Chapter 371: Consolidating Funds
Regardless of how the prices of copper and gold soared, Gongcun Copper-Gold Mine still could not be compared to Shazhai Molybdenum Mine.
Shazhai Molybdenum Mine was the second-largest molybdenum mine globally and the largest single molybdenum mine!
There were still plenty of mineral rights globally that were similar to Gongcun Copper-Gold Mine. Yet, for China, where copper resources were extremely scarce, Gongcun Copper-Gold Mine was indeed a rare and valuable resource.
This was precisely why numerous domestic copper and gold mining companies were interested in it.
"The offer is a bit low," Li Tang commented casually.
He did not immediately reveal the price he had in mind. Naturally, if he found the offer too low, he wouldn't agree to it.
Cheng Muye understood Li Tang's implication. After briefly consulting his assistant, he proactively raised the price, asking, "How about 350 million yuan?"
"Still too low."
Even before Gongcun Copper-Gold Mine had officially applied for mining rights, Land Mining Company had progressively sold its shares to domestic companies, with the total transaction price exceeding three billion yuan. And this was only a few years into the future when gold prices hadn't significantly exceeded current levels.
Domestic companies were willing to pay high prices to acquire this crucial mining right from foreign hands. However, when buying from their compatriots, they naturally wanted lower prices to get a better deal.
Offering 350 million yuan for a 75% stake implied the overall valuation of mining rights was only slightly above 400 million yuan. Clearly, this was far from Li Tang's expectations.
"Why don't you just give me your bottom line?" Cheng Muye felt uneasy about continuously raising prices incrementally.
"The valuation for Gongcun Copper-Gold Mine's mineral rights hasn't been officially evaluated by a professional appraisal organization. Still, as industry insiders, we can roughly estimate its worth," Li Tang finally shared his thoughts directly. "I value the total mining rights at around 1.5 billion yuan."
Hearing this figure, Cheng Muye was startled and felt a bit disconcerted. "Even Shazhai Molybdenum Mine's valuation you gave was only slightly above 1 billion yuan. That's a world-class mine with economic value potentially amounting to hundreds of billions! Gongcun Copper-Gold Mine is just a large deposit, and it's located in a remote area."
"Molybdenum mines are different," Li Tang replied confidently. "Since last year, molybdenum concentrate prices have been continuously declining from their peak. Why? Because molybdenum is a niche mineral with limited demand. Every new mine put into production significantly impacts market prices. As more molybdenum mines open, prices will inevitably fall further. Once Shazhai Molybdenum Mine enters production, the oversupply will worsen, sending prices crashing further down. Additionally, China's domestic molybdenum reserves are abundant. Honestly, the molybdenum business will become increasingly challenging."
"You're not optimistic about the future of molybdenum?" This was the first time Cheng Muye had heard this perspective. Despite recent drops, molybdenum concentrate prices remained high, and molybdenum mining companies were still immensely profitable, earning several times their production costs.
Hearing Li Tang declare molybdenum had no future was indeed a bold prediction.
"Exactly," Li Tang affirmed. "Otherwise, I wouldn't have transferred Shazhai Molybdenum Mine."
"But according to rumors, your reason for transferring Shazhai Molybdenum Mine was that your company, being privately owned, couldn't secure mining rights, thus forcing you to sell your stake cheaply. Another reason floating around is instructions from above," Cheng Muye mentioned, knowledgeable about domestic mining events.
Especially when molybdenum concentrate prices peaked last year, everyone closely monitored domestic and foreign molybdenum mines. Li Tang initially held full control over Shazhai Molybdenum Mine but had almost completely withdrawn now. Many commentators saw Li Tang's low-priced transfer of Shazhai Molybdenum Mine to Tongdu Nonferrous Group as patriotic self-sacrifice, deserving respect.
Yet now, from Li Tang's words, it appeared there were personal reasons as well.
"You're correct. The inability to secure mining rights was indeed the immediate trigger for selling Shazhai Molybdenum Mine," Li Tang admitted openly.
Had mining rights been obtainable, Li Tang wouldn't have easily parted ways with Shazhai Molybdenum Mine, certainly not at such a low price. With mining rights, the value would have at least doubled!
"Gongcun Copper-Gold Mine project also exceeds 100 tons of gold reserves. Under normal procedures, you also wouldn't be able to secure mining rights," Cheng Muye reminded.
"True," Li Tang acknowledged, having discussed this repeatedly with Xiao Yongyue. "While obtaining mining rights is difficult, as long as we hold them, nobody can force us to sell."
