IRC Limited

Website: www.ircgroup.com.hk
Primary ticker: HKEX:1029
Stage of development: Production
Commodity: Iron Ore
Project to Promote: K&S
Project location: Russia

Live financials
Cash: USD$4.3M
Debt: USD$224.6M

Major shareholders:
Petropavlovsk plc – 31%
Management ownership – 0.2%

IRC is the largest iron ore mining operator exclusively in the Russian Far East. Our world-class expertise focuses on producing the high quality iron ore concentrate with long term customer relationship in China and Russia.

IRC is unique in the iron ore market due to its competitive advantages, namely superior geology and direct access using established world class infrastructure to China, the world’s largest iron ore market.

K&S mine, our 3.2 million tonne per annum project, has started commercial production and will reach full capacity soon. The mine produces premium 65% iron ore products at some of the most competitive industry costs levels. In long term, we will have optionalities of doubling the group’s production capacity and beyond by developing K&S Phase II and other exploration projects.

Management Profile

 

Mr Johnny Yuen – Company Secretary, Corporate Controller

Mr Johnny Yuen is the Company Secretary, Corporate Controller, and Authorised Representative of the Company. Mr Yuen has also been promoted to Interim Chief Financial Officer of the Company on 1 February 2020. He began his career in KPMG and has over 20 years of financial management, accounting, auditing and administration experiences, including working in various senior positions of listed companies in Hong Kong. He is a fellow member of the HKICPA and a member of the ACCA. He holds a MBA from the Manchester Business School of University of Manchester.


What is your rationale for attending 121 Mining Investment?

Looking for potential investors to buy our stocks in the secondary market. Looking for investors to invest on our project K&S or be our major shareholder.

What recent news would you like to highlight to investors attending?

2019 ANNUAL RESULTS
K&S OPERATED AT 81% CAPACITY
EBITDA EXCLUDING FX INCREASES 39%

What is the focus of your management team for the next 3, 6 and 12 months?

3 Months:

Stabilise the high production rate

6 Months:

Reach 100% capacity

12 Months:

Increase our bottom line to a profitable level

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

The slow down of Chinese economy. We have an option to increase the production provision to Russian market.

What do you think makes your company such a compelling investment?

Major operating expenses of IRC are denominated in Russian Rouble, the recent strong depreciation on Russian Rouble caused the company to take advantage on its cost.

Analyst Insight – provided by Independent Investment Research

IRC Limited is a Hong Kong-listed company that ranks as the largest iron ore mining operator exclusively in the Russian Far East. The company is focused on producing high-quality iron ore concentrates, with long-term customer relationships in China and Russia.

The company’s flagship 100%-owned K&S Mine is located in the Jewish Autonomous Region (EAO) of the Russian Far East. It is the second full-scale mining and processing operation that the Group has developed. The Trans-Siberian Railway is linked directly to the mine site, allowing easy transport of products to customers in China. The distance from the K&S operation to the Chinese border is 1,500km, which translates into 10 to 14 days of transportation, much faster and consistent than other international peers. With the help of the Amur River Bridge, the transport cost and distance can be further reduced.

The Kimkan mining operation covers nearly 50 sq km and comprises two key ore zones – Central and West. The Processing Plant is well situated between the two deposits. The plant design for Phase I is to process 10 million RoM tonnes to produce 3.2 million tonnes of iron ore concentrate with a superior 65.8% Fe grade. There is an option for a Phase 2 expansion for the Processing Plant, with the addition of ore feed from the Sutara Pit, doubling the throughput capacity to produce 6.3 million tonnes of iron ore concentrate with a 65% Fe grade.

2019 was a year of development for IRC and it delivered solid operating and financial results against a challenging economic backdrop. During the year, K&S achieved an annual production record by operating at an average capacity of 81% to produce 2.6 million tonnes of iron ore, 15.3% higher than last year. The positive operational performance translated to improved financial results with the Group’s EBITDA (excluding foreign exchange) increased by 39.2% to US$33.3 million.