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Call Warrant – January 17, 2008

ZIJIN-C2:CW Zijin Mining Group Co Ltd (DB)

Code: 0518C2 (ZIJIN-C2)
List Date: 17-01-2008
List Price: RM0.1889
Expiry Date: 06-08-2008
Exercise Price: HKD12.2740
Conversion Ratio: 10.00
Warrant Type: European Style

Company Profile

As a famous gold mining enterprise and one of the Top 500 Enterprises Top 500 Enterprises in China, Zijin Mining Group Company Limited is an H-share company listed at the Hong Kong Stock Exchange (Stock name: Zijin Mining; stock code: 2899).


Zijin Mining was included in the FTSE Mining sector Indexes on 20 December 2004; it was added to the Dow Jones China

Offshore 50 Index on 20 March 2006; and on 20 October 2006, it entered into the FTSE/Xinhua China 25 Index. According to FORBES, Zijin Mining Group ranked 17th among the name list of China Top Enterprises and 16th among the list of China ‘s Overseas Listed Companies with the Most Investment Value (1st of all mining enterprises) in 2006.

Centering upon non-ferrous metals such as gold and copper, Zijinshan Gold Mine, the core enterprise of Zijin Group, has been developed into a gold mine that boasts the largest utilizable and ensured reserves of monomer mines, the biggest scale of ore mining & mineral processing, the greatest amount of gold production, the lowest beneficiation feed grade of ores, the lowest unit cost of ore processing and the best economic performance in China.Its composite cost for the gold produced from mining is RMB 58.53 Yuan/g and its cost control level is at the leading place in the country. The Gold Smelting Plant of Zijin Mining Group has been added to the directory of gold suppliers by the London Bullion Metal Association (LBMA). Standard gold produced by Zijin is marketable all over the world. And its gold products are authorized to adopt ISO Standards of Product Markings.

According to the statistics of China Gold Association, total gold production of China was 240.078 tons in 2006, 179.848 tons of which were produced from mining with an increase of 0.72% over the previous year. Zijin Group had 49.28 tons of gold output and the gold produced from mining reached 20.70 tons in 2006, respectively accounting for 20.53% of China ‘s total gold production and 11.51% of the gold produced from mining in China during the same year. Total profits of the gold mining industry of China amounted to RMB 6.1085 billion Yuan in 2006, and Zijin Group made the profit of RMB 1.705 billion Yuan (profits excluding gold itself) or 27.91% of those of whole China .

The Company has established 88 subsidiaries in more than 20 provinces across China including Fujian where its head office is located, Xinjiang , Guizhou , Inner Mogolia, Jilin , Qinghai , Tibet , Heilongjiang , Henan , etc as well as in 7 overseas countries. The Company has successfully invested in Nari Tolgoi Gold Mine of Mongolia, Tai-Pan Lead-zinc Mine of Vietnam and its neighboring Iron Mine with the transfer of those companies’ shareholding rights. Besides, it has become the largest shareholder of Ridge Mining, a listed company on the London Stock Exchange, and has made via tender offer the successful acquisition of Monterrico, another listed company on the London Stock Exchange. At the end of 2006, according to the calculation of equity interests, the ensured metal (ore) resources/reserves of the Group Company were as follows: about 455 tons of gold (57 tons of which were associated gold), 151 tons of platinum & palladium, 6.7 million tons of copper, 2.38 million tons of zinc, 544,600 tons of nickel, 400,000 tons of lead, 260,000 tons of molybdenum (30,000 tons of which were associated molybdenum), 100,000 tons of tin, 188 million tons of iron ore, and 300 million tons of coal. By the end of 2006, the Group Company had obtained 179 prospecting rights covering a total area of 5,972 square kilometers and 27 mining rights covering a total area of 41.3 square kilometers.

The Company has undertaken a number of national key projects in scientific and technological research, an industry-leading position in the utilization of low-grade gold mine as well as in the technical study and application of hydrometallurgy. With the approval of the Ministry of Personnel, Zijin established the first Postdoctoral Scientific Research Station of China’s gold industry in 2001. In 2006, the Company was qualified as a state-certified technology center.

With the aim of “benefiting people and contributing to the motherland by developing the enterprise with emphasis on the mining industry” and “becoming a major manufacturer of gold and non-ferrous metals in the world”, the Company is striving to “help promote the economic growth of both China and the world at large with its high-quality mineral materials”. The Company advocates the value of “coordinated development of the enterprise, staff and society”. Zijin’s spirit of “pioneer with painstaking efforts and exploit with innovative spirit” has come into being throughout the years. Based on the operation concept of “human orientation and pursuance of excellence”, Zijin has put forward the three-step development strategy of “leading in domestic gold industry, leading in domestic mining industry, and finally ranking top in international mining industry”. The overall objective of the Company is to build Zijin into a super high-tech international mining group with good economic performance.

Source: Zijin’s website


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