000, down from RMB 10,477,170,000 in 2019[96]. Shareholder and Dividend Information - The board has approved a dividend payout of 0.05 HKD per share, reflecting a commitment to returning value to shareholders[10]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2020, consistent with 2019[138]. Employee and Talent Management - The employee distribution as of the end of 2020 includes 5,032 males and 737 females, with a total of 5,769 employees[124]. - The group emphasizes internal promotions over external hiring, reflecting its commitment to employee career development[129]. - The group has implemented a talent incentive mechanism to attract and retain core talent, offering competitive compensation and benefits[127]. Strategic Initiatives - The company is committed to innovation-driven development, focusing on upgrading its smelting systems and enhancing the processing capacity of precious metal products[89]. - The company plans to accelerate the construction of a 400,000-ton project, ensuring quality control and cost management throughout the project phases[84].

[Company Information](index=4&type=section&id=Company%20Information) The report provides basic company information including board members, principal bankers, registered office, legal advisors, and auditors - The report provides basic company information including **board members**, **principal bankers**, **registered office**, **legal advisors**, and **auditors**[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[24](index=24&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=5&type=section&id=Business%20Review%20and%20Outlook) In H1 2020, the group's main product output generally declined due to the pandemic, with mine copper production down 26.84%, yet Q2 copper prices saw a V-shaped rebound, and the company aims to meet annual production targets and reduce costs by 3% H1 2020 Major Product Output and Year-on-Year Change | Product Category | Output | Year-on-Year Change | | :--- | :--- | :--- | | Mine Copper | approx. 9,645 tons | -26.84% | | Cathode Copper | approx. 240,930 tons | -10.54% | | Precious Metals | approx. 286.58 tons | -56.15% | | Chemical Products | approx. 539,276 tons | -9.47% | | Iron Concentrate | approx. 71,700 tons | -16.14% | | Molybdenum Concentrate | approx. 31 tons | -21.58% | - Copper prices strongly rebounded in Q2, from a March low of **USD 4,371/ton** to a July high of **USD 6,633/ton**, with domestic "new infrastructure" expected to continue driving copper prices upward[28](index=28&type=chunk) - For H2, the company aims to ensure annual mine crude copper production reaches **300,000 tons**, cathode copper production reaches **510,000 tons**, and achieve a **3% year-on-year decrease** in major product cash unit costs and a **5% decrease** in administrative expenses[34](index=34&type=chunk) - The company maintained stable production and operations amidst the dual challenges of the pandemic and floods, actively advancing key projects like the **400,000-ton project**[32](index=32&type=chunk)[33](index=33&type=chunk) [Exploration, Development, and Mining Activities](index=8&type=section&id=Exploration,%20Development,%20and%20Mining%20Activities) During the reporting period, the group continued exploration, development, and mining activities at key mines, with total expenditures significantly reduced to approximately RMB 525 million from RMB 1.022 billion due to pandemic impacts H1 2020 Overview of Activities at Each Mine | Mine | Exploration Activities | Development Activities | Mining Production Activities | | :--- | :--- | :--- | :--- | | Tonglushan Mine | drilled 2,474.8 meters, tunneling 555 meters | -545 meters, -605 meters mid-level development | mining volume 354,000 tons, ore processing volume 446,000 tons | | Fengshan Mine | drilled 491 meters, tunneling 1,174.8 meters | -440 meters mid-level development | mining volume 328,000 tons, ore processing volume 333,000 tons | | Tongshankou Mine | drilled 919.7 meters | Not implemented | mining volume 630,000 tons, ore processing volume 630,000 tons | | Chimashan Mine | Not implemented | None | Suspended production | | Sareke Copper Mine | Not conducted | Not conducted | raw ore processing volume 114,700 tons, copper production 1,246 tons | H1 2020 Exploration, Development, and Mining Activities Expenditures (RMB in thousands) | Mine | Operating Expenses | Capital Expenditures | H1 2020 Total | H1 2019 Total | | :--- | :--- | :--- | :--- | :--- | | Tonglushan Mine | 204,992 | 19,410 | 224,402 | 522,103 | | Fengshan Mine | 85,262 | 1,851 | 87,113 | 137,173 | | Tongshankou Mine | 130,361 | 13,329 | 143,690 | 244,568 | | Sareke Copper Mine | 66,591 | 0 | 66,591 | 115,391 | | **Total** | **490,161** | **34,590** | **524,751** | **1,021,820** | [Financial Review](index=11&type=section&id=Financial%20Review) Group revenue decreased by 30.62% to RMB 12.056 billion in H1 due to pandemic impacts on sales, resulting in a 37.07% decline in gross profit, while financial costs decreased by 29.66% due to lower interest-bearing debt H1 2020 Financial Performance Summary (RMB) | Metric | H1 2020 | H1 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 12.056 billion | RMB 17.377 billion | -30.62% | | Gross Profit | RMB 278 million | RMB 442 million | -37.07% | | Financial Costs | RMB 180 million | RMB 255 million | -29.66% | - The company's key investment project is the **400,000-ton high-purity cathode copper clean production project**, with a total investment of **RMB 5.7 billion**, utilizing world-leading "flash smelting + flash converting" technology, planned for completion by **end of 2021**[60](index=60&type=chunk) - During the period, joint venture Yangxin Hongsheng Copper Co Ltd twice acquired land use rights for a total consideration of approximately **RMB 120 million** to support project development[57](index=57&type=chunk) [Capital Management and Risk](index=12&type=section&id=Capital%20Management%20and%20Risk) As of June 30, 2020, the group's current ratio was 1.03, and its debt-to-asset ratio decreased to 336.36% primarily due to reduced net debt, while facing foreign exchange risks managed through derivative contracts Capital Structure and Liquidity (As of June 30, 2020) | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and Bank Balances | RMB 2.762 billion | RMB 1.547 billion | | Current Ratio | 1.03 | 1.01 | | Debt-to-Asset Ratio | 336.36% | 380.75% | | Net Debt | RMB 7.974 billion | RMB 9.078 billion | - As of June 30, 2020, the group had **5,627 employees**, with total staff costs for H1 approximately **RMB 295 million**[66](index=66&type=chunk) - The group faces foreign exchange risks primarily involving the **US dollar**, managed through derivative financial instruments such as currency forwards, swaps, and options[67](index=67&type=chunk) [Corporate Governance and Other Information](index=14&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Board of Directors and Shareholding Structure](index=14&type=section&id=Board%20of%20Directors%20and%20Shareholding%20Structure) The Board comprises four executive and three independent non-executive directors, with Zhongshi Development Co Ltd holding 66.85% as the controlling shareholder, ultimately controlled by China Nonferrous Metal Mining Group Co Ltd - As of June 30, 2020, the Board of Directors comprised **four executive directors** and **three independent non-executive directors** led by Chairman Mr. Wang Yan[73](index=73&type=chunk)[74](index=74&type=chunk)[77](index=77&type=chunk) Major Shareholder Holdings (As of June 30, 2020) | Shareholder Name | Capacity | Number of Shares Held | Approximate Percentage of Issued Shares (%) | | :--- | :--- | :--- | :--- | | Zhongshi Development Co Ltd | Beneficial owner | 11,962,999,080 | 66.85 | | Daye Nonferrous Metals Group Holding Co Ltd | Controlled corporation interest | 11,962,999,080 | 66.85 | | China Nonferrous Metal Mining Group Co Ltd | Controlled corporation interest | 11,962,999,080 | 66.85 | | China Cinda (HK) Asset Management Co Ltd | Beneficial owner | 936,953,542 | 5.24 | [Corporate Governance Practices](index=14&type=section&id=Corporate%20Governance%20Practices) The Board resolved not to declare an interim dividend, and the company generally complied with corporate governance codes, with a noted deviation regarding non-executive directors' terms, and a change in auditors post-period - The Board resolved not to declare any interim dividend for the six months ended June 30, 2020[76](index=76&type=chunk) - The company complied with the Corporate Governance Code, except for the appointment of non-executive directors without specific terms, a deviation from Code Provision A.4.1, though the company believes the rotation requirement achieves a similar effect[96](index=96&type=chunk) - Post-reporting period event: **ShineWing (HK) CPA Limited** was appointed as the company's auditor on **August 28, 2020**, filling the vacancy left by Deloitte's resignation on August 18[97](index=97&type=chunk) [Condensed Consolidated Financial Statements](index=19&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2020, the group reported revenue of RMB 12.056 billion, a 30.6% decrease, shifting from a profit of RMB 3.9 million to a loss of RMB 50.47 million, with a basic loss per share of RMB 0.08 cents Condensed Consolidated Statement of Profit or Loss Summary (RMB in thousands) | Metric | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | Revenue | 12,055,577 | 17,377,369 | | Gross Profit | 278,347 | 442,340 | | (Loss) / Profit Before Tax | (48,182) | 10,610 | | (Loss) / Profit for the Period | (50,469) | 3,901 | | (Loss) / Profit Attributable to Owners of the Company | (13,514) | 1,281 | | Basic (Loss) / Profit Per Share | RMB (0.08) cents | RMB 0.01 cents | [Condensed Consolidated Statement of Financial Position](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2020, total assets were RMB 16.763 billion, total liabilities RMB 13.903 billion, with net current assets increasing to RMB 279 million, while total equity slightly decreased to RMB 2.859 billion Condensed Consolidated Statement of Financial Position Summary (RMB in thousands) | Metric | June 30, 2020 (Unaudited) | December 31, 2019 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 8,287,014 | 8,474,837 | | Current Assets | 8,475,645 | 8,324,527 | | **Total Assets** | **16,762,659** | **16,799,364** | | Current Liabilities | 8,196,180 | 8,247,770 | | Non-current Liabilities | 5,707,386 | 5,682,032 | | **Total Liabilities** | **13,903,566** | **13,929,802** | | **Total Equity** | **2,859,093** | **2,869,562** | [Condensed Consolidated Statement of Changes in Equity](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2020, equity attributable to owners decreased to RMB 2.371 billion due to a loss of RMB 13.51 million for the period, while non-controlling interests increased by RMB 40 million - During the period, equity attributable to owners decreased by a loss of **RMB 13.514 million**, with the period-end balance at **RMB 2.371 billion**[112](index=112&type=chunk) - Non-controlling interests increased by a capital injection of **RMB 40 million**, with the period-end balance at **RMB 488 million**[112](index=112&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, net cash generated from operating activities was RMB 955.1 million, from investing activities RMB 254.5 million, and net cash used in financing activities was RMB 74.19 million, leading to a net increase in cash and cash equivalents of RMB 1.136 billion Condensed Consolidated Statement of Cash Flows Summary (RMB in thousands) | Metric | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 955,155 | 419,507 | | Net Cash Generated from Investing Activities | 254,548 | 746,857 | | Net Cash Used in Financing Activities | (74,188) | (365,045) | | Net Increase in Cash and Cash Equivalents | 1,135,515 | 801,319 | | Cash and Cash Equivalents at Beginning of Period | 1,501,884 | 861,616 | | **Cash and Cash Equivalents at End of Period** | **2,637,419** | **1,663,796** | [Notes to the Condensed Consolidated Financial Statements](index=25&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Key Accounting Policies and Revenue Analysis](index=25&type=section&id=Key%20Accounting%20Policies%20and%20Revenue%20Analysis) Financial statements are prepared under HKAS 34 with consistent accounting policies, with 99.9% of revenue from goods sales, primarily cathode copper, gold, and silver products, and almost all revenue from mainland China Revenue by Major Product (RMB in thousands) | Product | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Cathode Copper | 9,463,595 | 12,224,896 | | Gold and Other Gold Products | 1,084,667 | 2,032,100 | | Silver and Other Silver Products | 1,182,102 | 2,275,475 | | Other | 314,235 | 844,892 | | **Total Sales of Goods** | **12,044,499** | **17,355,593** | Revenue by Customer Location (RMB in thousands) | Region | H1 2020 | H1 2019 | | :--- | :--- | :--- | | China | 11,563,019 | 16,448,326 | | Hong Kong | 51,069 | 413,157 | | Other | 441,489 | 515,886 | | **Total** | **12,055,577** | **17,377,369** | [Operating Expenses and Financial Costs](index=30&type=section&id=Operating%20Expenses%20and%20Financial%20Costs) Total financial costs for the period were RMB 180 million, a 29.7% decrease, mainly due to reduced interest on bank and other borrowings, while total staff costs decreased by 8.3% to RMB 295 million Financial Cost Details (RMB in thousands) | Item | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 129,714 | 211,594 | | Interest on Loans from Related Parties | 25,168 | 22,984 | | Interest on Acceptance Bills | 21,116 | 21,000 | | Other | 6,834 | 8,350 | | **Total Borrowing Costs** | **182,832** | **263,928** | | Less: Capitalized Borrowing Costs | (3,290) | (8,662) | | **Net Financial Costs** | **179,542** | **255,266** | - Total staff costs for the period were **RMB 295 million**, a decrease from **RMB 322 million** in the prior year period[176](index=176&type=chunk) [Notes to Balance Sheet Items](index=33&type=section&id=Notes%20to%20Balance%20Sheet%20Items) Trade and bills receivables significantly decreased to RMB 408 million from RMB 1.01 billion at 2019 year-end, while total bank and other borrowings remained stable at RMB 9.564 billion, with RMB 5.627 billion due within one year - Total trade and bills receivables decreased from **RMB 1.01 billion** at 2019 year-end to **RMB 408 million**[212](index=212&type=chunk) Summary of Bank and Other Borrowings (RMB in thousands) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Bank Borrowings | 6,623,019 | 6,636,991 | | Other Borrowings | 2,941,476 | 2,829,140 | | **Total Borrowings** | **9,564,495** | **9,466,131** | | Amount Due Within One Year | (5,627,246) | (5,567,350) | | **Non-current Portion** | **3,937,249** | **3,898,781** | - The group holds derivative financial instruments for hedging commodity price and currency risks, with fair values of derivative financial assets at **RMB 404 million** and derivative financial liabilities at **RMB 38 million** at period-end[273](index=273&type=chunk)[275](index=275&type=chunk) [Related Party Transactions](index=47&type=section&id=Related%20Party%20Transactions) The group engaged in extensive related party transactions with its ultimate holding company and its subsidiaries, including sales, purchases, financial services, and leases, with pricing based on government or market rates Significant Related Party Transactions (RMB in thousands) | Transaction Type | Related Party | H1 2020 | | :--- | :--- | :--- | | Sales of Non-ferrous Metals | Fellow subsidiaries | 1,126,643 | | Sales of Non-ferrous Metals | Daye Group | 185,159 | | Purchases of Non-ferrous Metals | Fellow subsidiaries | 351,827 | | Interest Income | Finance Company/Joint Venture | 5,596 | | Interest Expenses | Daye Group/Finance Company/Fellow subsidiaries | 25,168 | - The group leased certain land from Daye Group, with related right-of-use assets at **RMB 141 million** and lease liabilities at **RMB 139 million** as of June 30, 2020[321](index=321&type=chunk) [Definitions](index=50&type=section&id=Definitions) This section defines specific terms used in the report such as "the Company," "the Group," "Listing Rules," and "RMB" - This section defines specific terms used in the report such as "**the Company**," "**the Group**," "**Listing Rules**," and "**RMB**"[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)

[Company Information](index=4&type=section&id=Company%20Information) This section outlines the fundamental corporate details, including board composition, key financial and legal advisors, and registration information [Company Basic Information](index=4&type=section&id=Company%20Basic%20Information) This section provides basic information about China Daye Non-Ferrous Metals Mining Limited, including its board members, principal bankers, and auditor - The company's Board of Directors consists of executive directors (**Mr. Wang Yan as Chairman and CEO**) and independent non-executive directors[8](index=8&type=chunk) - Principal bankers include Standard Chartered Bank (Hong Kong) Limited and Bank of Communications Co., Ltd[8](index=8&type=chunk) - The company's **stock code is 00661**, and its auditor is **Deloitte Touche Tohmatsu**[8](index=8&type=chunk) [Biographies of Directors and Senior Management](index=5&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) This section details the professional backgrounds and extensive industry experience of the executive directors, independent non-executive directors, and senior management [Executive Directors](index=5&type=section&id=Executive%20Directors) This section details the professional backgrounds and extensive industry experience of the executive directors, including the Chairman and CEO, across various operational and financial domains - Mr. Wang Yan was appointed Chairman of the Board in April 2019, with over **twenty years of corporate management experience**[10](index=10&type=chunk) - Mr. Long Zhongsheng has served as CEO and Executive Director since 2012, with over **thirty years of management experience in the mining industry**[10](index=10&type=chunk) - Mr. Chen Zhimiao was appointed Executive Director in June 2019, possessing over **twenty years of experience in accounting and finance**[12](index=12&type=chunk) [Independent Non-Executive Directors](index=6&type=section&id=Independent%20Non-Executive%20Directors) This section presents the three independent non-executive directors, highlighting their diverse expertise in accounting, telecommunications, and geological mining - Mr. Wang Guoqi is a **Certified Public Accountant in China** with extensive experience in accounting and finance[15](index=15&type=chunk) - Mr. Wang Qihong has extensive experience in the postal and telecommunications industry, having participated in **China Mobile's listing in Hong Kong**[15](index=15&type=chunk) - Mr. Liu Jishun is a professor and doctoral supervisor at Central South University, specializing in **ore genesis theory research and mineral exploration practice**[16](index=16&type=chunk) [Senior Management](index=6&type=section&id=Senior%20Management) This section introduces Mr. Chen Zhiyou, Vice President since 2016, detailing his responsibilities in quality, metrology, metal balance, and brand management, backed by extensive heavy metal smelting experience - Mr. Chen Zhiyou has served as Vice President since February 2016, responsible for quality management, metrology management, metal balance management, and brand building[17](index=17&type=chunk) - Mr. Chen possesses over **36 years of professional experience in heavy metal smelting**[17](index=17&type=chunk) [Chairman's Report](index=7&type=section&id=Chairman's%20Report) This report provides an overview of the Group's 2019 performance, strategic initiatives, and the industry outlook for 2020, emphasizing cost control and efficiency improvements [2019 Annual Performance Review](index=7&type=section&id=2019%20Annual%20Performance%20Review) In 2019, the Group achieved a **6.69% revenue increase to RMB 32.806 billion** and a **profit of RMB 174 million**, driven by precious metal prices, higher cathode copper output, and government subsidies 2019 Key Financial Indicators | Indicator | 2019 (RMB) | 2018 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 32,805,685,000 | 30,749,010,000 | +6.69% | | Profit/(Loss) for the Year | 173,548,000 | (86,602,000) | Turned loss into profit, increased by 260,150,000 | - Profit growth was primarily due to (i) **rising prices of precious metal products** such as gold and silver; (ii) increased benefits from **higher output of mined cathode copper**; and (iii) **government subsidies** received for early retirees[21](index=21&type=chunk) 2019 Key Product Output | Product | 2019 Output | Y-o-Y Change | | :--- | :--- | :--- | | Mined Copper | 29,500 tonnes | -1.67% | | Cathode Copper | 533,100 tonnes | +6.53% | | Precious Metal Products | 1,273.03 tonnes | +16.34% | | Chemical Products (Sulfuric Acid, etc.) | 1,178,300 tonnes | +15.34% | | Iron Concentrate | 224,100 tonnes | -8.72% | | Molybdenum Concentrate | 78.06 tonnes | -5.68% | [2019 Operating Results and Strategic Initiatives](index=8&type=section&id=2019%20Operating%20Results%20and%20Strategic%20Initiatives) Despite complex macroeconomic and industry challenges, the Group achieved all operating targets in 2019 through efficiency gains, optimized industrial layout, deepened reforms, strengthened risk management, and talent development, with notable progress in green mining and circular economy - Quality and efficiency improvements led to the full achievement of operating targets: the Ausmelt furnace achieved two repairs in three years, reaching an industry-leading furnace life, and the metallurgical and chemical system's operating rate reached **95.5%**[25](index=25&type=chunk) - Focusing on core business, industrial layout continued to optimize: mining development projects were over-fulfilled, the **400,000 tonnes project** progressed as scheduled, the circular economy became a highlight, and the collaborative circuit board disposal project received national funding support[26](index=26&type=chunk) - Deepened reforms achieved breakthroughs in key areas: promoting SOE reform actions, optimizing organizational structure, streamlining management, and properly addressing legacy issues from restructuring[29](index=29&type=chunk) - Risk prevention and control ensured compliant operations: optimizing the institutional system, strengthening financial supervision and management, formulating accountability measures for illegal operations and investments, and promoting green mine construction[30](index=30&type=chunk)[31](index=31&type=chunk) - Talent cultivation strengthened capability support: continuously enhancing capability, talent acquisition, technological innovation, and basic management, with the establishment of a new accounting professional committee[32](index=32&type=chunk) [Industry Outlook and 2020 Strategic Priorities](index=10&type=section&id=Industry%20Outlook%20and%202020%20Strategic%20Priorities) In response to the COVID-19 pandemic, rising resource nationalism, and increased copper industry competition, the Group's 2020 strategy prioritizes **cost control** to enhance efficiency and capitalize on industry consolidation opportunities - The **COVID-19 pandemic** posed a threat to the health of employees at production bases, but the Group implemented strict prevention and control measures to ensure normal production and operations[33](index=33&type=chunk) - The macroeconomic situation is complex and volatile, with rising global resource nationalism and protectionism, prolonged Sino-US trade friction, and slowing domestic copper consumption growth, presenting opportunities for industry mergers and acquisitions[33](index=33&type=chunk)[35](index=35&type=chunk) - The **2020 operating target** is set as **cost control**, focusing on cost reduction to drive quality and efficiency improvements, while monitoring industry changes and seizing strategic opportunities for restructuring and consolidation[35](index=35&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed financial review, an overview of the Group's mineral resources, exploration and production activities, 2020 strategic targets, and financial management insights [Financial Review](index=12&type=section&id=Financial%20Review) In 2019, the Group's revenue grew **6.69% to RMB 32.806 billion**, gross profit rose **7.95% to RMB 1.018 billion**, resulting in a **profit of RMB 174 million** and **basic EPS of RMB 0.82 cents**, marking a significant turnaround 2019 Key Financial Data | Indicator | 2019 (RMB) | 2018 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 32,805,685,000 | 30,749,010,000 | +6.69% | | Cost of sales and services provided | 31,788,017,000 | 29,806,274,000 | +6.65% | | Gross Profit | 1,017,668,000 | 942,736,000 | +7.95% | | Other Income | 160,719,000 | 75,704,000 | +112.30% | | Other operating expenses | 8,295,000 | 111,488,000 | -92.56% | | Other gains and losses | 13,802,000 (net gain) | (121,132,000) (net loss) | Increased by 134,934,000 | | Income tax expense | 52,697,000 | 40,152,000 | +31.24% | | Basic earnings/(loss) per share | RMB 0.82 cents | RMB (0.56) cents | Turned loss into profit | - Revenue and gross profit growth were primarily driven by **rising prices of precious metal products** such as gold and silver, and **increased production and sales of mined cathode copper**[38](index=38&type=chunk)[40](index=40&type=chunk) - Other income significantly increased by **112.30%**, mainly due to government subsidies received for early retirees[41](index=41&type=chunk) [Rich and High-Quality Mineral Resources](index=13&type=section&id=Rich%20and%20High-Quality%20Mineral%20Resources) As of December 31, 2019, the company held **five mines in Hubei and Xinjiang**, extracting copper, gold, silver, iron, and molybdenum, with resources and reserves estimated under **JORC standards** - The company owns **five mines**, located in Hubei (Tonglushan Mine, Fengshan Mine, Tongshankou Mine, Chimashan Mine) and Xinjiang (Sarek Copper Mine)[48](index=48&type=chunk)[50](index=50&type=chunk) - Key extractable metals include copper, gold, silver, iron, and molybdenum, with copper concentrate as the main product[50](index=50&type=chunk) - All mineral resources and ore reserves are estimated according to **JORC standards** and are regularly updated[50](index=50&type=chunk)[51](index=51&type=chunk) [Tonglushan Project Overview](index=14&type=section&id=Tonglushan%20Project%20Overview) The Tonglushan Mine, under JORC standards, has **controlled resources of 14 million tonnes (1.2% Cu)**, **inferred resources of 19 million tonnes (1.1% Cu)**, and **indicated reserves of 10.8 million tonnes (1.1% Cu)** Tonglushan Mine Resources and Reserves Overview (JORC Standards) | JORC Category | Quantity (million tonnes) | Cu (%) | Fe (%) | | :--- | :--- | :--- | :--- | | **Resources (CuEq≥0.5%)** | | | | | Controlled | 14 | 1.2 | 20 | | Inferred | 19 | 1.1 | 21 | | Total | 33 | 1.2 | 20 | | **Reserves (CuEq≥0.79%)** | | | | | Indicated Total | 10.8 | 1.1 | 17.0 | [Fengshan Project Overview](index=14&type=section&id=Fengshan%20Project%20Overview) The Fengshan Mine, under JORC standards, reports **controlled resources of 8.9 million tonnes (0.7% Cu)**, **inferred resources of 22 million tonnes (0.7% Cu)**, and **indicated reserves of 5.4 million tonnes (0.7% Cu)** Fengshan Mine Resources and Reserves Overview (JORC Standards) | JORC Category | Quantity (million tonnes) | Cu (%) | Mo (%) | | :--- | :--- | :--- | :--- | | **Resources (CuEq≥0.3%)** | | | | | Controlled | 8.9 | 0.7 | 0.004 | | Inferred | 22 | 0.7 | 0.012 | | Total | 31 | 0.7 | 0.01 | | **Reserves (CuEq≥0.43%)** | | | | | Indicated Total | 5.4 | 0.7 | 0.003 | [Tongshankou Project Overview](index=15&type=section&id=Tongshankou%20Project%20Overview) The Tongshankou Mine, under JORC standards, has a **total resource of 52 million tonnes (0.7% Cu)** and **indicated reserves of 17.1 million tonnes (0.67% Cu)** Tongshankou Mine Resources and Reserves Overview (JORC Standards) | JORC Category | Quantity (million tonnes) | Cu (%) | Mo (%) | | :--- | :--- | :--- | :--- | | **Resources** | | | | | Total (Open Pit and Underground Mining Areas) | 52 | 0.7 | 0.013 | | **Reserves** | | | | | Total (Open Pit and Underground Mining Areas) | 17.1 | 0.67 | 0.006 | [Chimashan Project Overview](index=16&type=section&id=Chimashan%20Project%20Overview) The Chimashan Mine, under JORC standards, has a **total resource of 0.553 million tonnes (0.85% Cu)** and **indicated reserves of 0.016 million tonnes (0.73% Cu)** Chimashan Mine Resources and Reserves Overview (JORC Standards) | JORC Category | Quantity (million tonnes) | Cu (%) | Mo (%) | | :--- | :--- | :--- | :--- | | **Resources** | | | | | Total (Within and Outside License Area) | 0.553 | 0.85 | 0.007 | | **Reserves** | | | | | Indicated Total | 0.016 | 0.73 | 0 | [Sarek Project Overview](index=17&type=section&id=Sarek%20Project%20Overview) The Sarek Copper Mine, under JORC standards, has a **total resource of 16.71 million tonnes (1.01% Cu)** and **mineral reserves of 6.418 million tonnes (1.09% Cu)** Sarek Copper Mine Resources and Reserves Overview (JORC Standards) | JORC Category | Resource Tonnage (million tonnes) | Copper Grade (%) | Copper Metal (tonnes) | | :--- | :--- | :--- | :--- | | **Resources** | | | | | Total | 16.71 | 1.01 | 168,575 | | **Mineral Reserves** | | | | | Total | 6,418 (thousand tonnes) | 1.09 | 70,087 | [Exploration, Development, and Mining Production Activities](index=19&type=section&id=Exploration%2C%20Development%2C%20and%20Mining%20Production%20Activities) In 2019, the Group conducted extensive exploration, development, and mining activities across its mines, incurring **RMB 251 million in total expenditure**, with significant copper output from Tonglushan, Fengshan, Tongshankou, and Sarek mines 2019 Key Output by Mine | Mine | Copper (tonnes) | Gold (kg) | Silver (kg) | Iron Concentrate (tonnes) | Molybdenum (tonnes) | | :--- | :--- | :--- | :--- | :--- | :--- | | Tonglushan Mine | 9,314 | 524 | 3,878 | 224,100 | - | | Fengshan Mine | 5,131 | 106 | 4,007 | - | 78 | | Tongshankou Mine | 6,789 | - | 3,169 | - | 0 | | Sarek Copper Mine | 8,258 | - | 6,710 | - | - | 2019 Exploration, Development, and Mining Production Activities Expenditure | Category | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Total | 251,361 | 1,476,160 | - Exploration activities included horizontal drilling and shaft exploration, development activities primarily involved level development engineering, and mining production activities focused on the production of various metal products[70](index=70&type=chunk) [2020 Operating Targets and Strategies](index=21&type=section&id=2020%20Operating%20Targets%20and%20Strategies) The Group's **2020 operating targets** focus on quality and efficiency improvements, driven by comprehensive cost management, optimized production, increased resource development, raw material diversification, progress on the **400,000 tonnes project**, and enhanced corporate governance 2020 Key Product Output Targets | Product | 2020 Target Output | | :--- | :--- | | Mined Copper | 28,700 tonnes | | Cathode Copper | 505,000 tonnes | | Gold | 10 tonnes | | Silver | 850 tonnes | | Sulfuric Acid | 970,000 tonnes | | Iron Concentrate | 210,000 tonnes | | Molybdenum Concentrate | 80 tonnes | - Implement comprehensive cost management, identifying cost reduction opportunities from sourcing to production processes[77](index=77&type=chunk) - Intensify resource development, conduct in-depth exploration for marginal and deep ore bodies, and increase copper metal reserves by over **20,000 tonnes**[79](index=79&type=chunk) - Promote raw material diversification, increasing procurement of high-value materials such as gold-silver rich materials and palladium-nickel bearing crude copper[80](index=80&type=chunk) - Fully advance the construction of the **400,000 tonnes project**, while simultaneously optimizing organizational structure, human resources, and institutional process systems[83](index=83&type=chunk) [Financial Management and Liquidity](index=22&type=section&id=Financial%20Management%20and%20Liquidity) In 2019, the Group did not declare a final dividend, maintaining an issued share capital of approximately **RMB 728 million**; the **current ratio was 1.01**, and the **debt-to-equity ratio decreased to 380.75%**, supported by reduced net debt and profitability, with foreign exchange risk managed via currency forward contracts - The Board does not recommend the payment of a final dividend for 2019[85](index=85&type=chunk) 2019 Key Financial Ratios | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Current Ratio | 1.01 | 1.03 | | Debt-to-equity Ratio | 380.75% | 449.43% | - The decrease in the debt-to-equity ratio was due to a reduction in net debt and the impact of profit for the year[89](index=89&type=chunk) - The Group faces foreign exchange risk primarily involving the **US dollar**, managed through regular net position reviews and entering into currency forward/option contracts[94](index=94&type=chunk) - In August 2019, Daye Non-Ferrous Metals established a joint venture, Yangxin Hongsheng Copper Industry Co., Ltd., with other parties, where Daye Non-Ferrous Metals contributed **RMB 1.3 billion** for a **52% equity stake**, with a business scope including non-ferrous metal smelting and processing[95](index=95&type=chunk) [Directors' Report](index=24&type=section&id=Directors'%20Report) This report details the Group's business review, key performance indicators, five-year financial summary, corporate governance, shareholder information, connected transactions, and post-reporting period events [Business Review and Key Indicators](index=24&type=section&id=Business%20Review%20and%20Key%20Indicators) In 2019, the Group demonstrated stable business performance with a **gross profit margin of 3.10%** and sound financial ratios, emphasizing green development, regulatory compliance, strong stakeholder relationships, and effective talent management 2019 Key Financial Performance Indicators | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Gross Profit Margin | 3.10% | 3.07% | | Debt-to-Asset Ratio | 82.92% | 85.76% | | Current Ratio | 1.01 | 1.03 | | Asset Turnover Ratio | 1.94 | 1.87 | - Environmental Policy and Performance: In 2019, approximately **RMB 240 million** was invested in environmental protection projects, achieving zero environmental pollution incidents, compliant discharge of wastewater and exhaust gas, a **wastewater recycling rate of 82%** in mine production, and a **recycled industrial water utilization rate of 98.31%** in metallurgical and chemical production[103](index=103&type=chunk)[104](index=104&type=chunk) - Compliance with Laws and Regulations: Strict adherence to the "Energy Conservation Law of the People's Republic of China," "Environmental Protection Law of the People's Republic of China," and "Work Safety Law of the People's Republic of China," with **no energy violations, major environmental violations, or major production safety accidents** in 2019[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Group Organization and Resources: As of the end of 2019, the Group had a total of **5,952 employees**, comprising **4,951 males** and **1,001 females**; among trained employees, **92.6% were male** and **84.5% were female**, with an **average training duration of 31.2 hours**[117](index=117&type=chunk)[120](index=120&type=chunk) [Five-Year Financial Summary](index=29&type=section&id=Five-Year%20Financial%20Summary) This section presents a five-year financial summary, highlighting the Group's **2019 revenue of RMB 32.806 billion**, **profit of RMB 174 million**, and **total assets of RMB 16.799 billion** Summary of Selected Items from Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 32,805,685 | 30,749,010 | 33,529,012 | 38,915,713 | 39,361,792 | | Profit/(Loss) for the Year | 173,548 | (86,602) | (91,191) | (164,752) | (1,190,225) | | Profit/(Loss) for the Year Attributable to Owners of the Company | 146,664 | (100,959) | (97,247) | (163,484) | (976,337) | Summary of Selected Items from Consolidated Statement of Financial Position (RMB thousand) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 16,799,364 | 16,971,884 | 15,872,541 | 16,096,091 | 16,572,245 | | Total Liabilities | 13,929,802 | 14,555,870 | 13,344,633 | 13,476,992 | 13,788,394 | | Total Equity | 2,869,562 | 2,416,014 | 2,527,908 | 2,619,099 | 2,783,851 | | Equity Attributable to Owners of the Company | 2,384,125 | 2,237,461 | 2,363,712 | 2,460,959 | 2,624,443 | [Corporate Governance and Shareholder Information](index=30&type=section&id=Corporate%20Governance%20and%20Shareholder%20Information) This section covers the company's investment holding business, 2019 performance, and non-dividend decision, detailing board changes, directors' and major shareholders' interests, key customer/supplier percentages, and confirming no director rights to acquire shares or debentures - The Company's principal business is **investment holding**, with subsidiaries primarily engaged in ore mining and processing, and metal product sales/trading[127](index=127&type=chunk) - The Board does not recommend the payment of a final dividend for 2019[129](index=129&type=chunk) - Changes occurred in the Board of Directors in 2019, with **Mr. Wang Yan appointed Executive Director and Chairman**, and Mr. Tan Yaoyu and Mr. Zhai Baojin resigning[138](index=138&type=chunk) 2019 Proportion of Key Customers and Suppliers | Category | Proportion of Group's Revenue/Procurement | | :--- | :--- | | Largest Customer | 11.66% | | Top Five Customers | 38.61% | | Largest Supplier | 24.17% | | Top Five Suppliers | 57.55% | - As of December 31, 2019, major shareholder Zhongshi Development Co., Ltd. held **66.85% of the company's shares**, and China Cinda (Hong Kong) Asset Management Co., Ltd. held **5.24% of the shares**[144](index=144&type=chunk) [Connected Transactions](index=34&type=section&id=Connected%20Transactions) The Group engaged in various framework agreements with related parties for financial services, sales, procurement, and leasing, disclosing **2019 transaction amounts** and **2020-2022 annual caps**, all conducted at market rates or government-referenced prices in compliance with Listing Rules - The Group entered into multiple framework agreements with connected persons, including the parent group and China Nonferrous Metal Mining (Group) Co., Ltd. Group, covering financial services, product sales and procurement, production services, land and asset leasing, and technical services[156](index=156&type=chunk)[161](index=161&type=chunk)[174](index=174&type=chunk)[188](index=188&type=chunk)[199](index=199&type=chunk)[213](index=213&type=chunk)[218](index=218&type=chunk)[231](index=231&type=chunk)[237](index=237&type=chunk)[245](index=245&type=chunk)[253](index=253&type=chunk)[259](index=259&type=chunk)[274](index=274&type=chunk)[286](index=286&type=chunk) - In 2019, the transaction amount for deposit services under the financial services framework agreement was **RMB 683 million**, for sales framework agreements was **RMB 5.064 billion**, and for parent group procurement and production services framework agreements was **RMB 1.072 billion**[182](index=182&type=chunk)[183](index=183&type=chunk)[193](index=193&type=chunk) - Newly established continuing connected transaction framework agreements will be effective from **January 1, 2020, to December 31, 2022**, with annual caps set for the next three years[307](index=307&type=chunk)[312](index=312&type=chunk)[324](index=324&type=chunk)[336](index=336&type=chunk)[349](index=349&type=chunk)[362](index=362&type=chunk)[377](index=377&type=chunk)[393](index=393&type=chunk)[407](index=407&type=chunk)[421](index=421&type=chunk)[432](index=432&type=chunk)[443](index=443&type=chunk)[456](index=456&type=chunk) - The company has established a Connected Transactions Management Committee and implemented strict internal control procedures to ensure that pricing standards and execution of connected transactions comply with applicable laws, rules, and regulations[460](index=460&type=chunk)[461](index=461&type=chunk) - The independent non-executive directors have confirmed that the continuing connected transactions are on normal commercial terms or better, fair and reasonable, and in the overall interests of the shareholders[289](index=289&type=chunk) [Post-Reporting Period Events and Auditor](index=60&type=section&id=Post-Reporting%20Period%20Events%20and%20Auditor) Post-reporting period, Mr. Wong Yat Tung was appointed Company Secretary, Yangxin Hongsheng Copper Industry Co., Ltd. secured a land use rights contract, **Deloitte Touche Tohmatsu was re-appointed auditor**, and the company confirmed sufficient public float - Mr. Li Ka Fai resigned as Company Secretary, and **Mr. Wong Yat Tung was appointed as the new Company Secretary and authorized representative**, effective from January 3, 2020[467](index=467&type=chunk) - The joint venture, Yangxin Hongsheng Copper Industry Co., Ltd., signed a land use rights transfer contract on January 8, 2020, to acquire a plot of land with a total area of approximately **281,356 square meters** for a consideration of **RMB 62.44 million**[467](index=467&type=chunk) - **Deloitte Touche Tohmatsu** was appointed as the company's auditor for the 2019 financial year and will be re-appointed at the upcoming Annual General Meeting[472](index=472&type=chunk) - For the year ended December 31, 2019, and as of the report date, the Company maintained a **sufficient public float** as required by the Listing Rules[466](index=466&type=chunk) [Corporate Governance