Molybdenum News Center

Kingair enhance new molybdenum mining operations while dropping air conditioner manufacturin

Shanghai. July 29.2008. INTERFAX-CHINA - Shanghai-listed Kingair Machinery Co. Ltd., an air conditioner manufacturer located in Shanghai Municipality, plans to switch its focus to molybdenum mining through an assets swap with an Inner Mongolian molybdenum miner, Kingair announced on July 28.

According to the announcement, Kingair plans to trade its entire air conditioner manufacturing assets, worth approximately RMB 260 million ($38.08 million), as well as 130 million new A-shares at a per-share price of RMB 8.64 ($1.27) for a 100 percent stake in Inner Mongolia Ejin Banner Shengyuan Mining Co. Ltd.

Upon completion of the new share issuance, Kingair's share capital will be boosted from the current amount of 145.32 million shares to 275.32 million shares, with Luoyang Juhui Investment Co. Ltd., Shengyuan Mining's largest shareholder, holding a 22.66 percent stake in Kingair. Luoyang Juhui will supersede the current largest shareholder, Taiwanese businessman Chen Tianlin, whose shareholding will decrease from 23.27 percent to 12.28 percent.

Shengyuan Mining currently holds mining rights to the Liushashan molybdenum deposit, which contains 36,800 tons of molybdenum reserves. The company also owns two molybdenum ore selecting facilities, with a combined daily ore processing capacity of 1,900 tons, and is in the process of constructing a new 1,500-ton per day selecting facility, scheduled to commence operation in April 2009.

Shengyuan Mining plans to produce 690 tons of molybdenum, 200 kilograms of gold and 320 tons of tungsten, all in concentrate form, and to generate sales revenue of RMB 350 million ($51.26 million) in 2009.

With this move, Kingair intends to enhance the company's profitability through its new molybdenum mining operations, while dropping its air conditioner manufacturing operations, which are currently generating losses for the company.

Kingair's A-share price rose by the daily limit to reach RMB 9.81 ($1.44) per share at the close of trading on July 28.

China's booming mining industry, as a result of the country's rapid economic growth and the government's increasingly clearer and stringent policies over the country's mineral resources, has attracted a number of listed companies to switch its core business operations, including Mianyang Gaoxin Industrial Development Group Inc., which moved from computer component manufacturing to copper mining, and Hunan Gold Fruit Industry Co. Ltd., which moved from telecommunications device manufacturing to iron ore mining.

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