Mid-market focused investment bank within SE Asia, Evolve Capital Advisory Pte Ltd

Evolve Capital Research

Mid-market focused investment bank within SE Asia

Evolve Capital Advisory Pte Ltd

Equity Bottom-Up

SPDR Straits Times Index ETF / Equity Bottom-Up

<ul>
<li>The Evolve Capital team is excited to begin its foray into equity research, with the ability to offer a more diverse set of offerings alongside our corporate finance solutions.</li>
<li>As we initiate coverage on companies within the SGX space, Evolve Capital is committed to building a repository of insights, showcasing a diverse range of companies that embody growth potential. </li>
<li>We focus on identifying compelling investment stories that can attract local and international investors, aimed at uncovering promising investment opportunities in the Catalist market and offering value through our insights.</li>
</ul>


The Evolve Capital team is excited to begin its foray into equity research, with the ability to offer a more diverse set of offerings alongside our corporate finance solutions.
As we initiate coverage on companies within the SGX space, Evolve Capital is committed to building a repository of insights, showcasing a diverse range of companies that embody growth potential. 
We focus on identifying compelling investment stories that can attract local and international investors, aimed at uncovering promising investment opportunities in the Catalist market and offering value through our insights.


Unveiling Potential Gems Within the Catalist

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

CNMC Goldmine Holdings / Equity Bottom-Up

<ul><li>10 Questions for CNMC Goldmine Holdings What is CNMC Goldmine’s business about and what are some of its key business segments? Our flagship project, the Sokor Gold Field, spans 10 square kilometers and has been producing gold for more than a decade.</li><li>Given that a large portion of CNMC Goldmine’s revenue is tied to gold prices, how does the Group manage the potential volatility?.</li></ul>

10 Questions for CNMC Goldmine Holdings What is CNMC Goldmine’s business about and what are some of its key business segments? Our flagship project, the Sokor Gold Field, spans 10 square kilometers and has been producing gold for more than a decade.Given that a large portion of CNMC Goldmine’s revenue is tied to gold prices, how does the Group manage the potential volatility?.

10 in 10 – CNMC Goldmine Holdings - Mining more Gold

<ul><li>The FTSE ST Catalist Index’s top weights are Kimly, UnUsUaL, CNMC Goldmine Holdings, Alset International and ISEC Healthcare – covering a variety of industries, spanning across consumer, metals & mining and real estate operations with a combined market capitalisation of nearly S$950 million.</li><li>The FTSE ST Catalist index is a market capitalisation weighted index that tracks the performance of Catalist-listed, the SGX sponsor-supervised board for growth companies.</li><li>The five biggest index weights of the FTSE ST Catalist Index are Kimly, Unusual, CNMC Goldmine Holdings, Alset International and ISEC Healthcare.</li></ul>

The FTSE ST Catalist Index’s top weights are Kimly, UnUsUaL, CNMC Goldmine Holdings, Alset International and ISEC Healthcare – covering a variety of industries, spanning across consumer, metals & mining and real estate operations with a combined market capitalisation of nearly S$950 million.The FTSE ST Catalist index is a market capitalisation weighted index that tracks the performance of Catalist-listed, the SGX sponsor-supervised board for growth companies.The five biggest index weights of the FTSE ST Catalist Index are Kimly, Unusual, CNMC Goldmine Holdings, Alset International and ISEC Healthcare.

Five Stocks with the Most Impact on the FTSE ST Catalist Index

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
Gold spot prices has been on the move YTD, with a 7.9% price gains and is now at US$1,974/oz level. While gold is typically seen as an inflation hedge, rising rates/yields may potentially increase the opportunity cost of holding this asset. 
	 </li>
	<li>
Gold prices have risen in 6 out of the 8 last rate hike cycles in the past 50 years. The period of declines were observed in 1983-84 and 1987-89 when low-to-mid double digit declines were observed. 
	 </li>
	<li>There are two SGX gold mining plays – CNMC Goldmine and Wilton Resources. The duo posted YTD total returns of +22.0% and +33.3% respectively, outperforming STI’s +7.5%. Investors seeking exposure to gold can also look at SPDR Gold Shares ETF (O87/GSD), one of the most actively traded ETF on SGX (top traded ETF for March and April 2022)</li>
</ul>
 

Gold spot price has seen a price gain of 7.9% in the year-to-date at US$1,974/oz. While this is a 4.2% retreat from the last peak in early March this year, the commodity has seen a price gain of 16.7% since the last trough in end March 2021. 
Taking a look at the past major US rate hike cycles (green highlights in chart below) in the past 50 years, gold prices have been observed to rise in 6 out of the past 8 cycles. The only periods of declines were observed in 1983-84 and 1987-89 rate cycles when there were low-to-mid double digit declines. 
While gold has typically been seen as an inflation hedge, rising rates and yields may potentially increase the opportunity cost of holding the commodity.
</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-04/Capture%202.PNG' alt='Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years' />
 </figure>
 <div class='content-caption'>Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
Source: Bloomberg, Refinitiv. As of 14 April 2022. Gold prices based on Refinitiv Gold Spot prices. 
SGX gold mining plays – CNMC Goldmine and Wilton Resources are both engaged in different stages of the gold exploration, development and production cycle. The two plays have seen an average total returns of +22.0% and +33.3% respectively, compared to the STI’s +7.5% in this YTD through to 14 April. CNMC Goldmine – Principally engaged in exploration, mining of gold and processing of mined ore into gold dores. Currently focused on development of its flagship project – the Sokor Gold Field Project located in State of Kelantan, Malaysia. Gold production commenced in July 2010 and since successfully produced &gt;210k ounces (6 metric tonnes) of fine gold. Wilton Resources  – Engaged in the exploration and mining of gold, and production of gold dore in Indonesia. The Group’s Cinemas Gold Project in West Java, Indonesia covers total area of 3,078.5 hectares and estimated to contain c. 2,360 kt of ore reserves (according to its latest Independent Qualified Person’s Report). The Group has resumed the construction of its 500 tonnes per day flotation and carbon-in-leach processing plant. Besides seeking to develop gold deposits, the Group is exploring potential of other mineralized areas of the Ciemas Gold Project to build sustainable value for its stakeholders. 
Apart from the two mining plays, investors can also seek exposure to Gold via the SPDR Gold Shares ETF (stock codes: O87 / GSD), which is amongst the top traded ETF by turnover on SGX. The price of gold bullion maintains low correlations to most other asset classes. The World Gold Council maintain that that including assets with a low correlation to each other assists portfolio managers to reduce overall portfolio risk. 
SPDR Gold Shares ETF saw trading turnover hit a 20-month high in the month of March 2022, and was the top traded ETF in 2 consecutive months (March and April). Globally, the ETF has seen an inflow of c. US$7.7 billion, as of 14 April 2022. 
Following the microstructure changes implemented in January this year, investors can trade the SPDR Gold ETF in single unit, with per trade value at around S$249 (as of 14 April) when trading via its SGD counter (stock code: GSD)

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock Name 
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			2022 YTD total returns %
			</td>
			<td>
			Instis inflows YTD S$M
			</td>
		</tr>
<tr>
<td>
			CNMC Goldmine
			</td>
			<td>
			5TP
			</td>
			<td>
			101
			</td>
			<td>
			22.0
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			Wilton Resources
			</td>
			<td>
			5F7
			</td>
			<td>
			52
			</td>
			<td>
			33.3
			</td>
			<td>
			-0.4
			</td>
		</tr>
<tr>
<td>
			SPDR Gold Shares ETF
			</td>
			<td>
			O87/GSD
			</td>
			<td>
			94,134*
			</td>
			<td>
			9.5**
			</td>
			<td>
			-64.9
			</td>
		</tr>
</tbody></table>
 Source: SGX, Refinitiv, Bloomberg (Data as of 14 April 2022)

Note: Total returns for CNMC Goldmine and Wilton Resources in S$

*Refers to total net assets in S$

**USD total returns
</body></html>





Gold spot prices has been on the move YTD, with a 7.9% price gains and is now at US$1,974/oz level. While gold is typically seen as an inflation hedge, rising rates/yields may potentially increase the opportunity cost of holding this asset. 
	 
	
Gold prices have risen in 6 out of the 8 last rate hike cycles in the past 50 years. The period of declines were observed in 1983-84 and 1987-89 when low-to-mid double digit declines were observed. 
	 
