龙资源(01712) - 2025 - 中期财报

Corporate Information Corporate Information Details This section details Dragon Mining Limited's corporate information, including board composition, key advisors, registration details, and its primary engagement in gold mining and mineral exploration - The company's board includes Chairman and Non-Executive Director Arthur George Dew and CEO and Executive Director Brett Robert Smith, supported by an Audit and Risk Management Committee, Remuneration Committee, and Nomination Committee[5][7] - The company is incorporated in Australia, with principal places of business in Perth, Australia, and Wan Chai, Hong Kong, and a stock code of 1712[8][9][10] - The Group is a for-profit entity primarily engaged in gold mining operations and gold mineral exploration[21][22] Consolidated Interim Financial Statements Consolidated Interim Statement of Profit or Loss For the six months ended June 30, 2025, the company achieved a profit before tax of AUD 18.044 million, a significant increase driven by substantial growth in revenue from customers Consolidated Interim Statement of Profit or Loss Key Data (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Revenue from customers | 54,460 | 30,678 | | Cost of sales | (27,839) | (26,800) | | Gross profit | 26,621 | 3,878 | | Other gains | 724 | 330 | | Other income | 418 | 2,025 | | Mineral exploration expenditure | (433) | (88) | | Management and administrative expenses | (4,009) | (2,621) | | Other operating expenses | (592) | (598) | | Finance costs | (648) | (616) | | Fair value (loss)/gain on financial assets | (49) | 310 | | Foreign exchange (loss)/gain | (3,988) | 329 | | Profit before tax | 18,044 | 2,949 | | Income tax expense | (5,352) | (978) | | Profit after income tax | 12,692 | 1,971 | | Basic and diluted earnings per share (AUD cents/share) | 8.03 | 1.25 | - Revenue from customers increased by 77.5% year-on-year, from AUD 30,678 thousand in 2024 to AUD 54,460 thousand in 2025[12] - Gross profit significantly increased by 586.5%, from AUD 3,878 thousand in 2024 to AUD 26,621 thousand in 2025[12] Consolidated Interim Statement of Other Comprehensive Income For the six months ended June 30, 2025, the company reported total comprehensive income of AUD 19.802 million, primarily due to a favorable foreign exchange difference on translation of overseas operations Consolidated Interim Statement of Other Comprehensive Income Key Data (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Profit after income tax (brought forward) | 12,692 | 1,971 | | Exchange difference on translation of overseas operations | 7,110 | (1,298) | | Total comprehensive income for the period | 19,802 | 673 | - The exchange difference on translation of overseas operations shifted from a loss of AUD 1,298 thousand in the prior period of 2024 to a gain of AUD 7,110 thousand in 2025[14] Consolidated Interim Statement of Financial Position As of June 30, 2025, total assets increased to AUD 165.627 million and net assets to AUD 102.566 million, mainly driven by increases in property, plant, and equipment and other assets Consolidated Interim Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Total current assets | 64,459 | 64,832 | | Total non-current assets | 101,168 | 67,740 | | Total assets | 165,627 | 132,572 | | Total current liabilities | 22,715 | 15,324 | | Total non-current liabilities | 40,346 | 34,484 | | Total liabilities | 63,061 | 49,808 | | Net assets | 102,566 | 82,764 | | Total equity | 102,566 | 82,764 | - Total non-current assets increased by 49.3%, from AUD 67,740 thousand as of December 31, 2024, to AUD 101,168 thousand as of June 30, 2025[15] - Total liabilities increased by 26.6%, from AUD 49,808 thousand as of December 31, 2024, to AUD 63,061 thousand as of June 30, 2025[15] Consolidated Interim Statement of Changes in Equity For the six months ended June 30, 2025, total equity increased to AUD 102.566 million, primarily due to profit after tax and an increase in foreign currency translation reserve during the period Consolidated Interim Statement of Changes in Equity Key Data (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Total equity at beginning of period (January 1) | 82,764 | 68,758 | | Profit after income tax for the period | 12,692 | 1,971 | | Other comprehensive income/(loss) | 7,110 | (1,298) | | Total comprehensive income for the period | 19,802 | 673 | | Total equity at end of period (June 30) | 102,566 | 69,431 | - Accumulated losses decreased from AUD 59,171 thousand as of January 1, 2025, to AUD 46,479 thousand as of June 30, 2025, reflecting improved profitability[16] - Foreign exchange reserve shifted from a negative AUD 1,610 thousand as of January 1, 2025, to a positive AUD 5,500 thousand as of June 30, 2025, indicating a positive impact from exchange rate movements[16] Consolidated Interim Statement of Cash Flows For the six months ended June 30, 2025, net cash from operating activities significantly increased, but net cash used in investing activities also rose substantially, leading to a net decrease in cash and cash equivalents Consolidated Interim Statement of Cash Flows Key Data (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 21,987 | 2,142 | | Net cash used in investing activities | (30,823) | (2,497) | | Net cash used in financing activities | (97) | (88) | | Net decrease in cash and cash equivalents | (8,933) | (443) | | Cash and cash equivalents at end of period | 30,721 | 21,831 | - Net cash from operating activities significantly increased from AUD 2,142 thousand in the prior period of 2024 to AUD 21,987 thousand in 2025[18] - Net cash used in investing activities substantially increased from AUD 2,497 thousand in the prior period of 2024 to AUD 30,823 thousand in 2025, primarily due to the payment of AUD 29,904 thousand for reclamation guarantees[18] Notes to the Consolidated Interim Financial Statements Corporate Information and Summary of