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(Extracted from Annual Report 2017)

On behalf of the Board of Directors, I hereby present the Annual Report of China Mining International Limited (the "Company") and its subsidiaries (the "Group") for the financial year ended 31 December 2017 ("FY2017").

FINANCIAL REVIEW

The Group achieved a revenue of RMB 26.0 million in FY2017, representing an increase of RMB 9.5 million or 58% from that of RMB 16.4 million attained in the financial year ended 31 December 2016 ("FY2016"). The increase was principally attributed to more completed units of higher value being delivered to the buyers in respect of the Xinxiang Sunny Town Project (新乡阳光新城项目).

In line with higher revenue attained in FY2017, the Group registered a higher gross profit of RMB 9.9 million in FY2017 compared to that of RMB 3.8 million in FY2016. A higher gross profit margin of 38% was also attained by the Group in FY2017 compared to that of 23% in FY2016, contributed by more completed units of higher value being delivered to the buyers in FY2017.

In line with our decreased business activities and coupled with our concerted cost-control efforts, our selling and distribution expenses decreased by RMB 1.2 million or 46% from RMB 2.6 million in FY2016 to RMB 1.4 million in FY2017 and our general and administrative expenses decreased by RMB 1.6 million or 6% from RMB 25.9 million in FY2016 to RMB 24.3 million in FY2017.

The Group registered a net loss of RMB 16.0 million in FY2017 compared to a net loss of RMB 11.0 million in FY2016.

Consequence to the above, the cash and bank balances of the Group, comprising mainly short-term investment products placed with local PRC banks, increased by RMB 12.3 million or 35% from RMB 34.4 million as at 31 December 2016 to RMB 46.7 million as at 31 December 2017.

OPERATION REVIEW

The status of the Group’s ongoing property development business as at 31 December 2017 is summarised as follows:

With regards to its mining business, the Group had on 17 April 2017 completed its 40.15% investment in Sino Feng Mining International S.àr.l., which wholly-owns Huixin Mining International Pty Limited ("Huixin"); Huixin in turn owns 40% of Aero Wind Properties Pty Limited ("AWP"), which is the holder of a prospecting right in respect of the iron ore mine project situated in Thabazimbi district, Limpopo Province, South Africa.

As for its existing two iron ore mines in China, with the sentiments and demand for iron ores expected to gradually improve in the medium to long-term, the Group will keep them as reserves till the overall macro-economic environment perks up. Iron ore prices have stabilised in the fourth quarter of 2017, in part due to increased demand from China albeit the constraints of supply side reforms and anti-pollution drive by the Chinese Government.

THE PROPOSED REVERSE TAKEOVER TRANSACTION

In respect to the reverse takeover transaction as first announced by the Company on 11 July 2013 and periodically thereafter on its progress, the latest announcement was being made on 30 June 2017 (the "Proposed RTO") to extend the long-stop date to 30 June 2018. The relevant parties are currently still awaiting for certain technical reports to be completed in order to work out possible revised terms to the transaction, which may include, but not limited to, the portfolio of the exploration and mining projects that will form part of the group of companies to be acquired by the Company pursuant to the Proposed RTO.

ACKNOWLEDGEMENTS

The year ahead is not without its challenges and to ensure that resources are allocated efficiently within the Group, we regularly review and when necessary, right-size our business units and continue to explore measures to optimise utilisation of our resources efficiently to spur growth and create a better value for Shareholders.

In closing, I would like to express my sincere appreciation to the management and staff for their hard work, contribution, commitment and dedication and say a big thank you to our suppliers, customers and bankers for their strong support over the years. I would also like to express my gratitude to my fellow Directors for their contributions and guidance in helping the Group to overcome the many challenges over the past year.

Last but not least, I would like to thank our Shareholders for the patience and trust as well as for standing by us throughout the past years, and I look forward to their continued support in the year ahead and beyond.

Guo Ying Hui
Chairman