CITY OF INDUSTRY, Calif., Dec. 1, 2010 /PRNewswire-FirstCall/ -- US China Mining Group, Inc., (OTC Bulletin Board :SGZH ) a Chinese leader in coal production and exploration in the People's Republic of China, today announced revenue and net income guidance for its fiscal year ending December 31, 2010.
Management expects the Company to generate revenue of approximately $66.5 million with net income of approximately $14.1 million for the 2010 Fiscal year ending December 31, 2010. This represents a revenue increase of approximately 2.3% and decrease in net income of approximately 44%, from 2009 levels. The decrease in net income is primarily attributed to a decrease in production at the Xing An mine due to maintenance and retrofit projects that began in the fourth quarter of 2009.
As previously reported, the Company began programs to increase production efficiencies and safety at the Xing An mine in December of 2009. Upon completion of these programs and modifications, the Xing An mine will be able to maintain coal processing operations year-round and will increase coal production from 600,000 metric tons per year to 900,000 metric tons per year pending approval from local Government in 2012. The Company expects to be at the full production of 600,000 tons when all upgrades have been completed, in May of 2011.
Mr. Hongwen Li, President of US China Mining Group, commented, "We have worked very hard over the past twelve months to upgrade our mine equipment and operations. We expect to begin seeing the benefits of this effort in the fourth quarter of 2010 and throughout 2011." Li continued, "We are also expanding our efforts to pursue other mining properties and short term production opportunities which could be revenue contributors for us in the 2011 fiscal year."
About US China Mining Group: US China Mining Group is a company engaged in coal production and sales by exploring, assembling, assessing, permitting, developing and mining coal properties in the People's Republic of China ("PRC"). After obtaining permits from the Heilongjiang Province National Land and Resources Administration Bureau and the Heilongjiang Economic and Trade Commission, we extract coal from properties to which we have the right to mine capped amounts of coal, and then sell most of the coal on a per metric ton ("ton") basis in cash on delivery, primarily to power plants, cement factories, wholesalers and individuals for home heating. We do not own the coal mines, but have mining rights to extract a capped amount of coal from a mine as determined by government authorized mining engineers and approved by the Heilongjiang Department of Land and Resources. Our business consists of the operations of Tong Gong coal mine in northern PRC, located approximately 175 km southwest of the city of Heihe in the Heilongjiang Province and the Hong Yuan and Sheng Yu coal mines located in the city of Mohe in Heilongjiang Province.
Safe Harbor Statement
This press release contains certain statements that may include 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as "believe, expect, anticipate, optimistic, intend, will" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risks and other factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
SOURCE US China Mining Group, Inc.