佳鑫国际资源(03858) - 2025 - 中期财报

Company Information This chapter details the company's board composition, key committees, and essential corporate information including auditors, legal advisors, and stock exchange listings Board of Directors and Corporate Structure This chapter details the company's board composition, key committees, and essential corporate information including auditors, legal advisors, and stock exchange listings - The Board of Directors comprises executive directors (Mr. Liu Liqiang as Chairman), non-executive directors, and independent non-executive directors, with an Audit Committee (Mr. Wong Hok Pan as Chairman), Remuneration Committee (Mr. Wang Jianfeng as Chairman), and Nomination Committee (Mr. Zhu Guoshan as Chairman)[5] - The company's auditor is PricewaterhouseCoopers, legal counsel is Sidley Austin, and compliance advisor is Guolian Securities International Capital Markets Co., Ltd[5] - The company's stock codes are HKEX: 3858, AIX: JXIR, and its official website is www.jiaxinir.com[6](index=6&type=chunk) Management Discussion and Analysis This section provides an overview of the Group's business, operational activities, financial performance, liquidity, and future plans, highlighting key achievements and challenges Business Review The Group is a Kazakhstan-based tungsten mining company primarily developing the Bakuta Tungsten Mine Project, which commenced commercial production in April 2025 - The Group is a tungsten mining company based in Kazakhstan, focused on developing the Bakuta Tungsten Mine Project[7] - As of December 31, 2024, the Bakuta Tungsten Mine is the world's largest open-pit tungsten mine by tungsten trioxide (WO3) mineral resources, the fourth largest WO3 mineral resources tungsten mine globally (including open-pit and underground), and possesses the largest designed tungsten mining capacity for a single tungsten mine[7] - The Bakuta Tungsten Mine Project commenced Phase I commercial production in April 2025, with a target annual mining and mineral processing capacity of 3.3 million tonnes of tungsten ore in 2025[7] - The Group holds exclusive mining rights for the Bakuta Tungsten Mine for 25 years, from June 2, 2015, to June 2, 2040[8] Exploration, Development and Mining Production Activities During the reporting period, the Group did not conduct exploration or development activities but commenced mining production, extracting 1,002,231 tonnes of tungsten ore - During the reporting period, the Group did not conduct any exploration or development activities for the Bakuta Tungsten Mine Project[9][10] Mining Production Activities for H1 2025 | Metric | Quantity | | :--- | :--- | | Tungsten ore mined | 1,002,231 tonnes | | Tungsten concentrate produced | 1,520.67 tonnes | | Tungsten trioxide produced | 783.41 tonnes | Mining Production Activities Costs for H1 2025 | Cost Category | Amount (thousand HKD) | | :--- | :--- | | Consumables cost | 95,329 | | Stripping cost | 44,656 | | Energy cost | 16,566 | | Employee benefits expense | 8,626 | | Changes in finished goods and work-in-progress | (90,244) | | Depreciation | 24,725 | | Amortization | 69 | | Transportation and delivery costs | 774 | | Others | 7,831 | | Total | 108,332 | Prospects and Future Plans The Group plans to continue developing the Bakuta Tungsten Mine Project into a world-class operation and explore further non-ferrous metal investment opportunities in Central Asia - The Group plans to continue developing the Bakuta Tungsten Mine Project into a world-class tungsten mining project in the second half of 2025[13] - The target annual mining and mineral processing capacity for tungsten ore is planned to increase to 4.95 million tonnes by 2027, integrating an ore sorting system at that time[13] - The Group also plans to explore more investment opportunities in non-ferrous metal resources in Central Asia[13] Financial Review The Group generated its first revenue of 126.3 million HKD and a gross profit of 18.0 million HKD after commencing commercial production in April 2025, significantly reducing its net loss to 7.0 million HKD - The Group commenced commercial production in April 2025, generating its first revenue of 126.3 million HKD, primarily from the sale of tungsten concentrate[14] - Sales costs of 108.3 million HKD were recorded, resulting in a gross profit of 18.0 million HKD and a gross margin of 14.2%[15][17] - Administrative expenses increased by 82.2% from 33.2 million HKD in the prior period to 60.5 million HKD, mainly due to increased employee benefits expenses from new hires (31.3 million HKD) and higher listing expenses (13.5 million HKD)[18] - Net loss for the period significantly decreased from 65.0 million HKD in the prior period to 7.0 million HKD, primarily due to an income tax credit of 82.6 million HKD arising from the recognition of deferred tax assets[21][22] Liquidity, Financial and Capital Resources The Group funds operations through bank borrowings, shareholder loans, and internal funds, with net current liabilities increasing to 442.9 million HKD as of June 30, 2025 - The Group primarily finances its working capital and