Prosperity Minerals’ (LON:PMHL) proposed acquisition of a stake in Malaysian iron ore company All Wealthy Capital (AWC) has been delayed until the end of July.

PIHL, Prosperity’s majority shareholder has told it that a circular to independent shareholders will be delayed until June as work on the competent person’s and independent valuation reports is still ongoing.

“This means that completion, if it were to occur, is likely to be in late July,” Prosperity said.

Prosperity originally announced a deal to buy a 5 per cent interest in AWC for US$25 million (approximately £15.8 million) in February.

AWC is 80 per cent owned by Elite Force, which in turn is 100 per cent owned by Prosperity’s chairman and chief executive David Wong. He is AWC’s sole director.

AWC also owns a 70 per cent interest in the exclusive mining rights at two Malaysian iron ore mines. It also owns a processing plant in Malaysia adjacent to the mines.

In March, Prosperity’s independent directors said they wanted to see a satisfactory competent person’s report, a satisfactory independent valuation report and a satisfactory fairness and reasonableness opinion from nomad Daniel Stewart before approving the deal.

Prosperity’s independent directors said they want to see a satisfactory competent person’s report, a satisfactory independent valuation report and a satisfactory fairness and reasonableness opinion from nomad Daniel Stewart before approving the deal.

The independent directors also said they need to be sure that the pro-forma net asset value of All Wealthy (AWC) is not materially less than US$500 million.

Prosperity Minerals’ parent company is Hong Kong-listed and the time needed to prepare a report for the HK authorities and hold an independent shareholders' meeting means completion is now likely to be in late May 2012, it said.

Prosperity originally announced it had agreed to buy a 5 per cent interest in AWC for US$25 million (approximately £15.8 million) in February.

AWC is 80 per cent owned by Elite Force, which in turn is 100 per cent owned by Prosperity’s chairman and chief executive David Wong. He is AWC’s sole director.

AWC owns a 70 per cent interest in the exclusive mining rights at two Malaysian iron ore mines.

It also owns a processing plant in Malaysia adjacent to the mines, which are currently under trial production with a future target production capacity of 3 million tonnes per annum.

The deal includes an option for Prosperity to buy 9.5 million tonnes of iron ore from AWC over a 10 year period at a discount to the prevailing market price.

The intention is to list AWC on the HK stock exchange within two years, but if this does not happen Prosperity can ask for its investment back.

The valuation of US$500 million placed was based largely on an investment of US$50 million for a 10 per cent stake in AWC by Nanjing Steel, one of the largest steel mill operators in China, Prosperity added.

Shares rose 4.5p to 79p.

Chinese iron ore trading and cement business Prosperity Minerals (LON:PMHL) boosted its first-half revenues by 17 per cent to US$507.8 million while producing a pre-tax profit of US$8.4 million (H1 2011: US$2.5 million loss), the firm said today.

Reporting its interim results for the six months to September 30, Prosperity said that while the firm increased the amount of iron ore shipped during the first half to 2.8 million tonnes, from 2.7 million tonnes in H1 2011, its revenue increase was also due to higher average selling prices. However, the operating profit per tonne came in lower at US$3.6 million (H1 2011: US$6.6 million) because, the firm said, margins continue to come under pressure due to the abandonment of the industry’s annual price fixing and greater direct trade between miners and steel mills.

Prosperity’s cement operations produced an attributable profit of US$8.7 million, compared to a loss of US$0.6 million in H1 2011. The firm said that its 33 per cent-owned Anhui Chaodong Cement business produced and sold more cement and clinker as demand in its region was strong and average selling prices higher. The 16.1 per cent-owned TCC Liaoyang business produced an operating profit of US$0.2 million, but it ended up contributing a loss of US$1.9 million (H1 2011: US$0.04 million) due to as loss on demand disposal of US$2.1 million caused by a share issuance in August.

Prosperity said that its real estate development projects business made a loss of US$3.5 million, compared to a US$0.6 million profit in H1 2011. 

“I remain confident that the company will continue to trade well in both iron ore and real estate despite challenging market conditions brought about by an unsettled iron ore market and Chinese government policy, together with continuing global economic uncertainties,” said David Wong, Prosperity’s chairman and chief executive officer.

Prosperity’s share price was down 1.8 per cent at 82 pence in early trading today.

Prosperity Minerals (LON:PMHL) today announced that its wholly-owned iron trading subsidiary has signed a new deal.

Prosperity Materials Macao Commercial Offshore Ltd (PMMC) has agreed to supply Jiangsu Prosperity Steel with up to 1.81 million tonnes of iron ore over a 14 month period.

This will be capped at 130,000 tonnes to the end of 2011, and 1.68 million tonnes in 2012. 

PMMC will also provide a range of administrative services, including the handling of shipping documents and liaising with payment banks.  