	There are two SGX gold mining plays – CNMC Goldmine and Wilton Resources. The duo posted YTD total returns of +22.0% and +33.3% respectively, outperforming STI’s +7.5%. Investors seeking exposure to gold can also look at SPDR Gold Shares ETF (O87/GSD), one of the most actively traded ETF on SGX (top traded ETF for March and April 2022)

 

Gold spot price has seen a price gain of 7.9% in the year-to-date at US$1,974/oz. While this is a 4.2% retreat from the last peak in early March this year, the commodity has seen a price gain of 16.7% since the last trough in end March 2021.  
Taking a look at the past major US rate hike cycles (green highlights in chart below) in the past 50 years, gold prices have been observed to rise in 6 out of the past 8 cycles. The only periods of declines were observed in 1983-84 and 1987-89 rate cycles when there were low-to-mid double digit declines.  
While gold has typically been seen as an inflation hedge, rising rates and yields may potentially increase the opportunity cost of holding the commodity.



      
    
    Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years


Source: Bloomberg, Refinitiv. As of 14 April 2022. Gold prices based on Refinitiv Gold Spot prices.  
SGX gold mining plays – CNMC Goldmine and Wilton Resources are both engaged in different stages of the gold exploration, development and production cycle. The two plays have seen an average total returns of +22.0% and +33.3% respectively, compared to the STI’s +7.5% in this YTD through to 14 April.  CNMC Goldmine – Principally engaged in exploration, mining of gold and processing of mined ore into gold dores. Currently focused on development of its flagship project – the Sokor Gold Field Project located in State of Kelantan, Malaysia. Gold production commenced in July 2010 and since successfully produced &gt;210k ounces (6 metric tonnes) of fine gold.  Wilton Resources  – Engaged in the exploration and mining of gold, and production of gold dore in Indonesia. The Group’s Cinemas Gold Project in West Java, Indonesia covers total area of 3,078.5 hectares and estimated to contain c. 2,360 kt of ore reserves (according to its latest Independent Qualified Person’s Report). The Group has resumed the construction of its 500 tonnes per day flotation and carbon-in-leach processing plant. Besides seeking to develop gold deposits, the Group is exploring potential of other mineralized areas of the Ciemas Gold Project to build sustainable value for its stakeholders.  
Apart from the two mining plays, investors can also seek exposure to Gold via the SPDR Gold Shares ETF (stock codes: O87 / GSD), which is amongst the top traded ETF by turnover on SGX. The price of gold bullion maintains low correlations to most other asset classes. The World Gold Council maintain that that including assets with a low correlation to each other assists portfolio managers to reduce overall portfolio risk.  
SPDR Gold Shares ETF saw trading turnover hit a 20-month high in the month of March 2022, and was the top traded ETF in 2 consecutive months (March and April). Globally, the ETF has seen an inflow of c. US$7.7 billion, as of 14 April 2022.  
Following the microstructure changes implemented in January this year, investors can trade the SPDR Gold ETF in single unit, with per trade value at around S$249 (as of 14 April) when trading via its SGD counter (stock code: GSD)




			Stock Name 
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			2022 YTD total returns %
			
			
			Instis inflows YTD S$M
			
		


			CNMC Goldmine
			
			
			5TP
			
			
			101
			
			
			22.0
			
			
			0.6
			
		


			Wilton Resources
			
			
			5F7
			
			
			52
			
			
			33.3
			
			
			-0.4
			
		


			SPDR Gold Shares ETF
			
			
			O87/GSD
			
			
			94,134*
			
			
			9.5**
			
			
			-64.9
			
		

 Source: SGX, Refinitiv, Bloomberg (Data as of 14 April 2022)

Note: Total returns for CNMC Goldmine and Wilton Resources in S$

*Refers to total net assets in S$

**USD total returns



How has Gold Performed in Rate Hike Cycles Historically?

<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2022-04/CNMC-CEO.jpg" class="editor-image img-responsive"></figure>
<div class="content-caption">CNMC-CEO</div>

The Latin proverb “Acta non verba” - or “Deeds, not words” - is one motto mining industry veteran Chris Lim lives by. This underpins his philosophy of leading by example when it comes to managing the operations of SGX-listed CNMC Goldmine Holdings Ltd.
“Taking the lead and setting an example is something we instil across the entire corporate hierarchy at CNMC,” said 48-year-old Lim, the Group’s Chief Executive Officer.&nbsp;
“Whether you’re a C-suite executive or the leader of a small team, we expect you to guide those under your care through your actions and the way you carry yourself,” he added.
“As actions always speak louder than words, this approach is particularly relevant for a business like ours, where we have to get our hands dirty - literally.”
Making it a point to listen to different perspectives before making major decisions, taking responsibility rather than finding fault, and giving credit where credit is due, are also key elements that define Lim’s leadership style.
“The senior management at CNMC is always open to feedback from all stakeholders, not only from our shareholders, but also our staff, suppliers, external consultants, and just about anyone involved directly or indirectly in our business,” he pointed out.
“As a publicly listed company, we’re mindful of our obligations to our stakeholders. Their feedback, whether positive or negative, is always worth listening to, as their support and understanding can go a long way in helping us get to where we want to go as a business.”
Indeed, over CNMC’s 16-year-long journey - it began operations in 2006 - there have been many highlights, challenges and lessons learned, Lim said.
“Producing our very first bar of gold - in 2010 - was without doubt a major milestone for us. It took us about four years to achieve this,” he recalled.
“Our listing on SGX in 2011 was another highlight in our history, as it gave us the much-needed capital to further develop our gold mining business and take it to the next level,” he added.
“This has enabled us to generate profits year after year since 2012, except for 2020, when the COVID-19 pandemic severely disrupted our operations.”
Beating the Odds
Over the years, the Group has faced - and overcome - multiple challenges.&nbsp; “Mining is capital-intensive, comes with lots of risks, and there’s no guarantee of success no matter how much one plans,” he noted.
“There’re many things beyond one’s control, such as the weather, geological compositions, and the price of the commodity being mined. The biggest challenge we’ve encountered so far is probably the pandemic,” he added, pointing to wide-ranging lockdown measures and travel restrictions that forced CNMC to stop operations for weeks or months on end in each of the last two years.&nbsp;
But then again, as German philosopher&nbsp;Friedrich Nietzsche so aptly put it: “What does not&nbsp;kill me,&nbsp;makes me stronger”.&nbsp;
“For all the challenges that we’ve encountered in the history of CNMC, the main takeaway for us has always been how we could do better the next time,” Lim said. “There’s no point playing the blame game. If something is not right, let’s all work on getting it fixed, and try not to repeat the error.”
CNMC, established by Professor Lin Xiang Xiong, was the first gold mining company to list on SGX Catalist in October 2011. Headquartered in Singapore, the Group is engaged in the exploration and mining of gold, and the processing of mined ore into gold doré bars.
It is focused on developing the Sokor Gold Field Project, located in the state of Kelantan, Malaysia. Spanning an area of 10 square kilometres, the project has identified five gold deposit regions, namely Manson’s Lode, New Discovery, New Found, Sg Ketubong and Rixen.
With an initial focus on open-pit - or surface - mining, CNMC has since expanded into underground mining, which enables the Group to extract higher-grade gold ore.
As at 31 December 2020, the Sokor Gold Field Project had JORC-compliant gold resources (inclusive of ore reserves) of 18.16 million tonnes at a grade of 1.5 g/t in the Measured, Indicated and Inferred categories, for a total of 890,000 ounces. The project achieved its first gold pour on 21 July 2010. In 2017, the Group acquired two mining properties in Kelantan - the CNMC Pulai Mining brownfield site and Kelgold Mining greenfield site.
For the year ended 31 December 2021, the gold producer chalked up US$1.72 million in profit attributable to shareholders, reversing a loss of US$3.54 million in FY2020. The turnaround came as FY2021 revenue rose 38% to US$32.88 million.
Diversified Mining Assets&nbsp;
To spur its longer term growth, CNMC is building another two underground mining facilities at its flagship Sokor gold project. These underground mines will allow the Group to extract more higher-grade gold ore for processing at its carbon-in-leach (CIL) plant.&nbsp;
