Change the entire leadership team in one day

Lao Cai Gold Corporation (GLC) has just announced the resignation of a series of senior leaders, from the chairman of the board of directors (BOD) to members and legal representatives, and appointed new leaders.

In early December, Mr. Nguyen Tien Duc - Chairman of the Board of Directors of Lao Cai Gold JSC - resigned for personal reasons. Mr. Nguyen Tien Hai - member of the Board of Directors - resigned due to a change of residence. Ms. Hoang Thi Que resigned from her position as member of the Board of Directors, director and legal representative of Lao Cai Gold, citing "change of residence and career orientation".

On December 2, the Board of Directors of Lao Cai Gold JSC elected Mr. Tran Quang Dang (born in 1955) as a member of the Board of Directors and Chairman of the Board of Directors. Ms. Nguyen Thi Huyen (born in 1981) was appointed as a member of the Board of Directors and the new legal representative of the company. Ms. Pham Thi Thu Nguyet was also appointed as a member of the Board of Directors.

GLC 2024Decdanhlanhdao.gif
Lao Cai Gold changes the entire leadership team.

According to the 2023 annual report, in addition to being a member of the Board of Directors and the new legal representative of Lao Cai Gold Company, Ms. Huyen is also the assistant general director of Ba Dinh Construction Investment Consulting JSC.

Previously, Mr. Nguyen Tien Duc (born in 1992) was also known as the Chairman of the Board of Directors of Mineral Development Joint Stock Company 4. Mr. Duc held the position of Chairman of GLC from June 2022 to December 2, 2024.

The change in senior personnel of Vang Lao Cai took place in the context of 3 consecutive years, from 2020 to 2023, GLC continuously records zero revenue.

In 2022 and 2023, GLC did not generate revenue, with losses of more than VND 9 billion and VND 13.9 billion, respectively. In 2023 alone, although there was no revenue, the cost of goods sold was nearly VND 9.9 billion, financial expenses were more than VND 1.7 billion, and business management expenses were nearly VND 2.3 billion.

Lao Cai Gold is the only gold mining company on the stock exchange. This enterprise mines, selects and refines gold from the Minh Luong mine (Van Ban district, Lao Cai). GLC is licensed to mine gold concentrate, the entire amount mined is sold to TKV Minerals Corporation to produce gold for consumption.

However, in recent years, GLC has had no revenue.

According to the company's explanation, the reason for zero revenue is because the gold mining license expired in April 2019, so the company has temporarily stopped mining.

By the end of 2023, GLC was still in the process of applying for a mining license but had not yet been approved. Short-term debt exceeded short-term assets by more than VND22 billion, with accumulated losses of more than VND113 billion. According to Asco Auditing Company, there is a material uncertainty that raises significant doubts about the company's ability to continue as a going concern.

GoldOre adobe.gif
GLC mines gold in Minh Luong commune, Van Ban district, Lao Cai province. Illustration photo: Adobe

New factor appears?

The ownership structure at Lao Cai Gold has changed continuously in the past and may continue to fluctuate in 2024 after the extraordinary shareholders' meeting in October.

GLC was established in September 2007 in Minh Luong commune, Van Ban district, Lao Cai province, with initial charter capital of 45 billion VND. The company has 5 shareholders: Vinacomin Mineral Corporation (now TKV Mineral Corporation - JSC) with 33%, Mineral State Company Limited 3 (now Vimico Mineral Joint Stock Company 3) 27%, Lao Cai Mineral Company (15%); Thai Nguyen Company Limited (15%) and Dong Bac Company (10%).

At the end of 2018, TKV held 46.14%, Minerals JSC 3 - Vimico 21.71%; Mr. Uong Huy Giang 8.65%; Minerals LLC - Bitexco 6.43% and Indochina Minerals JSC 6.33%.

By January 2019, after GLC was listed, TKV divested all capital.

At that time, most of the company's old staff resigned, so the new investor had to reorganize the apparatus. Recently, GLC focused its resources on continuing to complete legal procedures for applying for an extension of the investment certificate and mining license. This caused operating costs to continuously increase, while revenue from production and business activities was almost zero.

GLC 2023Dec codong.gif
GLC shareholder structure as of the end of 2023.

By the end of 2023, GLC will have a charter capital of VND 105 billion. Of which, Mr. Cao Truong Son holds 23.29%, Mr. Do Tuan Thinh holds 22.86%, Mr. Pham Anh Tuan holds 20.09% and Uong Huy Giang holds 22.91%.

Due to difficulties, GLC recorded increased accumulated losses, decreased assets, and negative equity.

The extraordinary shareholders' meeting in October approved the authorization for the Board of Directors to decide on the capital mobilization plan. Accordingly, the Board of Directors is authorized to approve capital mobilization transactions, select lenders, interest rates, loan terms and allocate mobilized capital for capital mobilization transactions with a value of over 35% of GLC's total assets and capital mobilization transactions with a value greater than 10% of the total asset value between GLC and shareholders owning 51% or more of the total number of voting shares or related persons of such shareholders.

In its report, GLC explained that the company has difficulty accessing loan sources. To meet the capital demand, the Board of Directors proposed that the General Meeting of Shareholders approve loan transactions or asset guarantees by members of the Board of Directors and Board of Directors for the company.

The extraordinary shareholders' meeting in October also approved transaction limits between GLC and related parties (including Mr. Nguyen Tien Duc with a maximum transaction value of VND80 billion and Ba Dinh Construction Investment Consulting JSC with a maximum of VND30 billion). These could be sales contracts, loan guarantee contracts; loan/lending contracts; asset lease/rental contracts; service contracts and other transactions as prescribed by law.

According to GLC's report, the geological reserves are 92,670 tons of ore, the exploitable reserves are 89,702 tons of gold ore, the permitted exploitation capacity is: 2016: 22,000 tons; 2017-2018: 28,000 tons; 2019: 11,702 tons. The exploitation license is valid until April 26, 2019.

GLC is located in an area that is considered to have great potential for gold resources in the Northwest region of Vietnam. According to the development orientation, GLC will likely be expanded its mining rights in two directions: 100m deeper than the current one and expanding the mining area by more than 120 hectares.

The risk of GLC is that the geological situation is quite volatile. The ore bodies at Minh Luong mine are thin, have small reserves and are scattered in 4 hilly areas 1-5km apart. The part of the resources within the licensed depth limit (cos +505 or more) is almost exhausted. The opening of new ore bodies is difficult and slow, so the mining output has not reached the design capacity, only about 40%.

New investors face difficulties in cracking down on gold thieves and have to stop all mineral exploitation in the Minh Luong gold mine area because most legal documents need to be extended.

Gold price forecast for 2025 is less bright after a rare sharp decline . World gold prices have fallen sharply recently. The outlook for gold in 2025 has changed quite quickly, the forecast is increasingly less bright due to strong signals from US President-elect Donald Trump as well as the shift of money flows.