2 1 Shi Ji Jing Ji Bao Dao·2025-12-15 12:13Core Viewpoint - Luoyang Molybdenum plans to acquire 100% equity of two subsidiaries of Canadian company EQX for $1.015 billion, gaining full rights to four gold mines in Brazil, which is expected to significantly enhance the company's performance in 2026 [1][2][14]. Group 1: Acquisition Details - The acquisition includes the Aurizona and RDM gold mines, which have a combined gold resource of 5.013 million ounces and an average grade of 1.88 g/t, higher than the global average of 1.06 g/t [9][10]. - The two subsidiaries, LatAm and LGC, reported combined revenues of 4.145 billion yuan and net profits of 1.013 billion yuan in the first three quarters of 2025 [7][8]. - The acquisition is expected to contribute an estimated revenue increase of 5.5 billion yuan and a net profit increase of 1.35 billion yuan to Luoyang Molybdenum in 2026, assuming successful consolidation [14]. Group 2: Strategic Importance - The acquisition is crucial for filling the performance gap in 2026 and allows the company to benefit from rising gold prices [2][8]. - Luoyang Molybdenum's gold production is projected to reach 20 tons annually, positioning it among the top domestic gold mining companies [11]. - The company has a diversified resource strategy, focusing on multiple commodities and regions, which includes ongoing expansions in copper and gold [13][18]. Group 3: Financial Performance - Luoyang Molybdenum's net profit surged from 2.329 billion yuan in 2020 to 14.28 billion yuan in the first three quarters of this year, with annual profit expectations reaching 20 billion yuan [17]. - The company's cash reserves are approximately 32.5 billion yuan, with a debt-to-asset ratio reduced from 64.89% to 48.57%, indicating significant leverage capacity for future acquisitions [17][18]. - Revenue from Brazil is projected to exceed 6.5 billion yuan in 2024, making it the second-largest revenue source after the Democratic Republic of the Congo [5][6].