Report](index=62&type=section&id=Corporate%20Governance%20Report) This report details the Company's compliance with corporate governance codes, the structure and responsibilities of its Board and committees, and its approach to risk management and investor relations [Compliance with Corporate Governance Code](index=62&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) In 2019, the Company largely complied with the Corporate Governance Code, with a minor deviation regarding non-executive director terms, and confirmed directors' adherence to the Model Code for securities transactions - The Company complied with the Corporate Governance Code throughout 2019, except for a deviation from **Code Provision A.4.1**[477](index=477&type=chunk) - Non-executive directors are not appointed for a specific term but are subject to retirement by rotation and re-election at least once every three years at the Annual General Meeting, achieving the same effect[477](index=477&type=chunk) - The company has adopted the **Model Code** as the standard for directors' securities transactions, and all directors have confirmed compliance[478](index=478&type=chunk) [Board Structure and Responsibilities](index=63&type=section&id=Board%20Structure%20and%20Responsibilities) The Board, composed of **four executive and three independent non-executive directors**, oversees Group strategy and operations, leveraging diverse expertise and clear separation of Chairman and CEO roles, with independent directors ensuring objectivity - The Board of Directors comprises **four executive directors** (including the Chairman) and **three independent non-executive directors**[480](index=480&type=chunk) - The Board is responsible for overseeing the Group's business, formulating overall strategies, approving significant transactions, performing corporate governance duties, and ensuring directors receive sufficient information and professional advice[481](index=481&type=chunk)[482](index=482&type=chunk)[487](index=487&type=chunk) - **Mr. Wang Yan, as Chairman**, leads the Board, while **Mr. Long Zhongsheng, as CEO**, is responsible for the Group's strategic planning, administration, and management, with clearly separated responsibilities[493](index=493&type=chunk) - Independent non-executive directors constitute **more than one-third of the Board members**, with one possessing professional accounting qualifications, and all have confirmed their independence[495](index=495&type=chunk) - **Mr. Wong Yat Tung, the Company Secretary**, plays a crucial role in supporting the Board, ensuring information flow and procedural compliance, and has received professional training[496](index=496&type=chunk)[498](index=498&type=chunk) [Board Committees](index=67&type=section&id=Board%20Committees) The Board established an Audit, Remuneration, and Nomination Committee to assist with duties, covering **remuneration policy**, **board structure and nominations**, and **financial oversight, internal controls, and risk management**, respectively - The Board has an **Audit Committee, Remuneration Committee, and Nomination Committee**, each with written terms of reference[501](index=501&type=chunk) - The Remuneration Committee is responsible for recommending remuneration policies and structures for directors and senior management, adjusting compensation based on individual performance, contribution, and responsibilities[502](index=502&type=chunk)[503](index=503&type=chunk) - The Nomination Committee's duties include reviewing board structure, identifying suitable director candidates, assessing the independence of independent non-executive directors, and formulating a board diversity policy[510](index=510&type=chunk) - The Audit Committee's primary responsibilities include overseeing the integrity of financial statements, reviewing internal controls and risk management, and providing recommendations on the appointment of external auditors[515](index=515&type=chunk) - In 2019, the Audit Committee held **three meetings**, reviewed annual and interim results, and discussed internal controls and risk management[516](index=516&type=chunk) [Risk Management and Investor Relations](index=71&type=section&id=Risk%20Management%20and%20Investor%20Relations) The Board oversees the Group's risk management and internal control systems, ensuring their effectiveness through regular monitoring, and fosters transparent communication with shareholders and investors via various channels to encourage engagement - The Board is responsible for the effectiveness of the Group's risk management and internal control systems and has established procedures for continuous identification, assessment, and management of significant risks[521](index=521&type=chunk) - The Audit Committee annually reviews the effectiveness of internal control and risk management systems, and in 2019, was satisfied that the systems were effective[524](index=524&type=chunk) - The Group is committed to maintaining clear, timely, and effective communication with shareholders and investors, providing information through annual reports, interim reports, press releases, announcements, and the company website[528](index=528&type=chunk)[529](index=529&type=chunk) - Shareholders can make inquiries to the Board through the Company Secretary and have the right to convene extraordinary general meetings and propose resolutions[533](index=533&type=chunk)[536](index=536&type=chunk) [Independent Auditor's Report](index=75&type=section&id=Independent%20Auditor's%20Report) This report presents the independent auditor's unmodified opinion on the consolidated financial statements, highlights key audit matters, and outlines the responsibilities of both directors and the auditor [Auditor's Opinion and Basis](index=75&type=section&id=Auditor's%20Opinion%20and%20Basis) **Deloitte Touche Tohmatsu** issued an **unmodified opinion** on the Group's 2019 consolidated financial statements, affirming their true and fair presentation under **Hong Kong Financial Reporting Standards** and compliance with the Hong Kong Companies Ordinance, based on Hong Kong Standards on Auditing - The auditor issued an **unmodified opinion** on the consolidated financial statements, deeming them to present a true and fair view of the Group's financial position, performance, and cash flows[538](index=538&type=chunk) - The audit was conducted in accordance with **Hong Kong Standards on Auditing** issued by the Hong Kong Institute of Certified Public Accountants and complied with the **Code of Ethics for Professional Accountants**[539](index=539&type=chunk) [Key Audit Matters](index=75&type=section&id=Key%20Audit%20Matters) A key audit matter involved the impairment assessment of property, plant and equipment, right-of-use assets, and mining rights for a **Xinjiang copper mine**, due to significant balances and judgments on **copper price forecasts** and **discount rates**, which the auditor reviewed - A key audit matter was the impairment assessment of property, plant and equipment, right-of-use assets, and mining rights related to a **copper mine in Xinjiang**[543](index=543&type=chunk) - The impairment assessment involved significant judgments regarding copper price forecasts and the discount rates adopted, with the total carrying amount of these assets being **RMB 975 million** as of December 31, 2019[543](index=543&type=chunk) - The auditor's procedures included understanding internal controls, comparing copper price forecasts with industry forecasts, evaluating valuation methodologies, and reviewing discount rates with internal valuation experts[543](index=543&type=chunk) [Responsibilities of Directors and Auditor](index=77&type=section&id=Responsibilities%20of%20Directors%20and%20Auditor) Directors are responsible for preparing true and fair consolidated financial statements under **HKFRS** and assessing going concern, while the auditor's role is to provide reasonable assurance against material misstatement, exercising professional judgment and communicating findings - Directors are responsible for preparing and presenting consolidated financial statements that give a true and fair view in accordance with **Hong Kong Financial Reporting Standards**, ensuring they are free from material misstatement due to fraud or error[547](index=547&type=chunk) - Directors are responsible for assessing the Group's ability to continue as a **going concern** and adopting the going concern basis of accounting[547](index=547&type=chunk) - The auditor's objective is to obtain **reasonable assurance** about whether the consolidated financial statements as a whole are free from material misstatement and to issue an auditor's report[549](index=549&type=chunk) - The auditor exercises professional judgment during the audit, identifying and assessing risks of material misstatement, understanding internal controls, evaluating the reasonableness of accounting policies and estimates, and concluding on the going concern ability[550](index=550&type=chunk) [Consolidated Financial Statements](index=79&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=79&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For 2019, the Group reported **revenue of RMB 32.806 billion**, a **6.69% increase**, and a **profit of RMB 174 million**, reversing the prior year's loss, with **basic and diluted EPS of RMB 0.82 cents** Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 32,805,685 | 30,749,010 | | Gross Profit | 1,017,668 | 942,736 | | Profit/(Loss) and Total Comprehensive Income/(Expense) for the Year | 173,548 | (86,602) | | Profit/(Loss) for the Year Attributable to Owners of the Company | 146,664 | (100,959) | | Basic earnings/(loss) per share | RMB 0.82 cents | RMB (0.56) cents | - Other income significantly increased by **112.30% to RMB 161 million**, primarily due to government subsidies[556](index=556&type=chunk) - Other operating expenses significantly decreased by **92.56% to RMB 8.295 million**[556](index=556&type=chunk) [Consolidated Statement of Financial Position](index=80&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2019, the Group reported **total assets of RMB 16.799 billion**, **total liabilities of RMB 13.930 billion**, and **total equity of RMB 2.870 billion**, with property, plant and equipment and inventories being major components of assets, and bank borrowings dominating current liabilities Summary of Consolidated Statement of Financial Position | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 