China Natural Resources (NASDAQ:CHNR)

HONG KONG, June 4, 2012 /PRNewswire/ -- CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a natural resources company based in the People's Republic of China, today announced that its Board of Directors has provided preliminary authorization for the Company to explore a possible spin-off and listing on an overseas stock exchange of the Company's coal-mining and related operations, subject to, among other things, regulatory approvals and market conditions. The proposed spin-off and listing is expected to include the offering of ordinary shares that will not be registered under the Securities Act of 1933, as amended. No decisions have been made regarding the timing and terms of such transaction or whether the Company will ultimately proceed with such a transaction. Source: PR Newswire (http://s.tt/1dlut)

HONG KONG, Dec. 21, 2011 /PRNewswire/ -- CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a compan based in the People's Republic of China, today released unaudited interim finanfor the three and six months ended June 30, 2011. See Results.

The condensed consolidated statement of operations and comprehensive income for the three and six months ended June 30, 2011 (unaudited) and the condensed consolidated balance sheet as of June 30, 2011 (unaudited) are derived from, and should be read in conjunction with, the Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2011 and 2010, which was filed with the Securities and Exchange Commission on December 21, 2011 under cover of Form 6-K. The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2011.

Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2011 interim results: "In view of the continuing economic growth in the PRC, we believe that demand for coal will continue to be robust in the foreseeable future. We are positive about the prospects for the coal mining industry in the PRC and we will continue to pursue growth through acquisition and consolidation of small to medium sized coal mines."

CHINA NATURAL RESOURCES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010

(Amounts in thousands, except share and per share data)

		RMB
		2008		2009		2010
Revenues
Total revenues for reportable segments		846,084		522,787		100,813
Revenues from discontinued operations		(745,167	)	(415,037	)	—
Total consolidated revenues		100,917		107,750		100,813
Loss from operations
Total loss for reportable segments		(20,244	)	(44,153	)	(59,140	)
Profit (loss) from discontinued operations		12,349		(10,320	)	—
Total consolidated loss from operations		(7,895	)	(54,473	)	(59,140	)
Interest income
Total interest income for reportable segments		4,265		2,821		1,112
Interest income from discontinued operations		(2,107	)	(167	)	—
Total consolidated interest income from operations		2,158		2,654		1,112
Income tax expense
Total income tax expense for reportable segments		8,949		9,022		12,224
Income tax expense from discontinued operations		(2,655	)	(6,584	)	—
Total consolidated income tax expense from operations		6,294		2,438		12,224
		US$
		2008		2009		2010
Revenues
Total revenues for reportable segments		128,058		79,126		15,259
Revenues from discontinued operations		(112,784	)	(62,818	)	—
Total consolidated revenues		15,274		16,308		15,259
Loss from operations
Total loss for reportable segments		(3,064	)	(6,682	)	(8,950	)
Profit (loss) from discontinued operations		1,869		(1,562	)	—
Total consolidated loss from operations		(1,195	)	(8,244	)	(8,950	)
Interest income
Total interest income for reportable segments		646		427		168
Interest income from discontinued operations		(319	)	(25	)	—
Total consolidated interest income from operations		327		402		168
Income tax expense
Total income tax expense for reportable segments		1,354		1,366		1,850
Income tax expense from discontinued operations		(402	)	(997	)	—
Total consolidated income tax expense from operations		952		(369	)	1,850

Mr. Li Feilie, the Company's Chairman, commented on the results: "China Natural Resources recorded total sales revenue of RMB100.81 million (US$15.26 million) in 2010, down by 6.44% from a year earlier. The drop in sales was mainly caused by the discontinuation of our copper business. While sales generated from our metal division achieved modest growth, our prime focus now is on our coal mining business. Following the gradual completion of construction and upgrade of our acquired coal mines, sales of coal will become our primary source of revenue in the coming years. The Company achieved net income attributable to shareholders of RMB574.40 million (US$86.94 million) in 2010, up by 961% from last year, of which RMB624.15 million (US$94.47 million) was derived from the bargain purchase gain relating to Guizhou Puxin's acquisition. The positive results reflect our ability to identify what we believe are undervalued assets, and signify the success of our strategy in pursuing growth through acquisition and consolidation of small to medium sized coal mines in mainland China. In view of the continuing economic growth in mainland China, we believe that demand for coal will continue to be robust in the foreseeable future. We are positive about the prospects of the coal mining industry in mainland China."

Liquidity comments in the 2010 20F give us reason to believe that CHNR liquidity needs have escalated from 2009.

The Company’s primary liquidity needs are to fund operating expenses, capital expenditures and acquisitions. To date, the Company has financed its working capital requirements and capital expenditures through internally generated cash, proceeds from sales of securities, short-term/ long-term bank loans and non-interest bearing loans from the Shareholder.

As of December 31, 2010, the Company has a working capital deficiency of RMB151.55 million (US$22.94 million). The Shareholder has confirmed to the Company continued financial support for the Company. Subsequent to year end, the Company secured additional loan facilities totaling RMB240 million (US$36.33 million). The Company also intends to open renewed negotiations with the banks in due course, and has, at this stage, not sought any written commitment that the loan facilities will be renewed. However, the Company has held discussions with its bankers about its future borrowing needs and no matters have been drawn to its attention to suggest that renewal may not be forthcoming on acceptable terms. The Company’s internal forecasts and projections, taking account of reasonably possibly changes in trading performance, operating as well as capital expenditures, continued Shareholder support.

Our liquidity, including our working capital, has been affected by many factors including:

• Funding of our on-going mining activities through internally generated funds;
• The timing of expenditures in relation to when our accounts receivable are paid;
• Our ability to secure bank financing as and when required, on acceptable terms;
• Our difficulty in accessing US capital markets to fund PRC operations;
• A lack of development of US trading markets for our securities, which has hampered our ability to use our securities as currency to fund acquisitions, business combinations and similar transactions;
• Differing liquidity needs of the metals segment and the coal segment;
• Investment strategies of institutional investors are not always consistent with investments in companies that engage in both metal ore and coal mining operations.

We anticipate that there will be significant capital expenditures ahead in the event of additional acquisitions. We expect to fund acquisitions with cash-on-hand, the issuance of our debt or equity securities, or a combination of both, and we may use our securities to raise capital to be used to fund operations. The use of our securities in this manner may be dilutive to shareholders.