Business Review

In 2024, under the ongoing impact of geopolitical tensions and macroeconomic uncertainties, the global economic landscape is expected to remain under pressure. Against this backdrop, financial market volatility has intensified, and investors are increasingly favoring gold or companies with strong fundamentals. In such a market environment, the Group, as a significant player in the gold mining industry, leveraged its sound management and acquisition strategies to achieve a remarkable 250% growth in net profit from approximately HK$60 million in 2023 to approximately HK$210 million in 2024. This achievement was primarily attributed to the acquisition of Grand Gallant Investments Limited in the middle of 2023. As anticipated by management, this acquisition strategy not only increased the Group's geographical location to diversify the operational risk but also significantly enhanced its overall performance.

From 2024 until the middle of March 2025, the Group successfully accomplished a series of planned tasks. Firstly, during the second and third quarters of 2024, the processing plant in Tongguan County was temporarily suspended due to the construction of a tailings dam, leading to a decrease in sale volume of mine-produced gold in this region. The construction of the tailings dam was completed on schedule, which demonstrated the Group's efficient management capabilities and the processing plant resumed normal production quickly in the fourth quarter of 2024. Secondly, as published in the announcement dated 27 September 2024, the vertical acquisition of Huasheng Construction Investment Limited, a company engaged in mine engineering and construction, is expected to bring synergy to the Group's business. This acquisition was completed in January 2025. Thirdly, as published in the announcement dated 7 March 2025, the horizontal acquisition of Wise Trend Investment Limited, which holds 70% of the economic benefits of certain exploration licenses in Subui County, is expected to expand the Group's mineral portfolio and support its sustainable development strategy. Looking ahead, the Group with its operational excellence and promising prospect will remain a competitive player in the evolving gold mining industry.

The Group is committed to being a responsible corporate citizen and to fulfilling its corporate social responsibility while remaining competitive and sustainable in its business development. Environmental sustainability, safety production and supporting local communities would continue to be the priority tasks of the Group. In response to safety production, the Group is taking a multi-faceted approach to achieving its goals: (i) it adhered to provide safe and healthy working environment, and carried out trainings to all workers and employees to enhance their safety management and technical knowledge skills, and (ii) the Group is promoting the automation and technological upgrades of underground mining and ore processing equipment. This involves achieving mechanized extraction and automated processing, alongside the development of three-dimensional digital models for geology, processes, and equipment. These upgrades do not only improve production efficiency but also enhance safety monitoring capabilities. To ensure environmental sustainability, the Group continues to monitor and review waste and pollution reduction measures at all of the operating plants to comply with the relevant regulations and requirements. To support the local community, the Group continues to participate in various donation and community activities.

Prospects

The profitability of the Group is highly dependent on gold prices in both domestic and international markets, particularly in its gold mining operation. As of middle of March 2025, gold prices have reached record highs, driven by a weaker U.S. dollar, rising inflation expectations, lower interest rates, and ongoing geopolitical and economic uncertainties. According to a report released by the World Gold Council, global trade and economic conflicts are likely to encourage central banks to continue their net gold purchases in 2025. This indicates that central banks' sustained interest in gold will remain a key factor supporting gold prices and further solidifying gold's role as a reliable safe-haven asset. Under the current favorable market conditions, more internal resources are expected to be reallocated to the higher-return gold mining segment, aligning better with the Group's long-term development goals. To enhance competitiveness and increase resource reserves, the Group has implemented multiple strategic measures. Firstly, the Group actively advances exploration activities under its exploration and mining licenses to unlock and maximise the potential value of its mine areas. These mine areas are located in favorable mineralization environments, showcasing significant exploration prospects across the majority of the relevant mining regions, which lays a solid foundation for future gold mining. Furthermore, we are committed to acquiring quality gold assets both domestically and internationally to further strengthen our gold mining portfolio. To maximise resource value, the Group plans to enhance processing capacity at appropriate times to meet the ever-changing market demands. Meanwhile, the Group will closely monitor market trends in commodity prices and take necessary measures to mitigate potential risks.

In conclusion, the Group's outstanding results in 2024 highlight its resilience and strategic foresight. With a diversified gold mining portfolio and favorable gold market conditions, the Group is well-positioned for continued growth. In order to reward shareholders' long-term support, the Board recommends the declaration and payment of a final dividend for the 2024 fiscal year. This dividend reflects the Group's confidence in its long-term prospects amidst ongoing global uncertainties. Management remains vigilant in responding to global market uncertainties while pursuing value-added investment opportunities to maximise shareholder value.