"Simply obtaining mining rights involves enormous costs, creating significant pressure on Huajin Group. Approval processes are also complicated. Moreover, once we have the rights, we must invest hundreds of millions, even billions, to develop the mine. You have mining experience and understand how substantial initial investment can be!"
Upon hearing Li Tang's words, Cheng Muye understood his point. Gongcun Copper-Gold Mine wasn't short of buyers. The issue wasn't about price alone. Li Tang approaching Cheng Muye first clearly meant showing him respect.
"For Gongcun Copper-Gold Mine, establishing a medium-sized mine with annual copper production of 20,000-30,000 tons and several tons of gold would be practical. There's no rush to exhaust underground resources entirely within a decade," Li Tang calculated aloud. "At this scale, annual revenues could reach 1-2 billion yuan, with profits of 200-300 million yuan. Given global shortages, copper and gold prices will continue rising, boosting profits further."
Based on this calculation, Gongcun Copper-Gold Mine's investment recovery period would generally span between five to ten years, relatively long-term. If copper and gold prices continued upward, annual profits could exceed 500 million yuan, shortening the recovery period significantly to just three years.
No matter how calculated, it remained a profitable deal.
"But a valuation of 1.5 billion yuan remains too high," Cheng Muye reasoned. Acquiring 75% at Li Tang's valuation meant investing 1.1 billion yuan, significantly beyond his expectations. Huajin Group had never paid such a high price for mineral rights.
"I've stated my terms clearly. Now it's up to President Cheng," Li Tang patiently waited.
Cheng Muye was conflicted. Rejecting Li Tang outright wasn't an option, nor could he easily discard Gongcun Copper-Gold Mine. "I must discuss with the board. It's tough to decide immediately."
"I'm in no hurry." Li Tang stood, adding before departing, "I will soon sell my shares in Langbul Resources Company, although I only hold 36%, insufficient for full control but enough to influence major decisions. If you're interested, we can discuss after finalizing Gongcun Copper-Gold Mine."
Hearing this, Cheng Muye grew anxious.
Huajin Group was a leader in domestic gold mining, possessing precise judgment about gold mine value. Compared to Gongcun Copper-Gold Mine, Langbul Resources Company's Tropicana Gold Mine was significantly more valuable, with exceptionally high-grade gold deposits and shallow depths, ensuring very low extraction costs!
"Don't leave yet! I'll contact our chairman immediately and convene a board meeting today to respond promptly!" Cheng Muye attempted to grab Li Tang, but the expansive meeting area prevented him.
Initially expecting only Gongcun Copper-Gold Mine discussions today, Cheng Muye hadn't anticipated Langbul Resources Company entering the conversation. Would Kakula Copper Mine also be involved?
It was clear Li Tang was liquidating assets to gather substantial funds. Although unsure of Li Tang's purpose, one thing was certain: every mining right Li Tang held was invaluable.
"I have other engagements today," Li Tang replied with an apologetic smile.
After leaving Huajin Group headquarters, Li Tang returned to Cloud Peak Tower.
Originally planning to meet Chen Jinghe from Zise Mining first, Li Tang learned Chen Jinghe was in Jian'an Province. Even immediately taking a flight, Chen Jinghe would take hours to arrive.
"Our chairman immediately stopped breakfast and caught the earliest flight after hearing you'd meet him!" Secretary Wang emphasized Chen Jinghe's respect toward Li Tang.
Chen Jinghe arrived at Cloud Peak Tower by afternoon, illustrating his sincerity and esteem for Li Tang. Such urgency from a chairman of a leading listed company was extraordinary.
"Wang, Li Tang rarely returns home due to his busy international commitments. Every meeting with him is precious," Chen instructed his secretary. "Li Tang is an industry leader internationally, excelling in exploration techniques and investment skills. Take this chance to learn from him how to guide a company to global leadership!"
"Please guide me, President Li," Wang respectfully bowed.
"Too polite," Li Tang waved before addressing Chen Jinghe with humility. "Chairman Chen's remarkable achievements with Zise Mining provide valuable lessons for a young person like me."
"How could I guide you?" Chen smiled warmly and promptly asked, "I heard you're planning to sell Gongcun Copper-Gold Mine's mining rights?"
"Yes," Li Tang nodded. "Just discussed it with President Cheng."
"Planning to sell your entire 75% stake?" Chen queried.
"Yes, urgently needing funds," Li Tang confirmed.
"Starting a new project?" Chen asked.
"Indeed, a special large-scale project," Li Tang revealed truthfully. "I plan to invest in Galuminium Group."
"Entering aluminum?" Chen pondered deeply, puzzled by Li Tang's shift.
Li Tang didn't continue discussing that matter and instead steered the conversation back on track. "Zise Mining is still interested in Gongcun Copper-Gold Mine's mining rights, right?"