other liquidity needs through bank borrowings, shareholder loans, and internal funds[23] Net Current Liabilities | Date | Amount (thousand HKD) | | :--- | :--- | | June 30, 2025 | 442.9 | | December 31, 2024 | 268.9 | - The increase in net current liabilities was primarily attributable to an increase in contract liabilities of 133.6 million HKD and an increase in borrowings of 94.5 million HKD, partially offset by increases in inventories and trade payables[24] Cash Flow Summary (Six Months Ended June 30, 2025) | Activity Type | Net Cash (thousand HKD) | | :--- | :--- | | Operating activities | 15.6 (inflow) | | Investing activities | (21.5) (outflow) | | Financing activities | 1.6 (inflow) | Cash and Cash Equivalents | Date | Amount (thousand HKD) | | :--- | :--- | | June 30, 2025 | 32.7 | | December 31, 2024 | 41.4 | Borrowings The Group's borrowings, primarily Euro and RMB-denominated bank loans, increased by 12.7% to 1,895.1 million HKD as of June 30, 2025, with varying interest rates and a final repayment date in June 2028 - The Group's borrowings refer to Euro and RMB-denominated bank loans, primarily used for the construction of the Bakuta Tungsten Mine Project[27] Borrowing Interest Rates (As of June 30, 2025) | Amount (thousand HKD) | Interest Rate | | :--- | :--- | | 362.7 | 1% fixed annual interest rate | | 1,302.8 | 3.488% - 5.013% floating annual interest rate | | 1,302.8 | 3.017% - 4.023% floating annual interest rate | - The principal of the Group's outstanding borrowings is repayable semi-annually, with the final repayment due on June 14, 2028[27] - The Group's current and non-current borrowings increased by 12.7% from 1,665.0 million HKD as of December 31, 2024, to 1,895.1 million HKD as of June 30, 2025[27] Financial Risks The Group faces credit, liquidity, foreign exchange, and interest rate risks, which management continuously monitors and mitigates through various strategies - The Group faces credit risk, liquidity risk, foreign exchange risk, and interest rate risk, which management continuously monitors to ensure a balance between risk and control[28] - Credit risk primarily arises from trade receivables, other receivables, and cash and cash equivalents, with management deeming the risk of counterparty default to be extremely low[29] - Liquidity risk is managed through adequate financial support from the holding company and by maintaining sufficient cash and cash equivalents[30] - Foreign exchange risk is managed by regularly reviewing net foreign exchange exposure and entering into forward foreign exchange contracts when necessary (none were entered into during the period); interest rate risk is managed by closely monitoring interest rate trends and considering hedging when necessary[31][32] Pledge of Assets As of June 30, 2025, the Group had no pledged assets, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had no pledged assets (December 31, 2024: nil)[33] Gearing Ratio and Basis of Calculation The Group's gearing ratio, calculated as net debt divided by total capital, slightly increased to 101.6% as of June 30, 2025, due to increased borrowings and accumulated losses Gearing Ratio | Date | Ratio | | :--- | :--- | | June 30, 2025 | 101.6% | | December 31, 2024 | 100.8% | - The slight increase in the gearing ratio was primarily due to increased borrowings and an increase in accumulated losses resulting from the loss incurred during the period[79] Commitments and Contingent Liabilities As of June 30, 2025, the Group had capital expenditure commitments of 145.5 million HKD for the Bakuta Tungsten Mine Project and operating lease commitments of 0.3 million HKD - As of June 30, 2025, the Group had capital expenditure commitments of 145.5 million HKD contracted but not yet recognized in the condensed consolidated financial statements[35] - The Group leases offices under non-cancellable operating lease arrangements, with total future minimum lease payments amounting to 0.3 million HKD[35] - As of June 30, 2025, the Group had no other significant commitments or contingent liabilities related to any third-party payment obligations[36] Off-balance Sheet Arrangements The Group confirms it has not entered into any off-balance sheet arrangements or commitments to guarantee third-party payment obligations, nor does it hold variable interests in unconsolidated entities - The Group has not entered into any off-balance sheet arrangements or commitments to guarantee payment obligations of any third parties or related parties[37] - The Group does not hold any variable interests in any unconsolidated entities that provide financing, liquidity, market risk, or credit support to the Group, or engage in leasing, hedging, or research and development services with the Group[37] Use of Proceeds from Initial Public Offering The Group's IPO net proceeds of approximately 1,261.3 million HKD are allocated for capital costs of the Bakuta Tungsten Mine Project, APT production capacity development, bank loan repayment, and working capital, expected to be fully utilized by 2027 - The total net proceeds from the listing and exercise of the over-allotment