Production and Operations - In the first half of 2023, the company produced approximately 6,200.00 tons of copper, a year-on-year decrease of about 6.06%, while cathode copper production increased by approximately 29.04% to about 313,189.00 tons[7]. - The production of precious metal products decreased by approximately 41.85% to about 189.98 tons, including gold at approximately 1.88 tons and silver at approximately 180.15 tons[7]. - Chemical products production increased by approximately 83.14% to about 957,647.00 tons, including sulfuric acid at approximately 954,467.00 tons[7]. - The production of iron concentrate decreased by approximately 47.77% to about 39,640.00 tons, while molybdenum concentrate production increased by 5.49% to about 5.49 tons[7]. - The company achieved stable production at Yangxin Hongsheng within 3 months and reached stable production targets within 6 months, with major product output meeting design values[11]. - The company is focusing on key technological breakthroughs in mining and smelting processes to enhance operational efficiency and production stability[13]. - The company aims to stabilize and increase production, emphasizing that production is equivalent to profit[23]. - The company plans to enhance its mining operations through technological innovations and mechanization[27]. - The company is focusing on the construction of intelligent mining and factory systems, with plans to optimize underground mining layouts and apply intelligent mining equipment[30]. - The company aims to achieve stable production of copper by the end of the year through environmental upgrades and process optimization in its smelting systems[32]. Environmental and Sustainability Efforts - The company has completed 60% of the equipment installation for the environmental upgrade of the smelting plant, which is part of its commitment to green and low-carbon development[9]. - The company is focusing on green development and ensuring compliance with central environmental inspections[22]. - The company is committed to sustainable and environmentally friendly production practices[27]. - The company has successfully completed 24 corrective measures related to environmental inspections, receiving positive recognition for its efforts[9]. Financial Performance - The company’s revenue increased by 17.90% to approximately RMB 21,168,130,000 compared to RMB 17,954,197,000 in the same period last year, primarily due to the successful production of the 400,000-ton project and increased cathode copper output[42]. - Gross profit for the six months ended June 30, 2023, was approximately RMB 830,813,000, a 94.67% increase from RMB 426,771,000 in the same period last year, driven by improved profitability from the 400,000-ton project and the gradual resumption of production at self-owned mines[42]. - Financial costs rose by 57.65% to approximately RMB 239,414,000, up from RMB 151,863,000, due to increased interest expenses from the growth in borrowings related to the 400,000-ton project[42]. - The company reported a net profit attributable to equity holders for the six months ended June 30, 2023, was RMB 17,362,000, a decrease of 65.7% from RMB 50,579,000 in the same period of 2022[113]. - The company reported a total of RMB 300,000,000 in structured bank deposits as of June 30, 2023, which were not present in the previous year[145]. Debt and Liabilities - The company’s total debt as of June 30, 2023, was approximately RMB 15,303,967,000, an increase from RMB 12,948,226,000 in the previous year[47]. - The current ratio improved to 1.14 as of June 30, 2023, compared to 1.02 at the end of 2022, with current assets of approximately RMB 13,463,542,000 and current liabilities of approximately RMB 11,790,333,000[46]. - The company’s total liabilities decreased from RMB 4,157,374 thousand as of June 30, 2022, to RMB 4,273,608 thousand as of June 30, 2023, indicating a reduction in financial leverage[81]. - The company’s bank borrowings increased to RMB 11,420,808,000 as of June 30, 2023, compared to RMB 9,877,062,000 as of December 31, 2022, representing an increase of approximately 15.6%[135]. Employee and Management - The company employed 5,598 staff as of June 30, 2023, with total employee costs for the six months amounting to approximately RMB 395,366,000, a decrease from RMB 408,561,000 in the same period last year[48]. - The company is committed to enhancing its management team by focusing on the development of young management personnel, particularly those born after 1985 and 1990[33]. - The company is implementing a salary incentive and market-based differential salary mechanism reform at the Tongshankou mine as part of its continuous reform efforts[15]. Strategic Initiatives - The company is advancing the construction of intelligent mining projects, with the pilot mine completing underground 5G networks and remote centralized control systems[13]. - The company plans to implement a technology reward system to enhance the efficiency of mining operations, aiming for a 100% utilization rate of tailings and improved production capacity[32]. - The company has initiated a talent recruitment plan for 2024, targeting the introduction of mid-to-senior level talents and recent graduates to support its green and high-quality development[33]. Market and Sales - Revenue from external customers in China was RMB 20,469,998,000, representing a 16.5% increase from RMB 17,627,832,000 in the prior year[103]. - Sales of cathode copper reached RMB 18,534,989,000, up 27.3% from RMB 14,574,026,000 in the previous year[102]. - Revenue from the sale of non-ferrous metals to related parties reached RMB 6,238,019,000 for the six months ended June 30, 2023, compared to RMB 2,700,649,000 in the same period of 2022, representing a significant increase[152]. Compliance and Governance - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[64]. - The company has complied with the corporate governance code throughout the six-month period ending June 30, 2023[66]. - The independent auditor has reviewed the interim financial statements for the six months ending June 30, 2023, in accordance with the relevant auditing standards[64].

