BEIJING, March 27, 2011 /PRNewswire-Asia-FirstCall/ --
China Shen Zhou Mining & Resources, Inc. ("China Shen Zhou" or the "Company") (NYSE AMEX:
SHZ), a Company engaged in the exploration, development, mining and
processing of fluorite, barite, zinc, lead, copper, and other
nonferrous metals in China, today
announced record revenues for the fourth quarter and fiscal year
ended December 31, 2011.
2011 Fourth Quarter Financial Highlights
- Net revenue increased 154.3% to a record high of $12.4 million from $4.9
million in the fourth quarter of 2010
- Gross profit increased 659.8% to $5.6
million compared with $0.7
million for the same period of 2010
- Net income attributable to the Company and its subsidiaries
rose to $1.1 million compared with a
net loss of $2.6 million for the same
period of 2010
- Net income per common share from continuing operations was
$0.04 versus a net loss of
$0.08 in the same period of 2010
- Cash and cash-equivalents were $5.6
million
2011 Financial Highlights
- Net revenue increased by 163.1% to a record $30.6 million compared to 2010
- Gross margin rose to 44.2% from 25.9% in 2010
- Net profit attributable to the Company and its subsidiaries was
$0.3 million versus a loss of
$3.2 million in 2010
Ms. Xiaojing Yu, Chairperson and
Chief Executive Officer, commented, "We are very pleased to report
record revenues for 2011. Our revenue and profit margin increased
significantly. The Chinese government's new policies limited
fluorite production and encouraged the integration and
consolidation within the fluorite industry. China Shen Zhou is benefitting from our growing
economies-of-scale, and our acquisition of valuable fluorite mining
assets and processing capabilities. We are continuing our strategy
of acquiring high-quality fluorite mines, while we are also
focusing our research and development efforts on the fluorine
chemical industry. In addition to adding a number of valuable
assets to our current operations, we plan to leverage our enhanced
platform by integrating it into the high value-added fluorine
chemical industry."
Unaudited Fourth Quarter Financial Results
For the fourth quarter of 2011, net revenue of $12.4 million was the highest for any quarter in
the Company's history. The $7.5
million increase from $4.9
million reported in the fourth quarter of 2010 was primarily
due to record fourth quarter revenue from fluorite sales by the
Company's Xiangzhen subsidiary.
Gross profit increased by $4.9
million to $5.6 million for
the fourth quarter of 2011 from $0.7
million in the fourth quarter of 2010. The increase in gross
profit was mainly due to increased fluorite prices and a higher
percentage of revenue from fluorite product sales, which have a
higher profit margin, compared to the same period of 2010.
General & Administrative ("G&A") expenses in the fourth
quarter of 2011 were $3.6 million
compared with $1.1 million in the
fourth quarter of 2010. G&A expenses as a percentage of total
net revenue were 29.3% compared with 22.5% for the same period of
2010. The increase was mainly due to (i) increased administrative
expense and depreciation and amortization expense amounting
to $814,000 for the newly
acquired Xinyi Fluorite and ((ii) increased professional fees
amounting to approximately $1,298,000
for the U.S. Securities projects, Investor relations, Xingzhen
Mining's exploration, and other professional acitivities.
Operating expenses in the fourth quarter of 2011 totaled
$3.7 million compared with
$2.8 million in the fourth quarter of
2010.
Net income from operations in the fourth quarter was
$1.9 million versus a loss from
operations of $2.0 million in the
fourth quarter of 2010.
Net profit attributable to the Company and its subsidiaries for
the fourth quarter of 2011 was $1.15
million compared with a net loss of $2.5 million for the same period of 2010.
Basic and fully diluted earnings per share were $0.04 or ($0.09)
for the years ended December 31, 2011
and 2010, respectively.
Fiscal Year 2011 Results
Annual net revenue increased 163.1% to a record $30.6 million for fiscal 2011, compared with net
revenue of $11.6 million in 2010. The
increase in net revenue was mainly due to higher average fluorite
prices and increased sales volume in the fluorite market. The
average price for fluorite powder rose over 101% to $329 per metric ton in 2011 compared with
$164 per metric ton in 2010.