“Our CIL plant has been in operation for more than four years now, and can be expanded to handle up to 1,000 tonnes of ore a day from 500 tonnes currently,” Lim noted. “We’ve the option to increase the plant’s processing capacity once the underground facilities can sustain production output at around 1,000 tonnes of ore a day.”
The Group is also about to kick off trial production of lead and zinc. “We’ve been planning for this for several years now, and are close to finally being able to diversify our portfolio of mining assets beyond gold to include these metals,” Lim added.
“We’re putting the finishing touches to a flotation plant at Sokor that can process about 550 tonnes of ore containing lead and zinc. We expect to start trial production of these metals in the second quarter of this year, barring unforeseen circumstances.”
While the pandemic continues to be a concern, Lim remains optimistic. “Malaysia is in a better position to deal with COVID-19 now compared to a year or two ago,” he said.&nbsp;
“Above all, I think the pandemic has reinforced the need for companies to have contingency plans in place at all times. This requires business owners - us included - to be actively and regularly involved in planning for multiple scenarios, so they can be as prepared as possible for any exigencies,” he added.
“In other words, COVID-19 has elevated the importance of this mindset, and the need to always be nimble, so we can respond quickly in whatever situation we’re in.”
At the same time, the Group continues to grapple with the challenge of rising production costs. “Our mine sites are powered by diesel generators, and with the surge in energy prices worldwide, diesel has become more expensive. While we’re still able to cope with the higher costs, we intend to install a national grid power line at Sokor, which should yield cost savings in the long term.”
Additionally, it remains focused on boosting output to reduce the cost of production for every ounce of gold coming from its processing plants.
“We still have a comfortable profit margin as current gold prices remain elevated,&nbsp;and are not far from their all-time highs,” Lim noted. “But as spot prices - which determine our selling prices - are not within our control, we have to focus on boosting output so that with higher revenues, production cost per ounce can fall.”
Apart from maximising value for shareholders, CNMC is also actively pursuing its Environmental, Social and Governance (ESG) targets.
"We comply with local environmental laws, and engage a licensed independent consultant to carry out regular on-site inspections at Sokor, to ensure our operations are as environmentally friendly as possible,” Lim noted.
“We track, for example, our carbon dioxide emissions very closely. Our total carbon dioxide emissions in FY2020 declined nearly 13% from the previous year to 20,121 tonnes. In terms of water management, we make it a point to recycle water and even treat wastewater before discharging it, so there’s no risk to the local communities and ecosystem at Sokor,” he added.
“All in all, we’re proud to say we’ve not fallen short in any significant way in terms of the impact we leave on the environment.”
CNMC Goldmine Holdings Ltd
CNMC is the first Catalist-listed gold mining company on SGX. Headquartered in Singapore, the Group started operations in 2006 and is engaged in the exploration and mining of gold and the processing of mined ore into gold doré bars. The Group is focused on developing the Sokor Gold Field Project, located in the State of Kelantan, Malaysia. Spanning an area of 10 sq km, the project has identified five gold deposit regions, namely Manson’s Lode, New Discovery, New Found, Sg. Ketubong and Rixen. As at 31 December 2020, the Sokor Gold Field Project had JORC-compliant gold resources (inclusive of ore reserves) of 18.16 million tonnes at a grade of 1.5 g/t in the Measured, Indicated and Inferred categories for a total of 890,000 ounces. The project achieved its first gold pour on 21 July 2010. The Company also owns CNMC Pulai Mining Sdn Bhd and Kelgold Mining Sdn Bhd, both of which are in Kelantan.
The company website is: <a href="http://www.cnmc.com.hk" target="_blank" rel="noopener">www.cnmc.com.hk</a> Click&nbsp;<a href="https://www.sgx.com/securities/equities/5TP" target="_blank" rel="noopener">here&nbsp;</a>for the company's StockFacts page. For the year ended 31 December 2021 financial results, click&nbsp;<a href="https://links.sgx.com/1.0.0/corporate-announcements/2QWQGXG4CDAMO3ID/703528_FY2021_PressRelease.pdf" target="_blank" rel="noopener">here</a>.
&nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;<a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10" target="_blank" rel="noopener">here</a>. &nbsp; For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;<a href="//www.smartkarma.com/C:/Users/tanje/Desktop/Working%20Files/kopi-C/jennifer.t@sgx.com" target="_blank" rel="noopener">jennifer.t@sgx.com</a>.