Financial Performance - For the six months ended June 30, 2023, the company's revenue increased by 18.8% to RMB 21,168.1 million compared to RMB 17,954.2 million in the same period of 2022[6] - Gross profit for the same period rose by 94.67% to RMB 830.8 million, up from RMB 426.8 million year-on-year[11] - The net profit attributable to the owners of the company decreased to RMB 17.4 million, down from RMB 50.6 million in the previous year, representing a decline of 65.6%[6] - Basic earnings per share for the period was RMB 0.10, compared to RMB 0.28 in the same period last year, reflecting a decrease of 64.3%[6] - Total revenue for the six months ended June 30, 2023, was RMB 21,168,130,000, an increase of 18.3% compared to RMB 17,954,197,000 for the same period in 2022[52] - Sales of cathode copper reached RMB 18,534,989,000, up 27.3% from RMB 14,574,026,000 in the previous year[52] Expenses and Liabilities - The company reported a significant increase in sales expenses, which rose to RMB 41.6 million from RMB 17.9 million, indicating a rise of 132.5%[12] - Administrative expenses increased to RMB 239.4 million from RMB 177.9 million, marking a rise of 34.6%[12] - Interest expenses on bank and other borrowings increased to RMB 203,978,000 from RMB 139,461,000 year-on-year[56] - The company's income tax expense for the six months ended June 30, 2023, was RMB 54,326,000, compared to RMB 24,813,000 for the same period in 2022[31] - Current liabilities totaled RMB 11,790.3 million, slightly down from RMB 11,948.2 million at the end of the previous year[13] - Non-current liabilities increased to RMB 8,031,699,000 as of June 30, 2023, from RMB 7,001,965,000 as of December 31, 2022[38] Assets and Equity - Total non-current assets amounted to RMB 10,735.0 million as of June 30, 2023, compared to RMB 10,981.7 million as of December 31, 2022[13] - The total equity as of June 30, 2023, was RMB 4,376,512,000, an increase from RMB 4,273,608,000 as of December 31, 2022[38] - As of June 30, 2023, the company's bank and other borrowings amounted to approximately RMB 8,031,226,000, an increase from RMB 6,695,567,000 as of December 31, 2022[112] - The group’s total debt amounted to approximately RMB 15,303,967,000, an increase from RMB 12,948,226,000 in the previous year[135] Production and Operations - In the first half of 2023, the company produced approximately 6,200 tons of copper, a year-on-year decrease of about 6.06%, while cathode copper production increased by approximately 29.04% to 313,189 tons[96] - The company achieved a nearly 80% increase in the production of anode plates in the copper smelting workshop during the first half of 2023[99] - The company reported a significant increase in chemical product production, with a total of approximately 957,647 tons, representing an increase of about 83.14% year-on-year[96] - The company aims to enhance operational quality through market-oriented benchmarking and comprehensive reforms[67] - The company is committed to increasing production and efficiency to drive scale benefits[69] Strategic Initiatives - The company has implemented new accounting standards effective from January 1, 2023, which may impact future financial reporting[21] - The company aims to implement "six efficiency enhancement" measures across all departments to improve core profitability, focusing on production increase, technological innovation, and cost control[78] - The company is focusing on technological innovation, aiming for a 100% utilization rate of tailings through the integration of digital technologies in mining operations[108] - The company plans to advance the construction of intelligent mining projects, optimizing underground mining operations and applying smart mining equipment[79] - The company is committed to environmental sustainability by developing comprehensive utilization plans for tailings and promoting green production practices[107] Human Resources - The total employee costs for the first half of 2023 amounted to RMB 395,366,000, a decrease from RMB 408,561,000 in the same period of 2022[86] - The group had 5,598 employees, with total employee costs for the six months ending June 30, 2023, amounting to approximately RMB 344,246,000, a decrease from RMB 364,961,000 in the same period last year[137] - The company is implementing a competitive selection process for key positions to attract and retain talented young professionals[101] - The company plans to strengthen talent development by implementing a three-year training program for new graduates and recruiting mid-to-senior level talents in 2024[129] Future Outlook - The company acknowledges the ongoing global economic uncertainties and the slow recovery of domestic production demand, indicating a cautious outlook for future growth[103] - The company expects a decline in sulfuric acid prices, which will lead to reduced profits, and has only completed 75.7% of its planned copper production for the first half of the year[74] - The board has decided not to declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[147] Audit and Reporting - The independent auditor has reviewed the group's condensed consolidated interim financial statements for the six months ended June 30, 2023, in accordance with the relevant auditing standards[150] - The interim report for the six months ended June 30, 2023, will be sent to shareholders and published on the company's website at an appropriate time[149]