Material Accounting Information This section outlines the company's reporting entity information, basis of financial statement preparation, and accounting policies, confirming its primary engagement in gold mining and exploration, and no significant impact from new accounting standards - Dragon Mining Limited was incorporated on April 23, 1990, as an Australian public company, primarily engaged in gold mining operations and gold mineral exploration[19][21][22] - The consolidated interim financial statements are prepared in accordance with the Hong Kong Companies Ordinance, the Listing Rules, and International Accounting Standard 34, and are presented in Australian Dollars[24][27][28] - The Board has determined that the new and revised accounting standards and interpretations have no material impact on the company, and no significant changes to accounting policies are required[32][34] Other Revenue, Income and Expenses This section details the company's revenue from customers, cost of sales, other gains, other income, and operating expenses for the six months ended June 30, 2025, showing significant growth in gold sales and toll treatment service revenue Other Revenue, Income and Expenses (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Revenue from customers | | | | Revenue from gold sales | 50,105 | 30,678 | | Revenue from toll treatment services | 4,355 | – | | Cost of sales | | | | Production costs (net of inventory movements) | 22,780 | 23,629 | | Depreciation of mine property, plant and equipment | 5,059 | 3,171 | | Other gains | | | | Financing income and interest | 724 | 330 | | Other income | | | | Net gain on cancellation of crusher agreement | – | 1,550 | | Service income | 405 | 447 | | Operating expenses | | | | Management and administrative expenses | 4,009 | 2,621 | | Reclamation costs | 465 | 488 | | Finance costs | | | | Unwinding of discount on reclamation provision | 504 | 572 | | Interest expense | 106 | 5 | | Total employee benefits | | | | Wages and salaries | 4,127 | 3,976 | - Revenue from gold sales increased by 63.3%, from AUD 30,678 thousand in 2024 to AUD 50,105 thousand in 2025[36] - New revenue from toll treatment services of AUD 4,355 thousand in 2025 significantly contributed to total revenue[36] Income Tax This section explains the company's income tax policy and expenses for the period ended June 30, 2025, indicating full utilization of tax losses in Finland and increased income tax expense and liabilities Income Tax Expense (For the 6 months ended June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Current income tax expense | 5,352 | 978 | - The company recognized an income tax expense of AUD 5,352 thousand (2024: AUD 978 thousand) and a tax liability of AUD 4,467 thousand (2024: AUD 968 thousand)[42][43] - The Group has fully utilized its tax losses in Finland, and no provision has been made for Hong Kong profits tax during the period[41][43] Trade and Other Receivables As of June 30, 2025, the company's total trade and other receivables increased, primarily due to a significant rise in trade receivables, with all amounts subsequently recovered after the period end Trade and Other Receivables (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Trade receivables – amortized cost | 3,019 | 657 | | Other receivables | 1,240 | 1,913 | | Total | 4,259 | 2,570 | - Trade receivables increased by 359.5%, from AUD 657 thousand as of December 31, 2024, to AUD 3,019 thousand as of June 30, 2025[47] - All trade receivables are due within one month, with no significant probability of default, and all amounts were subsequently collected after the period end[47][49] Inventories As of June 30, 2025, the company's total inventories increased to AUD 25.557 million, mainly due to higher ore and concentrate stockpiles and gold in circuit values Inventories (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Ore and concentrate stockpiles – at cost | 17,253 | 12,470 | | Gold in circuit – at cost | 6,708 | 4,236 | | Gold on hand – at cost | – | 1,492 | | Raw materials and stores – at cost | 1,596 | 1,059 | | Total | 25,557 | 19,257 | - Ore and concentrate stockpiles increased by 38.4%, from AUD 12,470 thousand as of December 31, 2024, to AUD 17,253 thousand as of June 30, 2025[51] Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the company recorded a fair value loss on financial assets, primarily shares in Aurion Resources Limited, but overall investment value increased Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Investments at fair value through profit or loss | 2,053 | 1,826 | - The company holds 2,452,910 shares in Aurion Resources Limited, representing 1.89% of its issued ordinary shares[54] - The fair value change of these shares during the period was a loss of AUD 0.05 million (June 30, 2024: gain of AUD 0.31 million)[54] Other Assets As of June 30, 2025, the company's non-current other assets significantly increased, mainly due to additional environmental guarantees placed for Finnish and Swedish mines Other Assets (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Current prepayments | 962 | 398 | | Current other receivables | 907 | 468 | | Non-current environmental and other guarantees | 40,580 | 12,587 | - Non-current environmental and other guarantees increased by 222.4%, from AUD 12,587 thousand as of December 31, 2024, to AUD 40,580 thousand as of June 30, 2025[57] - The company placed an additional collateral guarantee of SEK 5.2 million (approximately AUD 10.5 million total) for Svartliden in Sweden and a new environmental guarantee of EUR 20.6 million for Vammala in Finland[58][59] Property, Plant and Equipment As of June 30, 2025, the net book value of the company's property, plant, and equipment increased to AUD 57.569 million, primarily due to an increase in mine properties, with no impairment triggers identified during the period Net Book Value of Property, Plant and Equipment (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Land | 1,490 | 1,379 | | Buildings | 294 | 116 | | Property, plant and equipment | 5,447 | 4,520 | | Mine properties | 50,338 | 47,291 | | Total | 57,569 | 53,306 | - Mine properties net value increased by 6.4%, from AUD 47,291 thousand as of December 31, 2024, to AUD 50,338 thousand as of June 30, 2025[61] - No impairment triggers were identified, and no impairment was recognized during the period, with capitalized costs for Fäboliden mine property totaling AUD 20.8 million[62] Mineral Exploration and Evaluation Costs As of June 30, 2025, total mineral exploration and evaluation costs increased to AUD 2.603 million, mainly due to new additions and foreign exchange movements, with some costs reclassified to mine properties Mineral Exploration and Evaluation Costs (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Balance at beginning of period | 1,436 | 1,848 | | Additions | 1,565 | 3,103 | | Reclassified to mine properties | (587) | (3,547) | | Net foreign exchange movement | 189 | 32 | | Total | 2,603 | 1,436 | - Additions of AUD 1,565 thousand were made during the period, while AUD 587 thousand was reclassified to mine properties[63] - The recoverability of exploration and evaluation costs depends on the successful development and commercial exploitation or alternative recovery through the sale of interest areas[64] Trade and Other Payables As of June 30, 2025, the company's total trade and other payables increased to AUD 14.395 million, with all amounts due within one month Trade and Other Payables (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Trade payables and accrued expenses | 14,395 | 8,318 | | Total | 14,395 | 8,318 | - Trade payables and accrued expenses increased by 73.1%, from AUD 8,318 thousand as of December 31, 2024, to AUD 14,395 thousand as of June 30, 2025[66] - All trade payables and accrued expenses are due within one month[66] Provisions As of June 30, 2025, non-current provisions significantly increased, mainly due to a net increase in reclamation provisions and foreign exchange movements, reflecting ongoing commitments for Finnish and Swedish mine reclamation obligations Provisions (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Current employee entitlements | 1,600 | 1,810 | | Current reclamation | 1,948 | 1,814 | | Non-current employee entitlements | 37 | 28 | | Non-current reclamation | 40,088 | 34,229 | | Total | 43,673 | 37,881 | - Reclamation provisions saw a net increase of AUD 2,184 thousand and a net foreign exchange movement increase of AUD 2,840 thousand, bringing the total reclamation provision to AUD 42,036 thousand[68] - The company provided an additional SEK 32.0 million (approximately AUD 5.2 million) in collateral for Svartliden in Sweden, bringing the total to SEK 65.0 million (approximately AUD 10.5 million)[71][75] - A new environmental guarantee of EUR 11.9 million (approximately AUD 20.6 million) was placed for Vammala in Finland, with an existing EUR 1.4 million guarantee returned in June 2025[72][76] Contributed Equity As of June 30, 2025, the company's contributed equity remained unchanged at AUD 140.408 million, with 158,096,613 ordinary shares issued Contributed Equity (As of June 30) | Indicator | 2025 (AUD thousand) | December 31, 2024 (AUD thousand) | | :--- | :--- | :--- | | Fully paid ordinary shares | 140,408 | 140,408 | - The number of issued shares remained unchanged at 158,096,613 during the period[79] - The company entered into a placement agreement on September 8, 2025, to place up to 31,619,322 placement shares at HKD 5.61 per share, with estimated net proceeds of approximately HKD 172.8 million[79][81][125][126][127] Dividends For the period ended June 30, 2025, no dividends were paid or declared, and the board did not recommend any dividend payments - No dividends have been paid or declared since the beginning of the period, and the directors do not recommend paying any dividends for the period ended June 30, 2025[80][82] Earnings Per Share For the six months ended June 30, 2025, the company's basic and diluted earnings per share significantly increased, reflecting improved profitability Earnings Per Share (As of June 30) | Indicator | 2025 (AUD) | 2024 (AUD) | | :--- | :--- | :--- | | Profit after tax for basic and diluted EPS (AUD thousand) | 12,692 | 1,971 | | Weighted average number of ordinary shares for basic and diluted EPS | 158,096,613 | 158,096,613 | | Basic and diluted earnings per share (AUD cents) | 8.03 | 1.25 | - Basic and diluted earnings per share increased by 542.4%, from AUD 1.25 cents in the prior period of 2024 to AUD 8.03 cents in 2025[87] - Earnings per share is calculated based on the net profit attributable to ordinary shareholders of the parent company divided by the weighted average number of ordinary shares outstanding during the period[83][84][85] Related Party Transactions This section discloses transactions between the company, its subsidiaries, and other related parties, including administrative and management service agreements, loan facilities, and shareholdings of entities with significant influence over the Group - The company received AUD 55,500 for Chief Financial Officer services and AUD 63,598 for administrative services from Tanami Gold NL[92] - The company received AUD 86,233 for Chief Financial Officer services and AUD 210,549 for administrative services from Metals X Limited[92] - The company entered into an administrative and management service sharing agreement with Allied Group, receiving AUD 18,095 in service fees during the period[95][96] - The company has an unsecured loan facility of AUD 27.0 million with AP Finance Limited, a wholly-owned subsidiary of Allied Group[95][96] - Allied Properties Resources Limited (APRL) holds 29.65% of the company's ordinary shares, and Sincere View International Limited holds 13.74% of the company's ordinary shares[95][96] Segment