CNGGC Major Business Indicators Soar

On January 9,the China National Gold Group Corporation (CNGGC) announced that it has exceeded its strategic goal of quadrupling in four years proposed at the start of 2007 in terms of its gold resources reserves,total assets,sales revenue and profits all-round.The group will continue to implement a proactive strategy and carry out acquisitions,as planned,at home and overseas.Now,the group is involved in several resource projects,including a project that entered the phase of substantive contact.

According to Liu Bing,Deputy General Manager and Chief Accountant at CNGGC,as of 31 December 2010,CNGGC's gold reserves increased from 275 tons in 2006 to 1,300 tons,copper reserves from 1.25 million tons to 8 million tons,and molybdenum reserves from 200,000 tons to 1.4 million tons.The group ranks no.1 in terms of gold reserves in China,while no.5 and no.3 for copper and molybdenum reserves,respectively.By converting assets into gold,the group's total resources have grown by 13 times since 2006.Total assets of the group have increased five-fold from RMB 8.5 billion in 2006 to RMB 42.2 billion,while sales revenue has increased six-fold from RMB 8.5 billion in 2006 to RMB 51.8 billion.Over the past 4 years,CNGGC has spent RMB 3.6 billion in solving long-standing problems,and even under these conditions,total profits increased by 5.1 times from RMB 0.62 billion in 2006 to RMB 3.2 billion.Growth of sales revenue and total profits rank first among each of the 7 metallurgic enterprises directly under the central government.

As the largest gold manufacturer in China and the sole enterprise in China's gold industry directly under central government control,CNGGC has invested RMB 9.55 billion in resource M&A,prospecting and geological exploration over the past 4 years,thus obtaining resources efficiently and laying a solid foundation for development.Over the past 4 years,thegroup has drilled 1.66 million meters in total and acquired 1,163 tons of gold,6.33 million tons of copper,1.24 million tons of molybdenum,1.25 million tons of lead,and zinc and 6,330 tons of silver.Total value exceeded RMB 1 trillion.

Over the past 4 years,Zhongjin Gold Corporation Ltd.,a company listed in the A-share market and controlled by CNGGC,has managed to increase its resources from 58 tons to 430 tons,its total assets from RMB 2.2 billion to RMB 13.5 billion,its market value from RMB 5.284 billion to the highest RMB 67 billion.In addition,the group was active in planning its overseas resources strategy and built a capital platform for overseas development.In 2008,CNGGC successfully took control of Jinshan Gold Mines Inc.,a listed company in Canada;in 2010,CNGGC established China Gold International,with Jinshan Gold Mines Inc and Jiama (Tibet) as its principal components,achieving listing on the main board of the Hong Kong Stock Exchange,becoming Mainland China's first red-chip mining company to have achieved listing in both Canada and Hong Kong.According to a promise made during financing,China Gold International will invest approximately USD 100,000,000 in overseas M&A deals.

As for the much-discussed group listing of CNGGC,Liu noted that the group would enable Zhongjin Gold Corporation Ltd.(a company listed in A share market) to consolidate CNGGC's main business of gold,meanwhile making use of the international capital platform of China Gold International to acquire,develop and utilize overseas resources.

It is worth pointing out that over the past 4 years,CNGGC has eliminated disadvantages of frequent number,small size and scattered distribution,as well as low output and high cost,and has built 18 large-scale gold production bases and two nonferrous metals production bases in Wushan (Inner Mongolia) and Jiama(Tibet) according to the standards of three,five and right tons.To date,15 large-scale projects have been built,reconstructed or extended.

Compared with 2006,the group's production capacity of gold has increased by 13.7 tons,and copper by 40,000 tons with the daily processing volume of ore increasing from 20,000 tons to 130,000 tons,with new returns accounting for more than half of total profits.A group of projects including Wushan (Inner Mongolia) and Sanxin (Hubei) have achieved reconstruction and extension goals quickly,at a high quality and starting point.In particular,the Wushan project has been awarded the China National High Quality Project Prize.

Liu told reporters that the 12th Five-Year Plan was an important strategic opportunity for CNGGC to grow significantly on the basis of the 4 quadrupled indicators.The group will strive to exceed RMB 100 billion for both total assets and sales revenue,and double the other main indicators from current levels.