PMMC will receive a commission of US$2 per dry metric tonne of iron ore. 

It will also receive a handling charge of US$2 per dry tonne of iron ore, if the letter of credit in relation to shipment includes payment terms of 90 days.

The group has gone through a number of significant changes in the past few years after it sold off the majority of its cement businesses for $487 million in April 2010, and diversified its strategy to focus on iron ore trading and Chinese real estate.

This morning’s results, for the twelve months ended 31 March 2011, revealed a 17 percent rise in revenue from US$850 million to US$993.2 million. Pre-tax profit was up 369 percent to $192.1 million, while earnings (EBITDA) have risen 189 percent from US$68.3 million increase to US$197.4 million. 

Earnings per share also rose significantly from 15.2 to 139.7 cents a share, despite this Prosperity kept its 9 a share final dividend and proposed a separate special dividend, also worth 9 cents a share. Additionally it plans to get a share buy-back authority, for 10 percent of issued share, at the upcoming AGM.

"I am pleased with the Company's performance and direction and, I believe, we are strongly positioned and to grow the business and continue to increase shareholder value," said chief executive David Wong.

Prosperity highlighted that the scope of its iron trading business has been expanded during the reporting period, most notably through three new off-take agreements that will give the firm increased supplies of ore, at competitive prices in the medium term.

Furthermore it invested in Brazilian iron ore miner United Goalink Limited (UGL), by subscribing for 35 percent of the company.

Despite these new deals the total volume of shipped iron ore actually decrease in the financial year, with 6.3 million tonnes being shipped rather than 7.9 million tonnes. Prosperity said that this is because it has been more focused on agreeing sales through long-term contracts rather than selling into the ‘spot’ market.

The iron trading division contributed US$10.4 million of the group’s annual profit, US$100,000 more than last year.

"China is the World's largest importer and consumer of iron ore and volumes are expected to continue to increase in order to meet the country's high demand for steel products,” Wong added.

“Prosperity's success in securing increased and reliable supplies of iron ore at competitive prices will enable the Company to grow its iron ore trading business both in scale and profit in the medium and longer term.

During the year the group established its real estate business, after it entered into several agreements to develop recreational, commercial and residential projects. So far it has projects in Guangzhou City, Changzhou City and Hangzhou City.

Prosperity said that the SilverBay Plaza, in Guangzhou, had an occupancy rate of 97.2 percent at the end of the period. Meanwhile pre-sale activity is expected to get underway later this year for the Dongfang Wende Plaza, in the Guangdong Province, and the Changzhou project.

It expects building work for the Hangzhou project to start by mid-2012.

Speaking about the outlook for the real estate business Wong said: "In my view, real estate demand in China is strong and particularly so in the areas where Prosperity has chosen to invest. 

"The PRC Government's measures to reduce inflation, in general, and in the property market, specifically, have had and will continue to have an impact. However, I believe that there is robust and sustained demand for our projects and I look forward to satisfactory completions.”

Prosperity Minerals Holdings (LON:PMHL) could receive up to US$38 million after it set up an iron ore off-take deal between its associate Grace Wise Ltd and Chinese firm Nanjing Iron and Steel Group.

The AIM-listed group announced that Nanjing has agreed a deal to buy up to 19 million metric tonnes of iron ore over a ten year period – capped at 1 million tonnes for the first year and 2 million tonnes a year thereafter – from Grace Wise.

The iron will be produced in Malaysia by affiliates of Grace Wise, Prosperity said.

As the ‘exclusive introducing agent’ for Grace Wise Prosperity’s wholly-owned subsidiary Prosperity Materials Macao Commercial Offshore Ltd (PMMC) will be due a US2 a tonne commission on the iron ore shipped under the agreement.

“The Agreement will provide Prosperity with additional iron ore tonnage from Malaysia and a secure and reputable buyer in Nanjing Steel,” Prosperity chairman David Wong said.

“It is also in line with the company's strategy of sourcing from reliable suppliers at a competitive price and its low risk operating policy.”

Prosperity noted that the deal was conducted in the usual and ordinary course of PMMC’s business and it is similar to another long term off-take deal which was struck between Nanjing Steel and an independent third party. 

Importantly it pointed out that the deal allows PMMC to earn income from the sale of the Malaysian iron ore, without the risk associated with a long term supply of iron ore.

Grace Wise is considered to be an associated company to Prosperity Minerals. 

The AIM-listed firm’s chairman David Wong – who indirectly owns about 60 percent of Prosperity – has an indirect 58 percent stake in Grace Wise.

Prosperity Minerals (LON:PMHL), the iron ore trading company that has diversified into property development, said today that iron ore shipments fell as it concentrated on landing long-term contracts rather than selling on the spot market.