Information This section segments the company's operations by geographical location (Sweden and Finland), providing revenue, profit/loss, asset, and liability information for each segment, highlighting Finland's significant contribution to Group profitability - The Group's operating segments are divided into Sweden and Finland, primarily based on geographical location, different national regulatory environments, and different end products[97][101] Segment Revenue and Profit or Loss (For the 6 months ended June 30) | Indicator | Sweden (AUD thousand) | Finland (AUD thousand) | Unallocated (AUD thousand) | Total (AUD thousand) | | :--- | :--- | :--- | :--- | :--- | | Gold sales to external customers | 50,105 | – | – | 50,105 | | Inter-segment sales | – | 52,508 | – | 52,508 | | Elimination of inter-segment revenue | (52,508) | – | – | (52,508) | | Toll treatment revenue | 4,355 | – | – | 4,355 | | Total revenue from customers | 1,952 | 52,508 | – | 54,460 | | Segment (loss)/profit before tax | (6,330) | 24,643 | (269) | 18,044 | | Segment (loss)/profit after tax | (6,330) | 19,291 | (269) | 12,692 | Segment Assets and Liabilities (As of June 30) | Indicator | Sweden (AUD thousand) | Finland (AUD thousand) | Australia (AUD thousand) | Total (AUD thousand) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 65,722 | 73,362 | 26,543 | 165,627 | | Total liabilities | 30,566 | 31,057 | 1,438 | 63,061 | Expenditure Commitments This section discloses the company's exploration and remuneration commitments as of June 30, 2025, detailing estimated expenditures for the upcoming year and the next one to five years Exploration Commitments (As of June 30) | Period | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Within one year | 53 | 86 | | One year or later and not later than five years | 291 | 241 | | Total | 344 | 327 | Remuneration Commitments (As of June 30) | Period | 2025 (AUD thousand) | 2024 (AUD thousand) | | :--- | :--- | :--- | | Within one year | 684 | 667 | | One year or later and not later than five years | 3,420 | 2,667 | | Total | 4,104 | 3,334 | - Exploration commitments can be reduced by selectively relinquishing exploration tenements or renegotiating expenditure commitments[115] Significant Events After Period End This section discloses significant events occurring after the reporting period end, including the lapse of conditional voluntary cash offers and the company entering into a placement agreement to raise funds - APRL made a conditional voluntary cash offer on April 1, 2025, which was subsequently withdrawn on June 2, 2025[120][123] - Wah Cheong made a voluntary cash offer of HKD 2.60 per share on May 19, 2025, which the Independent Board Committee recommended shareholders reject, and the offer lapsed on August 8, 2025[121][122][124] - The company entered into a placement agreement on September 8, 2025, to place up to 31,619,322 placement shares at HKD 5.61 per share, with estimated net proceeds of approximately HKD 172.8 million[125][126][127] Independent Auditor's Review Report Auditor's Conclusion Ernst & Young reviewed the consolidated interim financial information for the six months ended June 30, 2025, concluding no material matters indicating non-compliance with IAS 34 - Independent auditor Ernst & Young reviewed the company's interim financial information for the six months ended June 30, 2025[129] - The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope smaller than an audit, thus no audit opinion was expressed[132][134] - The auditors are not aware of any matters that lead them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[133][135] Directors' Interests Directors' Shareholdings As of June 30, 2025, Mr. Arthur George Dew held 220,000 shares, representing 0.14% of total issued shares, with all interests being long positions Directors' Shareholdings (As of June 30) | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Arthur George Dew | Beneficial owner/Personal interest | 220,000 | 0.14% | - Save as disclosed, no other directors or chief executives had any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations[139][140] Substantial Shareholders' Interests Major Shareholder Holdings As of June 30, 2025, APAC Resources Limited, Allied Group Limited, and Lee and Lee Trust each held 29.65% of the company's shares through controlled corporations, while Sincere View International Limited held 13.74% Major Shareholder Holdings (As of June 30) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | APAC Resources Limited | Interest in controlled corporation | 46,877,727 | 29.65% | | Allied Group Limited | Interest in controlled corporation | 46,877,727 | 29.65% | | Lee and Lee Trust | Interest in controlled corporation | 46,877,727 | 29.65% | | Sincere View International Limited | Beneficial owner | 21,716,899 | 13.74% | | Mr. Hon Kwok Lung | Interest in controlled corporation | 21,716,899 | 13.74% | | Ms. Lam Suk Ying | Spouse's interest | 21,716,899 | 13.74% | - APAC Resources Limited, Allied Group Limited, and Lee and Lee Trust each indirectly held 29.65% of the company's shares through Allied Properties Resources Limited[145] - Mr. Hon Kwok Lung controls 80% of Sincere View International Limited, and Ms. Lam Suk Ying is Mr. Hon Kwok Lung's spouse, thus both are deemed to have a 13.74% interest[146][148][149] Corporate Governance and Other Information Corporate Governance Compliance The company is committed to good corporate governance, complying with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[152][156] - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions, and all directors have confirmed compliance[153][157] Changes in Directors' Information This section discloses changes in directors' information during the period, including other appointments for CEO and Executive Director Mr. Brett Robert Smith and Non-Executive Director Ms. Lam Lai - CEO and Executive Director Mr. Brett Robert Smith was