Kingold Jewelry Secures $28.3 Million Of Gold Under Gold Leasing Framework
Agreement With Shanghai Pudong Development Bank
Further Solidifying Gold Leasing Business and Accelerating Production
WUHAN CITY, China, March 5, 2013
WUHAN CITY, China, March 5, 2013 /PRNewswire/ -- Kingold Jewelry, Inc.
(NASDAQ: KGJI), ("Kingold" or the "Company"), one of China's leading
manufacturers and designers of high quality 24-karat gold jewelry, ornaments
and investment-oriented products, today announced that it signed a Gold
Leasing Framework Agreement ("Agreement") with the Wuhan branch of Shanghai
Pudong Development Bank Ltd. ("SPD Bank"). SPD Bank is a publicly-traded
(Shanghai Stock Exchange) commercial bank founded in 1992.
The new Agreement establishes the basic framework for Kingold to lease gold
from SPD Bank under a total credit line of RMB 200 million (approximately
US$32.1), with actual gold leases under the Agreement made pursuant to
separate lease agreements that specify the weight of gold leased, the
settlement price (yuan/gram), the lease term and the lease rate.
SPD Bank began leasing gold to Kingold under the Agreement in February, and
Kingold has entered into two lease agreements under the Agreement for an
aggregate 530 kilograms of gold having a market price of approximately RMB176
million (approximately US$28.3 million). These two lease agreements have an
initial term of approximately 12 months each, and provide for a lease rate of
6% p.a. Payments on these two gold leases will be due quarterly beginning in
March 2013 and are based on the 6% p.a. lease rate, the actual weight of gold
leased (in grams), the gold settlement price (yuan/gram), and the actual
number of days the gold was leased.
Kingold anticipates utilizing this access to additional gold reserves to
further expand market share in its 24k gold jewelry and investment gold
business and to further solidify its leading role in the gold-processing
industry. The Company has seen increasing demand from existing and new
clients, and encountered challenges to increase its working capital
capabilities to meet this demand. The new Agreement with SPD Bank will
provide additional financial strength as it expands production, and the
Company is currently working with SPD Bank on further cooperation in the
Mr. Zhihong Jia, Chairman and CEO of Kingold Jewelry, Inc. stated, "We are
very pleased to have secured access to additional gold to further develop our
gold jewelry and investment gold business, and are currently seeking similar
agreements with financial institutions in China. This framework arrangement
with SPD Bank, which builds upon our earlier gold leasing agreement with China
Construction Bank in January 2013, have in total provided Kingold with $69.1
million in new sources of gold to date to help accelerate our growth and
achieve a greater balance in free cash flow. We are confident that we will be
able to greatly enhance the processing capability in our 24K jewelry
manufacturing and investment gold processing businesses. We will continuously
seek innovative financing options with China's leading banking partners to
expand our business, further improve our market leading position, and create
value for our shareholders."
About Kingold Jewelry, Inc.
Kingold Jewelry, Inc. (NASDAQ: KGJI), centrally located in Wuhan City, China's
fourth largest city, was founded in 2002 and today is one of China's leading
designers and manufacturers of 24-karat gold jewelry, ornaments and
investment-oriented products. The Company sells both directly to retailers as
well as through major distributors across China. Kingold has received numerous
industry awards and has been a member of the Shanghai Gold Exchange since
2003. For more information, please visit www.kingoldjewelry.com.
Business Risks and Forward-Looking Statements
This press release contains forward-looking statements that are subject to the
safe harbors created under the Securities Act of 1933 and the Securities
Exchange Act of 1934. These include statements regarding the development and
expansion of Kingold's market share in its 24k gold jewelry and investment
gold business, solidifying its leading role in the gold-processing industry,
development of its gold jewelry and investment gold business, acceleration of
its growth and production, Kingold's ability to achieve greater balance in
free cash flow and its ability to enhance the processing capability in its 24k
jewelry manufacturing and investment gold processing businesses. Readers are
cautioned that actual results could differ materially from those expressed in
any forward-looking statements. In addition, please refer to the risk factors
contained in Kingold's SEC filings available at www.sec.gov, including
Kingold's most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. Readers are cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date on which they are made. Kingold
undertakes no obligation to update or revise any forward-looking statements
for any reason.
Kingold Jewelry, Inc.
Bin Liu, CFO
Phone: +1-847-660-3498 (US) / +86-27-6569-4977 (China)
The Equity Group Inc. Katherine Yao, Associate
Adam Prior, Vice President +86 10-6587-6435
(212) 836-9606 email@example.com
SOURCE Kingold Jewelry, Inc.
Press spacebar to pause and continue. Press esc to stop.