Yuguang Gold & Lead boosts hedging program margin limit to 900m yuan

Henan Yuguang Gold & Lead Group will expand its commodity futures and derivatives trading for hedging purposes, increasing the margin limit from 600 million yuan to 900 million yuan for 2025. This decision, approved by the board of directors on September 29, 2025, aims to bolster the company's ability to manage price fluctuations in raw materials and proprietary products, with the maximum contract value held on any given trading day not exceeding 7 billion yuan. The proposal is pending shareholder approval at the Fifth Interim Shareholders' Meeting in 2025, scheduled for October 16, 2025.

The company will engage in various commodity futures and options, including gold, silver, lead, copper, zinc, aluminum, and tin on the Shanghai Gold Exchange, Shanghai Futures Exchange, London Metal Exchange, and through OTC transactions. The trading period is from January 1, 2025, to December 31, 2025. Yuguang Gold & Lead plans to use its own funds for these hedging activities, adhering to stringent risk control measures and accounting standards, including the adoption of hedge accounting.

A feasibility analysis highlighted the necessity of increasing the margin limit due to elevated futures trading margin ratios and historically high product prices, which have amplified operational risks. The expanded program is designed to mitigate market, liquidity, policy, and operational risks through a robust internal control framework, regular monitoring, and staff training.