"We certainly are," Chen Jinghe replied without hesitation.
Chen didn't even inquire about Li Tang's negotiations with Cheng Muye. He straightforwardly said, "Name your price, and let's finalize this quickly."
"Me? Name my price?" Li Tang was momentarily stunned.
He hadn't anticipated Chen Jinghe's straightforwardness. He expected a prolonged negotiation, similar to his discussion with Cheng Muye.
"Give me a number, and I'll accept whatever you say!" Chen Jinghe's dark, sun-weathered face broke into an honest smile reminiscent of an old farmer.
Chen Jinghe was originally a geological technician. His technical skills were impeccable, and his reputation was solid enough to potentially earn him a place in the Engineering Academy. Yet, he was also exceptionally skilled in business, having grown Zise Mining from scratch into the nation's largest copper mining enterprise, even gaining international renown. Clearly, he was a master at managing enterprises.
By letting Li Tang set the price, Chen Jinghe demonstrated his understanding of Li Tang's personality and business style.
"Well… Chairman Chen is truly generous," Li Tang remarked.
Earlier, during his conversation with Cheng Muye, Li Tang had casually mentioned a valuation of 1.5 billion yuan without any pressure, but he was prepared to accept a lower figure if necessary. Now, Chen Jinghe was requesting an immediate and decisive price, forcing Li Tang to seriously consider a number that would close the deal right away.
"Whatever price you name, Zise Mining will accept!" Chen Jinghe repeated his stance again, utterly deviating from typical negotiation strategies.
Was he really unafraid of Li Tang calling out a ridiculously high figure?
Li Tang pondered deeply. It was difficult to set an excessively high price, but setting it too low might be disrespectful.
"Eight hundred million yuan," Li Tang cautiously chose a compromise figure.
Chen Jinghe appeared slightly taken aback, clearly having expected a lower price. Perhaps he had anticipated Li Tang would suggest something under 600 million yuan, especially since Shazhai Molybdenum Mine had been sold for just around that price.
However, after only a brief three-second hesitation, Chen Jinghe agreed readily. "Alright," he nodded with an honest smile. "You must urgently need cash?"
"Yes, ideally, I'd like all the funds within this year," Li Tang admitted openly. Indeed, he had one additional condition: payment should be made in full within three months. Combining this with the final 200 million yuan from selling his shares in Shazhai Molybdenum Company, he'd have at least one billion yuan in available capital.
"Our cash flow might not be sufficient right now, but I'll arrange the funding quickly," Chen Jinghe didn't bargain and directly accepted Li Tang's terms. "How about within two months?"
"No problem," Li Tang agreed, though he added gently, "But the sooner, the better."
"You're the second-largest shareholder in Gongcun Gold Company, right?" Chen Jinghe turned to Xiao Yongyue, who had been silent and thoughtful next to Li Tang.
Xiao Yongyue was clearly burdened by his thoughts. Apart from the potash fertilizer business in Gaolumu city, he had no room for business expansion. Gaolumu was a small place, limiting any ambitions. With the copper and gold markets booming, he'd long considered investing in the Gongcun Copper-Gold Mine. He originally planned to propose collaborating with Li Tang to develop the mine, assuming Li Tang, occupied by more significant ventures, wouldn't manage a small mine himself, thus making Xiao the ideal partner.
Now, with Li Tang selling the mining rights, Xiao had no choice but to accept the situation passively, seeing his dreams evaporate before him.
Hearing Chen Jinghe address him directly, Xiao raised his head, slightly disoriented. "What was that, Chairman Chen?"
"You hold 25% shares of Gongcun Gold Company. Any interest in selling those shares to us?" Chen asked bluntly.
"No," Xiao shook his head immediately.
"Based on Li Tang's pricing, your shares could fetch around 300 million yuan," Chen Jinghe reminded with a smile.
"I want to participate in the mine's investment and construction!" Xiao declared resolutely. "Chairman Chen, I'm very familiar with the northwest region—Tugu and Tubo Provinces. I could greatly assist when developing the mine."
Xiao had thought clearly about this—if collaboration was unavoidable, cooperating with a state-owned giant like Zise Mining, which simplified mining rights applications and facilitated bank loans and official approvals, was undoubtedly the best choice.
"Alright," Chen Jinghe shook Xiao's hand enthusiastically. "Let's discuss the development of Gongcun Copper-Gold Mine in detail later."
"Absolutely!" Xiao eagerly agreed, thrilled by the opportunity. Copper and gold markets were incredibly profitable right now—simply put, a chance to make big money.
"Congratulations to you both!" Li Tang hadn't expected Chen Jinghe and Xiao Yongyue to collaborate again by chance.
