Member Info for Pbow

My pleasure.

As an example someone on this board might ask chatgpt if cascabel could be powered by solar energy and it will give you a great answer telling you that its possible and why..... but it wont note that to do so you would have to clear thousands of acres of virgin rainforest which clearly wouldnt be allowed.

As I say I use it for two things really as a search engine and to translate documents (i work in Saudi so get some docs in Arabic). You can ask it to write things but it doesnt understand nuance so is invariably wrong.

Yeah there is no comparison to reading.... but the Chinese article I shared earlier. I got that by asking Chatgpt to find any news articles released in China / Hong Kong in the last 24 hours regarding the solgold potential takeover and translate it to English. Lot easier than trawling through chinese newspapers :-)

Dusty I would advise you try using chatgpt as a search engine. Its pretty good to be fair. Far better than google. I also find it seems to be good at translating documents.

Obviously ive used a translation site as I dont understand Chinese. But thats what the translation tool says the article says.

Earlier, the H1 report included RMB 780m in asset impairment charges, mainly inventory write-downs. As copper prices rebounded in Q3, Jiangxi Copper reversed RMB 480m of impairments. If copper stays high in Q4, further reversals could help earnings.

Sales expenses in Q3 (RMB 360m) were far above Q2’s RMB 20m — a seasonal pattern for the company and not a hit to core profitability.

Huang Lichong noted that Q3 results showed three things investors like:

strong net-profit growth

improved operating cashflow

a dividend yield above the A-share average

With copper prices near the top of their trading range, and gold in a strong allocation environment, the market is willing to assign Jiangxi Copper higher valuation elasticity — especially given its combination of “non-ferrous + gold + new energy” exposure. Overseas M&A adds long-term imagination.

At current prices, Jiangxi Copper’s valuation sits at the high end for A-share copper miners but remains low compared with U.S. copper companies — still a “discount participant” rather than an expensive asset.

From a sector-level perspective, the share-price rally reflects earnings growth + valuation recovery. The latter phase is now close to completion.

Huang emphasised that if copper prices remain high, dividends stay stable, and overseas projects like SolGold progress smoothly, then today’s valuation is reasonable-to-slightly-expensive.

But if copper prices fall, the macro environment weakens, or ROE drops, valuation pressure could emerge.

For Jiangxi Copper, the failed takeover is not the end. With copper demand driven by the global energy transition, the challenge will be balancing strategic value with acquisition cost in increasingly fierce international competition.

This takeover battle highlights both the opportunities and challenges Chinese mining companies face in the global reshaping of resource supply chains.

Cyclical Tailwinds Strengthening Jiangxi Copper’s Performance

Riding high copper prices and booming new-energy demand, Jiangxi Copper is experiencing strong share-price and earnings momentum.

Founded in 1979, it has built a diversified business spanning copper and gold mining/smelting, rare metals extraction, sulphur chemicals, and trading — forming a full “exploration–mining–processing–smelting–fabrication” copper value chain. It is China’s largest copper producer and a major gold and silver producer.

By end-2024, its wholly owned resources include:

890,000 tonnes of copper

239 tonnes of gold

8,253 tonnes of silver

166,000 tonnes of molybdenum

On an equity basis, copper resources exceed 1.31 million tonnes, with 96 tonnes of gold.

Given China’s falling copper grades and domestic self-sufficiency under 20%, these resources are a “ballast stone” underpinning Jiangxi Copper’s earnings resilience and strategic competitiveness.

The company’s results align well with the cycle.

Q3 results show:

Revenue (first three quarters): RMB 396bn (+0.98% YoY)

Net profit attributable: RMB 6.023bn (+20.85% YoY)

Ex-one-offs net profit: RMB 6.26bn (+6.2% YoY)

But quarter-on-quarter performance shows structural differences:

Q3 revenue: RMB 139.1bn (+14.1% YoY, −4.3% QoQ)

Q3 net profit: RMB 1.849bn (+35.2% YoY, −16.8% QoQ)

Gross profit of RMB 4.08bn was RMB 1.1bn lower than in Q2.

Analysts attribute the softness to a temporary drop in TC/RC copper concentrate smelting fees.

“BHP and Newcrest have coveted Cascabel for years. They may jointly block Jiangxi Copper — or even launch a competing bid,”

the M&A analyst added.

With over 60% of shares in the hands of small shareholders, who are likely to wait for higher prices, Jiangxi Copper faces a steep challenge in building consensus and lowering its acquisition cost.

The stalemate reflects the broader picture of the copper super-cycle, global resource revaluation and international capital competition.

According to Huang Lichong, President of Huisheng Capital:

China’s declining copper ore grades and low self-sufficiency rate make overseas copper searches a must, not an option.

Cascabel, as one of South America’s most promising undeveloped copper–gold deposits, with multi-million-tonne reserves, good grades, more than 20 years of mine life, and solid infrastructure, is naturally a prime target.

SolGold’s back-to-back rejections of Jiangxi Copper’s bids show that Tier-1 copper deposits are entering a seller’s market.

Huang said the core issue in both rejections is diverging expectations on price and control:

SolGold believes copper prices will remain strong

SolGold wants more of the “energy-transition copper bull market” upside to stay with existing shareholders

historical stakes held by global mining giants strengthen competitive tension and raise the negotiation floor

This takeover battle provides a significant lesson for Chinese miners overseas: anchor valuations on conservative copper-price assumptions + ESG + geopolitical risk, distinguish between strategic resources and financial investments, use minority stakes or JVs to balance asset value and cost, and avoid “paying premium for scale.”

