China focused Blackgold International Holdings (ASX: BGG) has reported that China Minsheng Banking Corp. Ltd have agreed on terms for a banking facility of more than RMB 1,000 million (US$161 million).
Funds drawn down under the facility will help fund development of the Company’s existing mines, acquire new assets and for general working capital.
The new bank facility satisfies the acqusition of Chongqing Guoping Shipping Transportation Co. Limited.
Half year ended 30 April 2013
Revenue was up 64% to A$64.6 million, net profit was higher by 19% to A$27.2 million.
Total production for the HY2013 was 843,200 tonnes. This is 28.5% higher than the total production of 656,000 tonnes achieved in the HY2012.
The demand for Blackgold’s product remained healthy. The aggregate quantity traded for HY2013 has increased by 134.0%, or 220,000 tonnes, to 384,000 tonnes when compared with HY2012. Blackgold is evaluating its purchasing model and had contacted foreign suppliers with the intention to expand its coal purchasing activities beyond the PRC region.
Growth in profits
Blackgold has reported strong continuing growth in earnings and return on shareholders funds, net income after tax was A$7.3 million in 2009, A$13.6 million in 2010, A$22 million in 2011 and A$43 million in 2012.
Return on Shareholders’ Equity was 35.3% in 2012.
Blackgold is able to sell all of its thermal coal internally within mainland China mainly to power generation customers. There is existing demand for more than three times the amount of coal that Blackgold produces this year according to the company.
Blackgold's business model is heavily focused on delivering coal at competitive prices.
Coal produced is usually trucked for less than 30 kilometres to port and then loaded onto barges and shipped to its end customers along the Yangtze River, significantly lowering its costs compared to other coal miners in China that are reliant on railway transportation.
Blackgold has coal blending capabilities to meet its customer’s coal specification needs.
FOB cash cost per tonne in 2011 was approx. RMB189/tonne (A$32.44/tonne). EBITDA margin was 42% for 2011.
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