Property and financial investment company New Times Group Holdings has agreed to buy control of four zinc mining firms and take part in a 150 million yuan project in the mainland in an effort to change its core business.
New Times will buy three companies that have interests in three zinc mines and a refinery in Hunan and Guizhou provinces. It will also take a 51 per cent stake in a new joint venture to develop another mine and refinery in Hunan.
'The three mines will have an initial output of 52,000 tonnes annually next year, 40,000 tonnes of which will be extracted from low-density zinc oxide mines,' said New Times chairman John Tse On-kin.
'Those low-density mines, previously considered useless, can now be used to produce zinc using new technology [from the joint-venture partner],' Mr Tse said. 'Our total zinc output in 2009 will reach 70,000 tonnes.'
Joint-venture partner Xiang Yun Yien Fei Long Shi Ye's expertise in zinc leaching, purification and electrolysis is similar to copper leaching but has yet to be widely applied in the zinc industry, the company said.
Mr Tse said New Times had HK$100 million in cash, and may have to raise funds by selling shares at HK$1.85 each, the average stock price in the past five trading days, to fund the acquisition.
New Times said it would sell its property and financial investment business within two years to focus on its zinc operations.
Shares in New Times Group rose 0.5 per cent to HK$1.91 yesterday.
Zinc, a raw material used in the production of stainless steel, has risen 14 per cent in the past year to US$3,384 per tonne as of Thursday on the London Metal Exchange. It reached a high of US$4,603 in November last year.
Change of direction
In two years the group will have sold its interests in property and financial investment
The amount of zinc New Times Group expects to produce by 2009, in tonnes 70,000