Completion of Tailing Pond Modifications at the Ibam Mine

Actively Implementing Capacity Expansion Plan

HONG KONG, Jan. 27, 2014 /PRNewswire/ -- CAA Resources Limited (HKSE: 2112) ("CAA Resources" or "the Company" or together with its subsidiaries, the "Group") is pleased to announce that, following the completion of modifications to tailing ponds at the Group's principal asset, the Ibam Mine, the Group has submitted a notice of completion to Jabatan Mineral dan Geosaing Pahang ("the Mining Bureau") on 23 January 2014 in order to arrange inspection.

Pursuant to the announcement made by the Group on 7 November 2014, it was required by the Mining Bureau to modify the tailing ponds at the Ibam Mine, due to the exceptionally heavy precipitation for the 2013 rainy season, which has begun earlier last year in Malaysia. During the modification process, the Ibam Mine's beneficiation process was temporarily suspended, however, there was no impact on the production and sale of iron ore products which required only simple crushing process and no beneficiation.

Commenting on the announcement, Li Yang, Chairman of CAA Resources, said: "We are very pleased to have successfully completed the modifications to the tailing ponds. This is an important long-term initiative for the Ibam Mine, as this reduces the risk of future flooding."

In line with our strategy, the Group will continue to build and grow production capacity at the Ibam Mine through further technological improvement and by installing new processing lines and actively implementing the third phase of the expansion plan, which is expected to raise annual mining volume to 13.22 million tonnes by the end of 2015. This will enhance our ability to capture the exciting opportunities arising from the growing iron ore importation, especially that of our main market, China."

According to China Customs' 2013 key commodities import data, China's demand of key commodities remained strong. In 2013, China's steel production output reached record highs and iron ore import rose 10.2% from the year before to 8.2 million tonnes.

Project Ibam is CAA Resources' principal operating asset. Located at Bukit Ibam, State of Pahang, Malaysia, the Mine has 152 million tonnes estimated superior quality iron ore reserves at an average grade of 46.5% total Fe as of 31 December 2012.

About CAA Resources
CAA holds extraction rights to significant and high quality iron ore reserves in Malaysia's Pahang State. The Group's open pit mine is located in close proximity to coastal shipping facilities which in turn offer lower production costs and shorter sea transportation routes to China, compared to other resource endowed countries such as Australia, Brazil or India. The high quality of CAA Resources' reserves, its low cost production methods and efficient transportation combine to make it a highly competitive supplier, primarily to the China market.

CAA Resources generates positive net cash and has a strong balance sheet following a successful listing on the Hong Kong Stock Exchange in 2013. Its dual track growth strategy is: to expand operations beyond its current footprint with the acquisition of new mining rights, and; to enhance output from existing operations through further mechanisation and enhancement of production technologies.

The Group is primarily focused on the exploration, mining, crushing, beneficiation and sale of iron ore products and its main asset, the Ibam Mine, has combined measured and inferred mineral resource of 152 million tonnes, at an average grade of 46.5% total iron ore as of 31 December 2012.

The Group's principal customers are a variety of reputable Chinese steel mills with whom CAA Resources' management have longstanding and stable relations. According to United Nations Conference on Trade and Development, Chinese apparent iron ore accounted for 53% of the world total consumption. Starting from the second half of 2012, the Group also began selling iron ore products to customers in Malaysia.

In the year ended 31 December 2012, CAA Resources' revenue reached USD 54 million, and sales volume reached approximately 464,000 tones, annual increases of 100% and 53% respectively. For the six months ended 30 June 2013, the Group achieved sales revenue of USD 47 million, up 81% over the same period last year. The Group also recorded sales of 405,000 tonnes of iron ore products, representing an increase of 113%.

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