The Development Course of Xinjiang Xinxin Mining Co., Ltd.

The company originated from Sino-Soviet Nonferrous Metals and Rare Precious Metals Co., Ltd. (hereinafter referred to as "Sino-Soviet Nonferrous Metals") established in 1950 according to the Sino-Soviet Treaty of Friendship, Alliance and Mutual Assistance. Sino-Soviet Nonferrous Metals Co., Ltd. became a state-owned enterprise in China on February 30, 1954, and later changed its name to Xinjiang Industrial Company on February 30, 1955.

In July 2000, the State Council reorganized the management system of China's non-ferrous metal enterprise industrial company, and the management right of Xinjiang Industrial Company was transferred to Xinjiang State-owned Assets Supervision and Administration Commission. Xinjiang Nonferrous Metals Co., Ltd. became a wholly state-owned limited liability company on March 5, 2002 to supervise and manage Xinjiang Nonferrous Metals enterprises.

Before the reorganization, Xinjiang Nonferrous Metals Industry (Group) Co., Ltd. owned 22 wholly-owned subsidiaries, including Xinjiang Nonferrous Karatongke Mine and Xinjiang Nonferrous Fukang Factory, mainly engaged in the mining, beneficiation, smelting and refining of non-ferrous metals such as nickel, copper, lithium, beryllium, tantalum, niobium and gold, and also engaged in the research, design, mechanical processing and plant construction of non-ferrous metal mining facilities.

After reorganization, Xinjiang Xinxin Mining was established as a joint stock limited company in China on September 1 2005 with a registered capital of 300 million yuan. Our sponsors include Xinjiang Nonferrous Metals Industry (Group) Co., Ltd., Shanghai Yilian mining sources Industry Co., Ltd., Admiralty Investment (Group) Co., Ltd., Xiamen Zijin Technology Co., Ltd., Xinjiang Xinyingying Materials Co., Ltd. and Shaanxi Hong Hao Industry Co., Ltd.

Xinjiang Nonferrous Metals Industry (Group) Co., Ltd. injected all its nickel business and related copper and other non-ferrous metals business into Xinjiang Xinxin Mining Industry. After its establishment, Xinjiang Nonferrous Kalatongke Mine and Xinjiang Nonferrous Fukang Factory became our branches, namely Kalatongke Branch and Fukang Branch respectively. In 2005, we obtained the required approval and completed the change registration of the predecessors of Kratonk Branch and Anti-Fukang Branch.

We are engaged in mining, mineral processing and smelting in Karatongke Mine. By the end of this quarter, we have discovered 1 1 rock masses and determined their positions, of which 6 have been confirmed as economically feasible ore reserves.

By the end of the first quarter of 2007, the mineral resources in the rock mass of Karatongke Mine were estimated to be about 40,879,700 tons.

We will actively explore the potential reserves of other rock masses.