appointed as Non-Executive Chairman of Mount Gibson Iron Limited and Non-Executive Director of Elementos Limited[159] - Non-Executive Director Ms. Lam Lai resigned as Executive Director and Authorized Representative of Ernest Borel Holdings Limited[159] Audit and Risk Management Committee Review The Audit and Risk Management Committee reviewed the company's consolidated interim results for the six months ended June 30, 2025, which were also reviewed by Ernst & Young - The Audit and Risk Management Committee, comprising three independent non-executive directors, reviewed the company's consolidated interim results for the six months ended June 30, 2025[160][164] - The company's auditor, Ernst & Young, conducted a review of the interim financial information in accordance with International Standard on Review Engagements 2410[160][164] Other Corporate Information This section clarifies the rounding of amounts in the report and confirms no interim dividends were paid or declared, nor were any company shares repurchased, sold, or redeemed during the period - Amounts presented in this report and the interim financial report have been rounded to the nearest AUD 1,000[161][165] - No dividends were paid or declared during the period, and the directors have not recommended or declared any dividends[162][166] - Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's shares during the six months ended June 30, 2025[163][167] Management Discussion and Analysis Business Review This section reviews the Group's operational nature, key activities, health and safety performance, mine operations in Finland and Sweden, ESG commitments, and operational risks - The Group primarily operates gold mines and processing facilities in Finland and Sweden, including the Vammala Production Centre in Finland and the Svartliden Production Centre in Sweden[169][170][172][173] - Safety is one of the Group's top priorities, with no lost-time injuries (LTIs) occurring during the period, and both Finnish and Swedish mines maintaining long periods without LTIs[176][181][182] - The Group faces operational risks including production delays, difficulties in obtaining permits, socio-political protests, cyberattacks, and natural disasters[232][234][239][240][245][246] Nature of Operations and Principal Activities Dragon Mining Limited, an Australian company listed on the HKEX, primarily operates gold mines and processing facilities in Finland and Sweden, and conducts gold exploration, evaluation, and development in the Nordic region - The Group operates gold mines and processing facilities in Finland and Sweden, with an annual production of 20,000 to 30,000 ounces of gold concentrate[169][172] - Principal activities include gold mining and ore processing in Finland, ore and gold concentrate processing in Sweden, and exploration, evaluation, and development of gold projects in the Nordic region[175] Health and Safety Safety is the Group's top priority, maintained through leadership, safety procedures, and regular inspections, with no lost-time injuries reported during the period in Finland and Sweden - The Group is committed to safeguarding the health and welfare of its employees and contractors, exceeding the expected standards of local health and safety regulations[176] - During the period, no lost-time injuries (LTIs) occurred in any of the Group's operations[181][182] Lost Time Injury Frequency (As of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Lost Time Injury Frequency | 10.6 | 10.6 | Operations Overview This section details production at Finnish and Swedish mines, showing significant gold production increase at Finland's Vammala plant and reduced operating costs at Sweden's Svartliden plant through toll treatment services - The Finland Vammala plant processed 157,047 tonnes of ore with an average grade of 3.06 grams/tonne, producing 13,475 ounces of gold and achieving a processing recovery rate of 87.2%[184][186][187] - The Sweden Svartliden plant produced 11,266 ounces of gold from Vammala flotation concentrate and processed 29,530 tonnes of gold-bearing ore from Botnia on a toll treatment basis, yielding 433 ounces of gold[204][205][207][208] - The toll treatment of gold-bearing ore from Botnia made a positive contribution to reducing the operating costs of the Svartliden plant[206][207] Environment, Social and Governance The Group maintains a robust corporate governance system, committed to socially responsible operations, balancing stakeholder interests, and promoting sustainable mineral resource development through efficient, balanced, and forward-looking management - The Board is overall responsible for the Group's Environmental, Social, and Governance (ESG) management, committed to the sustainable development of mineral resources[221][223] - The Group is committed to operating within the framework of the law, monitoring and minimizing environmental impact, and fully considering environmental matters at all stages of mining projects[222][224] - Dragon Mining emphasizes the Towards Sustainable Mining (TSM) initiative in Finland and has published a social responsibility report and a 2024 ESG report[226][227][230][231] Operational Risks The Group faces ongoing operational risks including safety incidents, production delays, permitting difficulties, socio-political protests, cyberattacks, and natural disasters, which could adversely affect business - Lost-time injuries, serious workplace accidents, or major equipment failures could lead to personal injury, production stoppages, or closures, significantly impacting the business[233] - The application for an environmental permit for full-scale mining at Fäboliden was rejected by the Swedish Supreme Court, and the company plans to resubmit the application, with any delays potentially affecting profitability[234][242][243][244][247] - The Group may face protests from activist groups or individuals opposing mining, leading to