KUALA LUMPUR (Sept 30): Property developer Encorp Bhd is diversifying into silica mining, which it sees as having a “huge future potential”.

The group, via wholly-owned subsidiary Encorp Construction & Engineering Sdn Bhd, has entered into a deal with LMC Mining Sdn Bhd to undertake the distribution of silica on a 97.7-acre land in Kinta, Perak and a 100-acre land in Kuantan, Pahang.

LMC has the rights to mine the silica at the two contract areas and Encorp is granted the rights to distribute all silica produced from the contract areas worth over RM50 million, the group said in a statement.

“The mining operation is expected to commence in the first quarter of 2023. Both locations shall operate for a period of 24 months and the mining rehabilitation work will be implemented simultaneously within the operational period,” added Encorp.

Commenting on the deal, Encorp group chief executive officer Hazurin Harun said: “Encorp’s entry into the agreement serves as a platform for Encorp to venture into the mining industry, specifically silica mining.

“Encorp’s venture into mining is part of our efforts to diversify its income from its property development base and tap into an industry with a huge future potential.”

Lower revenue contribution from its property division resulted in Encorp’s net loss widening to RM7.19 million for the second quarter ended June 30, 2022, from RM2.06 million a year earlier. Revenue fell by 22.9% to RM27.06 million, from RM35.10 million.

Encorp’s shares were unchanged at 21 sen on Friday (Sept 30), valuing the group at RM66.5 million.