Investment and Development Plans - The company plans fixed asset investments of RMB 1,356.48 million in 2023, focusing on key projects under the "14th Five-Year Plan," central environmental protection inspection rectification projects, and energy-saving, safety, and technological innovation initiatives[5] - The company aims to control 3 million tons of copper resources, achieve 40,000 tons of copper production from its own mines, and produce 1 million tons of cathode copper, 12 tons of gold, 850 tons of silver, and 2.45 million tons of sulfuric acid during the "14th Five-Year Plan" period[6] - The company's 400,000-ton high-purity cathode copper clean production project has been successfully completed and put into operation, marking a solid step towards its goals[118] - The company will continue to adhere to the "develop mining, consolidate smelting" strategy, aiming to enhance competitive cathode copper production capacity and upgrade existing smelting systems[118] - The company plans to optimize technical and economic indicators, reduce production costs, improve production environments, and enhance operational efficiency and profitability[118] - The company will promote the expansion and upgrading of the precious metals system and extend the precious metals industry chain to comprehensively improve smelting equipment levels and profitability[118] Environmental Protection and Rectification - The company completed 26 out of 34 central environmental protection inspection rectification measures, achieving a completion rate of 76.47% by the end of 2022[12] - Major pollutant emissions decreased significantly in 2022: sulfur dioxide by 35.14%, nitrogen oxides by 49.65%, COD by 35.24%, and ammonia nitrogen by 57.76%[12] - The company's online monitoring equipment exceeded hourly emission limits 62 times in 2022, a 94.7% decrease compared to 1,112 times in 2021[12] - The company received 1 environmental administrative penalty in 2022, an 87.5% decrease compared to 8 penalties in 2021[12] - The company completed the rectification of 9 out of 16 public complaints related to environmental issues, with the remaining 7 complaints under active rectification[13] - Completed 26 out of 34 environmental rectification measures, with 18 out of 24 severe environmental pollution cases resolved[17] - Completed 7 out of 8 rectification measures for the Fengshan Copper Mine tailings pond, with 260,000m³ of filling and 1,300,000m of board insertion completed[19] - Completed 4 out of 5 rectification measures for the Chimashan Copper Mine tailings pond, with 30,144.4m² of land leveling and 76,537.4m³ of volume completed[20] - Completed 7 out of 11 rectification measures for the smelter, with environmental impact assessment and planning permits obtained[21][22][23] Financial Performance and Ratios - The company's gross margin decreased to 3.46% in 2022 from 3.56% in 2021, while the debt-to-asset ratio increased to 81.60% from 75.74%[10] - The company's current ratio decreased to 1.02 in 2022 from 1.09 in 2021, while the asset turnover ratio dropped to 1.67 from 2.23[10] - The company's debt ratio is higher than the industry average, with inventory occupying a high scale due to the 400,000-ton project procurement[31] - The company has retained earnings of RMB 1,392,207,000 available for distribution to shareholders as of December 31, 2022[67] Risk Management and Mitigation - The company has no contingent liabilities as of December 31, 2022[35] - The company has strengthened credit risk management and strictly conducted contract legal reviews to mitigate market risks[36] - The company has implemented measures to control cash flow risks, including inventory quota control and optimizing supply chain services[33] - The company faces operational risks due to the gap in main processes and equipment compared to industry advanced levels[30] - The company has initiated measures to address macroeconomic risks, including adding restrictions on US mineral shipments in contracts[28] - The company has identified risks related to the use of non-flame-retardant cables in four subsidiaries, posing potential fire hazards, and water leakage risks at the Tonglushan Mine[39] Employee and Talent Management - The company has 780 employees aged 18-29, 773 aged 30-39, 3,152 aged 40-49, and 729 aged 50 or above[47] - The company has implemented a talent development strategy, including innovative incentive mechanisms and career development channels for core