delays or increased costs, and potentially adversely affecting the political landscape[245][248] Financial Review This section analyzes the company's financial performance for the six months ended June 30, 2025, covering profitability, revenue, costs, working capital, liquidity, gearing ratio, financial risks, and future strategy - For the period ended June 30, 2025, the Group recorded a profit before tax of AUD 18.0 million (2024: AUD 2.9 million) and a profit after tax of AUD 12.7 million (2024: AUD 2.0 million)[249][251] - The increase in profit is primarily attributable to improved gold grade and recovery, higher average gold prices, and positive contributions from toll treatment of gold-bearing ore[254] - The company has net assets of AUD 102.6 million, a working capital surplus of AUD 41.7 million, and a gearing ratio of 0.4%[269][273] Profitability For the six months ended June 30, 2025, the company's profit before tax and profit after tax both significantly increased, driven by improved gold grade and recovery, higher average gold prices, and positive contributions from toll treatment services - Profit before tax increased from AUD 2.9 million in the prior period of 2024 to AUD 18.0 million in 2025[249][251] - Profit after tax increased from AUD 2.0 million in the prior period of 2024 to AUD 12.7 million in 2025[249][251] Revenue from Customers Revenue from customers significantly increased, primarily from gold sales and new toll treatment services, with both gold sales volume and average gold prices rising - Gold sales revenue increased by 63.3% to AUD 50.1 million, with total gold sold at 10,370 ounces (2024: 9,025 ounces) and an average gold price of USD 3,123 per ounce (2024: USD 2,208 per ounce)[249][252] - Revenue from toll treatment services amounted to AUD 4.4 million, derived from processing 29,530 tonnes of gold-bearing ore from Botnia[250][253] Cost of Sales Cost of sales slightly increased, primarily including mining costs, processing costs, other production costs, and mine property depreciation. Finnish mining costs decreased, while Svartliden processing costs increased due to toll treatment services Cost of Sales Overview (As of June 30) | Indicator | 2025 (AUD thousand) | 2024 (AUD thousand) | Change Percentage | | :--- | :--- | :--- | :--- | | Mining costs | 14,120 | 12,877 | 9.7% | | Processing costs | 12,383 | 9,486 | 30.5% | | Other production costs | 399 | 350 | 14.0% | | Gold inventory movements | (4,122) | 916 | – | | Depreciation of mine property, plant and equipment | 5,059 | 3,171 | 59.5% | | Total Cost of Sales | 27,839 | 26,800 | 3.9% | - Finnish operations' mining costs averaged AUD 69 per tonne of ore, a 17.2% decrease year-on-year[262][264] - Svartliden processing costs increased by 43.8% to AUD 2,144 per tonne of concentrate, primarily due to toll treatment services[260][261] Gross Profit A substantial 77.5% increase in revenue from customers, coupled with only a 3.9% rise in cost of sales, led to a significant 586.5% increase in gross profit to AUD 26.6 million, achieving a gross margin of 48.9% - Revenue from customers increased by 77.5%, cost of sales slightly increased by 3.9%, and gross profit increased by 586.5% to AUD 26.6 million[266][270] - Gross margin improved from 12.6% in the prior period of 2024 to 48.9% in 2025[266][270] Investment in Aurion Resources Limited The company continues to hold 2,452,910 shares in Aurion Resources Limited, with no shares sold during the period - The company holds 2,452,910 shares in Aurion Resources Limited, a Canadian exploration company listed on the TSX Venture Exchange[267][271] - No Aurion shares were sold as of the date of this interim report[267][271] Management and Administration and Other Expenses Management and administration expenses include corporate costs, changes in reclamation provisions for non-productive assets, and depreciation of non-mining assets, while other expenses cover written-off evaluation asset costs and corporate-related costs - Management and administrative expenses include corporate costs, changes in reclamation provisions for non-productive assets, and depreciation of non-mining assets[268][272] - Other expenses include the cost of evaluation assets written off as part of the Group's regular review of capitalized exploration and evaluation costs, and corporate-related costs[268][272] Working Capital, Liquidity and Gearing Ratio As of June 30, 2025, the company's net assets and working capital surplus both increased, with sufficient cash and cash equivalents and a low gearing ratio - Net assets were AUD 102.6 million (2024: AUD 69.4 million), and working capital surplus was AUD 41.7 million (2024: AUD 38.3 million)[269][273] - Market capitalization at period end was AUD 106.7 million or HKD 548.6 million[269][273] - Cash and cash equivalents were AUD 30.7 million (2024: AUD 21.8 million), and the gearing ratio was 0.4% (2024: 0.3%)[269][273] Interest Bearing Liabilities The company has an unsecured loan facility of AUD 27.0 million with AP Finance Limited, maturing on December 31, 2026, with no amounts drawn during the period - The company has an unsecured loan facility of AUD 27.0 million with AP Finance Limited, maturing on December 31, 2026[274][279] - The terms and conditions of the loan facility remain unchanged, and the company has not drawn any amounts as of the date of this interim report[274][279] Conditional Voluntary Cash Offer APRL and Wah Cheong successively made conditional voluntary cash offers, but the Independent Board Committee recommended shareholders reject them, and the offers ultimately lapsed due to unfulfilled acceptance conditions - APRL made a conditional voluntary cash offer on April 1, 2025, which was subsequently withdrawn on June 2, 2025[275][277][280] - Wah Cheong made a voluntary cash offer of HKD 2.60 per share on May 19, 2025, which the Independent Board Committee recommended shareholders reject, and