Resource World Magazine

a u g u s t / s e p t e m b e r 2 0 1 5 www.resourceworld.com 25 originates. Blackbird energy [BBI-TSXV] is another junior company with Chinese investor sup- port. The company is actively drilling at the liquids-rich Montney fairway at Elmworth near Great Prairie, Alberta. Petrox Resources [PTC-TSXV] is on its way to merge with Shanghai Sinooil Energy Holding, where the potential of Petrox's Viking light oil play in Halkirk and Battle regions in Alberta attracted interests from the Chinese counterpart. So where is all this heading? The Canadian energy space has always been supported by traditional, institutional money here and from south of the border. The window has been opened for new investors. More participants in the mar- ket will make it more efficient. There is a need for new ideas in order to break out of the typical petroleum club circles which will be healthy for both investors and the energy industry. While the hot money in China has been chasing its own volatile stock markets, other groups looking for strategic investments are using this bottom part of the cycle to target solid assets with much lower valuations. glObalizaTiOn Of chinese currency One, less hurDle fOr fOreign invesTMenTs China's central government is currently turning to the globalization of its cur- rency, the RMB. A special economic zone is being established in Shanghai which is the direct connection of money flow between the Hong Kong Stock Exchange and the Shanghai Stock Exchange. This will facili- tate a freer flowing RMB and will make it easier for individuals and corporations to move their own currencies out of the country. Thus, some companies backed by strong assets will benefit from the easier flow of funds. In the past, Chinese investor interest was mainly in the oil sands' massive reserve base, but now it's the unconventional light oil for cash flow, or a combination of oil and a natural gas mix. Chinese interest in investment remains strong because owning investments in overseas portfolios backed by hard assets and petroleum resources is never a bad thing. For Canada, having one more customer other than the US will prove advantageous. Jerry Xie, Executive Vice President, said, "We keep achieving record production on both of our mines year after year. 2014 rev- enues of US $277.8 million and profit of US $41.9 million prove our stability and prof- itability. We are focusing on growth which incorporates cost reduction and efficiency. In 2014 we have seen a 17% reduction in cash production costs at both CSH and Jiama Mines. We not only pay attention to profitability, but also actively interact with local communities by advocating social responsibility and participating in local charity activities in China and Canada." n WesTern pOTash receives $80 MilliOn chinese invesTMenT western Potash Corp. [WPX-TSX; AHE- FSE] ] reported Beijing Tairui Innovation Capital Management agreed to invest $80 million in Western Potash at 32.13¢ per share of Western Potash for a total of 248,989,860 shares, resulting in Tairui holding a 51% ownership on a non- diluted basis. The per-share issue price of 32.13¢ represents a 46% premium over the company's volume-weighted average price on the TSX for the 30 trading days ended July 3, 2015. Under the terms, Tairui can appoint four nominees to the board of Western Potash. Beijing Tairui is a China-based private equity investment company focusing on energy and mining. Western Potash is a development-stage potash company focused on building a solution mine on the Milestone property in Saskatchewan. A positive Feasibility Study by AMEC confirmed the deposit is of sufficient size and grade to support primary and secondary potash solution mining for over 40 years at an ultimate production rate of 2.8M tonnes/year. An Environmental Assessment approval has been received. china gOlD inTernaTiOnal repOrTs sTrOng firsT quarTer Vancouver, BC-based China Gold international Resources Corp. Ltd. [CGG-TSX; 2099-HKEx] reported finan- cial and operational results for the three months ended March 31, 2015. Consolidated revenues of US $77.4 million for the first quarter increased compared to US $36.7 million for the first quarter of 2014. Revenues from the Chang Shan Hao gold mine in Inner Mongolia accounted for 67%, or US $52.1 million (Q1, 2014: US $31.6 million), of total revenue for the quarter. This increase from the same period last year was due to a 77% increase in gold sales volume offset by a 7% decrease in the realized average gold price. Revenue from the Jiama copper-gold (silver-molybdenum) mine in Tibet accounted for 33%, or US $25.3 million (Q1, 2014: US $5.07 million), of total revenue for the quarter. This significant increase from the same period last year was primarily due to restored access to the power supply which was temporarily limited during the first quarter of 2014. Cost of sales of US $56.2 million for the quarter ended March 31, 2015, increased by US $33.9 million from US $22.3 mil- lion for the same period in 2014. Net income increased by US $4.8 million from US $1.4 million in Q1 2014 to US $6.2 mil- lion for Q1 2015. Jerry Xie, Executive Vice President, said, "We keep achieving record produc- tion on both of our mines year after year. 2014 revenues of US $277.8 million and profit of US $41.9 million prove our sta- bility and profitability. We are focusing on growth which incorporates cost reduc- tion and efficiency. In 2014 we have seen a 17% reduction in cash production costs at both CSH and Jiama Mines. We not only pay attention to profitability, but also actively interact with local communities by advocating social responsibility and participating in local charity activities in China and Canada." n

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