1. The progress of a cooperation between Shandong Ishine Mining Industry Co., Ltd. (山東興盛礦業有限責任公司) (“Shandong Ishine”), an indirect wholly-owned subsidiary of the Company and The Institute of Process Engineering of The Chinese Academy of Sciences (中國科學院過程工程研究所) (the “Institute”) in relation to the research and development of new exploration technology for the Group’s Zhuge Shangyu Ilmenite Mine (諸葛上峪鈦鐵礦) in Yishui County (“Yishui”), Shandong Province, the People’s Republic of China (the “PRC”).Shandong Ishine has
cooperated with the Institute for the research and development of new exploration technology for the Group’s Zhuge Shangyu Ilmenite Mine (諸葛上峪鈦鐵礦) in Yishui and various experiments, including floatation selection process experiment (
浮選工藝試驗) and hydrometallurgical extraction (濕法冶金方法), have been carried out by the Institute in Zhuge Shangyu Ilmenite Mine (諸葛上峪鈦鐵礦) for such purpose.The Company had duly received the preliminary testing report provided by the Institute, which indicated these experiments had significant achievements. Under the new exploration technology and process, the data of the Institute demonstrated that the amount of concentrate produced per 30 tonnes of ilmenite ore represented original 50 tonnes of ilmenite ore required for such amount.
The Board considers that if these achievements are successfully implemented by the Company, they will increase the average grading of iron contents and titanium contents in the ilmenite ores produced from the Zhuge Shangyu Ilmenite Mine (
諸葛上峪鈦鐵礦) and reduce the costs of high-grade ilmenite products by approximately 20%, which will in turn help to further improve the gross
margin of our products in the long-term and increase the ores value of the Zhuge Shangyu Ilmenite Mine. It also will enable the Group to place itself at a leading position in respect of technology for use of titanium within the PRC.
To complete 76% or more of the research and development and innovation of ilmenite concentrates hydrometallurgy in time based on periodic major technological achievements as early as possible in 2016.
2. Shandong Ishine Mining Industry Co., Ltd. (山東興盛礦業有限責任公司) (“Shandong Ishine”), an indirect wholly-owned subsidiary of the Company and Shandong Academy of Science and Technology (山東省科學技術研究院) plan to introduce from Siberian Branch of the Russian Academy of Sciences (the “
Russian Party”) a new processing technology for efficient extraction of titanium from ilmenite for the purpose of effective development of the lean-titanium ilmenite resources of Shandong Ishine (“Introduction of New Processing Technology”).
Currently, the Group’s Titanium Metallurgical Industry incurs relatively high production cost and high energy consumption in production of Titanium with comprehensive recovery rate of titanium only at 80%. In contrast, the energy consumption in production of the technology owned by the Russian party is lower and achieve a comprehensive recovery rate of titanium of up to 95%, a level
of advanced international standard.
On 14 July 2015, Shandong Ishine, a wholly-owned subsidiary of the Group, entered into the formal cooperation agreement with Siberian Branch of the Russian Academy of Sciencesin relation to “Introduction of a New Processing Technology for Efficient Extraction of Titanium from Ilmenite”, pursuant to which the two parties shall carry out in-depth cooperation in the introduction of a new processing technology for efficient extraction of titanium from ilmenite. The new processing technology for efficient extraction of titanium introduced pursuant to the cooperation agreement was in international leading position. The new processing technology,
along with the rich titanium resources of the Group, shall significantly improve the value of the titanium ores of the Group.
3. In 2016, the approved establishment of Shandong Ishine Mining Academician Workstation will become the basis of closer industry-university-research cooperation for joint research on new techniques relating to hydrometallurgy processing of ilmenite and associated elements with furnace method.
4. On 10December2015, Shandong IshineMining Industry Co., Ltd. (“Shandong Ishine”), a wholly-owned subsidiary of the Group,was notified by the Department of Science & Technologyof Shandong Province (山東省科學技術廳), Shandong Province Finance Bureau (山東省財政廳),Shandong ProvincialOffice of State Administration of Taxation (山東省國家稅務局) and Shandong Local Taxation Bureau(山東省地方稅務局), that various approvals were passed. Shandong Ishine will be formally awarded with the National High-Tech Enterprise qualification.