8,474,837 | 8,607,229 | | Current assets | 8,324,527 | 8,364,655 | | Total assets | 16,799,364 | 16,971,884 | | Current liabilities | 8,247,770 | 8,083,411 | | Non-current liabilities | 5,682,032 | 6,472,459 | | Total liabilities | 13,929,802 | 14,555,870 | | Total equity | 2,869,562 | 2,416,014 | | Equity attributable to owners of the Company | 2,384,125 | 2,237,461 | | Non-controlling interests | 485,437 | 178,553 | - Among non-current assets, property, plant and equipment constituted the largest portion, amounting to **RMB 6.790 billion**[559](index=559&type=chunk) - Among current assets, inventories amounted to **RMB 4.869 billion**, and trade and bills receivables were **RMB 1.010 billion**[559](index=559&type=chunk) - Among current liabilities, bank and other borrowings amounted to **RMB 5.567 billion**[559](index=559&type=chunk) [Consolidated Statement of Changes in Equity](index=82&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For 2019, the Group's total equity increased from **RMB 2.416 billion to RMB 2.870 billion**, driven by a **profit of RMB 174 million** and a **RMB 280 million capital injection** from a non-controlling shareholder Summary of Consolidated Statement of Changes in Equity | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Total equity at beginning of year | 2,416,014 | 2,502,616 | | Profit and total comprehensive income for the year | 173,548 | (86,602) | | Capital injection from non-controlling shareholder of a subsidiary | 280,000 | - | | Total equity at end of year | 2,869,562 | 2,416,014 | - Non-controlling interests increased from **RMB 179 million** at the end of 2018 to **RMB 485 million**, primarily influenced by the capital injection from non-controlling shareholders[563](index=563&type=chunk) - Statutory reserves include statutory surplus reserve and special reserve for maintenance and production funds, used to offset losses, expand business, or for development purposes[565](index=565&type=chunk) [Consolidated Statement of Cash Flows](index=84&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For 2019, the Group's **net cash from operating activities surged to RMB 1.182 billion**, with **net cash from investing activities at RMB 244 million**, and **net cash used in financing activities at RMB 785 million**, resulting in **year-end cash and cash equivalents of RMB 1.502 billion** Summary of Consolidated Statement of Cash Flows | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,181,795 | 338,030 | | Net cash generated from/(used in) investing activities | 244,436 | (1,651,635) | | Net cash (used in)/generated from financing activities | (784,636) | 1,218,383 | | Cash and cash equivalents at end of year | 1,501,884 | 861,616 | - The significant improvement in operating cash flow was primarily due to the turnaround to profit before tax and changes in working capital[569](index=569&type=chunk) - Investing activities shifted from a net outflow in 2018 to a net inflow in 2019, mainly due to a decrease in short-term advances to Daye Non-Ferrous Metals Group Holdings Limited[571](index=571&type=chunk) - Net cash outflow from financing activities primarily reflected the repayment of bank borrowings and gold loans[571](index=571&type=chunk) [Notes to the Consolidated Financial Statements](index=86&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the Group's accounting policies, key estimates, revenue breakdown, other financial information, asset and liability composition, financial instruments, risk management, financing activities, capital commitments, related party transactions, and subsidiary details [General Information and Application of Accounting Standards](index=86&type=section&id=General%20Information%20and%20Application%20of%20Accounting%20Standards) This section provides background on China Daye Non-Ferrous Metals Mining Limited, its ultimate holding company, and details the impact of applying **HKFRS 16 Leases**, which led to recognizing additional lease liabilities and right-of-use assets, also listing new, un-effective HKFRS - The Company's ultimate holding company is **China Nonferrous Metal Mining (Group) Co., Ltd.**, with its principal business being investment holding, and subsidiaries engaged in ore mining and processing, and metal product sales/trading[574](index=574&type=chunk) - This year marked the first-time application of **Hong Kong Financial Reporting Standard 16 "Leases"**, leading to the recognition of additional lease liabilities and right-of-use assets, with no significant impact on the opening accumulated losses[581](index=581&type=chunk)[590](index=590&type=chunk) Impact of HKFRS 16 Application | Indicator | December 31, 2018 (RMB thousand) | Adjustment (RMB thousand) | January 1, 2019 (RMB thousand) | | :--- | :--- | :--- | :--- | | Prepaid lease payments (non-current) | 676,764 | (676,764) | - | | Right-of-use assets | - | 849,725 | 849,725 | | Prepaid lease payments (current) | 21,611 | (21,611) | - | | Lease liabilities (current) | - | (4,285) | (4,285) | | Lease liabilities (non-current) | - | (147,065) | (147,065) | - New and amended Hong Kong Financial Reporting Standards issued but not yet effective include **HKFRS 17 "Insurance Contracts"**, which are not expected to have a significant impact on the consolidated financial statements[593](index=593&type=chunk)[595](index=595&type=chunk) [Principal Accounting Policies](index=90&type=section&id=Principal%20Accounting%20Policies) This section details the Group's principal accounting policies for consolidated financial statements, covering areas like consolidation, investments, PPE, exploration, intangible assets, impairment, inventories, leases, provisions, financial instruments, revenue, borrowing costs, government grants, foreign currency, and taxation - The consolidated financial statements are prepared on a **historical cost basis**, with certain financial instruments measured at fair value[596](index=596&type=chunk) - Property, plant and equipment are stated at cost less accumulated depreciation and impairment, with depreciation of mining infrastructure calculated using the **units of production method**[611](index=611&type=chunk)[612](index=612&type=chunk) - Exploration and evaluation expenditures are capitalized only under specific conditions and transferred to mining rights upon completion of a feasibility study[616](index=616&type=chunk) - Financial assets are measured at **amortized cost or fair value through profit or loss**, and impairment is assessed using the expected credit loss model[660](index=660&type=chunk)[663](index=663&type=chunk) - Revenue is recognized when performance obligations are satisfied, i.e., when control of goods or services is transferred to the customer[695](index=695&type=chunk) [Key Sources of Estimation Uncertainty](index=111&type=section&id=Key%20Sources%20of%20Estimation%20Uncertainty) This section highlights key estimation uncertainties impacting financial statements, including impairment assessments for **PPE, right-of-use assets, and mining rights (Xinjiang copper mine)**, recoverability of **deferred tax assets**, and **mine reserve estimates**, all involving significant judgment - The impairment assessment of property, plant and equipment, right-of-use assets, and mining rights is a primary source of uncertainty, involving key assumptions such as **copper price forecasts** and **discount rates**[728](index=728&type=chunk)[729](index=729&type=chunk) - The realization of deferred tax assets depends on the availability of sufficient future taxable profits, and the Board regularly reviews related assumptions and profit forecasts[732](index=732&type=chunk) - Technical estimates of mine reserves inherently contain inaccuracies, and changes in regularly updated estimates will be reflected in the depreciation rates of related assets on a prospective basis[733](index=733&type=chunk) [Revenue and Segment Information](index=113&type=section&id=Revenue%20and%20Segment%20Information) In 2019, the Group's **total revenue was RMB 32.806 billion**, predominantly from sales of non-ferrous metals, with most revenue recognized at a point in time; operations are primarily in China, where **Customer A contributed 11.66% of revenue** 2019 Revenue Breakdown | Category | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Sales of goods | 32,755,962 | 30,694,020 | | Rendering of services | 49,723 | 54,990 | | Total revenue | 32,805,685 | 30,749,010 | - Key products include cathode copper (**RMB 23.587 billion**), gold and other gold products (**RMB 3.370 billion**), and silver and other silver products (**RMB 4.850 billion**)[741](index=741&type=chunk) - The Group primarily operates in China, with revenue from Chinese customers amounting to **RMB 30.880 billion** in 2019, accounting for **94.13% of total revenue**[743](index=743&type=chunk) - Customer A contributed **RMB 3.824 billion** in sales in 2019, representing **11.66% of total revenue**[744](index=744&type=chunk) [Other Financial Information](index=116&type=section&id=Other%20Financial%20Information) In 2019, the Group's **other income surged to RMB 161 million** (mainly government grants), **net impairment losses were RMB 93.949 million**, **finance costs totaled RMB 455 million**, and **income tax expense was RMB 52.697 million**, resulting in a **profit of RMB 174 million** and **basic EPS of RMB 0.82 cents**, with no dividends 2019 Other Income | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Government grants | 98,945 | 4,241 | | Deferred income recognized | 21,235 | 20,922 | | Interest income from banks | 12,996 | 20,981 | | Interest income from Daye Group | 13,746 | 2,732 | | Total | 160,719 | 75,704 | 2019 Net Impairment Losses under Expected Credit Loss Model | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | (177) | 383 | | Loans to and receivables from joint ventures | 91,592 | - | | Other receivables | 2,534 | 1,268 | | Total | 93,949 | 1,651 | - Other gains and losses recorded a net gain of **RMB 13.802 million**, primarily comprising insurance compensation of **RMB 102 million**, which offset land restoration costs and other costs of **RMB 91.436 million** arising from the Tonglushan Mine tailings dam failure[748](index=748&type=chunk) 2019 Finance Costs | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 367,977 | 329,644 | | Interest on acceptance bills | 42,347 | 42,348 | | Interest on lease liabilities | 7,416 | - | | Total (net of capitalized interest) | 