Approximately 58,000 metric tons of Fluorite powder were sold in
2011 versus approximately 29,000 metric tons in 2010. Fluorite
revenue increased by 219% to $25.6
million for 2011 from $8.0
million for 2010. Nonferrous metals revenue for 2011
increased 38% to $5.0 million,
compared to 2010.
Gross profit increased by approximately $10.5 million to $13.5
million from $3.0 million in
fiscal year 2010. The increase in gross profit was mainly due to
increased fluorite prices and the higher percentage of revenue from
fluorite product sales, which have a higher profit margin, compared
to the same period last year Gross profit from fluorite was
approximately $12.9 million and
$2.0 million for the years ended
December 31, 2011 and 2010,
respectively. Gross profit from our nonferrous metal segment was
approximately $0.6 million and
$1.1 million for the years ended
December 31, 2011 and 2010,
respectively. Gross margin increased to 44.2% in 2011 versus 25.9%
in 2010.
Selling and distribution expenses rose 94.2% to $202,000 and represented almost 1.0% of sales in
2011. The higher expenses were due to the increased sales volume in
2011.
General and administrative expenses increased to $11.2 million in 2011 from $4.1 million in 2010. The increase was mainly due
to (i) 400,000 shares of common stock with the fair value of amount
to $972,000 being granted by the
board of directors on June 20, 2011
to the employees under the 2009 Omnibus Long-term Incentive Plan;
(ii) increased administrative expense and depreciation and
amortization expense amounting to $1,684,000 for the newly
acquired Xinyi Fluorite and (iii) increased professional fees
amounting to approximately $2,168,000
for the U.S. Securities projects, Xinyi Fluorite acquisition audit,
Investor relations, Xingzhen Mining's exploration, and other
professional activities.
Interest expense increased by approximately $0.09 million as compared to the same period of
2010.
Net income attributable to the Company for the year ended
December 31, 2011 was approximately
$0.35 million, a difference of
$3.64 million compared to net loss of
$3.29 million for 2010. Basic and
fully diluted earnings per share were $0.01 or ($0.12)
for the year ended December 31, 2011
and 2010, respectively.
As of December 31, 2011, the
Company had cash and cash equivalents of $5.6 million compared to $1.5 million at the end of 2010. Total
shareholders' equity grew to $63.6
million from $21.8 million at
the end of 2010.
Recent Developments
On January 13, 2011, the Company
through its subsidiary, Xingzhen Mining, acquired a 55% equity
interest in Xinyi Fluorite. In 2011, Xinyi Fluorite extracted
approximately 14,000 metric tons of fluorite ore, produced 9,000
metric tons of fluorite powder, and sold 9,000 metric tons of
fluorite powder for approximately US$3.16
million, which accounted for approximately 12% of the
revenues of our fluorite business.
On April 12, 2011, the Company
through its subsidiary, Qianzhen Mining, entered into an equity
transfer agreement to sell its 60% equity interest in Qingshan
Metal to a Chinese citizen, Mr. Mao
Huang, a minority shareholder of Xingzhen Mining.
On September 29, 2011, the
Ministry of Industry and Information Technology of China announced
"the provisional measures of fireclay (high-alumina clay) fluorite
industry admittance notice", which explicitly states that
enterprises that did not meet the requirements of this notice would
not be able to obtain a production quota distribution priority. Our
Company is a leader in the fluorite industry and as such, its
subsidiaries all meet the requirements of this notice and have the
advantage of distribution and integration.
In July 2011, SRK Consulting China
Ltd. ("SRK"), an institution that specializes in evaluating the
particular geology of a region, completed an independent assessment
of the current status and prospective future production of the
Sumochaganaobao Fluorite Mine ("Sumo Mine") resource, and provided
an independent technical report containing Mineral Resource and Ore
Reserve information. On November 18
2011, Xinyi Fluorite requested that SRK evaluate Xinyi Mine No. 1's
current situation and potential extraction volume. A technical
report that satisfies the JORC standard was expected to be
completed in 2012.
Outlook
"We are excited about our growth potential for the remainder of
2012 and beyond," continued Ms. Xiaojing
Yu. "Our acquisition strategy has created a broad foundation
for future expansion into high value industry segments. We continue
to capitalize on new national policies which encourage
consolidation in the fluorite industry. We are seeking
opportunities to acquire nonferrous metal, precious metal, and
non-metallic mineral resources and plan to further expand
Xingzhen's production capacity, while we accelerate Xingzhen
Mining's exploration efforts."
About China Shen Zhou Mining & Resources, Inc.
China Shen Zhou Mining & Resources, Inc., through its
subsidiaries, is engaged in the exploration, development, mining,
and processing of fluorite, barite and nonferrous metals such as
zinc, lead and copper in China.
The Company has the following principal areas of interest in
China: (a) fluorite extraction and
processing in the Sumochaganaobao region of Inner Mongolia; (b)
fluorite and barite extraction and processing in Wuchuan County of
Guizhou province; (c) fluorite and
barite extraction and processing in Yanhe County of Guizhou
province; (d) fluorite extraction and processing in Jingde County,
Anhui Province; (e) zinc/copper/lead processing in Wulatehouqi of
Inner Mongolia; and (f) zinc/copper exploration, mining and
processing in Xinjiang.
For more information, please visit
http://www.chinaszmg.com/.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Forward-looking statements can be identified by the use
of forward-looking terminology such as "will", "believes",
"expects" or similar expressions. These forward-looking statements
may also include statements about our proposed discussions related
to our business or growth strategy, which is subject to change.
Such information is based upon expectations of our management that
were reasonable when made but may prove to be incorrect. All of
such assumptions are inherently subject to uncertainties and
contingencies beyond our control and upon assumptions with respect
to future business decisions, which are subject to change. We do
not undertake to update the forward-looking statements contained in
this press release. For a description of the risks and
uncertainties that may cause actual results to differ from the
forward-looking statements contained in this press release, see our
most recent Annual Report filed with the Securities and Exchange
Commission (SEC) on Form 10-K, and our subsequent SEC filings.
Copies of filings made with the SEC are available through the SEC's
electronic data gathering analysis retrieval system (EDGAR) at
http://www.sec.gov.
Contact Information
Min Liu
Investor Relations
Grayling
Tel: +1-646-284-9413
min.liu@grayling.com
CHINA SHEN ZHOU
MINING & RESOURCES, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(Audited, amounts in
thousands, except share data)
|
|
|
|
|
|
December 31,
|
|
|
2011
|
|
2010
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
5,569
|
|
$
|
1,545
|
Notes receivable,
net
|
|
|
1,019
|
|
|
-
|
Accounts receivable,
net
|
|
|
3,332
|
|
|
162
|
Prepayment for office
rent
|
|
|
-
|
|
|
82
|
Advances to
suppliers
|
|
|
1,833
|
|
|
333
|
Acquisition deposit
|
|
|
2,359
|
|
|
-
|
Other deposits, net
|
|
|
258
|
|
|
517
|
Inventories
|
|
|
7,479
|
|
|
7,243
|
Restricted assets
|
|
|
2,536
|
|
|
-
|
Assets - Discontinued
operations
|
|
|
-
|
|
|
1,188
|
Total current
assets
|
|
|
24,385
|
|
|
11,070
|
|
|
|
|
|
|
|
Restricted assets
|
|
|
175
|
|
|
70
|
Prepayment for vehicle
rent
|
|
|
443
|
|
|
-
|
Property, machinery and mining
assets, net
|
|
|
60,313
|
|
|
33,052
|
Total assets
|
|
$
|
85,316
|
|
$
|
44,192
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
$
|
3,324
|
|
$
|
2,434
|
Short term bank
loans
|
|
|
11,996
|
|
|
8,061
|
Receipts in advance
|
|
|
1,528
|
|
|
2,058
|
Other payables and
accruals
|
|
|
2,772
|
|
|
4,053
|
Due to related
parties
|
|
|
250
|
|
|
-
|
Taxes payable
|
|
|
1,877
|
|
|
644
|
Liabilities - Discontinued
operations
|
|
|
-
|
|
|
100
|