Their destinies indeed seemed intertwined, not due to Gongcun Copper-Gold Mine but rather Qulong Copper Mine.
Historically, after obtaining rights to Qulong Copper Mine, Xiao had invested 15 billion yuan into its development. Had it gone smoothly, he might have become the nation's richest private entrepreneur in mining history. Unfortunately, strict environmental assessments blocked the project indefinitely. With no other option, Xiao had sold most of Qulong Copper Mine's shares to Chen Jinghe's Zise Mining for over three billion yuan, retaining only a minor stake.
Once Zise Mining entered, all previous obstacles were swiftly cleared, making the mine's operational status just a matter of time. This difference in treatment between state-owned enterprises and private companies in China's mining sector was precisely why Li Tang avoided extensive domestic mining investments.
"There's another matter," Li Tang interrupted their thoughts, turning to Chen Jinghe again. "Chairman Chen, do you know about Tropicana Gold Mine?"
"Certainly!" Chen Jinghe's eyes immediately brightened. "It's this year's largest high-grade gold discovery, right? Two hundred tons of reserves with a grade exceeding ten grams per ton?"
"Yes," Li Tang nodded, getting straight to the point. "I own 36% of this mine. Previously, Mark, the former CEO of Barrick Gold, offered me 200 million Australian dollars for my stake. At the time, gold prices weren't as high as now. Obviously, the value has since increased substantially."
"You're planning to sell this gold mine too?" Chen Jinghe asked excitedly.
Zise Mining had ambitions to expand internationally, as domestic growth was no longer sufficient for their ambitions. Thanks to strategic domestic acquisitions in previous years, Zise Mining was poised to become China's top copper company. Their next step was conquering global copper and gold markets.
Participating in Tropicana Gold Mine's acquisition and development would significantly bolster their international experience, especially considering the mine's exceptional quality. Even global mining giant Barrick Gold was interested, further validating its immense value.
"Yes, again for fund-raising purposes," Li Tang explained clearly. "However, as it's in Australia, costs there are considerably higher than domestically. Australian dollars and U.S. dollars don't hold the same weight abroad."
"Give me a price and let's see if we can handle it," Chen Jinghe said expectantly.
"The Tropicana shares are highly sought after, especially by Barrick Gold, who already holds 15%. If they acquire my 36%, they'd gain controlling interest, significantly diluting other management shareholders. Barrick is desperate for control, and they'd pay handsomely. Three hundred million Australian dollars is guaranteed, possibly even higher," Li Tang confidently asserted.
"Three hundred million Australian dollars…" Chen Jinghe hesitated, realizing this was nearly double what he'd just committed to Gongcun Copper-Gold Mine. Although tempted by the mine's quality, he understood Li Tang's urgent need for immediate payment. Raising over 2 billion yuan quickly was challenging.
"Would you also require a one-time payment in full?" Chen Jinghe clarified.
"Yes, as soon as possible," Li Tang confirmed.
"If only you held controlling shares. With only 36%, we'd have limited influence over operational decisions at Langbul Resources," Chen Jinghe expressed his concern candidly. Zise Mining's international strategy emphasized controlling interests to manage their investments fully. Entrusting such large sums to another's management was unsettling.
"I understand completely," Li Tang acknowledged Chen's perspective without pressure.
Chen Jinghe proposed completing Gongcun Copper-Gold Mine's transaction first and promised to consult Zise Mining's board regarding Tropicana Gold Mine, offering Li Tang a quick response thereafter.
Upon returning to Jian'an Province, Chen Jinghe swiftly finalized Gongcun Copper-Gold Mine's purchase. Regarding Tropicana, he regretfully informed Li Tang that raising sufficient funds in such a short period proved impossible, forcing Zise Mining to reluctantly withdraw.
Meanwhile, Cheng Muye, having missed Gongcun Copper-Gold Mine, showed significant interest in Tropicana. However, following extensive site inspections and board discussions, Huajin Group could agree to Li Tang's 300 million AUD asking price but could only deliver funds within six months to one year, given the complex state-owned enterprise approval processes.
Li Tang politely declined, realizing a six-to-twelve-month delay would render his plans for Galuminium Group meaningless.
Concluding Barrick Gold was indeed the ideal partner to rapidly liquidate Tropicana Gold Mine and obtain substantial foreign currency, Li Tang orchestrated strategic media leaks through Gao Jingjing about ongoing negotiations with Chinese gold giants to generate urgency.
As expected, Barrick's Mark quickly heard the news and immediately called Li Tang personally, expressing his frustration outright:
"Li, you haven't been sincere enough with me!"
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