Zhaojin Full-Year Profit Rises 11% on Output, Prices
Zhaojin Mining Industry Co., which operates in China’s largest gold-producing province, posted a 11 percent gain in profit in 2007 as the company raised output to take advantage of higher bullion prices.
Net income climbed to 388.4 million yuan ($55 million) from 351.2 million yuan a year earlier, the Zhaoyuan, Shandong province-based company said in a statement to Hong Kong’s stock exchange today. This compares with the 418 million yuan median estimate of five analysts surveyed by Bloomberg News.
Zhaojin Mining and rival Zijin Mining Group Co. are benefiting from rising gold prices as investors seek a hedge against a weaker U.S. dollar and rising inflation. China’s demand for gold jumped 23 percent in 2007, as a booming economy spurs jewelry purchases.
Gold for immediate delivery averaged $697 an ounce in 2007, 15 percent more than a year earlier. It reached a record this year, nearing $1,000 an ounce.
Sales rose 30 percent to 1.51 billion yuan, Zhaojin Mining said today. The company produced 622,567 ounces of gold in 2007, 24 percent more than the previous year, according to the statement. The company’s average price of gold sold was about $689.61 an ounce, 9.6 percent higher than in 2006.
“The group will capitalize on the surge of gold price” in 2008, Zhaojin Mining said. The company “will continue to implement outward expansion and exploration development.”
Zhaojin Mining operates five mines in Shandong province, eastern China.
This year, the company plans to invest 1.12 billion yuan to acquire an additional area of about 320 square kilometers with mining and exploration rights, gold metal resources of 53 tons, and gold mine productivity of about 120,565 ounces per year, it said in the statement.
Zhaojin Mining fell 4.2 percent to HK$30.95 as of 10:12 a.m. in Hong Kong trading. The stock has doubled in the past 12 months.
Tags: gold, inflation, output