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Zijin earnings slump after missing out on Q1 commodity price rise

Zijin MiningGroup Co. Ltd. posted an 84.64% year-over-year drop in first-quarternet income attributable to shareholders, as net cash flow from operations fell68.26% to 442.1 million Chinese yuan.

Net profit for the period tumbled to 63.8 million yuan from415.0 million yuan a year ago as it had hedged product sales, leading thecompany to miss out on rising commodity prices in the first quarter.

"In addition, as the company held a relatively large sizeof gold leasing, when gold price went up, financing cost increased, leading toa drop in the company's income," according to the release.

EPS for the quarter dropped to 0.3 fen from 1.9 fen a yearago, according to unaudited results released May 2 on the Hong Kong StockExchange.

The company's financial expenses increased 59.53% year overyear to 277.7 million yuan due to the expansion in financing scale, and thecease of capitalization of interest expenses of certain divisions, which newlycommenced production.

Operating income for the three months increased 22.03% yearover year to 19.40 billion yuan as the company booked a rise in production andsales across all commodities.

Losses on changes in fair value in the quarter amounted to296.5 million yuan, swinging from gains of 204.4 million yuan a year ago,mainly due to the losses from certain hedging and gold leasing business, whichalso resulted in a loss on investment of 428.2 million yuan in the quarter,from investment income of 64.2 million yuan a year ago.

Gold produced from mines rose to 10,262 kilograms from 8,309kilograms a year ago, while refinery and processed gold totaled 45,328kilograms, rising from 38,246 kilograms.

Silver output from mines rose to 49,899 kilograms from47,596 kilograms year over year, while copper production from mines increasedto 41,651 tonnes from 37,058 tonnes. Refinery copper output jumped to 95,304tonnes from 66,620 tonnes.

As of April 29, US$1was equivalent to 6.48 Chinese yuan.