Zhaojin Mining Achieves Leaping Growth Over Five Years Since Listing

Adhering to pure gold production and aiming to become world-class gold mining company

HONG KONG, Dec. 8, 2011 /PRNewswire-Asia/ -- Zhaojin Mining Industry Company Limited ("Zhaojin Mining" or the "Company", stock code: 1818, together with its subsidiaries, the "Group"), a leading gold enterprise in the PRC, is pleased to announce that today marks the fifth anniversary of the listing of Zhaojin Mining. Since its listing on the Main Board of the Hong Kong Stock Exchange on 8 December 2006, the Group has adhered to its spirit and objective of pure gold production, strived to consolidate and develop gold resources in China and continued to strengthen its operational management. Zhaojin Mining's key indicators including output, reserve, profit and revenue are improving year after year, showing a rapid growth. The Group is supported by both the public and shareholders.

Since its listing in 2006, Zhaojin Mining has rewarded its shareholders with excellent results. Revenue increased at a CAGR of 36.97%, whereas gross profit and net profit rose at CAGRs of 38.77% and 37.29% respectively. The dividend payout ratio reached 40% on average.

Mr. Lu Dongshang, Chairman of Zhaojin Mining, said, "2011 marks the fifth anniversary of the listing of Zhaojin Mining. The Group has positioned itself as a pure gold player as it capitalizes on the guaranteed value of gold in the changing global financial market. Over the past five years, revenue from gold sales has maintained its uptrend and gold reserves have also increased steadily. The Group has proactively implemented its merger and acquisition strategy, invested in technological innovation and raised its safety standards for mines to develop itself into a leading gold producer in China and strive to become China's and the world's leading gold mining company."

The Group's average gold selling price increases over 15% annually and is higher than the market average. In accordance with standards issued by the Joint Ore Reserves Committee in Australia, the total gold mining resources of the Group as at 31 December 2010 amounted to 495.82 tons (approximately 15.941 million ozs) and the minable gold reserves of the Group amounted to 251.89 tons (approximately 8.0984 million ozs). The Group maintains its competitive advantages as a leading gold producer in China.

Zhaojin Mining adheres to its strategies for external development and seeks potential quality mines domestically and overseas with business acumen in a prudent manner. The Group also strives to expand nationwide and consolidates as well as enhances regional resources. Based in Zhaoyuan City, Shandong Province, which is a "Gold Capital" of China, the Group continues to explore quality gold resources in areas such as Xinjiang, Gansu, Inner Mongolia, Guangxi and Liaoning in order to expand its business in major gold producing regions, covering northern, northwestern and southwestern China. In addition, the Group has entered into resource integration agreements with Inner Mongolia's Ejinaqi, Xinjiang's Toli, Xinjiang's Ruoqiang, Xinjiang's Altay, Hebei's Chongli, Liaoning's Fengcheng and Qinghe. Over the five years since its listing, the Group has acquired 122.96 tons of gold resources with a mining area of 44.54 square kilometers and an exploration area of 1,437.7 square kilometers. The number of companies outside Zhaoyuan has reached 26.

As for the overseas business, the Group carefully assessed market conditions and took every investment opportunities in overseas mining markets. With its experienced and knowledgeable management team, the Group subscribed 20,000,000 shares in Australia-based Citigold Corporation, laying a solid foundation for further development of overseas projects.

As for mine safety, Zhaojin Mining adheres to its safety concept of "gold is precious but life is priceless" together with its environmental protection concept of "prioritizing environmental protection over gold or silver mining". The Group strengthens every safety and environmental protection standard in order to establish green and safe mines. Zhaojin Mining was among the first batch of national resource utilization demonstration bases, whereas Xiadian Gold Mine and Jinchiling Gold Mine were included in the first batch of national green mines.

As for technological innovation, the Group has invested RMB218 million and obtained 151 above-provincial-level scientific research achievements and more than 300 national patents. In these five years, Zhaojin Mining continues to enhance its management capability and improve cost efficiency. Despite inflation and rising raw material prices, the Group remains one of the companies in the industry with the lowest mining cost and the highest gross profit as well as one of the most profitable gold mining companies in Asia.

Good corporate governance is a key indicator of an international enterprise. Zhaojin Mining has observed corporate governance guidelines, continued to enhance its corporate governance standards and developed China's and the world's leading governance model for a listed company. In 2010, the Group received the "Board of Directors of the Year 2010" award. Furthermore, the Group strives to enhance investor relations and the communication with investors through an established system to improve transparency of information release. In 2010, the Group was awarded the "Gold Prize for Investor Relations and Social Responsibility". 

Over these years, Zhaojin Mining won various professional awards and honours, including "Asia Pacific Business Excellence Standard Award", "The Best Annual Report Award", Asia's top 200 SMEs and Golden Bauhinia Awards. All these show that the Group's efforts were recognized by the capital market. As one of the most influential gold stocks, Zhaojin Mining has been included in the MSCI China A Index.

Mr. Lu concluded, "The five years mark a major milestone. We will achieve greater heights and continue to adhere to our direction as a pure gold player, capture value investment opportunities, enhance operational management capability and promote sustainable development. At the same time, we will also heighten our sense of social responsibility, highlight safety and environmental protection in our work and improve operational management and strive to become a leading gold company at home and in the world, rewarding shareholders with fruitful results."

Five-year Financial Highlights

About Zhaojin Mining Industry Company Limited

Zhaojin Mining Industry Company Limited is a leading gold 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 six mines in Zhaoyuan City. 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 a leading position in the industry.

Issued by Porda Havas International Finance Communications Group for and on behalf of Zhaojin Mining Industry Company Limited. For further information, please contact: