Kingold Jewelry Signs Agreement with Shanghai Laofengxiang to Process Gold Jewelry Products Company Expects to Process at Least 5 tons (Approximately 176,370 Ounces)
WUHAN CITY, China, Oct. 23, 2012 /PRNewswire/ -- Kingold Jewelry, Inc. (NASDAQ: KGJI), one of China's leading manufacturers and designers of high quality 24-karat gold jewelry, ornaments and investment-oriented products, today announced that it has entered into a major gold-processing agreement with Shanghai Laofengxiang Jewelry Research Institute Co., Ltd. ("Shanghai Laofengxiang"), a subsidiary of Shanghai Laofengxiang Co., Ltd -- the leading gold jewelry retailer in China listed on the Shanghai Stock Exchange.
Pursuant to the agreement, Kingold will process a variety of 24-karat gold jewelry products (rings, necklaces, bracelets) for Shanghai Laofengxiang beginning immediately until December 31, 2013. Kingold will process at least 5 tons, or approximately 176,370 ounces, of jewelry products until the expiration date of the agreement. In contrast, Kingold processed around 2 tons of gold jewelry for Shanghai Laofengxiang in 2011. Based on the processing fee of RMB 10.6 yuan per 1 gram of 24-karat gold, this would equate to approximately RMB 53 million or US $8.4 million of processing fees in the next five quarters.
Shanghai Laofengxiang Co., Ltd. is a leading jewelry research, production, trade and retail company, which has been based in Mainland China since 1848. Shanghai Laofengxiang is one of the "Time-Honored Brands" and "Famous TradeMarks of China", and its products have been distributed in its 700 plus chain-stores and 2000 sales network across China, with 98% market coverage and Shanghai Laofengxiang's brand equity is approximately to RMB 7.6 billion.
Mr. Zhi Hong Jia, Chairman and Chief Executive Officer of Kingold Jewelry, stated, "Kingold has been supplying jewelry products to Shanghai Laofengxiang for many years, and as a result of our expanded service capabilities and execution they continue to increase their order flow with our Company. We are very confident that our quality, timeliness, and reputation within the industry are the keys for us in keeping long-term customers. We typically can receive an order, process and design the piece, and deliver within approximately 24 hours, and believe this consistent level of service will attract new clients to take advantage of our gold processing services. We look forward to expanding our growing client base with other large distributors in the coming months, both in China and internationally."
About Kingold Jewelry, Inc.:
Kingold Jewelry, Inc., 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. 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.
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SOURCE Kingold Jewelry, Inc.