Hong Kong, Mar 9, 2009 AEST (ABN Newswire) - One of the PRC's leading gold production enterprises, Zhaojin Mining Industry Company Limited (HKG:1818)(PINK:ZHAOF) today announced its annual results for the year ended 31 December 2008 (the "year under review").

The Group recorded a remarkable result during the year under review with revenue amounted to RMB2,152,731,000 for the year ended 31 December 2008, representing an increase of 42.35% as compared to the corresponding period of last year. Gross profit of the Group increased by 43.07% to RMB1,079,917,000. Profit for the year and profit attributable to equity holders amounted to RMB538,122,000 and RMB533,905,000 respectively, representing an increase of approximately 37.45% and 39.6% respectively as compared to the corresponding period of last year.

Gross margin and Net margin was 50.16% and 25.00%, with an increase of 0.25 and 0.14 percentage points respectively. In addition, basic earnings per share amounted to RMB0.37. The Board of Directors recommended a high cash dividend payout ratio of 53.94% for the year ended 31 December 2008 with payment of a cash dividend of approximately RMB 0.166 (excluding taxation) per share to reward for the continuous support of its shareholders.
Financial Highlights (For the year ended 31 December)
                        2008         2007     Change
                    (RMB'000)   (RMB'000)   
Revenue             2,152,731   1,512,273    +42.35%
Gross profit        1,079,917     754,821    +43.07%
Gross margin           50.16%      49.91%    +0.25 pt
Profit for the year   538,122     375,923    +43.15%
Net margin             25.00%      24.86%    +0.14 pt
Profit attributable 
to equity holders     533,905     388,447    +37.45%
Basic earnings 
per share (RMB)          0.37        0.27    +37.04%
Commenting on the annual results of the year under review, Mr. Lu Dongshang, Chairman of Zhaojin Mining Industry Company Limited said, "Under the prevailing financial turmoil initiated by the subprime mortgage crisis of the States, the mining industry has entered recession with significant decline in the price of the major commodities. In spite of these circumstances, we have achieved a remarkable result in 2008. Thanks to significant increase in gold input and sales volume, the average sale price of gold of the Group was RMB193.20/gram (approximately USD 879.23/oz) (value-added tax included), representing an increase of 12.45% as compared to the corresponding period of last year.

The gold's function for store of value was clearly demonstrated under the highly volatile environment of the global financial market. In line with the trend of the gold price, the Group strived to increase its output and implied excellent cost control policy in order to achieve satisfactory results.

In 2008, the Group adhered to its pure gold production strategies and sustained its position as a leading gold producer in the PRC. The Group's total output of gold for the year under review amounted to approximately 17,619 kg (approximately 566,432 ozs), of which 9,825 kg (approximately 315,881 ozs) of gold was from the Group's mines and approximately 7,794 kg (approximately 250,583 ozs) of gold was from smelting and processing of gold.

During the year under review, capitalizing on the competitive advantages of its capital, management and technology, the Group engaged in active yet prudent outward expansion and implied stringent investment risk controls. There were 19 subsidiaries of the Group outside Zhaoyuan district, covering the major gold production regions nationwide.

The total investment committed for the year amounted to RMB779,915,000 with 7 framework agreements concluded. Additional exploration area acquired amounted to 553.84 km2 and additional mining area acquired with exploration rights amounted to 10.43 km2, while the gold resources of approximately 31 tons (approximately 996,673 ozs) and gold mine production capacity of approximately 937.5 kg/year (approximately 30,141.32 ozs/year). As at 31 December 2008, the Group owned 58 exploration rights in total, covering an aggregate exploration area of approximately 1,381.73 km2 and 21 mining rights, covering an aggregate mining area of approximately 52.46 km2.

In accordance with the standards issued by the Joint Ore Reserves Committee ("JORC") in Australia, the total gold resources of the Group amounted to 253.06 tons (approximately 8,136,066 ozs) and the gold reserves amounted to 165.29 tons (approximately 5,314,196 ozs), representing an increase of 20.2% and 9.9% respectively, as compared to the previous year.

The Group has accelerated the pace of infrastructure and technology reform in 2008. In particular, the Dayingezhuang Gold Mine and Xiadian Gold Mine completed the expansion projects ahead of schedule. Moreover, the Group has implemented numerous technology innovation projects as well as effective cost control and technology management measures in order to maintain its competitive advantages of low cost production among underground mines in the PRC.

Forging ahead, Mr. Lu concluded, "Year 2009 will be a year for the Group to achieve sound and rapid development and we will adhere to our development strategy of "the benevolent can gather strengths from others". In light of our favorable location, abundant resources, advanced technology and management innovation, we will engage in active and prudent expansion, enhance the management of the enterprises located outside Zhaoyuan and emphasize on production reform and upgrading projects.

Zhaojin Mining will continue to adhere to our pure gold production strategies and strive to increase our gold resources and output. We will also engage in domestic and worldwide resources integration and exploration actively and endeavor to continuous growth in profit with the aim of being the leading gold production enterprise both nationwide and worldwide and reward our shareholders and society with excellent results.

About Zhaojin Mining Industry Company Limited

Zhaojin Mining Industry Company Limited is a leading gold production enterprise in the PRC. The Group is located in Zhaoyuan City in Shandong Province - the 'Gold City' of China, holding 10% of the country's total gold reserves and having the longest history of gold mining in the PRC. The Group is principally engaged in the exploration, mining, ore processing, smelting and sale of gold products, and is the largest gold smelting enterprise in the PRC. The principal products of the Group include standard Au9999 and Au9995 gold bullion. Zhaojin Mining operates five mines in Zhaoyuan City and owns a 75% equity interest in another operating mine. The Group also owns various gold mines throughout the Northern, Northwestern, and Southwestern parts of China. With its abundant gold resources, advanced technology and seasoned management, the Group has attained to a leading position in the industry.



Issued by Porda International (Finance) PR Group for and on behalf of Zhaojin Mining Industry Company Limited. For further information, please contact:

Porda International (Finance) PR Company Limited

Ms. Keely Chan
Tel: +852-3150-6760
Email: keely.chan@ pordafinance.com.hk

Ms. Kylie Yeung
Tel: +852-3150-6770
Email: kylie.yeung@pordafinance.com.hk

Ms. Susanna Ho
Tel: +852-3150-6755
Email: susanna.ho@pordafinance.com.hk

Ms. Ada Leung
Tel: +852-3150-6732
Email: ada.leung@pordafinance.com.hk

Fax: +852-3150-6728

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