Tongling Nonferrous Metals Raised Nearly 4.5 Billion to Expand Copper Concentrate Reserve

In the evening of October 14, Tongling Nonferrous Metals published report on private placement of shares. The volume of company’s targeted stock issue is 490,522,000 shares, the issue price is 9.16 yuan/share, the total amount of fund being raised is 4.493 billion yuan,after deducting cost of issue of 71,068,200 yuan, the net amount of raised fund is 4.422 billion yuan.

About the actual usage of this time’s raised funds, the company alleged it would invest 1.001 billion yuan to acquire 100% stock equity of Lujiang Mining, spend 1.392 billion yuan to acquire productive assets of Tongguan Metallurgical Chemical, and invest 800 million yuan in Tongling Nonferrous Metals’ copper smelting technology upgrading project. The remaining 1.3 billion yuan will be used to replenish working capital, in order to minimize the dependence of the company’s working capital on interest-bearing debt, improve the company’s financial structure, reduce expenditure in financial expenses, improve profit-earning ability, further expand the company’s size and strength, and enhance market competitiveness.

Tongling Nonferrous Metals indicted that for the 100% stock equity of Lujiang Mining project, after acquisition it would further improve the company’s self supply volume of copper concentrate, consolidate and improve the company’s advantage in raw material resources, further improve the company’s industrial chain and industrial layout,consolidate and improve the company’s industry standing, and provide powerful resource guarantee for the company’s development; meanwhile, it can avoid potential horizontal competition and affiliated transaction between it and the controlling shareholders after Shaxi Copper Mine, a subordinate of Lujiang Mining, enters exploitation stage in the future; acquisition of Tongguan Metallurgical Chemical’s productive assets can minimize the company’s affiliated transaction with Nonferrous Metals Holding in purchase and sales of sulfur concentrate, iron concentrate products, remove the horizontal competition between the company and the Nonferrous Metals Holding in sulfuric acid products, and improve the independence of listed company.

Regarding copper smelting process technology upgrading project, the company indicated that this project would adopt world leading flash smelting and flash converting copper concentrate smelting processing system, which upgraded process technology, and would significantly improve the company’s copper concentrate smelting technological standard,enable the company’s cost of copper concentrate smelting and acid making with smelting gases to reach domestic and overseas advanced standards. Meanwhile it will help fulfill the company’s sustainable development target in energy saving and emission reduction,and conform to national industrial policies.

On August 29, Governor Wang Xuejun and Deputy Governor Zhan Xialai of Anhui Province and chief officials of the Provincial State-owned Assets Supervision and Administration Commission visited Tongling Nonferrous Metals for survey research, and convened on-site special subject meeting,aiming to learn about the enterprise’s production, operation and reform development conditions,study related countermeasures,push forward Tongling Nonferrous Metals to further deepen reform, speed up transition and upgrading. According to industry insiders, with the implementation of this time’s Tongling Nonferrous Metals’ private placement plan, the company’s pace of state-owned enterprise reform might quicken its pace.