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Hong Kong, Dec 15, 2009 AEST (ABN Newswire) - One of the PRC's leading gold production enterprises, Zhaojin Mining Industry Company Limited ("Zhaojin Mining" or the "Company", (HKG:1818) (PINK:ZHAOF) together with its subsidiaries, the "Group") is pleased to announce that on 14 December 2009, is glad to announce that in the morning of 14 December 2009, the Company received a confirmation letter from Shandong Property Right Exchange Center and Zhaoyuan State-owned Assets Supervision and Administration Bureau, confirming that the Company has obtained the transferee qualification for the 100% state-owned property rights of Canzhuang Gold Mine at the consideration of RMB426,610,000. Upon the completion of the transfer, the gold metal reserve of the Company will be increased by more than 20,000 kilograms together with 4 additional mining rights covering an area of approximately 3.17 square kilometers and 12 additional exploration rights covering an area of approximately 71.92 square kilometers.

Canzhuang Gold Mine is located at Canzhuang town of Zhaoyuan City and is one of the 100 largest non-ferrous metal mining enterprises in the PRC. Its business scope includes gold resources mining, gold ore processing products, and quartz mining. According to the public information from Shandong Property Right Exchange Center as at 30 June 2009, the gold metal reserve of Canzhuang Gold Mine was 16,11 5 kilograms, the ore reserve was 3,386,287 tonnes. From the appraisal date up to now, Canzhuang Gold Mine has explored gold metal reserve of more than 4,000 kilograms. Together with the original gold metal reserve of 16,115 kilograms, Canzhuang Gold Mine will have an aggregate of more than 20,000 kilograms of gold metal reserve, with a high average grade of over 4.8 grams/tonne which doubled the grade of the current mines of the Company. Canzhuang Gold Mine currently has 4 mining rights including Shangzhuang, Caogoutou, Huangbuling and Qilishan, 12 exploration rights including the depth and periphery of Shangzhuang and Huangbuling. It also has 2 processing plants with a daily processing capacity of 500 tonnes each and 1 processing plant with a daily processing capacity of 400 tonnes. Gold production volume of Canzhuang Gold Mine in 2008 amounted to 605 kilograms (output of self-owned mines was 563 kilograms), and gold production volume amounted to 326 kilograms (output of self-owned mines was 320 kilograms) during the period from January 2009 to June 2009.

Commenting on the acquisition, Mr. Lu Dongshang, Chairman of Zhaojin Mining Industry Company Limited said, "Merger and acquisition is one of the most important strategies for Zhaojin Mining. The Company persists in exploring new mines inside and outside Zhaoyuan district. This acquisition is definitely an important step for the Company to consolidate resources in Zhaoyuan district. Canzhuang Gold Mine is a developed mine located at Zhaoyuan City. The successful acquisition will not only further enrich the resources and enhance the grade of ores of the Group, but also effectively consolidate resources in Zhaoyuan district. The acquisition will increase the gold metal reserves of the Group by more than 20,000 kilograms together with 4 additional mining rights covering an area of approximately 3.17 square kilometers and 12 additional exploration rights covering an area of approximately 71.92 square kilometers. Furthermore, the acquisition will effectively increase the self-supply rate of the tolling treatment business, as well as the overall gross profit margin of the Company. As Canzhuang Gold Mine is adjacent to the major mines of the Company in Zhaoyuan district, the acquisition will also create synergy effect for the Company. Looking forward, the Group will continue adhering to pure gold strategic positioning and simultaneous resource consolidation inside and outside Zhaoyuan district. The Group will continue to strengthen its infrastructure construction, R&D and technology reform, enhance the profitability and competitiveness of the Group, striving to bring the best returns to shareholders."

Issued by Porda International (Finance) PR Group for and on behalf of Zhaojin Mining Industry Company Limited.

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.

 


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