Recently, Sichuan Rongda gold Co., Ltd. (hereinafter referred to as “Sichuan gold”) broke through the Shenzhen main board and made new progress.
The main products of Sichuan gold are gold concentrate and synthetic gold, which can become standard gold products traded in Shanghai Gold Exchange after smelting or refining. Standard gold is mainly used in gold jewelry, industrial gold, investment products, government reserve gold and other fields.
During the reporting period (from 2018 to the first quarter of 2021), Sichuan gold’s operating revenue was 352 million yuan, 385 million yuan, 460 million yuan and 170 million yuan respectively, and its net profit was 123 million yuan, 117 million yuan, 163 million yuan and 43.5778 million yuan respectively, of which the net profit margin from 2018 to 2020 was more than 30%.
According to the feedback, 17 normative issues, 19 information disclosure issues and 3 other issues were involved in this time.
Among them, issues related to equity have been mentioned many times, such as the identification and rectification of the loss of state-owned assets, and whether the shareholding arrangement of local governments is a temporary agreement.
At the same time, the related party transactions between Sichuan gold and related parties Zijin Mining Group Company Limited(601899) (601899. SH) have also been paid special attention. Whether the related party transactions affect the operating independence of the issuer and whether there is interest transfer, and the specific measures to reduce the related party transactions with controlling shareholders and actual controllers in the future should also be disclosed.
caused the loss of state-owned assets
The predecessor of Sichuan gold is Muli Rongda. In 2006, Sichuan Bureau of Geology and mineral resources (with the regional survey team of Sichuan Bureau of Geology and mineral resources and the mining company as the main investors) took the existing geological exploration results, exploration rights and mining rights of soluogou gold mine as shares, and Hanlong group, Zijin Nanfang and Beijing Jinyang jointly formed a cooperative company with capital shares.
The specific mode of cooperation is: Shuangliu Rongda, a subordinate enterprise of the Provincial Bureau of Geology and mineral resources, invested 600000 yuan to establish Muli Rongda company, and took shares at the price of exploration right and mining right to inject the exploration right of soluogou gold mine, diaojingou gold mine and mining right of soluogou gold mine in Muli County into Muli Rongda company, Then transfer 58% equity of Muli Rongda company to three companies (36% of Hanlong group, 12% of Zijin investment and 10% of Beijing Jinyang).
It is worth noting that the establishment of Muli Rongda and the content of the agreement on cooperative exploration and development of Muli soluogou gold mine are not fully carried out in accordance with the reply on cooperative operation and development of Muli soluogou gold mine (cdgf [2006] No. 72) issued by Sichuan Bureau of Geology and mineral resources. There are violations in the decision to introduce social capital and select investors without approval, And caused a loss of 62.5082 million yuan of state-owned assets.
Therefore, the regulators require the company to supplement and disclose: the specific information of relevant partners, including but not limited to the composition of shareholders, actual business, cooperation background, signing and performance of cooperation agreement, and whether necessary approval / filing procedures have been performed; Sichuan Provincial Bureau of Geology and mineral resources takes the existing geological exploration results, exploration rights and mining rights of soluogou gold mine as shares, whether it has fulfilled the necessary procedures of state-owned assets evaluation and approval, and whether the issuer’s acquisition of exploration rights and mining rights is legal and compliant; The specific contents and previous changes of such exploration rights and mining rights; Whether the recognition and rectification of the loss of state-owned assets have been confirmed by the competent authorities.
In addition, the gambling listing agreement between Sichuan gold and its shareholder Muli Guotou (the main investor of Muli County Government, holding 13%) has also attracted the attention of regulators.
According to the previous report of interface news, on July 3, 2007, the people’s Government of Muli Tibetan Autonomous County (Party A) and Muli Rongda (Party B) signed the agreement on joint development of soluogou gold mine, which agreed that Party B would pay Party A the cooperative development fee in cash based on 10.00% of the recoverable amount and the annual average price of Shanghai gold exchange at the time of payment. In October 2020, according to the reply of Sichuan provincial organ affairs administration, Rongda Co., Ltd. reflected the cooperative development fee that Rongda Co., Ltd. needs to pay to Muli County Government every year through capital and share increase and directional conversion. After the equity cooperation is completed, Muli Guotou holds 13.00% equity of Rongda Co., Ltd.
In this regard, the regulators require the company to supplement and disclose: the payment and later adjustment of cooperative development expenses during the reporting period, and the relevant delayed payment involving late fees and fines; According to the calculation basis of Muri SDIC’s 13% shareholding, whether the capital increase and directional transfer of provident fund have fulfilled the necessary internal decision-making and approval procedures for state-owned assets management.
At the same time, Muli Rongda signed the supplementary agreement to the framework cooperation agreement with Muli County Government on July 19, 2019, which agreed that if Sichuan gold failed to be listed before September 30, 2021, the supplementary agreement and the framework cooperation agreement would become invalid, and the two sides would renegotiate on the cooperative development of soluogou.
