With the explosion of new energy vehicle industry driving demand, lithium prices hit a new high, and the relationship between supply and demand of global lithium resources is becoming increasingly tense. Upstream minerals have become a hot investment focus at present. Recently, another Chinese enterprise won an overseas lithium mine, triggering a rise in the share price limit.
On February 8, Sinomine Resource Group Co.Ltd(002738) (002738, hereinafter referred to as Sinomine Resource Group Co.Ltd(002738) ) announced that it planned to acquire 74% equity of bikita lithium project in Zimbabwe held by AMMS and Samm for us $180 million (about RMB 1.144 billion). According to the latest news disclosed on Sinomine Resource Group Co.Ltd(002738) February 9, the subsequent delivery of bikita lithium project in Zimbabwe has been started.
Affected by the news, the opening price of Sinomine Resource Group Co.Ltd(002738) soared by 9.59% on February 9, and then triggered the daily limit to close at 64.24 yuan, with a total market value of 20.9 billion.
Sinomine Resource Group Co.Ltd(002738) stock price trend chart in recent five days
The announcement shows that on January 29, 2022, the wholly-owned subsidiary of the company, China Mining (Hong Kong) rare metal resources Co., Ltd. (hereinafter referred to as Hong Kong China Mining rare), plans to acquire 100% equity of AFMIN and amzim jointly held by AMMS and Samm with a benchmark consideration of US $180 million in cash. The above two companies jointly hold 74% equity of bikita.
At present, bikita is implementing internal restructuring and share repurchase cancellation. If the final internal restructuring of bikita is approved by the government, the company will hold 99.05% equity and corresponding related creditor’s rights of bikita; If bikita’s internal share repurchase and related company’s debt of 100% are finally approved, bikita will be cancelled.
The main asset of bikita company is the bikita lithium mine project in Zimbabwe. The project is in the production stage. The main products are technical grade lithium permeable feldspar concentrate and cesium garnet concentrate with high grade and low impurities. According to the resource estimation report issued by IRES, the accumulated explored lithium mineral resources in bikita lithium mining area are 29.414 million tons of ore, the average grade of Li2O is 1.17%, and the content of Li2O metal is 344000 tons, equivalent to 849600 tons of Li2CO3 equivalent.
Sinomine Resource Group Co.Ltd(002738) on February 9, the investor interaction platform said that bikita mine in Zimbabwe is a mature mine in production. At present, it has a beneficiation capacity of 700000 tons / year (equivalent to about 70000 tons of concentrate), with an average lithium oxide content of about 4% – 6%. The main reason why the original shareholders planned production capacity but did not take action was their subjective personal will and the impact of the epidemic. Sinomine Resource Group Co.Ltd(002738) also said that after the completion of the project acquisition, the company plans to expand the production scale of the mine within the year, and plans to expand the production capacity to 1.05 million tons / year in the future.
In addition, there are still many unverified LCT type (lithium cesium tantalum type) pegmatite bodies in bikita mining area, which has the potential to further expand the reserves of lithium cesium tantalum mineral resources.
Sinomine Resource Group Co.Ltd(002738) was established in 1999 and its main business is the development and utilization of rare light metal (lithium, cesium and rubidium) resources, geological exploration technology services and mining right investment. The company has the world’s main high-quality cesium resources and is the world’s largest producer and supplier of cesium and rubidium products. It is understood that Sinomine Resource Group Co.Ltd(002738) has been engaged in geological exploration business in Zimbabwe since 2004 and established a subsidiary in Zimbabwe in 2009, mainly engaged in geological exploration, mining and beneficiation.
Sinomine Resource Group Co.Ltd(002738) said that this transaction is in line with the company’s development strategy of actively reserving rare light metal mineral resources, focusing on the layout of lithium new energy materials, rare light metals (cesium, rubidium) and other emerging material industries, and improving the upstream and downstream industrial chain. After the completion of this transaction, it can increase the company’s lithium mineral resources reserves, improve the company’s self-sufficiency rate of raw materials in lithium salt business, ensure the stable supply of medium and long-term raw materials in lithium salt business, and improve the profitability and sustainable development ability of the company’s main business.