talents[48] - The company has a high internal promotion rate, reflecting its commitment to employee career development, supported by robust management development and succession planning programs[61] Client and Market Dependency - The company's major clients are large enterprises, with most having established long-term cooperation, and the risk of dependency on major clients is minimal due to a large number of substitutes in the domestic cathode copper market[59] COVID-19 Impact and Liquidity - The company has implemented strict COVID-19 prevention measures, with minimal impact on operations, and sufficient liquidity to ensure smooth operations[60] Compliance and Legal Management - The company has strengthened its compliance management system, focusing on extending compliance requirements to all levels and fostering a compliance culture[58] Infrastructure and Project Progress - The company has completed the preliminary design of the smelter's rainwater and sewage diversion and drainage upgrade EPC project in June 2022, with all construction drawings completed by October 2022[57] - The company has increased inventory of raw materials and requested additional transit ports to avoid prolonged customs clearance times, which could increase procurement costs[43] Framework Agreements and Transactions - The total transaction amount generated under the China Nonferrous Mining Financial Services Framework Agreement for the year ended December 31, 2022, was RMB 818,463,000 for deposit services and RMB 1,896,046,000 for financial services provided by China Nonferrous Mining Group[93] - The total transaction amount generated under the Parent Group Sales Framework Agreement for the year ended December 31, 2022, was RMB 6,395,155,000[115] - The total transaction amount generated under the Hubei Gold Procurement Framework Agreement for the year ended December 31, 2022, was RMB 37,116,000[112] - The annual cap for 2022 under the Parent Group Sales Framework Agreement was RMB 14,383,651,000[79] - The annual cap for 2022 under the Hubei Gold Procurement Framework Agreement was RMB 91,893,000[110] - The annual cap for 2022 under the China Nonferrous Mining Financial Services Framework Agreement was RMB 10,802,160,000[93] - Total transaction amount generated under the Zhongse Aobo sales framework agreement for the year ended December 31, 2022, was RMB 0[128] - The annual cap for 2021 was RMB 77,755,000[131] - The annual cap for 2021 was RMB 2,567,932,000[132] - The annual cap for 2020 was RMB 4,629,255,000[140] - The annual cap for 2022 was RMB 4,140,206,000[141] - Total transaction amount generated under the comprehensive supporting services framework agreement for the year ended December 31, 2022, was RMB 330,909,000[149] - Total transaction amount generated under the land lease framework agreement for the year ended December 31, 2022, was RMB 849,000[154] - Total transaction amount generated under the China Nonferrous Mining Group procurement and production services framework agreement for the year ended December 31, 2022, was RMB 3,617,153,000[164] - The annual cap for 2020 was RMB 379,020,000[170] - The annual cap for 2022 was RMB 30,000,000[186] - The company will bear all taxes and levies related to the lease, determined based on the payable rent[195] - The company holds four mines and a smelter in Hubei Province, with no comparable land nearby[196] - The annual cap for 2021 is set at RMB 1,100,000[197] - The land lease framework agreement is in effect from January 1, 2020, to December 31, 2022[199]

Financial Performance - The total revenue for the year ended December 31, 2022, was approximately RMB 33,658,516,000, a decrease of about 5.66% compared to RMB 35,677,656,000 in the same period of 2021[1][2] - Gross profit decreased by approximately 8.25% to about RMB 1,165,785,000 from RMB 1,270,548,000 in the previous year[1][2] - The company reported a loss of RMB 6,416,000 for the year, a significant decline from a profit of RMB 336,576,000 in 2021[2] - Basic and diluted earnings per share were RMB 0.62, down from RMB 1.60 in the previous year[2] - The total financial costs amounted to RMB 327,134,000, compared to RMB 314,366,000 in the previous year[2][20] - The company reported a significant impairment loss on trade receivables and other receivables, with net amounts of RMB (31,520) and RMB (56,310) respectively for the year[46] - The company reported a loss of RMB 24,561,000 from the write-off of subsidiaries in 2022, with no such losses reported in 2021[47] - The net loss recorded in other gains and losses for the year ended December 31, 2022, was approximately RMB 66,530,000, an increase of about 70.74% from a net loss of RMB 38,965,000 in 2021, primarily due to losses from bankrupt and liquidated subsidiaries[197] Assets and Liabilities - Non-current assets increased to RMB 9,131,706,000 from RMB 7,401,211,000, indicating a growth of approximately 23.36%[3][17] - The company's bank and other borrowings