option amounted to approximately 1,261.3 million HKD[38] Status of Use of Proceeds from IPO (As of Reporting Date) | Purpose | Percentage of Net Proceeds as per Prospectus | Unutilized Net Proceeds Post-Listing (million HKD) (including over-allotment option) | Expected Timeline for Full Utilization of Net Proceeds | | :--- | :--- | :--- | :--- | | Funding capital costs for Bakuta Tungsten Mine Project development - Tailings storage facility | 17.5% | 220.7 | 2026 | | Funding capital costs for Bakuta Tungsten Mine Project development - Concentrator plant | 27.5% | 346.9 | 2026 | | Funding establishment of ore sorting system for Phase II commercial production | 10.0% | 126.1 | 2027 | | Developing Ammonium Paratungstate (APT) production capacity - Preliminary design | 6.0% | 75.7 | 2027 | | Developing Ammonium Paratungstate (APT) production capacity - Market research | 2.0% | 25.2 | 2027 | | Developing Ammonium Paratungstate (APT) production capacity - Feasibility study | 1.0% | 12.6 | 2027 | | Developing Ammonium Paratungstate (APT) production capacity - Miscellaneous expenses | 1.0% | 12.6 | 2027 | | Repayment of principal and accrued interest for part of our Euro-denominated bank loans | 25.0% | 315.3 | 2027 | | Working capital and other general corporate purposes | 10.0% | 126.1 | 2027 | | Total | 100.0% | 1,261.3 | | - As of the date of this report, the net proceeds have not yet been utilized[40] Employees and Remuneration Policy As of June 30, 2025, the Group had 347 employees with staff costs of approximately 39.96 million HKD, participating in defined contribution retirement benefit plans and receiving discretionary bonuses Number of Employees and Staff Costs | Date | Number of Employees | Staff Costs (thousand HKD) | | :--- | :--- | :--- | | June 30, 2025 | 347 | 39,960 | | June 30, 2024 | 150 | 14,370 | - The Company participates in several defined contribution retirement benefit plans applicable to all relevant employees[41] - The Company accrues discretionary bonuses for its employees based on their years of service, expected to be settled within twelve months[41] Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures During the reporting period, the Group did not undertake any significant investments, material acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the period, the Group had no significant investments, material acquisitions, or disposals of subsidiaries, associates, or joint ventures[42] Future Plans for Material Investments or Capital Assets As of June 30, 2025, the Group had no future plans for material investments or capital assets other than those disclosed in the prospectus - Other than those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus, as of June 30, 2025, the Group had no other future plans for material investments and capital assets[43] Interim Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board resolved not to declare any interim dividend for the period (six months ended June 30, 2024: nil)[44] Corporate Governance and Other Information This section covers the Group's corporate governance practices, including directors' securities dealings, compliance with the Corporate Governance Code, and post-reporting period events Standard Securities Dealing Code for Directors The Standard Securities Dealing Code for Directors was not applicable during the reporting period as the company's shares were not yet listed on the Stock Exchange as of June 30, 2025 - As the Company's shares were not yet listed on the Stock Exchange as of June 30, 2025, the Standard Code was not applicable to the Company during the period[45] Compliance with Corporate Governance Code The Corporate Governance Code was not applicable during the reporting period as the company's shares were listed on the Stock Exchange only on August 28, 2025, and will apply from that date - As the shares were listed on the Stock Exchange on August 28, 2025, and the Company was not a listed company during the period, the Corporate Governance Code was not applicable to the Company during the period but will apply from the listing date[46] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period, as the shares were not yet listed as of June 30, 2025 - As the shares were not yet listed on the Stock Exchange as of June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[47] - As of June 30, 2025, the Company had no treasury shares[47] Significant Events After Reporting Period Subsequent to the reporting period, the company's shares commenced trading on the Stock Exchange on August 28, 2025, raising approximately 1,261.3 million HKD in net proceeds from the global offering and over-allotment option - The Company's shares commenced trading on the Stock Exchange on August 28, 2025[48] - The listing involved the issuance of 109,808,800 new shares at 10.92 HKD per share, with total net proceeds of 1,087.7 million HKD[48] - The over-allotment option under the global offering was fully exercised, resulting in the issuance of an additional 16,471,200 shares, with total net proceeds of 173.6 million HKD[48] - Save as disclosed above, no other significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement[49] Changes in Information of Directors and Chief Executive As of the report date, there were no changes in the directors' information required to be disclosed under Listing Rule 13.51(2)(a) to (e) and (g) - As of the date of this report, there were no changes in the directors' information required to be disclosed under paragraphs (a) to (e) and (g) of Rule 13.51(2) of the Listing Rules[50] Interests of Directors and Chief Executive As the company's shares were not listed as of June 30, 2025, relevant disclosure provisions of the Securities and Futures Ordinance were not applicable, and interests will be disclosed in the upcoming annual report - As the shares were not listed on the Stock Exchange as of June 30, 2025, Sections 7 and 8 of Part XV of the Securities and Futures Ordinance, Section 352, and the Standard Code were not applicable to the Company's directors or chief executive as of that date[51] - The Company will disclose the interests or short positions of directors and the chief executive in the shares, underlying shares, and debentures of the Company or its associated corporations in the Company's upcoming annual report[51] Interests of Substantial Shareholders and Other Persons As the company's shares were not listed as of June 30, 2025, relevant disclosure provisions of the Securities and Futures Ordinance were not applicable, and interests will be disclosed in the upcoming annual report - As the shares were not listed on the Stock Exchange as of June 30, 2025, Sections 2 and 3 of Part XV of the Securities and Futures Ordinance and Section 336 were not applicable to the Company as of that date[52] - The Company will disclose the interests or short positions of relevant persons (other than the Company's directors and chief executive) in the shares and underlying shares in the Company's upcoming annual report[52] Audit Committee and Review of Interim Financial Information The Audit Committee has reviewed and agreed to the Group's unaudited condensed consolidated interim financial information and this report for the reporting period - The Audit Committee, comprising one non-executive director and two independent non-executive directors, has reviewed and agreed to the Group's unaudited condensed consolidated interim financial information and this report for the period[53] Condensed Consolidated Statement of Comprehensive Loss This section presents the Group's financial performance, including revenue, costs, and net loss, for the reporting period For the Six Months Ended June 30, 2025 The Group recorded its first revenue of 126.3 million HKD and a gross profit of 18.0 million HKD, significantly narrowing its loss to 6.989 million HKD due to an income tax credit Condensed Consolidated Statement of Comprehensive Loss (Six Months Ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Revenue | 126,313 | – | 126,313 | | Cost of sales | (108,332) | – | (108,332) | | Gross profit | 17,981 | – | 17,981 | | Administrative expenses | (60,499) | (33,241) | (27,258) | | Other net losses | (27,200) | (30,158) | 2,958 | | Operating loss | (69,718) | (63,399) | (6,319) | | Net finance costs | (19,837) | (1,570) | (18,267) | | Income tax credit | 82,566 | – | 82,566 | | Loss for the period | (6,989) | (64,969) | 57,980 | | Total comprehensive loss for the period | (16,807) | (59,254) | 42,447 | | Loss attributable to owners of the Company | (5,996) | (63,617) | 57,621 | | Basic and diluted loss per share (HK cents) | (1.82) | (19.31) | 17.49 | - Loss for the period significantly decreased from 64.969 million HKD in the prior corresponding period of 2024 to 6.989 million HKD in 2025, primarily due to the commencement of commercial production generating revenue and the recognition of an income tax credit[55] - Basic and diluted loss per share improved from (19.31) HK cents in 2024 to (1.82) HK cents in 2025[55] Condensed Consolidated Statement of Financial Position This section presents the Group's financial position, including assets, liabilities, and equity, as of the reporting date As of June 30, 2025 As of June 30, 2025, total assets increased to 2,298.7 million HKD, total liabilities rose to 2,328.6 million HKD, and net current liabilities expanded to 442.9 million HKD Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Assets | | | | | Total non-current assets | 2,080,961 | 1,772,955 | 308,006 | | Total current assets | 217,737 | 91,893 | 125,844 | | Total assets | 2,298,698 | 1,864,848 | 433,850 | | Deficit | | | | | Equity attributable to owners of the Company | (22,856) | (7,327) | (15,529) | | Non-controlling interests | (7,038) | (5,760) | (1,278) | | Total deficit | (29,894) | (13,087) | (16,807) | | Liabilities | | | | | Total non-current liabilities | 1,667,911 | 1,517,094 | 150,817 | | Total current liabilities | 660,681 | 360,841 | 299,840 | | Total liabilities | 2,328,592 | 1,877,935 | 450,657 | | Net current liabilities | (442,944) | (268,948) | (173,996) | - Total assets increased by 433.85 million HKD, primarily due to increases in property, plant and equipment and deferred tax assets[56] - Total