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Gold and Molybdenum (601958): Shareholding in Tianchi Molybdenum Strengthens Lead


Gold and Molybdenum (601958): Shareholding in Tianchi Molybdenum Strengthens Lead
The company is currently the world’s third largest and largest domestic producer of molybdenum concentrate.The company produced molybdenum concentrates in 20184.750,000 physical tons, an increase of 4 in the first ten years.68%, the output is second only to Freeport, Codelco; domestically, the only company with an output of more than 40,000 physical tons.The company has cultivated molybdenum for many years, covering the entire industrial chain of molybdenum product mining, selection, metallurgy, chemical industry, metal deep processing, as well as the production and sales of by-products from comprehensive recycling of resources.Carry out related metal trading business through the mastered marketing channels, forming a diversified business model of “self-produced + self-operated + trade”. The company has abundant mine resources and lower mineral costs. The company operates two large open-air molybdenum mines: Jinduicheng Molybdenum Mine and Ruyang Donggou Molybdenum Mine. All raw ore needed by the company comes from its own molybdenum ore, and the self-sufficiency rate of raw materials is 100%.Jinduicheng Molybdenum Mine is one of the six major molybdenum mines in the world. The company owns Jinduicheng Molybdenum Mine2.The mining right of 6,282 square kilometers is a large-scale open-pit mine, which can produce molybdenum concentrates with a molybdenum content greater than 52% and higher quality than ordinary molybdenum concentrates (molybdenum content 45% -48%).Jinduicheng Molybdenum Ore Reserves 5.1.8 billion tons, with an average grade of 0.083%; based on the company’s existing mining capacity, it can still serve for 38 years. The company currently holds 65% equity of Ruyang Company.Ruyang has rich reserves of molybdenum resources, of which the Donggou molybdenum reserve is 68.98.Dongyang molybdenum ore total amount of ore 5.4.0 billion tons, with 杭州夜网论坛 an average grade of 0.122%, with a service life of 71 years. From the perspective of the distribution of mines across the country, both mines belong to mines with high grades and carbonized ore processing capacity.Due to the existence of economies of scale, the costs of these two mines are relatively speaking. In addition, the Central China Manzhou Liwushan and Dexing copper mines are in addition to the associated molybdenum cost.The cost advantages of Donggou molybdenum mine are at the forefront of mines in the country. In addition, in 2013, the company acquired 10% equity of Anhui Jinsha Molybdenum Industry Co., Ltd. held by Anhui Geology and Mining Investment Group Co., Ltd., and newly added molybdenum metal equity reserves22.70 ounces. Proposed to participate in Tianchi Molybdenum 18.3% equity, consolidated the leading joint stock company issued an announcement, invested 300 million shares in Tianchi Molybdenum Industry, accounting for 18% of it.3% equity.Tianchi Molybdenum owns Jide Molybdenum Mine, a small town in Shulan City, which has recorded reserves.40,000 metal tons with an average grade of 0.113%.The design mining method is open-pit mining, with a production scale of 825 tons / year, and is currently in the mining infrastructure construction stage.After our sintering is fully achieved, the output scale may be over 9,000 metal tons, and the overall scale ranks among the top domestic trace ore production enterprises. The downstream metal deep processing part is expected to force molybdenum metal deep processing to be at the same time at the lowest end of the entire industrial chain, which is a substitute with a higher gross profit margin.According to the data in “2016 Status and Development Proposals of Molybdenum Metal Deep Processing Industry”, some enterprises are involved in the substitution of molybdenum deep processing and molybdenum metal products and are still in an early stage of development.As the leading domestic molybdenum processing company, the company has established a complete target production line.According to the company’s 2018 annual report, the marketing of new products has achieved remarkable results. The new six-generation targets have obtained customer certification and achieved batch supply.In the future, the company will continue to focus on the research and development of molybdenum targets and actively promote them in the market. The investment proposal estimates that the company’s net profit attributable to its parent from 2019 to 2021 will be 5 respectively.6,6.1 and 6.9 trillion, corresponding to the current maximum PE is 39.4 times, 36.7 times and 32.4 times, considering the company’s industry level and development prospects, give the company an “overweight” rating.