amounted to approximately RMB 6,695,567,000 as of December 31, 2022, compared to RMB 2,999,443,000 in 2021, indicating a significant increase in debt[43] - The total accounts payable increased to RMB 3,590,256,000 in 2022 from RMB 1,812,904,000 in 2021, showing a significant rise of approximately 98%[54] - The company’s non-current liabilities totaled RMB 7,001,965 million in 2022, compared to RMB 5,939,196 million in 2021, an increase of approximately 17.9%[121] - As of December 31, 2022, the total debt of the group amounted to approximately RMB 12,948,226,000, compared to RMB 9,247,453,000 in 2021, representing an increase of 40.5%[200] Operational Strategy - The company plans to continue its focus on market expansion and new product development in the upcoming fiscal year[1] - The company aims to enhance its management system and compliance risk control, focusing on continuous improvement and effective financial management[34] - The company emphasizes the importance of talent as a core element for driving development and market competitiveness, with plans to strengthen talent acquisition and training mechanisms[33] - The company is committed to accelerating green and high-quality development, establishing a solid foundation for future growth during the "14th Five-Year Plan" period[32] - The company plans to implement various mid- to long-term incentive mechanisms to motivate and retain talent, ensuring a focus on performance and results[33] - The company has identified the need for a strategic shift in response to environmental inspections and challenges, promoting a transformation towards sustainable development[32] - The company plans to enhance its digital mining and smart factory construction as part of its strategy for high-quality green development[62] - The company is focused on enhancing its green and intelligent factory standards, aiming for cost, efficiency, and environmental improvements[191] - The company plans to strengthen resource acquisition through both internal exploration and external partnerships, particularly in the Huangshi region[192] - The company is committed to advancing technological breakthroughs in key projects, including the production of high-grade copper and improving recovery rates[193] - The company has established a carbon peak action plan, focusing on energy consumption reduction and pollution control[190] - The company has implemented a compliance management initiative, enhancing risk prevention and management across all levels[181] Research and Development - Research and development costs increased to RMB 20,584,000 in 2022 from RMB 16,873,000 in 2021, reflecting a growth of approximately 22%[49] - Research and development costs included employee costs of approximately RMB 4,903,000, up from RMB 3,589,000 in 2021, indicating an increase in investment in innovation[115] Revenue from Operations - The company has made acquisitions, with Company A generating revenue of RMB 5,628,543,000 in 2022, up from RMB 4,974,800,000 in 2021[45] - Revenue from the sale of properties, plants, and equipment was RMB 3,525,000 in 2022, compared to a loss of RMB 4,666,000 in 2021[47] - The group produced approximately 10,700 tons of mined copper in 2022, a decrease of about 51.14% year-on-year[148] - The group recorded revenue of approximately RMB 33,658,516,000 for the year ended December 31, 2022, a decrease of about 5.66% compared to RMB 35,677,656,000 in 2021[161] - The group’s sales and service costs for the year ended December 31, 2022, were approximately RMB 32,492,731,000, a decrease of about 5.56% compared to RMB 34,407,108,000 in 2021, primarily due to a decline in raw material procurement prices and a slight decrease in product sales volume[195] Employee Costs - The total employee costs rose to RMB 905,425,000 in 2022, up from RMB 779,220,000 in 2021, indicating an increase of about 16%[49] - Employee benefits expenses capitalized as inventory were approximately RMB 586,542 million for the year, compared to RMB 598,700 million in 2021[142] Other Income and Expenses - Other income increased to RMB 71,320,000 from RMB 66,472,000, reflecting a growth of approximately 12.77%[2][19] - Other operating expenses increased by approximately 2,072.91% to RMB 382,650,000, primarily due to losses during the shutdown of self-owned mines[163] - The average credit period for purchasing goods ranged from 60 to 180 days, with financial risk management policies in place to ensure all payables are settled within credit terms[178] Corporate Governance - The board does not recommend the payment of a final dividend for the year ended December 31, 2022[70] - The board of directors held only two regular meetings during the year to review and discuss annual and interim performance, which is below the recommended frequency[84] - There were no significant events after the reporting period that would impact the financial statements[78]

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)