Total current
liabilities
|
|
|
21,747
|
|
|
17,350
|
|
|
|
|
|
|
|
Long term loans
|
|
|
-
|
|
|
2,630
|
Due to related
parties
|
|
|
-
|
|
|
2,439
|
Total liabilities
|
|
|
21,747
|
|
|
22,419
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
Common Stock ($0.001 par
value; 50,000,000 shares authorized;
|
|
|
|
|
|
|
32,285,973 shares and
27,974,514 shares issued and outstanding
|
|
|
|
|
|
|
as of December 31, 2011 and
2010, respectively
|
|
|
32
|
|
|
28
|
Additional paid-in
capital
|
|
|
58,425
|
|
|
29,508
|
PRC statutory
reserves
|
|
|
1,732
|
|
|
1,672
|
Accumulated other
comprehensive income
|
|
|
6,109
|
|
|
4,357
|
Accumulated deficit
|
|
|
(13,344)
|
|
|
(13,630)
|
Stockholders' equity - China
Shen Zhou Mining & Resources, Inc. and Subsidiaries
|
|
|
52,954
|
|
|
21,935
|
Noncontrolling
interest
|
|
|
10,615
|
|
|
-
|
Noncontrolling interest -
Discontinued operations
|
|
|
-
|
|
|
(162)
|
Total stockholders'
equity
|
|
|
63,569
|
|
|
21,773
|
Total liabilities and
stockholders' equity
|
|
$
|
85,316
|
|
$
|
44,192
|
CHINA SHEN ZHOU
MINING & RESOURCES, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Audited, amounts in
thousands, except per share data)
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
|
2011
|
|
2010
|
Net revenue
|
|
$
|
30,551
|
|
$
|
11,612
|
Cost of sales
|
|
|
17,051
|
|
|
8,604
|
Gross profit
|
|
|
13,500
|
|
|
3,008
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling and distribution
expenses
|
|
|
202
|
|
|
104
|
General and administrative
expenses
|
|
|
11,197
|
|
|
4,085
|
Provision for doubtful
accounts
|
|
|
(148)
|
|
|
355
|
Impairment provision for
inventories
|
|
|
-
|
|
|
287
|
Impairment provision for
mining assets
|
|
|
-
|
|
|
1,007
|
Total operating
expenses
|
|
|
11,251
|
|
|
5,838
|
|
|
|
|
|
|
|
Net income (loss) from
operations
|
|
|
2,249
|
|
|
(2,830)
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest expense
|
|
|
(682)
|
|
|
(589)
|
Provision for available for
sale investment
|
|
|
-
|
|
|
(148)
|
Other, net
|
|
|
(40)
|
|
|
472
|
Total other expense
|
|
|
(722)
|
|
|
(265)
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
|
1,527
|
|
|
(3,095)
|
|
|
|
|
|
|
|
Income tax benefits
(expenses)
|
|
|
(1,235)
|
|
|
-
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
|
292
|
|
|
(3,095)
|
|
|
|
|
|
|
|
Discontinued operations
(Note 4):
|
|
|
|
|
|
|
Loss from operations of
discontinued component
|
|
|
(7)
|
|
|
(193)
|
Loss on disposal of
discontinued subsidiary
|
|
|
(82)
|
|
|
-
|
Loss from discontinued
operations
|
|
|
(89)
|
|
|
(193)
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
203
|
|
|
(3,288)
|
Add: Noncontrolling
interests attributable to the noncontrolling interests
|
|
|
143
|
|
|
-
|
Net income (loss) -
attributable to China Shen Zhou Mining & Resources, Inc. and
Subsidiaries
|
|
|
346
|
|
|
(3,288)
|
|
|
|
|
|
|
|
Other
comprehensive income:
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
1,752
|
|
|
518
|
Comprehensive income
(loss)
|
|
$
|
2,098
|
|
$
|
(2,770)
|
|
|
|
|
|
|
|
Net income (loss) per
common share – basic and diluted
|
|
|
|
|
|
|
From continuing
operations
|
|
$
|
0.01
|
|
$
|
(0.11)
|
From discontinued
operations
|
|
|
(0.00)
|
|
|
(0.01)
|
|
|
$
|
0.01
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding
|
|
|
|
|
|
|
- Basic and Diluted
|
|
|
31,369
|
|
|
27,902
|
CHINA SHEN ZHOU
MINING & RESOURCES, INC AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Audited, amounts in