CNMC-CEO

The Latin proverb “Acta non verba” - or “Deeds, not words” - is one motto mining industry veteran Chris Lim lives by. This underpins his philosophy of leading by example when it comes to managing the operations of SGX-listed CNMC Goldmine Holdings Ltd.
“Taking the lead and setting an example is something we instil across the entire corporate hierarchy at CNMC,” said 48-year-old Lim, the Group’s Chief Executive Officer.&nbsp;
“Whether you’re a C-suite executive or the leader of a small team, we expect you to guide those under your care through your actions and the way you carry yourself,” he added.
“As actions always speak louder than words, this approach is particularly relevant for a business like ours, where we have to get our hands dirty - literally.”
Making it a point to listen to different perspectives before making major decisions, taking responsibility rather than finding fault, and giving credit where credit is due, are also key elements that define Lim’s leadership style.
“The senior management at CNMC is always open to feedback from all stakeholders, not only from our shareholders, but also our staff, suppliers, external consultants, and just about anyone involved directly or indirectly in our business,” he pointed out.
“As a publicly listed company, we’re mindful of our obligations to our stakeholders. Their feedback, whether positive or negative, is always worth listening to, as their support and understanding can go a long way in helping us get to where we want to go as a business.”
Indeed, over CNMC’s 16-year-long journey - it began operations in 2006 - there have been many highlights, challenges and lessons learned, Lim said.
“Producing our very first bar of gold - in 2010 - was without doubt a major milestone for us. It took us about four years to achieve this,” he recalled.
“Our listing on SGX in 2011 was another highlight in our history, as it gave us the much-needed capital to further develop our gold mining business and take it to the next level,” he added.
“This has enabled us to generate profits year after year since 2012, except for 2020, when the COVID-19 pandemic severely disrupted our operations.”
Beating the Odds
Over the years, the Group has faced - and overcome - multiple challenges.&nbsp; “Mining is capital-intensive, comes with lots of risks, and there’s no guarantee of success no matter how much one plans,” he noted.
“There’re many things beyond one’s control, such as the weather, geological compositions, and the price of the commodity being mined. The biggest challenge we’ve encountered so far is probably the pandemic,” he added, pointing to wide-ranging lockdown measures and travel restrictions that forced CNMC to stop operations for weeks or months on end in each of the last two years.&nbsp;
But then again, as German philosopher&nbsp;Friedrich Nietzsche so aptly put it: “What does not&nbsp;kill me,&nbsp;makes me stronger”.&nbsp;
“For all the challenges that we’ve encountered in the history of CNMC, the main takeaway for us has always been how we could do better the next time,” Lim said. “There’s no point playing the blame game. If something is not right, let’s all work on getting it fixed, and try not to repeat the error.”
CNMC, established by Professor Lin Xiang Xiong, was the first gold mining company to list on SGX Catalist in October 2011. Headquartered in Singapore, the Group is engaged in the exploration and mining of gold, and the processing of mined ore into gold doré bars.
It is focused on developing the Sokor Gold Field Project, located in the state of Kelantan, Malaysia. Spanning an area of 10 square kilometres, the project has identified five gold deposit regions, namely Manson’s Lode, New Discovery, New Found, Sg Ketubong and Rixen.
With an initial focus on open-pit - or surface - mining, CNMC has since expanded into underground mining, which enables the Group to extract higher-grade gold ore.
As at 31 December 2020, the Sokor Gold Field Project had JORC-compliant gold resources (inclusive of ore reserves) of 18.16 million tonnes at a grade of 1.5 g/t in the Measured, Indicated and Inferred categories, for a total of 890,000 ounces. The project achieved its first gold pour on 21 July 2010. In 2017, the Group acquired two mining properties in Kelantan - the CNMC Pulai Mining brownfield site and Kelgold Mining greenfield site.
For the year ended 31 December 2021, the gold producer chalked up US$1.72 million in profit attributable to shareholders, reversing a loss of US$3.54 million in FY2020. The turnaround came as FY2021 revenue rose 38% to US$32.88 million.
Diversified Mining Assets&nbsp;
To spur its longer term growth, CNMC is building another two underground mining facilities at its flagship Sokor gold project. These underground mines will allow the Group to extract more higher-grade gold ore for processing at its carbon-in-leach (CIL) plant.&nbsp;