liabilities increased by 450.66 million HKD, mainly due to increases in borrowings and contract liabilities[58] - Net current liabilities increased from 268.95 million HKD as of December 31, 2024, to 442.94 million HKD as of June 30, 2025[58] Condensed Consolidated Statement of Changes in Equity This section outlines the changes in the Group's equity (deficit) during the reporting period, reflecting the impact of losses and exchange differences For the Six Months Ended June 30, 2025 The Group's total equity (deficit) increased from (13.087) million HKD to (29.894) million HKD, primarily due to the loss for the period and negative exchange differences Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30) | Metric | June 30, 2025 (thousand HKD) | January 1, 2025 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Share capital | 465,653 | 465,653 | 0 | | Exchange differences | 9,271 | 18,804 | (9,533) | | Accumulated losses | (497,780) | (491,784) | (5,996) | | Total attributable to owners of the Company | (22,856) | (7,327) | (15,529) | | Non-controlling interests | (7,038) | (5,760) | (1,278) | | Total equity / (deficit) | (29,894) | (13,087) | (16,807) | - Total equity (deficit) increased from (13.087) million HKD as of January 1, 2025, to (29.894) million HKD as of June 30, 2025, primarily due to the loss for the period and negative exchange differences[59] Condensed Consolidated Statement of Cash Flows This section presents the Group's cash flows from operating, investing, and financing activities for the reporting period For the Six Months Ended June 30, 2025 The Group generated net cash from operating activities of 15.554 million HKD, with net cash outflows from investing activities of 21.448 million HKD and net cash inflows from financing activities of 1.567 million HKD Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Activity Type | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Net cash from / (used in) operating activities | 15,554 | (27,788) | 43,342 | | Net cash used in investing activities | (21,448) | (225,355) | 203,907 | | Net cash from / (used in) financing activities | 1,567 | (33,541) | 35,108 | | Net change in cash and cash equivalents | (4,327) | (286,684) | 282,357 | | Cash and cash equivalents at end of period | 32,662 | 173,225 | (140,563) | - Net cash from operating activities was 15.554 million HKD, a significant improvement from a net outflow of 27.788 million HKD in the prior corresponding period[61] - Net cash used in investing activities significantly decreased to 21.448 million HKD, primarily due to reduced additions to property, plant and equipment and capitalized interest expenses[25][61] - Net cash from financing activities was 1.567 million HKD, mainly from proceeds from borrowings, partially offset by interest paid and repayment of borrowings[25][61] - Cash and cash equivalents at the end of the period amounted to 32.662 million HKD, a decrease from 41.440 million HKD at the beginning of the period[26][61] Notes to the Interim Financial Information This section provides detailed explanations and disclosures regarding the Group's interim financial information, including accounting policies, financial risks, and significant events 1 General Information The Company, incorporated in Hong Kong in 2014, primarily engages in the exploration, development, and operation of the Bakuta Tungsten Mine in Kazakhstan, with shares listed on HKEX and AIX on August 28, 2025 - Jiaxin International Resources Investment Limited was incorporated in Hong Kong on August 29, 2014[62] - The Group is primarily engaged in the exploration, development, and operation of the Bakuta Tungsten Mine in Kazakhstan[62] - For the six months ended June 30, 2025, the Group substantially completed the construction of mining infrastructure for the Bakuta Tungsten Mine and commenced commercial production and sale of tungsten concentrate[62] - The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited and Astana International Exchange on August 28, 2025[62] 2 Basis of Preparation The interim financial information is prepared in accordance with HKAS 34 on a going concern basis, despite net current liabilities and deficit, as management expects sufficient financial resources from projected cash flows and IPO proceeds - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[63] - Despite a net loss of 6.989 million HKD, net current liabilities of 442.944 million HKD, and a net deficit of 29.894 million HKD as of June 30, 2025, the interim financial information is prepared on a going concern basis[63] - The directors have considered projected cash flows and funds raised from the issuance of new shares, concluding that the Group has sufficient financial resources to meet its financial obligations in the foreseeable future[63] - HKFRS 18 will replace HKAS 1, introducing new requirements expected to have a widespread impact on presentation and disclosure, effective January 1, 2027[69] 3 Critical Accounting Estimates and Judgements The significant judgments made by management and key sources of estimation uncertainty in applying the Group's accounting policies