Actively Expands Overseas Market to Propel International Development
Strengthens Business Operation by DiversifyingMining Resources
HONG KONG, Dec. 21, 2012 /PRNewswire/ -- China Hanking Holdings Limited ("China Hanking" or the "Company" (Stock Code: 3788), and its subsidiaries, the "Group"), is pleased to announce that on 20 December 2012, the Company has entered into a share purchase agreement with a wholly-owned subsidiary of Hanking Group to acquire 70% equity interest in Northeastern Lion Limited ("Northeastern Lion") for a total consideration of RMB311.8 million. According to an independent technical report, Northeastern Lion owns laterite nickel mines at North Konawe Regency, South East Sulawesi Indonesia, which have measured and indicated nickel resources of 3.75 million tons and inferred nickel resources of 1.04 million tons, through three project companies PT Konutara Sejati ("KS"), PT Konutara Prima ("KP") and PT Karyatama Konawe Utara ("KKU"). Moreover, the three project companies own production operation IUP of laterite nickel resources with a term of 20 years respectively, covering an area of 7,869 hectares in total. The abundant laterite nickel resources acquired will assist the Company in realizing its long-term strategies of diversifying mining resources and internationalization.
In addition, through KS, Northeastern Lion has commenced mining, selling laterite nickel and will gradually expand its mining capacity. Meanwhile, the Company has acquired a laterite nickel ore smelter, which is planned to be a base for staff training and continuing improvement of the alchemical technique for laterite nickel ore in the PRC. In addition, the Company also possesses an alchemical technique for laterite nickel mining and metallurgy, which can be applied in Indonesia. The project companies have also made plans to establish smelters with an annual capacity of 40 thousand tons laterite nickel in Indonesia by the end of 2016 to add values to laterite nickel products produced by the Company.
According to the share purchase agreement, the consideration of RMB311.8 million will be settled by cash in installments. The Company will fund the consideration by internal resources.
As one of the key expansion strategies of the Company is to diversify mining resources, on 20 December 2012, the Company has also entered into the Sale and Purchase Contract of Indonesian Laterite Nickel Ore with a connected company Harvest Globe Limited ("Harvest Globe"), to purchase laterite nickel ore from Harvest Globe. The laterite nickel ore acquisition with Harvest Globe has created opportunities for the Company to further develop its current business by engaging in nickel production and trading business. The contract has a term of three years from 1 January 2013 to 31 December 2015 with the proposed annual caps of RMB65 million.
Mr. Pan Guocheng, Chief Executive Officer of China Hanking commented: "This is a significant acquisition that will further boost the Company's long-term strategies of diversifying mining resources and internationalization. The laterite nickel ore is located at North Konawe Regency, South East Sulawesi Indonesia, which owns world-class resources with high qualities, as well as close proximity to coastline. A temporary pier has been established to provide logistics facilities, satisfying the Group's requirement of low-cost operations and promoting the long-term development of the Company. Northeastern Lion has commenced mining, selling laterite nickel and has gained ample operating experience in the laterite nickel market. Our outstanding alchemical technique for laterite nickel mining and metallurgy can also be applied in Indonesia. We believe that upon completion of the acquisition, the integration of resources as well as processing and refinery techniques will bring great synergies to the current operations of the Group, further improving its overall operating performance. Looking forward, we will continue to seize the opportunity of developing quality mining resources, so as to realize our strategy of diversifying mining resources and to become a leading international resources mining enterprise, and ultimately maximize shareholders' returns."
About China Hanking Holdings Limited
China Hanking is one of the largest iron ore producers in Northeast China with a proven track record in exploration, production, processing and sales of iron ore for over 15 years. The average grade of the company's iron ore was approximately 66%. As of the end of 2011, the Group has retained 210 million tons of iron ore resources and 167 million tons of iron ore reserve. Benefiting from China Hanking's competitive cost advantage, its cash operation cost is only half of the average cash operation cost of its Chinese peers. Leveraging on its renowned reputation, the Company has established an extensive customer base as well as long-term partnerships with large-scale steel manufacturers.
China Hanking Holdings Limited was listed on the Main Board of The Hong Kong Stock Exchange in 2011, stock code: 3788.
For further information, please contact:
China Hanking Holdings Limited
Investor Relations
Tel: +86-24-3129-8912
Porda Havas International Finance Communications Group
Investor Relations
Ms. Cindy Xin
Tel: +852-3150-6771
Fax: +852-3150-6728
Email: cindy.xin@pordahavas.com
Media Relations
Mr. Bunny Lee
Tel: +852-3150-6707
Fax: +852-3150-6728
Email: bunny.lee@pordahavas.com
