02 Jun 2014

Mr. Chen Jinghe, Chairman of Zijin Mining Group Co., Ltd,("Zijin") was interviewed by CCTV and other media during 2014 National Geological Exploration Conference on May 29,2014.

Talking about the impact of the declining non-ferrous metals price on mining companies, Mr. Chen jinghe's view is as follows: declining gold price has significant impacts on corporate profits, in the current situation, at least one-third or more of the mining companies are hovering between profit and loss. Some companies are at loss, which provides a lot of gold projects for sale, bringing merger opportunities . But for the company who purchase the projects, it's a test of management and operation capability to turn the projects into profit.

On overseas mergers his view is as follows: there are many opportunities for overseas mergers but it is very difficult. Although we believe that the gold price would fluctuate at present price and may rise in the future, it's very naive and dangerous to wait for the price rise. The future development of companies does not rely on the rise in price, but on the good operation of worsening external environment, it's the only way to avoid the risk in the merger."

In mergers, we should focuse on big projects while giving up small ones, having progression and retreat, eliminating projects not creating value for the company and optimizing the assets structure continuously, we should also balance the input and output. When we invest overseas, we should know ourselves as well as our partners, we cannotcarry out the company's strategy when conditions are not there."

On risk management, when the gold price is higher than the planned price, hedging is a good method to reduce the risk of declining price.

Different companies have different capacity to make profits and shoulder the risk, the key is cost. If a company pays great attention to cost control when the price falls, it can keep its strong competitiveness even with less profit. For, the gross margin of Zijin's mineral is kept at the good level with current metal prices, showing our strong capability to manage risk.

Zijin's strategy is internalization, large-scale projects and asset securitization

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