for these interim financial statements are consistent with those applied in the 2024 financial statements - The significant judgments made by management and key sources of estimation uncertainty in applying the Group's accounting policies when preparing this interim financial information are consistent with those applied in the 2024 financial statements[70] 4 Financial Risk Management The Group's risk management policies remained unchanged, addressing foreign exchange risk (Euro, RMB, USD, Tenge) and capital risk, with the gearing ratio slightly increasing due to higher borrowings and expanded deficit - For the six months ended June 30, 2025, there were no significant changes in the Group's risk management policies[72] - The Group's foreign currency transactions are primarily denominated in Euro, RMB, USD, and Kazakhstan Tenge; the functional currency of the main subsidiary operating the Bakuta Tungsten Mine has been changed to RMB[73] Net Monetary Assets / (Liabilities) (thousand HKD) | Currency | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Euro to HKD | 129,713 | 62,415 | | RMB to HKD | (72,462) | 15,558 | | USD to HKD | 222,919 | 216,078 | | Euro to RMB | (1,842,546) | Not applicable | | USD to RMB | (244,873) | Not applicable | | Tenge to RMB | (85,296) | Not applicable | - The gearing ratio (calculated as net debt divided by total capital) increased from 101% as of December 31, 2024, to 102% as of June 30, 2025, primarily due to increased borrowings and an increase in accumulated losses resulting from the loss incurred during the period[79] - As of June 30, 2025, and December 31, 2024, the Group had no financial instruments measured at fair value in the consolidated statement of financial position[80] 5 Segment Information and Revenue The Group operates as a single segment in tungsten mining in Kazakhstan, with all 126.313 million HKD revenue for the six months ended June 30, 2025, derived from tungsten concentrate sales to a single customer - The Group is primarily engaged in tungsten mining exploration, development, and extraction in Kazakhstan, and is reviewed as a single operating segment[81] - For the six months ended June 30, 2025, all of the Group's revenue of 126.313 million HKD was derived from the sale of tungsten concentrate to a single customer[83] - Revenue is recognized when control of the goods is transferred to the customer, typically upon delivery of the goods and transfer of legal title to the customer[85] 6 Expenses by Nature The Group's total expenses for the six months ended June 30, 2025, significantly increased to 168.831 million HKD, primarily due to costs associated with commercial production Expenses by Nature (Six Months Ended June 30) | Expense Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Consumables cost | 93,670 | – | | Stripping cost | 44,656 | – | | Energy cost | 16,566 | – | | Employee benefits expense | 39,956 | 14,367 | | Changes in finished goods and work-in-progress | (90,244) | – | | Listing expenses | 13,462 | 7,450 | | Depreciation | 25,653 | 874 | | Amortization | 69 | – | | Transportation and delivery costs | 774 | – | | Others (miscellaneous) | 14,573 | 4,760 | | Total | 168,831 | 33,241 | - Total expenses significantly increased from 33.241 million HKD in the prior corresponding period of 2024 to 168.831 million HKD in 2025, primarily due to the incurrence of commercial production-related costs[86] - Employee benefits expense increased from 14.367 million HKD to 39.956 million HKD, and listing expenses increased from 7.450 million HKD to 13.462 million HKD[86] 7 Other Net Gains / (Losses) The Group's other net losses for the six months ended June 30, 2025, decreased to 27.200 million HKD, primarily due to a reduction in net foreign exchange losses Other Net Gains / (Losses) (Six Months Ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Net foreign exchange losses | (25,158) | (30,502) | 5,344 | | Others | (2,042) | 344 | (2,386) | | Total | (27,200) | (30,158) | 2,958 | - Other net losses decreased by 2.958 million HKD, primarily due to a 5.344 million HKD reduction in net foreign exchange losses[87] 8 Net Finance Costs The Group's net finance costs significantly increased to 19.837 million HKD for the six months ended June 30, 2025, as interest expenses and foreign exchange losses were no longer capitalized after the completion of mining asset construction Net Finance Costs (Six Months Ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Finance income | 19 | 70 | (51) | | Interest expense | (34,997) | (37,892) | 2,895 | | Reversal of discount | (268) | (3,652) | 3,384 | | Net foreign exchange losses | (93,111) | – | (93,111) | | Less: Capitalized amount | 108,520 | 39,904 | 68,616 | | Net finance costs | (19,837) | (1,570) | (18,267) | - Net finance costs significantly increased from 1.570 million HKD in the prior corresponding period of 2024 to 19.837 million HKD in 2025[88] - For the six months ended June 30, 2025, the Group's mining asset construction was substantially completed, thus interest expenses and foreign exchange related to completed construction are no longer