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Public company info - Bay Area Gold Group Limited , 01194.HK
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Bay Area Gold Group Limited, 01194.HK - Company Profile
Chairman Yi Shuhao
Share Issued (share) 297,000,000
Par Currency Hong Kong Dollar
Par Value 0.001
Industry Precious Metal
Corporate Profile Business Summary: The Group is principally engaged in mining and processing of gold ores and sale of gold products in The People’s Republic of China (the “PRC”), trading of metals and minerals in the PRC, and provision of financial services business in Hong Kong and the PRC, including asset management, securities brokerage, financing and advisory services. Performance for the year: During the year, the Group recorded loss from operations of HK$291 million as compared with profit from operations of HK$80 million last year. During the year, the Group’s revenue increased by 28% to HK$1,040 million (2018: HK$814 million). The gross profit margin of the Group decreased to 16% during the year (2018: 28%). During the year, the loss per share of the Company was HK10.78 cents (2018: HK20.40 cents). Business Review Financial Services Business During the year under review, the Group has successfully operated three investment funds under its management in the PRC. In 2019, no new funds have been raised and registered due to regulatory factors. Trading of metals and minerals The Group is involved in trading of metals and minerals in PRC and the revenue of this segment was approximately HK$289,723,000 (2018: HK$114,003,000). Gold Mining Business At the same time, the Group continued focusing in mine development and reserve converting exploration during the year. Total gold production was 2 tonnes (65 Koz) during the year, a 5% increase as compared to that in 2018. Henan Jinxing Gold Mine Henan Jinxing Mine is located approximately 6 km from the regional town of Baitu and approximately 110 km southwest of Luoyang City, Henan Province. It is the largest mine in terms of gold resources of the Group. It is an underground mine and consists of two areas, namely Jinxing area and Xiepojing area. The Group acquired Jinxing Mine in 2010. Ten vein groups have been identified within the mining area, with similar orientation, size and shape. The variation of overall continuity of the thickness and grade of the vein is also relatively consistent, which suggested good potential for further resources expansion. Jinxing Mine has received the environmental approval and safety approval for its new tailings yard and has started the construction work. It has JORC code and its equivalent gold resources of 74.9 tonnes (2,406 Koz) with average grade of 4.6g/t. Gold production in 2019 was 0.5 tonnes (17 Koz), a decrease of 26% compared to that of 2018. During the year of 2019, Jinxing Mine has exploited Xingxingyin No.1 Shaft, Houmusi No.2 Shaft and Matoumen. In addition, it also launched the in-depth investigation and exploration for the production of Kangshan Mine, including exploration works of drilling, geological surveys, shallow drilling on ground surface, induced polarization profiling and mechanical core drilling. Henan Luanling Gold Mine Luanling Mine is located in Luanchuan County, Henan Province, 40 km away from Jinxing Mine. It is composed of Northern underground mining site and Southern open-pit and underground mining site and is contained within a single mining licence with an area of 9 km2 . The Group acquired the mine in 2010 and realised full scale production in 2012. It has JORC code gold resources of 60.1 tonnes (1,933 Koz) with average grade of 3.2g/t. Gold production in 2019 was 0.6 tonnes (20 Koz), an increase of 43% compared to that of 2018. During the year of 2019, Luanling Mine has completed the underground mining, which includes drift, transverse mining and exploration construction, and stope preparation and cutting construction. In addition, it has conducted drilling construction, including in-depth investigation and production exploration. Yunnan Mojiang Gold Mine Mojiang Mine, is located in Mojiang County, Pu’er City, Yunnan Province, which is approximately 300 km southwest of the provincial capital – Kunming of Yunnan Province. It lies on the famous Mojiang-Jinping and Ailaoshan Fold Belt, implying favourable geology attributions. It has JORC code gold resources of 14.1 tonnes (458 Koz) with average grade of 1.4 g/t. Gold production in 2019 was 0.8 tonnes (24 Koz), a 9% increase compared to that of 2018. During the year of 2019, Mojiang Mine has conducted exploration works mainly for the exploration design. It has completed the drilling and the addition of reserving gold. Due to the complexity of geological conditions of the mining area, more mined-out areas which increase the difficulty of geological mining, the exploration shall not be completed in 2019. However, the pit exploration and drivage have been completed and resulted in certain mining volume and by-product mines. Yunnan Hengyi Gold Mine Hengyi Mine is located in Zhenyuan County, Yunnan Province. It is approximately 380 km southwest from Kunming. It holds two mining licenses, namely Shangzhai and Bianfushan. Hengyi Mine is located between the Mojiang-Jinping Fold Belt and the Ailaoshan Fold Belt of the San Jiang Metamorphic Fold System. The San Jiang Metamorphic System is situated on the southwest margin of the Yangzi Platform and the northeast margin of the Simao Block between the Honghe and Amojiang Faults. Since the Group’s acquisition of Hengyi Mine in 2012, the Group has been working on ramping up its production capacity. Heap leaching has been practised for several years at the mine. It has JORC code gold resources of 51.3 tonnes (1,650 Koz) with an average grade of 2.7 g/t. Gold production in 2019 was 118 kg (4 Koz), a 76% increase compared to that of 2018. Inner Mongolia Yongfeng Gold Mine Yongfeng Mine is an underground mine which was acquired by the Group in 2009. Yongfeng Mine consists of two mining areas, namely Lianhuashan mining area and Honghuagou mining area, which are further divided into seven sub-mining areas. Yongfeng Mine is located in the middle segment of the northern margin of the North China Plate, adjacent to the Inner Mongolia Fold Belt in the North. Seven mineralised veins were identified. The mineralised veins have similar characteristics with an average width between 1 and 1.5 metre and occur as gold-bearing quartz veins. It has resources of 16.1 tonnes (519 Koz) with an average grade of 9.5 g/t. The output of Yongfeng Mine in 2019 was 8 kg (0.3 Koz), a 60% decrease compared to that of 2018. Prospects: The Fed has lowered interest rates three times in 2019. Looking forward in 2020, the Fed policy of low interest rate is likely to remain unchanged. The prolonged conflict in the Middle East, on-going trade tensions between the U.S and China will present high risks to the geopolitical uncertainties. Worries over the further spreading of the new deadly coronavirus globally and fears about its potential adverse impact on the world economy will drive up gold’s safe-haven demand further. As it stands, the Group forecast a prosperous gold market in 2020. The Company had entered into the sales and purchase agreement with an independent third party to dispose the Group's financial services business segment. As at the date of this announcement, the said disposal has not completed. Yet, the Group's strategy is to focus the Group’s resources in gold mining business segment as the Group's principal business in 2020. As such, the Group’s objective is to maintain its stable development in respect of mine exploration and reserve increase by means of strict implementation of existing mines exploration planning. More effort will be put on optimizing the construction of the major exploration projects and on the cost control in an environmentally friendly manner. Being one of the largest privately owned, China-based gold mining companies, the Group commits business strategy as to:(i) continue to expand production capacity at the Group's existing mines, (ii) speed up construction work of the capacity expansion and improve the exploration efficiency, and (iii) continue to conduct further exploration projects in order to increase resources and upgrade reserves. As always, the Group will remain vigilant on costs and adopt a prudent approach in its growth strategies.

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