the offer lapsed on August 8, 2025[276][277][278][280][281] Use of Net Proceeds from the Company's Placement The company fully utilized the net proceeds from the January 2021 share placement to settle environmental guarantee obligations related to its Finnish and Swedish operations - The net proceeds from the January 2021 share placement amounted to HKD 39.6 million (approximately AUD 7.6 million)[283][284] - During the period, the Group utilized the remaining net proceeds of HKD 2.6 million (approximately AUD 0.5 million) to partially settle environmental guarantees for Vammala and Svartliden[283][284] - The net proceeds have been fully allocated to settle certain environmental guarantees related to the company's operations in Finland and Sweden[283][284] Financial Risks The company faces various financial risks including foreign exchange, commodity price, liquidity, credit, and interest rate risks, and implements corresponding measures for management and hedging - The company sells gold and silver doré and gold concentrate in USD, incurs most costs in SEK and EUR, and presents its financial statements in AUD, exposing it to foreign exchange risk[287][293] - The company is exposed to the risk of fluctuations in gold prices, with no current plans to hedge commodity price risk[289][295] - Credit risk primarily arises from bank deposits, trade and other receivables, and environmental and other guarantees, with a concentration of credit risk from sales of gold concentrate to a Finnish smelter[292][297] Company Strategy and Future Developments The company focuses on gold exploration, mining, and processing in the Nordic region, aiming to develop existing and new mining assets, and plans to resubmit the environmental permit application for full-scale mining at Fäboliden - The company's objective is to focus on developing existing and new mining assets within a reasonable distance of its Vammala and Svartliden processing plants in Finland and Sweden[302][307] - Following the Swedish Supreme Court's rejection of the environmental permit appeal for full-scale mining at Fäboliden, the company plans to resubmit a revised application to address the environmental court's concerns[308][312] - The net proceeds from the placement are intended for the acquisition of a mining contractor business, settlement of environmental bonds, upgrading processing plant facilities and equipment, and mining development costs at Svartliden[326][327] Dividends For the period ended June 30, 2025, no dividends were paid or declared, and the board did not recommend any dividend payments - No dividends have been paid or declared since the beginning of the period, and the directors do not recommend paying any dividends for the period ended June 30, 2025[314] Significant Investments Held, Material Acquisitions and Disposal of Subsidiaries, Associates or Joint Ventures and Future Plans for Material Investments or Capital Assets Aside from disclosures in the interim report, there were no other significant investments, material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor any other plans for material investments or capital asset additions approved by the board during the period - Other than as disclosed in this interim report, there were no other significant investments held, nor any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period[311][314] - Other than as disclosed in this interim report, the Board had not approved any plans for other material investments or additions to capital assets as of the date of this interim report[311][314] Purchase, Sale, or Redemption of the Company's Listed Securities During the period, the company did not repurchase any listed securities, despite shareholders authorizing the repurchase of up to 10% of issued shares - During the period, the company did not repurchase any of its listed securities under the repurchase mandate granted by shareholders at the Annual General Meeting held on May 22, 2025[315][321] - The company was authorized to repurchase up to 15,809,661 shares, representing 10% of the total issued shares as of the date of the Annual General Meeting[313] Significant Events After Period End This section reiterates significant events after the reporting period, including the lapse of a conditional voluntary cash offer and the company entering into a placement agreement to raise funds, detailing the placement terms and use of proceeds - Wah Cheong's voluntary cash offer lapsed on August 8, 2025, as the acceptance conditions were not fulfilled[319][323] - The company entered into a placement agreement on September 8, 2025, to place up to 31,619,322 placement shares at HKD 5.61 per share, with estimated net proceeds of approximately HKD 172.8 million[320][323][326][327] - The net proceeds from the placement will be used for the acquisition of a mining contractor business, settlement of environmental bonds, upgrading processing plant facilities and equipment, and mining development costs at Svartliden[326][327] Advanced Projects and Exploration Review Exploration Finland This section reviews the company's exploration activities in Finland, including drilling progress at Jokisivu gold mine, cessation of mining at Kaapelinkulma and Orivesi gold mines, and exploration at Uunimäki gold project and Stormi nickel-copper mine - The company holds a group of projects in Southern Finland, totaling 1,037.89 hectares, which collectively form the Vammala Production Centre[333][335] - At the Jokisivu gold mine, 48 underground diamond core drill holes totaling 6,701.40 meters were drilled during the period, with positive assay results received from the 2024 final exploration activities[337][339][340][341] - Mining activities at the Kaapelinkulma gold mine and Orivesi gold mine ceased in April 2021 and June 2019, respectively, with no exploration activities conducted during the period[346][349][352][353] - The Uunimäki gold project saw its