Real Gold Announces profit up 10% to CNY355mn

The surging price of gold during generally unfavourable economic conditions has created a favourable environment for the gold market.

Real Gold Mining Limited (“Real Gold”), a gold producer in China, on Thursday announced its unaudited interim results for the six months ended 30 June 2011.

With its two ore processing facilities – the Nantaizi Gold Mine and the Luotuochang Gold Mine – continuing to ramp-up production and a rise in the prices of gold and other metals, the Group recorded revenue of approximately RMB734.2 million for the six months ended 30 June 2011, representing an increase of approximately RMB155.5 million, or approximately 26.9% year-on-year. Gross profit surged 29.6% to approximately RMB567.1 million, with the gross profit margin set at 77.2% (2010 1H: 75.6%). Gold contributed approximately 65.5% of the total revenue. Affected by the loss of disposal of subsidiary and currency exchange, net profit attributable to owners of the Company only increased 10.3% to approximately RMB355.2 million. Bank balances and cash in hand reached approximately RMB2.64 billion in the reporting period. The Board recommended the payment of an interim dividend of HK5 cents per share, according to a Real Gold report.

Mr Lu Tianjun, Chairman of Real Gold, said, “In the first half of 2011, facing the uncertain economy in Europe and the US and the politically unstable situation in the Middle East, the price of gold has reached new heights due to its risk avoidance character during generally unfavourable conditions. The trend has created a favourable environment for the gold market and provides a solid foundation for the Group’s long term development. Looking ahead, we will further enhance corporate transparency as well as our management standard and continue to maintain a close relationship with investors. Leveraging our high-grade poly-metallic mineral reserves and the advantages of a low cost and high profit margin business structure, we will step up our efforts in exploring self-owned mining areas and integrating the gold mine resources in Inner Mongolia, Xinjiang and other regions. Our aim is to develop into a leading gold producer in China and maximise returns for shareholders”.