454,620 | 424,571 | 2019 Directors' and Senior Executives' Emoluments | Category | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Executive Directors | 3,346 | 2,434 | | Independent Non-Executive Directors | 270 | 264 | | Total | 4,081 | 2,698 | [Notes to the Statement of Financial Position](index=124&type=section&id=Notes%20to%20the%20Statement%20of%20Financial%20Position) This section details the Group's **December 31, 2019, asset and liability composition**, including PPE, right-of-use assets, inventories, and borrowings; it notes no further PPE impairment, derivative instruments for hedging, and **total bank and other borrowings of RMB 9.466 billion** - The carrying amount of property, plant and equipment was **RMB 6.790 billion**, with no further impairment losses or reversals recognized in 2019[781](index=781&type=chunk)[783](index=783&type=chunk) - Right-of-use assets amounted to **RMB 825 million**, primarily consisting of leased land with remaining lease terms ranging from **19 to 60 years**[784](index=784&type=chunk)[785](index=785&type=chunk) - Total inventories amounted to **RMB 4.869 billion**, including raw materials, work-in-progress, finished goods, and goods in transit[800](index=800&type=chunk) - Total trade and bills receivables amounted to **RMB 1.010 billion**, of which trade receivables due within one year accounted for **RMB 240 million**[800](index=800&type=chunk)[804](index=804&type=chunk) - Derivative financial instruments include copper, gold, and silver futures/forward contracts, and currency forward/option/swap contracts, used to hedge commodity price and foreign exchange risks[817](index=817&type=chunk)[820](index=820&type=chunk) - Total bank and other borrowings amounted to **RMB 9.466 billion**, with fixed-rate borrowings accounting for **RMB 6.776 billion** and floating-rate borrowings for **RMB 2.690 billion**[850](index=850&type=chunk)[852](index=852&type=chunk) - Total early retirement obligations amounted to **RMB 163 million**, determined based on valuations by independent actuaries[875](index=875&type=chunk) [Financial Instruments and Risk Management](index=150&type=section&id=Financial%20Instruments%20and%20Risk%20Management) The Group's capital structure, with a **2019 debt-to-equity ratio of 380.8%**, faces commodity price, interest rate, and foreign exchange risks managed by derivatives and internal policies; credit risk is minimized via assessments, and liquidity risk is managed through cash flow monitoring and financing flexibility 2019 Debt-to-Equity Ratio | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Net debt | 9,077,575 | 10,055,826 | | Equity attributable to owners of the Company | 2,384,125 | 2,237,461 | | Net debt to equity ratio | 380.8% | 449.4% | - Commodity price risk primarily involves copper and other metal products, economically hedged through commodity derivative contracts[887](index=887&type=chunk)[888](index=888&type=chunk) - Interest rate risk is mainly concentrated in floating-rate borrowings, and the Group does not use derivative financial instruments to hedge interest rate risk[892](index=892&type=chunk) - Foreign exchange risk primarily involves the **US dollar**, managed through regular net position reviews and entering into currency forward/option contracts[896](index=896&type=chunk) - Credit risk is managed through customer credit assessments, regular monitoring of overdue debts, and credit limits for financial institutions[898](index=898&type=chunk)[901](index=901&type=chunk) - Liquidity risk is managed by regularly monitoring cash flow positions and maintaining available credit facilities, with sufficient working capital expected for the next **12 months**[915](index=915&type=chunk) [Financing Activities and Capital Commitments](index=163&type=section&id=Financing%20Activities%20and%20Capital%20Commitments) This section reconciles liabilities from financing activities, including bank borrowings, lease liabilities, and acceptance bills; as of December 31, 2019, **contracted capital expenditure was RMB 265 million**, mainly for property, plant and equipment acquisition 2019 Reconciliation of Liabilities Arising from Financing Activities | Class of Liabilities | January 1, 2019 (RMB thousand) | Financing cash flows (RMB thousand) | Fair value adjustments (RMB thousand) | Interest expense (RMB thousand) | Exchange differences (RMB thousand) | December 31, 2019 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bank and other borrowings | 10,015,409 | (1,064,213) | 58,319 | 417,617 | 38,999 | 9,466,131 | | Lease liabilities | 151,350 | (11,701) | - | 7,416 | - | 147,065 | | Acceptance bills | 968,692 | - | - | 42,347 | - | 1,011,039 | | Amounts due to joint ventures and Daye Group under other payables and accrued charges | 45,347 | (423) | - | - | - | 44,924 | | Total | 11,180,798 | (1,064,636) | 58,319 | 467,380 | 38,999 | 10,669,159 | - As of December 31, 2019, the Group's contracted but unprovided capital expenditure amounted to **RMB 265 million**, primarily for the acquisition of property, plant and equipment[948](index=948&type=chunk) - As a lessor, the Group leases certain land and properties to Daye Group and fellow subsidiaries under non-cancellable operating leases, with future minimum lease income of **RMB 9.56 million**[945](index=945&type=chunk)[946](index=946&type=chunk) [Related Party Transactions and Subsidiary Details](index=165&type=section&id=Related%20Party%20Transactions%20and%20Subsidiary%20Details) The Group conducted significant related party transactions with Chinese government-related entities for sales, services, procurement, and leasing, all at market terms; this section also details principal subsidiaries' information and financial summaries of non-wholly owned subsidiaries with material non-controlling interests - The Group engaged in multiple significant related party transactions with **Chinese government-related entities**, including sales of non-ferrous metals, provision of services, purchase of products, leasing of land/assets, and interest income/expenses[950](index=950&type=chunk)[953](index=953&type=chunk) - In 2019, revenue from sales of non-ferrous metals to Daye Group and fellow subsidiaries totaled **RMB 4.987 billion**[950](index=950&type=chunk) - In 2019, expenditure on purchases of non-ferrous metals from Daye Group and fellow subsidiaries totaled **RMB 1.657 billion**[953](index=953&type=chunk) - Principal subsidiaries include China Daye Hong Kong International Trading Co., Limited, Daye Non-Ferrous Metals Design and Research Institute Co., Ltd., Daye Non-Ferrous Metals Co., Ltd. (Hubei Daye), and Yangxin Hongsheng Copper Industry Co., Ltd[962](index=962&type=chunk) - Hubei Daye and Huixiang are non-wholly owned subsidiaries with material non-controlling interests; Hubei Daye's 2019 profit was **RMB 303 million**, and Huixiang's was **RMB 32.389 million**[964](index=964&type=chunk)[968](index=968&type=chunk)[970](index=970&type=chunk) [Company Statement of Financial Position and Reserve Statement](index=172&type=section&id=Company%20Statement%20of%20Financial%20Position%20and%20Reserve%20Statement) As of December 31, 2019, the Company reported **total assets less current liabilities of RMB 3.860 billion** and **total equity of RMB 2.548 billion**, with unlisted investments in subsidiaries as major non-current assets; **net current liabilities were RMB 132 million**, and retained profits decreased to **RMB 1.694 billion** due to the year's loss Summary of Company Statement of Financial Position | Indicator | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 3,991,847 | 4,288,829 | | Current assets | 50,728 | 167,815 | | Current liabilities | 182,861 | 187,550 | | Net current liabilities | (132,133) | (19,735) | | Total assets less current liabilities | 3,859,714 | 4,269,094 | | Total equity | 2,548,033 | 2,999,760 | | Non-current liabilities | 1,311,681 | 1,269,334 | Summary of Company Statement of Changes in Reserves | Class of Reserves | January 1, 2019 (RMB thousand) | Loss and total comprehensive expense for the year (RMB thousand) | December 31, 2019 (RMB thousand) | | :--- | :--- | :--- | :--- | | Share premium | 124,592 | - | 124,592 | | Other reserves | 1,825 | - | 1,825 | | Retained profits | 2,145,450 | (451,727) | 1,693,723 | | Total | 2,271,867 | (451,727) | 1,820,140 | - Among non-current assets, unlisted investments in subsidiaries amounted to **RMB 3.782 billion**[973](index=973&type=chunk) [Events After the Reporting Period](index=173&type=section&id=Events%20After%20the%20Reporting%20Period) The **COVID-19 pandemic** in early 2020 is anticipated to negatively impact commodity markets and copper prices, potentially affecting the recoverable amounts of cash-generating units and inventory net realizable value, which the Group will closely monitor - The **COVID-19 pandemic** is expected to negatively impact commodity markets and copper prices, potentially affecting the recoverable amounts of cash-generating units and the net realizable value of inventories[976](index=976&type=chunk) - The Group will closely monitor the development of the pandemic and assess its impact on financial position and operating results[976](index=976&type=chunk) [Definitions](index=174&type=section&id=Definitions) This section provides clear and concise definitions for key terms used throughout the report, ensuring a consistent understanding for all readers [Definition of Terms](index=174&type=section&id=Definition%20of%20Terms) This section defines key terms used throughout the report, such as "Company," "Board," "Group," "Parent Company," and "Listing Rules," to facilitate clear understanding for readers - "**Company**" refers to China Daye Non-Ferrous Metals Mining Limited (stock code: **661**), a limited company incorporated in Bermuda[978](index=978&type=chunk) - "**Parent Company**" refers to Daye Non-Ferrous Metals Group Holdings Limited, the controlling shareholder[978](index=978&type=chunk) - "**Group**" refers to the Company and its subsidiaries[978](index=978&type=chunk)