capitalized[89] 9 Income Tax The Group recognized an income tax credit of 82.566 million HKD for the six months ended June 30, 2025, due to deferred tax assets from tax losses, anticipating future taxable profits from commercial production - For the six months ended June 30, 2025, the Group recognized deferred tax assets of 82.566 million HKD for tax losses carried forward, resulting in an income tax credit[90] - Management believes that future taxable profits are probable after the commencement of commercial production at the Bakuta Tungsten Mine, enabling the realization of related tax benefits[90] Applicable Income Tax Rates | Jurisdiction | Tax Rate | | :--- | :--- | | Hong Kong | 16.5% | | Kazakhstan | 20% | | China | 25% | | Luxembourg | 15% | 10 Loss Per Share Basic loss per share attributable to owners of the Company significantly improved to (1.82) HK cents for the six months ended June 30, 2025, with no potential dilutive ordinary shares Basic Loss Per Share (Six Months Ended June 30) | Metric | 2025 (thousand HKD / thousand shares / HK cents) | 2024 (thousand HKD / thousand shares / HK cents) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (5,996) | (63,617) | | Weighted average number of ordinary shares issued | 329,420 | 329,420 | | Basic loss per share | (1.82) | (19.31) | - Basic loss per share has been retrospectively adjusted for the effect of the share split on August 28, 2025, changing the number of shares from 11,765 to 329,420,000[95] - There were no potential dilutive ordinary shares, and diluted loss per share was equal to basic loss per share[97] 11 Dividends The Company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024 - For the six months ended June 30, 2025, and 2024, the Company neither paid nor declared any dividends[98] 12 Property, Plant and Equipment The Group's net book value of property, plant and equipment increased to 1,685.167 million HKD as of June 30, 2025, reflecting the reclassification of construction in progress and new additions Net Book Value of Property, Plant and Equipment (thousand HKD) | Metric | June 30, 2025 (thousand HKD) | January 1, 2025 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Buildings and infrastructure | 1,329,808 | 8,314 | 1,321,494 | | Mining development assets | 108,481 | 83,720 | 24,761 | | Machinery | 192,376 | – | 192,376 | | Vehicles, computers and office equipment | 7,171 | 4,919 | 2,252 | | Construction in progress | 47,331 | 1,397,799 | (1,350,468) | | Total | 1,685,167 | 1,494,752 | 190,395 | - For the six months ended June 30, 2025, the Group substantially completed the construction of mining assets for the Bakuta Tungsten Mine infrastructure in Kazakhstan[101] - Total depreciation expense was 25.653 million HKD, with 24.725 million HKD charged to cost of sales and 928 thousand HKD to administrative expenses[101] 13 Subsoil Use Rights The Group's net book value of subsoil use rights slightly increased to 10.187 million HKD as of June 30, 2025, primarily due to currency translation differences, partially offset by amortization Net Book Value of Subsoil Use Rights (thousand HKD) | Metric | June 30, 2025 (thousand HKD) | January 1, 2025 (thousand HKD) | | :--- | :--- | :--- | | Net book value | 10,187 | 10,075 | - Amortization expense for the period was 69 thousand HKD[100] 14 Trade Receivables As of June 30, 2025, the Group's trade receivables amounted to 47.087 million HKD, all aged less than three months and primarily from tungsten concentrate sales, with no loss allowance recognized due to low default risk - As of June 30, 2025, trade receivables amounted to 47.087 million HKD, all due from customers and aged less than three months[103] - Payments for tungsten concentrate sales are collected in two installments, with approximately 70% received within a few days of delivery and the remainder within 15 days after the final settlement invoice[102] - No loss allowance was recognized for trade receivables as the directors consider the risk of counterparty default to be insignificant[103] 15 Share Capital As of June 30, 2025, the Company had 11,765 issued and fully paid ordinary shares with a share capital of 465.653 million HKD, which was subsequently adjusted to 329,420,000 shares due to a share split Issued and Fully Paid Share Capital (thousand HKD) | Date | Number of Ordinary Shares | Share Capital (thousand HKD) | | :--- | :--- | :--- | | December 31, 2024 and June 30, 2025 | 11,765 | 465,653 | - Pursuant to a written resolution of shareholders on August 15, 2025, each issued ordinary share of the Company was subdivided into 28,000 ordinary shares immediately prior to the completion of the listing[104] - Immediately following the share split, the number of issued shares of the Company changed from 11,765 to 329,420,000[104] 16 Borrowings The Group's total borrowings increased to 1,895.083 million HKD as of June 30, 2025, comprising Euro and RMB-denominated bank loans, secured by shareholder guarantees to be released post-listing Borrowings Details (thousand HKD) | Type | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Non-current secured bank loans (Euro) | 