He added that the intraday move toward 30p reflected recognition of Cascabel’s resource value and the fact that global competition for high-quality South American copper assets is now entering a red-hot phase.

Another M&A analyst noted that the 26p offer represented a 15.5% discount to the current price (30.77p) and was below the 52-week high — a conservative valuation far short of what shareholders expect for a takeover premium. This was the direct reason behind the board’s refusal.

SolGold’s delicate shareholder balance further increases uncertainty. Jiangxi Copper, despite being the largest single shareholder with 12.19%, sits alongside BHP (10.4%) and Newcrest (10.3%), forming a three-way balance of power.

More importantly, Jiangxi Copper does not have a board seat, giving it no voice in SolGold’s decision-making. The board-level rejection was therefore “pre-wired”.

A Cold Reception Amid Shareholder Power Games

For resource companies, the classic “safe rule” of overseas M&A is counter-cyclical bargain hunting. Jiangxi Copper, however, appears unwilling to stick to old patterns.

Its pursuit of Ecuador’s multi-million-tonne copper deposit has been sucked into a double bind of high valuation expectations and shareholder power constraints. The two rejected bids reflect the market’s rapidly rising view of SolGold’s worth — and highlight the fierce global competition for core resources.

The takeover battle’s outline is already clear.

In March, Jiangxi Copper paid USD 18.07 million to increase its SolGold stake to 12.19%, becoming its largest shareholder. The core target was SolGold’s flagship Cascabel copper–gold project in Ecuador — an asset containing 12.2 million tonnes of copper and 30.5 million ounces of gold. For Jiangxi Copper, whose long-term raw-material self-sufficiency is under pressure, Cascabel is a strategic-level “ammunition depot.”

At that time, copper prices on the LME were already rising into a super-cycle. Demand from the energy transition was strengthening the strategic value of the investment.

By November, Jiangxi Copper’s acquisition efforts accelerated sharply.

In the five days between 23 and 28 November, it submitted two non-binding cash offers, the latest at 26 pence per share. SolGold’s board rejected both.

The market has already “voted with its feet”. Canadian investment bank Canaccord Genuity’s target price of 46 pence per share injected strong confidence into SolGold’s valuation.

SolGold’s share price rose from 20.10p (21 November, the first trading day before deal news broke) to 30.77p on 2 December — a 53% rise. From the 52-week low of 5.54p, the gain is an astonishing 455%, far outpacing the broader commodities sector.

Despite Two Rejected Bids, Jiangxi Copper Hits Limit-Up! Q3 Net Profit Surges 35% — What Is Capital Betting On?

Huaxia Times – 4 December, 20:45

Although Jiangxi Copper’s (600362.SH) two takeover offers were rejected, its A-shares still hit the daily limit.

On 1 December, Jiangxi Copper’s A-share price shot straight up from the open, touching the limit-up band during the session. The market enthusiasm echoed strongly with the wave of resource-sector capital activity.

Even though the share price dipped slightly (less than 1%) on 2 December and closed at RMB 40.46, it remained firmly within its five-day high range after the strong recent rally.

This unusual share-price move is being driven by a dual logic:

rising global copper prices are providing valuation support; and

the market is pricing in expectations ahead of Jiangxi Copper’s strategic overseas M&A moves.

Compared with SolGold’s share-price rise, Jiangxi Copper’s strength despite setbacks in its acquisition attempt reflects how investors are beginning to revalue resource-sector leaders.

The takeover has already hit real obstacles. SolGold’s complex shareholder structure and intense alignment-of-interest battles are the main reasons behind its board rejecting Jiangxi Copper’s offers twice. Whether the situation can be unlocked remains uncertain.

On 1 December, Huaxia Times submitted interview questions to Jiangxi Copper. As of publication, the company had not replied.

Jack im telling you things out of the goodness of my heart. Ill start by telling you that Saudi Arabia and the UAE are two separate countries.

I would guess there is a mix. Some arent interested. Anyone who is will be waiting for the Chinese to actually bid.

A consortium between Glencore and BHP would be interesting... esp if Glencore agreed to build a smelter in Ecuador for the copper. Politically that would be a game changer for a bid. (Glencor have agreed to build one in Chile today).

Jack I stated that i thought a corporate action was taking place hours before it happened. Quady incidentally said I was talking nonsence.

I think the UAE could eventually be interested in investing in a project such as Cascabel. But its clearly not what this trip is for.

You keep living in your fantasy world, ill try and make logical points.

No he isnt he is spending 2 days and an evening.... also he will be at the GP for most of it I would guess

TomTee they dont. Noboa is meeting the President of the UAE for at max an hour (given the time it takes to drive from the Palace to where the next stop on their agenda is - the war memorial). They have detailed what will be discussed and it doesnt include mining. Which is probably why the minister responsible for mining isnt going.

If you read the presidential account tweets its clearly nothing to do with mining unfortunately. It details who is on the trip and neither of the ones we would want to be there are.

"Subsequently, President Noboa will travel to the United Arab Emirates (UAE), where the agenda will focus on formalising agreements and holding strategic meetings to promote social-housing projects in Ecuador; strengthen security and integrity; support innovation initiatives; and boost trade in products such as tuna and flowers.

To this end, the signing of memorandums of understanding is expected, including cooperation on integrity and anti-corruption; the development of the Technological Innovation Corridor; and progress towards an agreement on reciprocal investment protection."

From China

https://m.jiemian.com/article/13709276.html?