thousands, except share data)
|
|
|
|
|
|
For the Year Ended December 31,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
346
|
|
$
|
(3,288)
|
Adjustments to reconcile
net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
Loss from operations of
discontinued component, net of income tax benefits
|
|
|
7
|
|
|
194
|
Loss on sale of discontinued
operations, net of income taxes
|
|
|
82
|
|
|
-
|
Provision for doubtful
accounts
|
|
|
(131)
|
|
|
355
|
Impairment provision for
inventories
|
|
|
-
|
|
|
287
|
Provision for available for
sale investment
|
|
|
-
|
|
|
148
|
Impairment provision for
mining assets
|
|
|
-
|
|
|
1,007
|
Depreciation and
amortization
|
|
|
4,171
|
|
|
2,434
|
Noncontrolling
interests
|
|
|
(143)
|
|
|
-
|
Forgiveness of payroll
payables
|
|
|
50
|
|
|
(300)
|
Stock-based
compensation
|
|
|
972
|
|
|
-
|
Changes in operating assets
and liabilities:
|
|
|
|
|
|
|
(Increase) decrease in
-
|
|
|
|
|
|
|
Notes receivable
|
|
|
(1,019)
|
|
|
-
|
Accounts receivable
|
|
|
(3,075)
|
|
|
48
|
Advances to
suppliers
|
|
|
(1,398)
|
|
|
371
|
Other deposits
|
|
|
230
|
|
|
(636)
|
Prepayment for vehicle
rent
|
|
|
(443)
|
|
|
-
|
Prepayment for office
rent
|
|
|
82
|
|
|
198
|
Inventories
|
|
|
53
|
|
|
(3,687)
|
Restricted assets
|
|
|
(2,639)
|
|
|
693
|
Increase (decrease) in
-
|
|
|
|
|
|
|
Accounts payable
|
|
|
449
|
|
|
(2,386)
|
Receipts in advance
|
|
|
(612)
|
|
|
53
|
Other payables and
accruals
|
|
|
(2,167)
|
|
|
420
|
Taxes payable
|
|
|
1,207
|
|
|
300
|
Net cash used in operating
activities from continuing operations
|
|
|
(3,978)
|
|
|
(3,789)
|
Net cash (used in) provided by
operating activities from discontinued operations
|
|
|
(37)
|
|
|
59
|
Net cash used in operating
activities
|
|
|
(4,015)
|
|
|
(3,730)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Purchases of property,
machinery and mining assets
|
|
|
(5,193)
|
|
|
(2,099)
|
Acquisition of subsidiaries,
net of cash and cash equivalents acquired
|
|
|
(6,022)
|
|
|
-
|
Sales of property, machinery
and mining assets
|
|
|
189
|
|
|
75
|
Net cash used in investing
activities from continuing operations
|
|
|
(11,026)
|
|
|
(2,024)
|
Net cash used in investing
activities from discontinued operations
|
|
|
-
|
|
|
(4)
|
Net cash used in investing
activities
|
|
|
(11,026)
|
|
|
(2,028)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Due to related
parties
|
|
|
(656)
|
|
|
67
|
Proceeds from issuance of
common shares
|
|
|
20,000
|
|
|
-
|
Issuance costs of common
shares
|
|
|
(1,516)
|
|
|
-
|
Repayment at short-term bank
loans
|
|
|
(8,964)
|
|
|
(5,036)
|
Proceeds from short-term bank
loans
|
|
|
9,704
|
|
|
12,142
|
Net cash provided by financing
activities
|
|
|
18,568
|
|
|
7,173
|
Foreign currency
translation adjustment
|
|
|
497
|
|
|
(203)
|
|
|
|
|
|
|
|
Net increase in cash and
cash equivalents
|
|
|
4,024
|
|
|
1,212
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the year
|
|
|
1,545
|
|
|
333
|
Cash and cash
equivalents at the end of the year
|
|
$
|
5,569
|
|
$
|
1,545
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities
|
|
|
|
|
|
|
Shares issued to
employees as share based compensation
|
|
$
|
-
|
|
$
|
752
|
Shares issued to Acquire
Xinyi Fluorite
|
|
$
|
9,467
|
|
$
|
-
|
|
|
|
|
|
|
|
Supplemental disclosures
of cash flow information:
|
|
|
|
|
|
|
Cash paid for interest
expenses
|
|
$
|
582
|
|
$
|
415
|
Cash paid for income
tax
|
|
$
|
57
|
|
$
|
-
|
SOURCE China Shen Zhou Mining & Resources, Inc.