Therefore, the regulators asked: is the arrangement of Muri SDIC’s 13% shareholding a temporary agreement, and whether the two sides have an agreement to adjust the equity arrangement and other similar interest redistribution on the cooperative development of Thoreau Valley.
In addition, the regulators also asked the company to explain the accounting method and compliance of cooperative development fees during the reporting period; Supplement the new reserves and calculate whether there is a significant impact on the operating performance during the reporting period if the cooperative development expenses payable by Muli SDIC to Muli County Government are not introduced; Explain the calculation basis and method of 13% equity and whether the price is fair.
As of the signing date of the prospectus, the equity structure of Sichuan gold is as follows:
Source: prospectus
and Zijin Mining Group Company Limited(601899) large related party transactions
The interface news reporter noted that the large amount of related party transactions between Sichuan gold and related parties Zijin Mining Group Company Limited(601899) (601899. SH) were also asked by the regulators.
Zijin Nanfang (formerly Zijin investment), which holds 10.44% of the company’s equity, is a wholly-owned subsidiary of Zijin Mining Group Company Limited(601899) . During the reporting period (2018-the first half of 2021), the sales of Sichuan gold to Zijin Mining Group Company Limited(601899) direct or indirect holding enterprises (except Guizhou Jinzhou energy and Mining Co., Ltd.) are related party transactions, accounting for 32.31%, 33.79%, 22.06 and 10.59% of the total sales of the current period respectively.
Source: prospectus
In this regard, the regulators require the company to disclose the transaction content, transaction amount, transaction background of related party transactions and the relationship between related transactions and the issuer’s main business; Explain and summarize the fairness of related party transactions and whether there is benefit transfer to the issuer or related parties in combination with the fair price in the comparable market, the market price of the third party and the price between related parties and other trading parties; In combination with the financial status and operation of relevant related parties, the rationality of income and total profit generated by related party transactions, fully explain and briefly disclose whether related party transactions affect the operating independence of the issuer, whether they constitute dependence on the controlling shareholder or actual controller, and whether there is any possibility of adjusting the income, profit or cost of the issuer through related party transactions The transfer of interests to the issuer; In addition, the issuer shall also disclose specific measures to reduce related party transactions with controlling shareholders and actual controllers in the future.
It should also be noted that the downstream customers of Sichuan gold are highly concentrated.
During the reporting period, the sales of the company’s top five customers were 352 million yuan, 400 million yuan, 458 million yuan and 170 million yuan respectively, accounting for 100%, 100%, 91.78% and 100% respectively. The main customers include Zhongjin Gold Corp.Ltd(600489) directly or indirectly controlled enterprises, Zijin Mining Group Company Limited(601899) directly or indirectly controlled enterprises, Guizhou Jinzhou energy and Mining Co., Ltd., Shandong Humon Smelting Co.Ltd(002237) and SDIC Jincheng Metallurgy Co., Ltd.
In view of the above situation, the regulators require the company to compare the situation of comparable companies in the same industry, explain the reason and rationality of the high concentration of customers, and whether it conforms to the characteristics of the industry; Supplement the basic information of the top five customers, including but not limited to the time of establishment, registered capital, main business, business scale, ownership structure, cooperation history, sales amount, proportion in similar purchases of the customer, sales content and settlement method, and explain whether there are other interest arrangements with the issuer; Explain the changes of unit price and gross profit margin of the same product in different periods of the same customer, and the comparison of unit price and gross profit margin of the same product between different customers in the same period, and analyze and explain the reasons for the differences.
administrative punishment for safety accident
It is reported that in recent years, China has gradually increased the management of safety production and environmental protection of gold mining and beneficiation enterprises, resulting in a significant increase in safety and environmental protection expenditure of gold mining and beneficiation enterprises.
In the feedback, the regulators required the sponsor and the issuer’s lawyer to check and explain the matters related to environmental protection.
For example, the specific links of production and operation involving environmental pollution, the names and emissions of major pollutants, the actual operation of major treatment facilities, the issuer’s environmental protection investment and related expenses and costs during the reporting period, and the operation of environmental protection facilities; Whether the environmental protection investment and environmental protection related costs during the reporting period match the pollution generated by the company’s production and operation; Environmental protection measures taken for the project invested with raised funds and corresponding capital sources and amounts; Whether the company’s production and operation and investment projects with raised funds meet the national and local environmental protection requirements.
On July 13, 2021, an operator of the company’s concentrator operated against rules and regulations without authorization, resulting in the burial of personnel and death after ineffective rescue. The Emergency Management Bureau of Muli Tibetan Autonomous County imposed an administrative fine of 410000 yuan on the company and 212400 yuan on the individual director of soluogou gold mine.
In case of administrative punishment due to work safety problems, the Supervisor requires the company to supplement: whether the issuer has established a perfect work safety management system, and the effectiveness and implementation of the work safety management system; The operation of the issuer’s safety facilities and whether there are any violations in safety production.