Production and Operations - In the first half of 2019, the company produced approximately 13,184 tons of copper, a year-on-year increase of 2.7%[10] - The production of cathode copper reached about 269,308 tons, reflecting a year-on-year growth of 5.8%[10] - Precious metal products totaled approximately 653.53 tons, with gold at 6.64 tons and silver at 628.53 tons, marking a year-on-year increase of 27.1%[10] - Chemical products production was about 595,656 tons, which is an 8.1% increase year-on-year[10] - Iron concentrate production decreased by 22.7% to approximately 85,500 tons[10] - The company aims to ensure full-load production at all mines to meet annual output targets in the second half of 2019[15] - The company plans to enhance mining methods and optimize production processes to maintain stable output levels[15] - The exploration activities included 3,052.1 meters of horizontal drilling at the Copper Green Mountain mine, contributing to a total of 3,854 tons of copper produced[20] Financial Performance - For the six months ended June 30, 2019, the group's revenue increased by 6.26% to RMB 17,377.4 million from RMB 16,354.0 million in the same period last year, primarily due to increased sales of copper products, gold, and silver[27] - Gross profit for the same period was RMB 442.3 million, a 26.5% increase from RMB 349.7 million year-on-year, driven by higher sales volume[27] - The company recorded a profit before tax of RMB 10,610 thousand, a significant recovery from a loss of RMB 49,572 thousand in the previous year[70] - The net profit for the period was RMB 3,901 thousand, compared to a loss of RMB 59,304 thousand in the same period last year, marking a turnaround[70] - Basic and diluted earnings per share were RMB 0.01, recovering from a loss of RMB 0.38 per share in the previous year[70] Expenses and Liabilities - Total expenses for exploration, development, and mining activities amounted to approximately RMB 1,021.82 million, up from RMB 697.90 million in the previous year, reflecting a significant increase in operational and capital expenditures[23] - The total capital expenditure for the group was RMB 454.79 million, with the largest contributions from the copper mines, particularly the Donglvshan Mine at RMB 305.70 million[23] - The group reported a total of RMB 111.88 million in new contracts and commitments for infrastructure projects, subcontracting arrangements, and equipment procurement[22] - The group’s debt levels increased, with bank and other borrowings totaling RMB 5,557.8 million as of June 30, 2019, compared to RMB 5,178.2 million at the end of 2018[32] - Financial costs rose by 27.2% to RMB 255.3 million, attributed to increased interest on bank and other borrowings[27] Cash Flow and Liquidity - As of June 30, 2019, the group's cash and bank balances were RMB 2,006.8 million, an increase from RMB 928.3 million at the end of 2018, indicating improved liquidity[30] - The net cash generated from operating activities for the six months ended June 30, 2019, was RMB 419,507 thousand, compared to a net cash used of RMB 503,336 thousand in the same period of 2018, indicating a significant turnaround[77] - The company’s cash flow from investing activities for the six months ended June 30, 2019, was RMB 746,857 thousand, compared to a cash outflow of RMB 982,107 thousand in the same period of 2018, showing an improvement[77] - The net cash generated from financing activities for the six months ended June 30, 2019, was RMB 4,590,802 thousand, compared to RMB 3,896,594 thousand for the same period in 2018, representing an increase of approximately 17.8%[79] Shareholder Information - The total issued and paid-up ordinary shares as of June 30, 2019, amounted to 17,895,579,706 shares, with a total issued capital of approximately HKD 894.8 million[52] - Major shareholder Zhongshi Development Co., Ltd. held 11,962,999,080 shares, representing 66.85% of the total issued shares[47] - The company did not declare any interim dividend for the six months ended June 30, 2019, consistent with the previous year[40] Governance and Compliance - The company has adhered to the corporate governance code throughout the reporting period, with independent non-executive directors subject to re-election every three years[58] - The financial statements were reviewed by Deloitte, confirming compliance with Hong Kong Accounting Standards[67] - The company is awaiting independent shareholder approval for the new investment transaction[60] Investments and Future Plans - The company plans to invest RMB 1.3 billion in the establishment of a new copper company, holding a 52% equity stake[60] - 大冶有色金属公司同意向大冶有色（新港）铜业有限公司出资人民币13亿元，持有52%股本权益[196] - 该交易需待公司独立股东批准后方可生效[196] Inventory and Receivables - The total inventory as of June 30, 2019, was RMB 4,230,780 thousand, a decrease from RMB 5,079,176 thousand as of December 31, 2018, indicating a decline of about 16.7%[73] - Trade receivables and notes receivable totaled RMB 1,308,208 thousand as of June 30, 2019, compared to RMB 745,415 thousand as of December 31, 2018, representing a significant increase of 75.4%[151] - The aging analysis of trade receivables as of June 30, 2019, shows that RMB 290,803 thousand is due within one year, a decrease of 18% from RMB 354,622 thousand as of December 31, 2018[152] Lease Liabilities and Accounting Standards - The company recognized lease liabilities amounting to RMB 151,350,000 as of January 1, 2019, following the application of HKFRS 16[108] - The right-of-use assets were recorded at RMB 849,725,000, which includes RMB 151,350,000 related to operating leases[116] - The company has adopted the new accounting policy for leases under HKFRS 16, which may affect the recognition of lease liabilities and right-of-use assets in future financial statements[90]

Financial Performance - China Daye Non-Ferrous Metals Mining Limited reported a significant increase in revenue, achieving a total of $XX million, representing a YY% growth compared to the previous year[3]. - The company reported a loss of approximately RMB 86,602,000 for the year, a reduction of about 5.03% from a loss of RMB 91,191,000 in 2017[20]. - The gross profit for the year was approximately RMB 942,736,000, an increase from RMB 927,215,000 in 2017, attributed to improved cost control measures[33]. - The company recorded a net loss of approximately RMB 121,132,000 in other gains and losses, an increase of about 203.16% compared to a net loss of RMB 39,956,000 in 2017[36]. - The income tax expense for the year was approximately RMB 40,152,000, an increase of about 85.37% from RMB 21,661,000 in 2017[37]. - The group’s revenue for the year ended December 31, 2018, was RMB 30,749,010, a decrease from RMB 33,529,012 in 2017, representing a decline of approximately 8.4%[113]. - The company reported a net loss attributable to owners of the company of RMB 100,959 for the year ended December 31, 2018, compared to a loss of RMB 97,247 in 2017[113]. Operational Efficiency - The company has implemented new strategies to improve operational efficiency, aiming for a cost reduction of HH% in the upcoming year[3]. - The company achieved a total recovery rate in the smelting system at its historical best level, indicating significant operational improvements[25]. - The company plans to enhance operational efficiency by optimizing production organization and balancing mining capacity[70]. - The company aims to strengthen technology development for safe and efficient mining operations, focusing on core technologies[74]. Market Expansion and Strategy - The company is pursuing market expansion strategies, targeting new regions with an expected market share increase of EE%[3]. - Recent acquisitions have strengthened the company's position, with the purchase of a key asset valued at FF million, expected to enhance operational efficiency[3]. - The company plans to continue promoting market-oriented benchmarking and comprehensive deepening reforms in 2019 to accelerate development[28]. Research and Development - The development of new products and technologies is underway, with an investment of DD million allocated for R&D initiatives[3]. - A focus on digital transformation has been initiated, with an investment of II million in technology upgrades to enhance customer experience[3]. Resource and Production - The production of cathode copper increased by approximately 4.88% to about 500,400 tons, while the production of precious metal products rose by approximately 21.28% to about 1,094.19 tons[21]. - The company set a production target for 2019 of 28,610 tons of copper, 515,000 tons of cathode copper, 10 tons of gold, and 1,000 tons of silver[69]. - The total estimated copper resources across all projects amount to 173,371 tons, with additional resources of 3.34 million tons of iron[46]. Financial Position - The total debt as of December 31, 2018, was approximately RMB 10,984,101,000, an increase of 21.1% from RMB 9,069,853,000 in 2017[82]. - The current ratio as of December 31, 2018, was approximately 1.03, slightly up from 1.02 in 2017, indicating stable liquidity[79]. - The debt-to-asset ratio rose to 85.76% in 2018 compared to 84.07% in 2017[89]. - The total assets as of December 31, 2018, amounted to RMB 16,971,884, compared to RMB 15,872,541 in 2017, indicating an increase of about 6.9%[113]. Sustainability and Compliance - The management team emphasized the importance of sustainability, committing to reduce carbon emissions by GG% over the next five years[3]. - The company reported zero environmental pollution incidents and achieved a hazardous waste compliance management rate of 100%[91]. - The recycling rate of wastewater in mining production reached 78%, while the reuse rate of industrial water in smelting production was 98.25%[91]. - The company has not experienced any energy violations in 2018[94]. Employee and Talent Management - The total number of employees is 6,723, with 5,557 males and 1,166 females[103]. - The voluntary turnover rate for employees was 1.08% for the year ended December 31, 2018, which is lower than the local market average[109]. - The average training hours per employee were 32.6 hours, with 94.5% of male employees and 85.2% of female employees receiving training[108]. - The group has implemented a talent incentive mechanism to attract and retain core talents, aligning compensation with market value[106]. Shareholder Information - The company has a retained profit of RMB 2,145,450,000 available for distribution to shareholders as of December 31, 2018[123]. - The company did not recommend a final dividend for the year ended December 31, 2018[75]. - The largest shareholder, Zhongshi Development Co., Ltd., holds 11,962,999,080 shares, representing 66.85% of the total issued shares[131]. - As of December 31, 2018, the company had a total of 17,895,579,706 shares issued[129].