ZHONG JIA GX (00899): Continuously committed to addressing outstanding debts, currently actively advancing financing negotiations, strategic cooperation, and fundraising activities.

ZHONG JIA GX (00899) announced that, according to the annual report for the financial year ended March 31, 2025, the Group had made forecasts on April 1, 2024, expecting rental income of approximately HK$10.27 million and mineral sales of approximately HK$13.02 million for the financial year ended March 31, 2025. However, the actual rental income for the year was approximately HK$7.55 million, and mineral sales were zero, showing variances of approximately 29.57% (rental variance) and 100% (mineral variance) from the forecasted values. The company had previously anticipated an economic recovery in China in 2024 after the lifting of COVID-19 restrictions. However, due to the continued slowdown in the Chinese market, the company experienced a record high vacancy rate, resulting in the rental variance. As per the announcement on December 14, 2023, the company had acquired two Chinese enterprises owning two mining sites (Nine Source Mine and Jin Hao Mine). In September 2024, Typhoon Yagi caused significant damage to both mining sites, affecting operations and infrastructure. Additionally, the typhoon further delayed the completion of the special acceptance procedures at Nine Source Mine and the ongoing permit processing at Jin Hao Mine. As of the date of this announcement, neither of the mines had commenced production or generated revenue. The company is actively seeking qualified consultants to prevent further delays at the mining sites and anticipates significant capital investment in necessary infrastructure even before obtaining mining licenses. To resume production at Nine Source Mine, several key improvement projects need to be completed, including drainage system upgrades, safety checks, risk assessments, structural integrity testing, and landslide risk prevention, requiring an estimated investment of approximately RMB 7 million. Jin Hao Mine is expected to require an investment of around RMB 100 million for mining equipment and infrastructure, factory construction, payment of restoration and rehabilitation fund deposits, and preparation for resource tax payments to meet regulatory requirements and obtain mining licenses. As of July 31, 2025, the company had not secured sufficient funds for the improvements at Nine Source Mine and the application for the Jin Hao Mine license. The company is actively seeking diversified financing options, including project loans from financial institutions, exploring partnerships with strategic investors, or fundraising activities, to expedite the licensing process. Additionally, as per the annual report for the financial year ended March 31, 2025, the company held cash and cash equivalents of approximately HK$7.943 million; trade payables of approximately HK$47.449 million (including approximately HK$2.305 million aged within 180 days of the contract/invoice date; approximately HK$1.89 million aged 181 to 365 days; and approximately HK$44.955 million aged over 365 days); and other payables of approximately HK$110.92 million. The company continues to work towards resolving outstanding debts and is currently engaged in discussions for financing, strategic partnerships, and fundraising activities to improve its financial position and drive forward its mining operations.