KINETIC DEV(01277) releases the latest updates on Yong'an Coal Mine and Wei Yi Coal Mine.

KINETIC DEV (01277) Announcement: Yong'an Coal Mine is located in the Ningxia Hui Autonomous Region, with a north-south span of about 6.5 kilometers and an east-west span of about 3.6 kilometers, covering an area of approximately 21.7 square kilometers. As of the date of this announcement, the total coal resources of Yong'an Coal Mine are approximately 224 million tons, including approximately 63.22 million tons of controlled coal resources and approximately 161 million tons of inferred coal resources. The main coal types are fat coal, 1/3 coking coal, and main coking coal. The washed clean coal is high-quality coking coal with low ash content and high bonding properties, suitable for coking coal, coal blending for coking, power generation, liquefaction, etc. Yong'an Coal Mine is a shaft mining coal mine, with a combined mining method of inclined shafts, designed production capacity of 1.2 million tons per year. The design allows for simultaneous production in the "two regions and two faces", with one mining area in each of the upper and lower coal groups achieving designed production capacity. The latest developments of Yong'an Coal Mine project are as follows: Operation commencement: Yong'an Coal Mine entered the joint trial operation stage in November 2024. Currently, the underground coal group joint trial operation face is functioning normally, with all systems operating smoothly. Three downcast shafts in the upper coal group are nearing completion, with the expectation that the upper coal system construction will be completed in the second half of 2026. The mine will undergo comprehensive acceptance, obtain safety production permits, and transition from the basic construction phase to the formal production phase. Production plan: In 2026, the plan is to produce approximately 0.5 million tons of raw coal from the downcast coal group. In 2027, it is planned to have one coal face in each of the upper and lower coal groups simultaneously in production, achieving a capacity of 1.2 million tons. Coal washing plant: A large coking coal washing plant with an annual processing capacity of 2.4 million tons has been put into operation to support the production operation of Yong'an Coal Mine and Wei Yi Coal Mine. The plant uses the most advanced heavy medium no-pressure three-product + coarse coal slurry separation + fine coal slurry flotation combined technology, with advantages of simple process, high separation precision, flexible product structure adjustment, low energy consumption, and good economic benefits. Mining costs: Based on current trial production estimates, the expected production cost of clean coal after reaching full production capacity will be approximately RMB 380 per ton. After full production, it is expected to bring considerable returns to the company and its shareholders. Supporting facilities: The coal mines are equipped with ventilation rooms, gas pump rooms, mud grouting stations, compressed air rooms, air heating rooms, boiler rooms, 35kV substations, mine water treatment stations, mine fire water tanks, main shaft headframes, auxiliary shaft hoist rooms, joint office buildings, bath buildings, comprehensive mining equipment warehouses, mechanical repair workshops, and worker dormitories. Wei Yi Coal Mine is located in the Ningxia Hui Autonomous Region, with a north-south span of about 7.2 kilometers and an east-west span of about 3.8 kilometers, covering an area of approximately 26.7 square kilometers. As of the date of this announcement, the total coal resources of Wei Yi Coal Mine are approximately 119 million tons, including approximately 38.09 million tons of controlled coal resources and approximately 80.52 million tons of inferred coal resources. The main coal types are fat coal, 1/3 coking coal, and main coking coal, with good coal quality, low ash and sulfur content in the clean coal, suitable for high-quality coking coal, as well as raw material coal for chemical industry and power generation. Initially, Wei Yi Coal Mine mainly produces main coking coal, but as mining depth and coal seam characteristics change, the coal types produced include 1/3 coking coal and fat coal. Wei Yi Coal Mine is a shaft mining coal mine, with an inclined shaft mining method and a designed production capacity of 900,000 tons per year. Initially, one wing of the first mining area with a comprehensive mining face will be put into production, followed by both wings of the later mining area each having a comprehensive mining face in simultaneous production, achieving the designed production capacity. The latest developments of Wei Yi Coal Mine are as follows: Construction and operation plan: Various mining construction work at Wei Yi Coal Mine is proceeding smoothly. The first and second phases of the mine construction project have been completed, and the third phase is currently under construction. It is expected that in the second half of 2026, the construction of the first comprehensive mining face will be completed, the mine will enter the joint trial operation stage, and in 2027, the mine will undergo joint acceptance and obtain safety production permits, transitioning from the basic construction phase to the formal production phase. It is anticipated that in the second half of 2027, the construction and production of the second comprehensive mining face will be completed, enabling two comprehensive mining faces to be in simultaneous production, reaching full production in 2028. Mining costs: Based on initial estimates, the expected production cost of clean coal after reaching full production capacity will be approximately RMB 400 per ton. After reaching full production, it is expected to bring considerable returns to the company and its shareholders. Supporting facilities: The coal mines are equipped with ventilation rooms, gas pump rooms, compressed air rooms, air heating rooms, 35kV substations, mine water treatment stations, mine fire water tanks, main shaft headframes, auxiliary shaft hoist rooms, joint buildings, worker dormitories, and canteens. In terms of production, it is expected that Yong'an Coal Mine under the company's umbrella will officially start production in the second half of 2026 and reach full production status in 2027. The mining construction project at Wei Yi Coal Mine is expected to enter the joint trial operation stage in the second half of 2026 and reach full production status in 2028. On the sales side, the customers of Yong'an and Wei Yi Coal Mines are mostly domestic enterprises in coking, steel, coal chemical industry, power plants, etc. The smooth progress of various work at Yong'an and Wei Yi Coal Mines signifies that the company's strategic layout in the main coal business sector is accelerating. The expected official production of Yong'an and Wei Yi Coal Mines in the future is expected to further enhance the overall capacity of the company, optimize operational efficiency, drive performance growth, and bring benefits to the company and its shareholders. The company will continue to adhere to the principles of safety production and sustainable development, promoting steady business development.