first drilling campaign during the period, completing 21 drill holes totaling 2,369.45 meters of diamond drilling[356][361] Exploration Sweden This section reviews the company's exploration activities in Sweden, including the status of Fäboliden and Svartliden gold mines, with Fäboliden exploration paused due to environmental permit issues and Svartliden mining completed - The company holds 3,536.89 hectares of land tenure in Northern Sweden, collectively known as the Svartliden Production Centre[363][364] - Exploration activities at the Fäboliden gold mine were not conducted during the period due to the ruling by the Swedish Land and Environment Court[367][372] - Mining at the Svartliden gold mine was completed by the end of 2013, and no exploration activities were conducted in its mining area during the period[369][370][373] Resources and Reserves This section provides updated estimates for mineral resources and ore reserves in Finland and Sweden, showing increases in mineral resources and ore reserves for Kaapelinkulma and Fäboliden - Independent consultants have reviewed the company's mineral resource and ore reserve estimates in Finland and Sweden, with updated estimates for Kaapelinkulma, Fäboliden, Orivesi, and Svartliden as of May 1, 2025[371][374] Vammala Production Centre Mineral Resource Estimates (As of May 1, 2025) | Mining Area | Category | Tonnes (thousand tonnes) | Gold (grams/tonne) | Ounces (thousand ounces) | | :--- | :--- | :--- | :--- | :--- | | Jokisivu Gold Mine | Measured | 520 | 3.5 | 59 | | | Indicated | 1,500 | 2.9 | 140 | | | Inferred | 670 | 2.7 | 59 | | Kaapelinkulma Gold Mine | Measured | 21 | 1.9 | 1 | | | Indicated | 63 | 2.9 | 6 | | | Inferred | 98 | 4.8 | 15 | | Orivesi Gold Mine | Measured | 93 | 5.0 | 15 | | | Indicated | 110 | 5.9 | 21 | | | Inferred | 71 | 4.8 | 11 | | VPC Total | Total | 3,100 | 3.2 | 320 | Svartliden Production Centre Mineral Resource Estimates (As of May 1, 2025) | Mining Area | Category | Tonnes (thousand tonnes) | Gold (grams/tonne) | Ounces (thousand ounces) | | :--- | :--- | :--- | :--- | :--- | | Fäboliden Gold Mine | Measured | 100 | 3.3 | 11 | | | Indicated | 6,000 | 2.6 | 510 | | | Inferred | 5,200 | 3.3 | 560 | | Svartliden Gold Mine | Measured | 120 | 3.4 | 13 | | | Indicated | 310 | 3.8 | 38 | | | Inferred | 60 | 4.0 | 8 | | SPC Total | Total | 12,000 | 3.0 | 1,100 | Group Total Ore Reserves (As of May 1, 2025) | Mining Area | Category | Tonnes (thousand tonnes) | Gold (grams/tonne) | Ounces (thousand ounces) | | :--- | :--- | :--- | :--- | :--- | | Jokisivu (Underground) | Proved | 300 | 2.5 | 24 | | | Probable | 930 | 2.2 | 66 | | Fäboliden (Open Pit) | Probable | 3,200 | 3.0 | 310 | | Group Total | Total | 4,500 | 2.8 | 400 | Competent Persons Statement This section confirms that exploration results, mineral resource, and ore reserve estimates in the report were prepared and reviewed by competent persons, comply with reporting codes, and no new information significantly impacts the data - Exploration results were prepared by Mr. Neale Edwards, a full-time employee of Dragon Mining Limited, who has relevant experience and qualifies as a Competent Person[405][406][409] - Mineral resource estimates were reviewed and compiled by Mr. Shaun Searle, a Director of Ashmore Advisory Pty Ltd, who qualifies as a Competent Person[410][413][415][418] - Ore reserve estimates were prepared and reviewed by Mr. Joe McDiarmid, a full-time employee of MoJoe Mining Pty Ltd, and Mr. Ian Sheppard, an employee of SLR, both of whom qualify as Competent Persons[420][423][424][425] - The company confirms that no new information or data has been identified that would materially affect the reported exploration results, mineral resource, and ore reserve estimates[407][411][416][419][421][426] Environmental Review Finland Environmental Review This section reviews environmental management and monitoring at the Vammala Production Centre, Orivesi, Jokisivu, Kaapelinkulma, and Uunimäki in Finland, covering environmental permits, water management, dust control, ecological surveys, and closure plans - The Vammala environmental permit was upheld by the Supreme Administrative Court, but with a reduced capacity to 300,000 tonnes per annum and requirements for additional environmental impact monitoring and water management improvements[432][435] - Dust generation occurred at the Vammala tailings area, with dust concentrations exceeding limits, and the company is planning to upgrade its dust control system[445][448] - The Natura assessment report for the Orivesi gold mine has been submitted, recommending progressive approval of the closure plan, and fish and crayfish populations show positive growth[450][453][455][459][460] - The Jokisivu gold mine received a new environmental permit, allowing for increased crushing volume and earlier loading and transport operations, but faces an appeal from an NGO[468][471][473][474] - Closure work and waste rock utilization are progressing at the Kaapelinkulma gold mine, and a contaminated soil study recommends covering with topsoil[477][478][481][482] Sweden Environmental Review This section reviews environmental management at Svartliden in Sweden, including reclamation plan progress, approval of Fäboliden ore processing permit changes, and rejection of the Fäboliden full-scale mining environmental permit application - The Svartliden reclamation plan requires hard covering of the entire waste rock dump and an additional SEK 32.0 million (approximately AUD 5.1 million) in collateral guarantees[497][500] - The permit change for the Svartliden plant to process Fäboliden ore was approved by the Environmental Court, and Vapsten's appeal was rejected[499][501] - The environmental permit application for full-scale mining at Fäboliden was rejected by the Environmental Court, and the company plans to resubmit a revised application to mitigate the Environmental Court's concerns[503][504]