China Natural Resources Releases 2009 Annual Results of Operations

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May 26, 2010, 05:57 ET

HONG KONG, May 26 /PRNewswire-FirstCall/ -- CHINA NATURAL RESOURCES, INC. (Nasdaq: CHNR), a company based in the People's Republic of China, today released results of operations for the year ended December 31, 2009 (derived from the Company's audited financial statements) as follows.

CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009 (Amounts in thousands, except share and per share data)
	Year Ended December 31,
	2007		2008		2009		2009
	RMB		RMB		RMB		US$
NET SALES
Related parties		-		26,210		63,025		9,232
Others		125,963		74,707		44,725		6,551
		125,963		100,917		107,750		15,783
COST OF SALES
Related parties		-		(25,452)		(61,887)		(9,066)
Others		(39,855)		(34,953)		(33,749)		(4,943)
		(39,855)		(60,405)		(95,636)		(14,009)
GROSS PROFIT		86,108		40,512		12,114		1,774
ADMINISTRATIVE EXPENSES, including share-based compensation expense of RMB 38,998 (US$5,712) in 2007 and RMB26,016 (US$3,811) in 2008 and 2009		(52,499)		(48,407)		(66,587)		(9,754)

INCOME (LOSS) FROM OPERATIONS		33,609		(7,895)		(54,473)		(7,980)

OTHER INCOME (EXPENSE)
Interest income		4,520		2,158		2,654		389
Loss attributable to investment
in unconsolidated investees		(2,145)		(9,691)		(11,211)		(1,642)
Other		(512)		(2,993)		(247)		(36)
		1,863		(10,526)		(8,804)		(1,289)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		35,472		(18,421)		(63,277)		(9,269)

INCOME TAX EXPENSE		(12,016)		(6,294)		(2,438)		(357)
INCOME (LOSS) FROM CONTINUING OPERATIONS		23,456		(24,715)		(65,715)		(9,626)

DISCONTINUED OPERATIONS
Income (loss) from discontinued Mark Faith operations, net of tax		-		24,560		(10,937)		(1,602)
Gain on disposal of Mark Faith		-		78,877		123,133		18,036
INCOME FROM DISCONTINUED OPERATIONS		-		103,437		112,196		16,434

NET INCOME		23,456		78,722		46,481		6,808
NET INCOME (LOSS) ATTRIBUTABLE TO:
CHNR Shareholders		23,456		78,722		54,140		7,930
Non-controlling interests		-		-		(7,659)		(1,122)
		23,456		78,722		46,481		6,808
NET INCOME (LOSS) ATTRIBUTABLE TO CHNR SHAREHOLDERS:
Continuing operations		23,456		(24,715)		(62,431)		(9,145)
Discontinued operations		-		103,437		116,571		17,075
		23,456		78,722		54,140		7,930
NET INCOME (LOSS) PER SHARE:
Basic
Income (loss) from continuing operations		1.76		(1.28)		(2.97)		(0.44)
Income from discontinued operations		-		5.36		5.55		0.81
Net income per share		1.76		4.08		2.58		0.37

NET INCOME (LOSS) PER SHARE:
Diluted
Income (loss) from continuing operations		1.35		(1.11)		(2.86)		(0.42)
Income from discontinued operations		-		4.64		5.34		0.78
Net income per share		1.35		3.53		2.48		0.36

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
Basic		13,290,471		19,276,019		21,004,238		21,004,238
Diluted		17,347,024		22,278,600		21,817,907		21,817,907

The consolidated statements of operations for the years ended December 31, 2007, 2008 and 2009 have been prepared in accordance with generally accepted accounting principles in the United States, and are derived from, and should be read in conjunction with, the Company's consolidated financial statements for the years ended December 31, 2007, 2008 and 2009, as filed with the Securities and Exchange Commission on May 26, 2010 under cover of Form 20-F.

Mr. Li Feilie, the Company's Chairman, commented on the results: "China Natural Resources recorded total sales revenue of RMB107.75 million (US$15.78 million) in 2009, up by 6.8% from a year earlier. The Company achieved net income attributable to shareholders of RMB54.14 million (US$7.93 million) in 2009, down by 31.2%, of which RMB116.57 million (US$17.08 million) was derived from discontinued operations arising from the disposition of the remaining 60% equity interest in our copper smelting business. Most recently, we have completed the acquisition of five coal mines in Guizhou Province, the PRC. These five coal mines have a total annual production capacity of 450,000 MT and are expected to reach 1,500,000 MT once the second phase of construction is completed in 2011. In view of the continuing economic growth in the PRC, we believe that demand for coal will continue to be robust in the foreseeable future. We are positive about the prospects of the coal mining industry in the PRC and our continuing acquisition strategy in consolidating small to medium size coal mines in Guizhou Province."

For the convenience of the reader, amounts in Renminbi ("RMB") have been translated into United States dollars ("US$") at the rate of US$1.00=RMB6.8270 quoted by Bloomberg Finance L.P. on December 31, 2009. The RMB is not freely convertible into foreign currencies and no representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.

About China Natural Resources:

China Natural Resources, Inc., a British Virgin Islands corporation, through its operating subsidiaries in the People's Republic of China, is currently engaged in (a) the acquisition, exploration, construction, development and operation of coal mines in Guizhou Province, the PRC, and (b) the acquisition and exploitation of mining rights, including the exploration, mineral extraction, processing and sale of iron, zinc and other nonferrous metals extracted or produced at mines primarily located in Anhui Province in the PRC.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of federal securities laws. These forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People's Republic of China, risks and hazards associated with the Company's mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company's reliance on third-party contractors and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Although the Company's management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate.

SOURCE China Natural Resources, Inc.