Group 1 - The company, Zhonglian Development Holdings (00264), has announced a placement agreement to issue up to 15 million shares at a price of HKD 1.75 per share, which represents a discount of approximately 16.27% compared to the closing price of HKD 2.09 on September 30, 2025 [1][2] - The maximum number of shares to be placed corresponds to about 3.25% of the enlarged issued share capital of the company, assuming no changes in the issued share capital during the placement period [1] - The expected net proceeds from the placement, after deducting commissions and related expenses, will be approximately HKD 25.55 million, with a net issue price of about HKD 1.70 per share [2] Group 2 - The company plans to use the net proceeds from the placement for general working capital and to enhance its financial position, with allocations including approximately HKD 6.06 million for materials and equipment related to leather manufacturing and cleaning services, HKD 13.69 million for general operational expenses, HKD 2.94 million for settling outstanding payables, and approximately HKD 2.86 million for new business development opportunities [2]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $86 million for the June quarter, bringing the first half unaudited adjusted EBITDA to $183.6 million, which is a material outperformance compared to the previous year [4][16] - The twelve-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 1.29, with a Lost Time Injury Frequency Rate (LTIFR) of 0.05 for June, indicating strong safety performance [2][3] Business Line Data and Key Metrics Changes - RKF nickel metal production was 30,463 tonnes, slightly lower than the previous quarter, impacted by kiln realignment and maintenance [4][7] - HPAL production from HNC was 2,075 tonnes of nickel, continuing to operate above nameplate capacity [4] - The Hangjai mine achieved record ore sales of over 3 million wet metric tonnes, with an EBITDA of $41.4 million, a 33% increase from the previous quarter [6][12] Market Data and Key Metrics Changes - MHP pricing remained stable at $11,449, slightly higher than the previous quarter, with payabilities for MHP close to 90% [8][9] - The Hengjia mine's EBITDA increased by CAD10.4 million, highlighting the benefits of integrated operations [8] Company Strategy and Development Direction - The company is focusing on the completion of the E and C project, with commissioning deferred to align working capital requirements [10][11] - The feasibility study to increase the Anglia mine RKB from 9 million tonnes to 19 million tonnes has been approved, indicating growth plans [13] - The Sampala project is progressing well, with a feasibility study lodged for an initial operation of 6 million wet metric tonnes per annum [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving RKAB approval in August and expects to ramp up production from the Hangjai mine significantly [37] - The company remains confident in the exploration target of over 1 billion wet metric tonnes of ore at the Sao Paulo project, with strong margins expected [16][40] Other Important Information - The company is actively managing working capital due to a significant build-up, particularly in RKF operations [20][30] - There are discussions regarding various financing sources, excluding equity raises, to manage cash flow and debt obligations [32][33] Q&A Session Summary Question: Cash flow neutrality despite good EBITDA - Management explained that the neutral cash flow was due to a large working capital build, particularly in RKF operations, which is expected to unwind [20][21] Question: MHP realizations increase - Management noted market tightness leading to improved MHP payabilities, offsetting a decrease in LME prices [22][23] Question: Delaying commissioning of E and C - The decision to delay was significant enough to avoid building up working capital ahead of the sales license [28][30] Question: Debt service requirements - Management confirmed $33 million in interest amortization was paid in July, with another $100 million due in the remainder of the year [31][34] Question: Production ramp-up from Hangjai mine - Management remains optimistic about receiving the RCAB permit in August and targets significantly above 12 million tonnes for the year [37] Question: Development timing for Sao Paulo - The company is targeting completion of the haul road by early Q4, with first ore delivery expected in early H2 next year [40]