1,615,989 | 1,470,386 | | Current secured bank loans (Euro) | 84,702 | 47,408 | | Current secured bank loans (RMB) | 30,408 | 31,170 | | Current unsecured bank loans (RMB) | 163,984 | 106,065 | | Total borrowings | 1,895,083 | 1,655,029 | - Euro-denominated secured bank loans amounted to 188 million Euro, used for the Bakuta Tungsten Mine construction, bearing a fixed annual interest rate of 1%, with a portion of unutilized facilities bearing floating interest rates[106][107] - RMB-denominated secured bank loans amounted to 92 million RMB for operating activities; unsecured bank loans amounted to 150 million RMB for construction and operating activities[109][110] - Borrowings are corporately guaranteed by Jiangxi Copper Corporation Limited and counter-guaranteed by other shareholders; these guarantee arrangements will be released after the listing[111] Borrowing Repayment Schedule (thousand HKD) | Term | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 1 year | 279,094 | 184,643 | | 1 to 2 years | 537,813 | 201,599 | | 2 to 5 years | 1,078,176 | 1,268,787 | | Total | 1,895,083 | 1,655,029 | 17 Trade Payables As of June 30, 2025, the Group's trade payables totaled 76.199 million HKD, primarily denominated in RMB and Tenge, all aged within three months, with a typical credit period of six months Trade Payables (thousand HKD) | Currency | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | RMB | 20,675 | – | | Tenge | 55,524 | – | | Total | 76,199 | – | - All trade payables are aged within three months[114] - The credit period granted by suppliers is generally 6 months[113] 18 Contract Liabilities The Group's contract liabilities significantly increased to 165.414 million HKD as of June 30, 2025, primarily representing prepayments received from customers for goods not yet provided Contract Liabilities (thousand HKD) | Date | Amount (thousand HKD) | | :--- | :--- | | June 30, 2025 | 165,414 | | December 31, 2024 | 31,783 | - Contract liabilities primarily represent prepayments received from customers for customer contracts where the related goods have not yet been provided[115] - No revenue was recognized during the six months ended June 30, 2025, that was included in the contract liabilities balance at the beginning of the six months ended June 30, 2025[115] 19 Related Party Transactions The Group engaged in various related party transactions, including borrowing guarantees from Jiangxi Copper Corporation Limited, construction and mining service contracts with China Civil Engineering Construction Corporation, and purchases from several associated companies - Jiangxi Copper Corporation Limited provides guarantees for the Group's borrowings with a fixed guarantee fee of 0.57% per annum; this guarantee will be released after the listing[118] Procurement Contracts with China Civil Engineering Construction Corporation (thousand HKD) | Transaction Type | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Construction services paid and payable | 28,673 | 227,905 | | Equipment purchase payments | – | 63,965 | | Mining services purchase payments | 44,656 | – | Outstanding Balances with Related Parties (thousand HKD) | Balance Type | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Contracted but not included in consolidated financial statements | 141,655 | 329,473 | | Amounts payable for construction work | 65,873 | 48,951 | | Trade payables | 36,302 | – | | Prepayments for equipment purchase and construction services | 118,494 | 110,639 | | Outstanding balance from purchase of goods | 14,640 | 6,983 | | Shareholder loans | 56,260 | 45,305 | | Amounts payable to Jiangxi Copper Corporation Limited | 13,392 | 12,646 | | Amounts payable to shareholders | 69,652 | 57,951 | - Key management personnel remuneration was 4.399 million HKD (prior corresponding period of 2024: 3.860 million HKD)[123] 20 Events After Reporting Period Other than the share split disclosed in Note 15, no other significant events requiring additional disclosure or adjustment occurred between June 30, 2025, and the approval date of these interim financial statements - Save as disclosed in Note 15, no other significant events requiring additional disclosure or adjustment occurred between June 30, 2025, and the approval date of these interim financial statements[124] Definitions This section provides definitions for key terms used throughout the report to ensure a clear understanding of its content, covering corporate governance, business projects, financial terminology, and listing-related concepts Glossary of Terms This section defines key terms used in the report, ensuring clarity for readers on corporate governance, business projects, financial terminology, and listing-related concepts - "Bakuta Tungsten Mine Project" refers to the geological exploration, tungsten ore mining, and construction of tungsten ore processing facilities undertaken by the Company in Bakuta, Kazakhstan[125] - "Listing" refers to the listing of shares on the Main Board of the Stock Exchange[125] - "Period" refers to the six months ended June 30, 2025; "Prior Period" refers to the six months ended June 30, 2024[125]