In the year ended March 31, the company shipped 6.3 million tonnes of iron ore compared with 7.9 million in the previous 12 months.

“Prosperity has been exploring opportunities to increase its access to reliable medium to long term supplies of iron ore at competitive prices,” the company said in a statement to investors.

The China-focused group has three major off-take agreements with Grace Wise, Blackrock Mining and Century Holdings, which means it can source ore from both Canada and Malaysia.

Prosperity revealed today there may be scope to increase its tonnage from Malaysia as Grace Wise has recently expanded its operations.

The company has also invested in an exploration and production opportunity in Brazil. It has done so by acquiring a 70 per cent stake in a company called Lead Hero Investments, which in turn has 50 per cent of a firm called United Goalink Limited.

UGL owns exploration rights and a mining concession in the Cera Province of the country.

The first 52,000 tonnes of iron ore was shipped in March and Prosperity expects output to increase in coming years.

Separately, construction of the first phase of its residential housing project in Changzhou City, China, has begun. It includes 50 low rise villas, which will be sold off-plan initially.

It has agreed to acquire a 55,589 square metre piece of land in Hangzhou City, the capital of Zhejiang province. It will own half the property via a joint venture.

The land has 111,200 square metres of developable gross area, and the height of the building must be no more than 50 metres - i.e. it will be a multi-storey building.

The plan is to develop the site into a commercial property, primarily office and retail space, which will subsequently be sold. Prosperity said that construction is expected to start in mid-2012 and pre-selling is expected to start in early 2013.

It will initially cost about £36.5 million (RMB 392 million) to buy the land, which will be paid in three phases starting on 6 April. The subsequent payments will be made in September 2011 and March 2012.

The total construction costs and investments are not yet finalised. Prosperity said the development plan is currently being formulated.

The JV company will apply for planning consents from the local government and it will submit construction details for review and approval. Prosperity said that this generally takes about 12 months.

Prosperity Minerals (LON:PMHL) revealed its trading business has signed an off-take deal with Blackrock Metals of Canada.

The agreement starting 2012 secures the supply of 800,000 tonnes of iron ore over a two and a half year period at a discount to the prevailing market price, with the option to increase the supply to 4 million metric tonnes over four years. 

If the option is exercised, it will trigger a US$40 million pre-payment which will be financed by a loan from the Industrial & Commercial Bank of China.

Chief executive David Wong said: "China is our sole, target market and the largest national consumer of iron ore. 

“It is also the world's fastest growing major economy and will continue to rely on imported iron ore as it develops infrastructure and extends urbanisation. 

“With our latest agreement, we will import additional volumes from a new, reliable source and will do so at a competitive cost. 

“I believe that this and other initiatives, combined with the existing first class marketing team, means that our iron ore trading division will continue to perform well in the coming years".

Blackrock's iron ore mining project is located in the Chibougamau area of Quebec, eastern Canada and covers 4,406 hectares and 256 mining claims. 

The company has a broad range of assets including an iron ore trading business, real estate development and a number of cement related interests.

It has been sitting on a substantial cash pile since it sold most of its cement business for around US$490 million – the final payment was received in August. Prosperity plans to invest in the Chinese iron ore and property assets to benefit from the countries ever expanding market place.

“The PRC continues to be the world's fastest growing major economy and in its new five year plan 2011-15, there will be a palpable shift of focus from exports to the expansion of domestic demand and the welfare of China's more than 1.3 billion inhabitants," chairman David Wong said.

“We believe this can only be good news for Prosperity's prime businesses."

This afternoon Prosperity released its interim results for the six months ended 30 September 2010. The headline results were enhanced by the massive gains made following the cement divestments.

As a result of the US$489 million disposal the company had a US$237 million gain, which boosted the rest of the figures.  The company made a net profit of US$234.5 million, around 10 times more than the comparative period of 2009. Earnings (EBITDA) reached US$237.9 million (H109: US$42.9 million).

"It has been another very busy and profitable six months for the group,” Wong added.

“We completed the sale of the majority of cement assets for some US$490 million, including debt, entered into an agreement to buy iron ore from Malaysia and diversified into the real estate sector with purchases in Guangzhou and the establishment of a new joint venture in Changzhou City, 

“Similarly, in the second half, we are looking at a number of equally exciting projects in both iron ore and property.”

In respect of current trading, Prosperity said that iron ore trading volumes have been recovering from the lower volumes that were shipped in the first half. 

Furthermore it expects more iron ore shipments from its partner Grace Wise in the second half.

It is also considering a new property investment in two high-end residential property developments.

The projects are located in Chongqing Direct Municipal City, in south-western China and in Hangzhou City in the Zhejiang Province of eastern China. 

“Management remains positive about the medium to long term prospects of the PRC real estate market and believes that the PRC government's measures aimed at cooling speculation will benefit the market over the same period,” the company said.