XIAMEN, China, April 21, 2015 /PRNewswire/ -- Hengxing Gold Holding Company Limited ("Hengxing Gold" or the "Company") (HKEx: 2303) would like to announce its 2015 first quarter operational updates for its wholly owned Gold Mountain Mine and its arbitration with Trio China Ltd. Gold Mountain Mine is the largest gold mine in China's Xinjiang region in terms of JORC gold resources, annual ore processing capacity and gold production volume at full production level.
2015 Q1 Production Updates
Gold Mountain Mine crushed and processed approximately 585,808 tonnes of ore and produced approximately 6,728.6 ounces (equivalent to approximately 209.3 kg) of gold dore during the first quarter of 2015. The management has decided for productivity purposes to allow on-site staff one-month holiday leave to enable them ample time to travel inter-province to visit their families for the Chinese New Year. As a result, the processing plant only operated for two months in the first quarter of 2015. Despite the shorter production period in the quarter, there is an increase of approximately 34% gold dore production compared to the fourth quarter in 2014. The management is pleased with the progress of the increased production ramp up.
Crushing System Technical Upgrade
In order to reach full production capacity, the Company continued its efforts on the technical upgrades of current processing system by testing the merits of crushers produced by different specialized manufacturers. The Company has scheduled trial runs of Gaoke Crusher supplied by Shenyang Metallurgy Mine Heavy Equipment Co., Ltd in late April of 2015 and followed by a vibrating crusher supplied by Xuzhou Qiaoxin Mining Machinery Manufacturing Company Limited .
2015 Exploration Updates
The Company has taken an ongoing effort under its exploration license and has conducted joint exploration work in Bohegou area with Western Region Gold Ili Company Limited. Additional effort will be invested to test several continuous gold-in-soil anomalies in an expanded exploration program for 2015.
Arbitration with Trio China Ltd
The Company and Trio China Ltd ("Trio China", a subsidiary of the Weir Group PLC) entered into Gold Mountain Mine Crushing System Purchase Agreement (the "Purchase Agreement") in 2010 whereby the Company agreed to purchase from Trio China machineries and equipments which forms the overall crushing system. Trio China has made several undertakings to guarantee the crushing system must fulfil certain acceptance criteria and production performance measures which were not met according to the terms of the Purchase Agreement. Therefore the Company believes that Trio China is liable to replace the equipments at its own costs and ensure the acceptance criteria are fully achieved. Furthermore it shall compensate the Company for the losses incurred during such production period.
After several failed negotiations attempting to address these performance issues, the Company is left with no choice but to exercise the contractual rights in the contract to resolve the disputes through the Xiamen Arbitration Commission (the "XMAC") and has accordingly filed the arbitration application against Trio China. In the arbitration application submitted to the XMAC, the Company's legal advisers is seeking from Trio China compensations for losses and damages totalled RMB 46,213,900, including (1) RMB 11,530,000 refund of partial purchase price; (2) RMB 15,453,900 compensation on cost of wearable components; and (3) RMB 19,230,000 production losses. As stipulated in the contract, the result of XMAC arbitration shall have a legal binding effect on both parties. XMAC has taken the cognizance of the arbitration and a date for the arbitration hearing is to be scheduled.
About the Weir Group PLC and Trio China
The Weir Group PLC is a global engineering solution provider, which focuses on designing, manufacturing and supplying products and engineering services for the minerals, oil & gas, and power & industrial markets. Trio China is a manufacturer of crushing, vibrating, washing, and conveying equipments for the aggregate, mining, recycling, and mineral industries. On 15 October 2014, the Weir Group PLC announced that they had entered into an agreement to acquire Trio China.
About Hengxing Gold Holding Company Limited (HKEx: 2303)
Hengxing Gold is an emerging gold mining company in China and currently operating the largest gold mine in Xinjiang, with 3.2 million ounce of gold resources and 2.2 million ounce of gold reserves. It aims to achieve the full processing capacity in 2015 then expects to produce average 78,000 ounce of gold per annum for over 20-year mine life. Hengxing Gold's growth strategy is to operate multiple gold mines cost efficiently and grow its resources base by making acquisitions that will bring additional value to its shareholders.
For more information, please visit http://www.hxgoldholding.com.
Contact Information:
Hengxing Gold Holding Company Limited
CHEN Ying
Corporate Affairs Manager
+86-592-2969521
hxgold@xmhxgroup.com
