Chifeng Gold (06693): Establishing an independent contractor mine development and mining service agreement

According to Zhitong Finance App, Chifeng Gold (06693) announced that on August 7, 2026 (after the stock exchange trading session), Vientiane Mining, an indirect non-wholly-owned subsidiary of the company, and China Railway 19th Bureau Group Laos Sole Co., Ltd. (the contractor) signed an independent contractor mine development and mining agreement for mine development and mining services. Under the agreement, the contractor will provide open pit mining services, including ore mining and waste stone removal, as well as other mining services and activities related to Vientiane Mining's mining operations in Laos. The total provisional price of the agreement is US$220 million (equivalent to approximately RMB 1,501 billion), excluding VAT, for a period of six years and settled at the estimated mining rate.

The parent company of the contractor is an experienced international mining service company focusing on open pit mining operations. With its experience and advanced knowledge in open pit mining operations, in the long run, outsourcing some open pit mining operations to contractors can provide a more cost-effective solution for the Group to develop the Vientiane Mining Saipan Gold and Copper Mine.

In order to ensure production continuity and capacity utilization, since oxidation mining is already underway, primary ore mining is scheduled to commence in the second quarter of 2027. The agreement was concluded to secure a reliable and professional contractor to undertake core mining operations and reduce the risk of mine development and ore removal within the Saipan gold and copper mine rights scope, ensure optimal use of Vientiane mining beneficiation facilities, achieve collaborative operation effects, and complete the seamless connection from ore pre-stripping to integrated mining operations when applicable.

By entering into this agreement, the company can fully integrate contract mining operations with existing infrastructure, including high-pressure oxidizer and shielding agent applications that have optimized and increased primary ore recovery rates, and upgraded filling systems. This consolidation maximizes resource efficiency and reduces marginal operating costs. Under the company's asset-light strategy, the agreement targets unit mining costs during the contract period and transfers the risks associated with mine development and ore removal within the Saipan gold and copper mine rights to the contractor, such as cost risks related to fuel, labor and consumables, so that the company can focus on ore processing and recovery rate optimization.