Zhaojin Mining Acquires and Consolidates Three Gold Projects in Zhaoyuan City

Intensifying efforts in resource integration

Enhancing core competitiveness

HONG KONG, Dec. 7, 2011 /PRNewswire-Asia/ -- Zhaojin Mining Industry Company Limited ("Zhaojin Mining"or the "Company" and, together with its subsidiaries, the "Group"; stock code: 01818), a leading gold production enterprise in China, announced to acquire an exploration right and two gold mines as well as set up two joint venture companies in Zhaoyuan City to further develop gold resources according to the overall planning for resource integration in Zhaoyuan. The three projects are another step taken by Zhaojin Mining towards the consolidation and merger of gold resources in Zhaoyuan district after the acquisition of Canzhuang gold mine, which will intensify the Company's efforts in resource integration in Zhaoyuan City to enhance its profitability and competitiveness.

1. Proposed acquisition of Zaoyangshan exploration right. Zhaoyuan Jintingling Mining Industry Company Limited, a wholly-owned subsidiary of the Company, plans to acquire the exploration right in respect of Zaoyangshan Gold Mine and its ancillary assets ("Zaoyangshan Exploration Right") at the quoted price of RMB28 million. The Zaoyangshan Exploration Right, which will be disposed through a public listing-for-sales in Yantai Joint Property Right Exchange Center, was granted by Shandong Provincial Department of Land & Resources with an exploration area of approximately 16.20 square kilometres. The mine possesses good ore-forming conditions and development prospects as well as good infrastructure and facilities. According to the valuation by an independent PRC valuer based on the geology essential factor appraisal method, the valuation of the Exploration Right was RMB22,475,300 as at 31 July 2011 and the valuation of the ancillary assets was RMB5,512,300. The indicated and inferred ore resources, gold resources and average grade are estimated to be 379,881 tonnes, 1,267 kilogrames and 3.34 gram per ton respectively. The Company will conduct exploration at the Zaoyangshan Gold Mine if the acquisition is successful.

2. The integration of Zhaojuan Daqinjia ("DQJ") gold mine and the establishment of Zhaoyuan Zhaojin-Daqinjia Mining Company Limited, a joint venture company to be incorporated in the PRC with limited liability. ("DQJ JV") The DQJ gold mine was established in June 1986. Located in Shandong Province, Zhaoyuan City, the DQJ gold mine is engaged in integrated businesses in exploration, mining and ore processing, especially the mining and processing of gold ore. According to a valuation report as at 31 December 2010 prepared by an independent PRC valuer, the DQJ gold mine owns a mining area of 0.8752 square kilometres, an exploration area of 6.32 square kilometres and ore reserves of 626,133 tonnes. The Company entered into the DQJ JV Agreement and the Supplemental DQJ JV Agreement regarding the formation of the DQJ JV with the DQJ JV Partner on 1 January 2011 and 1 November 2011 respectively. Pursuant to the framework and principles of the DQJ JV Agreement (as further supplemented by the Supplemental DQJ JV Agreement), the Company will own 90% of the DQJ JV after it is established. The DQJ JV will be principally engaged in the mining of gold and its associated ore, and processing and sales of mine products. As at the announcement date, according to the valuation by a geological expert, the DQJ JV has approximately 4,300 kilogram of remaining gold metal quantity 1,068,000 tonnes of ore reserves with an average grade of 4.03 gram per ton. The Company's gold reserves are expected to be expanded through further exploration and increase in reserves.

3. The integration of Jishan gold mine and the establishment of Jishan JV. The Jishan gold mine is located in Zhaoyuan City, Shandong Province. It is engaged in integrated businesses in exploration, mining and ore processing, especially the mining and processing of gold ore. According to a valuation report as at 30 June 2011 prepared by an independent PRC valuer, the Jishan JV owns a mining area of 1.4156 square kilometres, an exploration area of 1.34 square kilometres and ore reserves of 156,130.6 tonnes. On 1 December 2011, the Company entered into the Jishan JV Agreement with the Jishan JV Partner. Pursuant to the Jishan JV Agreement, the parties have agreed to establish the Jishan JV which will be principally engaged in the exploration and exploitation of gold in Zhaoyuan, Shandong Province, the PRC. As at the announcement date, according to the valuation by a geological expert, the Jishan JV has 1,510 kilogram of remaining gold metal quantity, 368,867 tonnes of ore reserves with an average grade of 4.09 gram per ton. The Company will own 95% of the Jishan JV after it is established, which will help enhance the Company's gold reserves through further exploration and increase in reserves.

Zhaoyuan does not only have premium geologic structure of metallogenic belt but also has rich gold resources. Three of the gold projects are located in the Zhaoyuan city and lie in Shuangmuding fracture belt and Zhao(yuan)-Ping(du) Fault Belt, which have ideal conditions for mineralization. These three acquisitions are another step taken by group towards consolidation and merger of gold resources in Zhaoyuan after the acquisition of Canzhuang gold mine, which will intensify the Group's efforts in resource integration in Zhaoyuan city to enhance profitability and competitiveness.

Mr. Lu Dongshang, Chairman of Zhaojin Mining, said, "The Group strives to strengthen geological exploration and steadily increase mine reserves. The three projects are all located in Zhaoyuan City, which is rich in quality gold resources. Through enhancing exploration efforts and exploitation capability, we are able to increase our future gold reserves. Merger and acquisition is one of our strategies for strengthening capability. We believe this can intensify resource integration in Zhaoyuan and enhance our core competitiveness and profitability, so that we can accelerate our move to become a world-class gold producer and generate more fruitful returns for the shareholders who have supported us all along."

About Zhaojin Mining Industry Company Limited

Zhaojin Mining Industry Company Limited is a leading gold production enterprise in the PRC. The Group is located in Zhaoyuan City in Shandong Province – the ‘Gold Capital' 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 6 mines in Zhaoyuan City. The Group also owns various gold mines throughout the northern, northwestern, southwestern of China. With its abundant gold resources, advanced technology and management, the Group has maintained 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: