China Daye Announces 2012 Annual Results

HONG KONG, March 27, 2013 /PRNewswire/ --

Results Highlights:

• Revenue was approximately RMB28,878 million, up of 6.4% year-on-year.
• Gross profit was approximately RMB863 million, down 6.3% year-on-year.
• Profit attributable to equity holders was RMB157 million, up 5.3% year-on-year.
• Basic earnings per share were RMB0.96 cent.

China Daye Non-Ferrous Metals Mining Limited ("China Daye" or the "Company") (Stock Code: 00661.HK) announced its audited consolidated annual results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2012 (the "Period").

In 2012, the production and operations of the Group have changed significantly, and they managed to maintain stable and rapid development through various enhancements. In March 2012, the Groups completed its reverse takeover of Daye Nonferrous Metals Co., Ltd. ("Daye Metal"). This was a major strategic move by China's Daye's parent company, Daye Nonferrous Metals Corporation Holdings Limited (the "Parent Company"). It floated the premier assets of the Parent Company through its listing platform, China Daye. The Parent Company injected its four mines located in the Hubei province, PRC (being, Tonglvshan Mine, Fengshan Mine, Tongshankou Mine and Chimashan Mine) to the Group. This lays a solid foundation for the robust growth of the Group's operations. In the second half of 2012, the Group entered into a memorandum of understanding (the "MOU") in which the Parent Group proposed within the next three to five years, to inject the interest in four existing mines currently held by the Parent Group into the Company. During the Period, the Group's revenue increased by 6.4% year-on-year to RMB28,878 million; gross profit decreased by 6.3% year-on-year to RMB863 million. Profit attributable to equity holders rose by 5.3% to RMB157 million, and basic earnings per share decreased from RMB0.43 cents to RMB0.96 cents.

Mr. Zhang Lin, Chairman of China Daye, said, "In 2012, the prices of non-ferrous metal products dropped while the prices of energy resources remained at high level and labor cost increased substantially. They were impacted by the unstable and deteriorating European debt crisis, persistent depression of global economy and slowdown in the economic growth of China. During the Period, the Group managed to overcome the adverse impact brought by the stringent macro-economic environment and completed reorganization. The Group continued to improve its production facilities, operations and management, thereby ensuring smooth running and rapid growth of the Group. It also implemented projects for prospecting of replacement resources in the State's old mines and re-exploration of its mines. It also made new achievements in mineral resources exploitation. In addition, we exceeded our prospecting targets for the whole year. The Ausmelt furnace ancillary facility was smoothly constructed and commenced operation during the Period.

Optimized production process to achieve production targets

During the Period, the Group optimized its production process and achieved its expected production targets with operations running at full capacity. For the year ended 31 December 2012, the output of all products reported an increase. The Group produced a total of approximately 22,000 tonnes of mined copper, up approximately 6.1% year-on-year. Copper cathode production amounted around 275,200 tonnes, up 1.7% year-on-year. Precious metal production was approximately 397.12 tonnes  (including approximately 7,754 kg of gold, 389.14 tonnes of silver, 13 kg of platinum and 201 kg of palladium), up approximately 9.7% year-on-year. Chemical production was approximately 790,800 tonnes (including sulfuric acid), up approximately 14.3% year-on-year. Iron concentrate production was approximately 271,000 tonnes.

Continuous strong support from the Parent Company with re-injection of premier assets

In November 2012, the Company and Daye Nonferrous Metals Corporation Holdings Limited (the "Parent Company", together with its subsidiaries, the "Parent Group") entered into a MOU. The Parent Group has proposed injecting the interest in four existing mines currently held by the Parent Group into the Company within the next three to five years. These mines include a Guokesu gold mine in the Republic of Kyrgyzstan, a Jilongshan gold mine in Hubei Province, a Lini lake copper-iron mine in Hubei Province and a multi-metal mine at Zedang in Tibet. In addition, the Company will be injected two new mines in Hubei Province that proposed to be acquired by the Parent Group from the relevant government authorities in China, including a rutile mine in Zaoyang and niobium and cerium rare-earth mine in Miaoya, Zhushan. The signing of the MOU is in the best interests of the Company and its shareholders. It is also a major strategic move by China Daye's parent company to float the premier assets of the Parent Company.

An analysis of the Group's revenue by major product and service categories:

Business outlook

The global economy remains uncertain while China economy is undergoing structural adjustments. The slowdown in economic growth coincides with soaring costs. The global economy is unstable and shows few signs of recovery, which we believe will bring greater challenges to the Group. The market expects the non-ferrous metal industry to show signs of stability with an upward trend in production growth and improvement in efficiency in 2013. The prices of non-ferrous metals are expected to increase as compared to 2012. According to the '12th Five-year Development Plan' of China, the launch and implementation of the 'Energy-saving Subsidy Program' is expected to lead to further increases in consumption demand for non-ferrous metals, in particular, the products refined and processed from non-ferrous metals.

Mr. Zhang Lin concluded, "Looking ahead, the Group will push ahead with its five core development strategies, i.e. 'resources enhancement, scale expansion, structural optimization, efficient use of capital markets and growth of talent'. It will continue to optimize its production process, enhance production efficiency, optimize marketing and trading operations, and improve its efficiency. Meanwhile, we will enhance our market analytical abilities, and actively expand the market. We will also push vigorously forward with project construction so as to increase the competitive strengths of our various business segments. More importantly, we will continue to exercise stricter cost control and use resources more efficiently, achieving continuous growth of our business and creating greater returns for shareholders."

About the Parent Company

Daye Nonferrous Metals Corporation Holdings Limited ("Daye Nonferrous Metals") was founded by the State-owned Assets Supervision and Administration Commission of Hubei Provincial People's Government and China Nonferrous Metal Mining (Group) Co., Ltd. After several years of development, it evolved into a leading state-owned integrated copper enterprise with a value chain encompassing exploration, mining, smelting, chemicals, rolling processing, waste heat power generation, waste recycling, research and design, geological survey, shaft engineering, construction and installation, machinery repair and manufacturing and transportation. In 2010, it was selected as a major enterprise promoted by the government in the demonstration zone for the materials industry and newly industrialized enterprises in the central China. Daye Nonferrous Metals has a global business network that is spread around the world. It currently has over 20 wholly owned subsidiaries, associates and holding companies in southeastern Hubei, the Yangtze River Delta, the Pearl River Delta, Hunan, Xinjiang, Hong Kong, Kyrgyzstan and Mongolia.

About China Daye

China Daye and its subsidiaries are mainly engaged in exploration, mining and trading of non-ferrous metals.

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