“Our CIL plant has been in operation for more than four years now, and can be expanded to handle up to 1,000 tonnes of ore a day from 500 tonnes currently,” Lim noted. “We’ve the option to increase the plant’s processing capacity once the underground facilities can sustain production output at around 1,000 tonnes of ore a day.”
The Group is also about to kick off trial production of lead and zinc. “We’ve been planning for this for several years now, and are close to finally being able to diversify our portfolio of mining assets beyond gold to include these metals,” Lim added.
“We’re putting the finishing touches to a flotation plant at Sokor that can process about 550 tonnes of ore containing lead and zinc. We expect to start trial production of these metals in the second quarter of this year, barring unforeseen circumstances.”
While the pandemic continues to be a concern, Lim remains optimistic. “Malaysia is in a better position to deal with COVID-19 now compared to a year or two ago,” he said.&nbsp;
“Above all, I think the pandemic has reinforced the need for companies to have contingency plans in place at all times. This requires business owners - us included - to be actively and regularly involved in planning for multiple scenarios, so they can be as prepared as possible for any exigencies,” he added.
“In other words, COVID-19 has elevated the importance of this mindset, and the need to always be nimble, so we can respond quickly in whatever situation we’re in.”
At the same time, the Group continues to grapple with the challenge of rising production costs. “Our mine sites are powered by diesel generators, and with the surge in energy prices worldwide, diesel has become more expensive. While we’re still able to cope with the higher costs, we intend to install a national grid power line at Sokor, which should yield cost savings in the long term.”
Additionally, it remains focused on boosting output to reduce the cost of production for every ounce of gold coming from its processing plants.
“We still have a comfortable profit margin as current gold prices remain elevated,&nbsp;and are not far from their all-time highs,” Lim noted. “But as spot prices - which determine our selling prices - are not within our control, we have to focus on boosting output so that with higher revenues, production cost per ounce can fall.”
Apart from maximising value for shareholders, CNMC is also actively pursuing its Environmental, Social and Governance (ESG) targets.
"We comply with local environmental laws, and engage a licensed independent consultant to carry out regular on-site inspections at Sokor, to ensure our operations are as environmentally friendly as possible,” Lim noted.
“We track, for example, our carbon dioxide emissions very closely. Our total carbon dioxide emissions in FY2020 declined nearly 13% from the previous year to 20,121 tonnes. In terms of water management, we make it a point to recycle water and even treat wastewater before discharging it, so there’s no risk to the local communities and ecosystem at Sokor,” he added.
“All in all, we’re proud to say we’ve not fallen short in any significant way in terms of the impact we leave on the environment.”
CNMC Goldmine Holdings Ltd
CNMC is the first Catalist-listed gold mining company on SGX. Headquartered in Singapore, the Group started operations in 2006 and is engaged in the exploration and mining of gold and the processing of mined ore into gold doré bars. The Group is focused on developing the Sokor Gold Field Project, located in the State of Kelantan, Malaysia. Spanning an area of 10 sq km, the project has identified five gold deposit regions, namely Manson’s Lode, New Discovery, New Found, Sg. Ketubong and Rixen. As at 31 December 2020, the Sokor Gold Field Project had JORC-compliant gold resources (inclusive of ore reserves) of 18.16 million tonnes at a grade of 1.5 g/t in the Measured, Indicated and Inferred categories for a total of 890,000 ounces. The project achieved its first gold pour on 21 July 2010. The Company also owns CNMC Pulai Mining Sdn Bhd and Kelgold Mining Sdn Bhd, both of which are in Kelantan.
The company website is: www.cnmc.com.hk  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the year ended 31 December 2021 financial results, click&nbsp;here.
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About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;here. &nbsp;  For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;jennifer.t@sgx.com.

CNMC Goldmine: Mining Expanding Opportunities

Singapore

CNMC Goldmine Holdings Ltd. explores for gold and processes mined ore into gold dore.  The Company operates in Kelantan State of Malaysia.

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