The announcement also mentioned that this transaction is expected to have a positive impact on the company’s production and operating performance in 2022, and have a positive impact on the stable supply of spodumene and Diopside in the medium and long term.
According to the latest performance forecast disclosed by Sinomine Resource Group Co.Ltd(002738) , the net profit attributable to the shareholders of the listed company is expected to be 500 million yuan to 560 million yuan in 2021, an increase of 186.92% – 221.35% over the same period of the previous year; It is estimated that the net profit after non deduction will be 488 million yuan to 548 million yuan, with a year-on-year increase of 221.10% – 260.57%; The basic earnings per share is 1.5643 yuan / share -1.7520 yuan / share.
It is worth noting that this acquisition is not Sinomine Resource Group Co.Ltd(002738) the first time to layout overseas mineral resources.
In December 2021, the wholly-owned subsidiary of Sinomine Resource Group Co.Ltd(002738) Hong Kong China Mining rare intends to subscribe for 7.5 million additional shares issued by PWM, a Canadian listed company, with its own capital of 1.5 million Canadian dollars (about 7.5182 million yuan), accounting for about 5.72% of the total share capital of PWM after the completion of this additional issuance, and signed an underwriting agreement with PWM on all lithium, cesium and tantalum products of the case Lake project.
PWM has three pegmatite lithium projects in Ontario, Canada, including case Lake project, Paterson Lake project and Gullwing tot Lake project. Since the discovery of lepyroxene type pegmatites in case Lake area in 2018, pegmatites with lithium cesium tantalum mineralization have been found in three lakes area. At present, six pegmatite bodies of lithium cesium tantalum mineralization have been found in the pegmatite group in the case Lake project area.
Announcement screenshot
Sinomine Resource Group Co.Ltd(002738) it also owns the Tanco mine project in Canada. The 120000 ton spodumene mining and beneficiation capacity has been officially put into operation in October 2021 (it has basically reached the production capacity at present). It is planned to actively promote the open-pit mining scheme of Tanco mine and build a 500000 ton beneficiation plant, of which 180000 tons are expected to be put into operation by the end of 2022. It was revealed on February 9 that the theoretical transportation cycle of Tanco refined lithium ore to Jiangxi processing plant is 1-2 months.
It is understood that global cesium resources are scarce and highly concentrated, mainly in the form of cesium garnet, lithium mica and salt lake brine. At present, there are three major cesium garnet mines in the world: Canada’s Tanco mine, Zimbabwe’s bikita mine and Australia’s Sinclair mine. Up to now, Sinomine Resource Group Co.Ltd(002738) has arranged two of the minerals, further strengthened the guarantee of upstream resources, and greatly improved the self-sufficiency rate of raw materials.
In addition, Sinomine Resource Group Co.Ltd(002738) is also the first batch of enterprises in China to produce battery grade lithium fluoride and high-purity lithium carbonate. The company’s new capacity of 25000 tons of lithium salt has reached production capacity. In addition to the existing capacity of 6000 T / a industrial grade lithium carbonate to produce battery grade lithium carbonate and high-purity lithium carbonate, the flexible production lines with an annual output of 15000 tons of battery grade lithium hydroxide and 10000 tons of battery grade lithium carbonate invested and built by the company have been completed and put into operation, and it is expected to gradually expand in 2022.
According to the analysis of galaxy securities, Sinomine Resource Group Co.Ltd(002738) as the leader of overseas geological exploration and global cesium and rubidium resources, the leader of lithium fluoride and the upstart of lithium salt, China’s “specialized and new” lithium battery new material, plans to acquire bikita lithium mine, make a major breakthrough in the lithium resource end upstream of the industrial chain, and will greatly improve the company’s lithium mine reserve and lithium resource self-sufficiency rate, Accelerate the transformation of the company into an integrated enterprise of lithium resource mining and new material processing, lay a solid foundation for the expansion of lithium salt production, open up the future growth space and development potential of the company, and the valuation of the company is expected to be improved.
