Capital Expenditures and Investments - China Natural Resources plans to increase capital expenditures for nickel exploration at the Moruogu Tong Mine in Inner Mongolia in 2022[1] - The company intends to fund six additional drilling holes, with an initial investment of CNY 2.16 million, to expedite resource capture in the southern part of the mine[2] Market Conditions and Strategic Evaluation - Chairman Mr. Wong Wah On Edward highlighted the high commodity prices and increasing demand for raw materials, particularly in sectors like electric vehicles and electronics[3] - The company is evaluating strategic options with other natural resource mines, including copper, vanadium, and kaolin mines, to enhance asset monetization for shareholders[3] Diversification and Opportunities - China Natural Resources is also exploring opportunities in the wastewater treatment industry and the healthcare sector[4] Risks and Challenges - The company faces various risks, including potential lack of appetite for current holdings and uncertainties related to metal price volatility and mining permits[5]

Financial Performance - The company reported a loss for the year from continuing operations attributable to owners of the Company of CNY 25,579,000 in 2020, compared to a loss of CNY 5,645,000 in 2019[15]. - Total revenue for the year ended December 31, 2020, was CNY 138,674,000, a significant increase from CNY 7,468,000 in 2019[16]. - The basic and diluted loss per share attributable to owners of the Company from continuing operations was CNY 0.90 in 2020, compared to CNY 0.23 in 2019[15]. - Profit for the year 2020 was CNY 25.58 million (US$ 3.92 million), compared to a loss of CNY 5.65 million in 2019, primarily due to a CNY 31.33 million (US$ 4.80 million) fair value gain on Feishang Anthracite shares[97]. - Revenue decreased by CNY 6.10 million (US$0.93 million) for the year ended December 31, 2020, primarily due to the cessation of copper ore trading[93]. - Gross profit for the year ended December 31, 2020, was CNY 13,591 (US$2,081), with a gross profit margin of 0.20%[93]. - Total comprehensive income for the year was CNY 26,282 million in 2020, compared to a loss of CNY 5,756 million in 2019[214]. - Cash and cash equivalents decreased from CNY 3,444 million in 2019 to CNY 2,450 million in 2020, a decline of about 29%[206]. Business Strategy and Operations - The company is actively seeking opportunities to enter the healthcare industry in the PRC, indicating a strategic pivot from its previous operations[16]. - The company has ceased trading of copper ore, which was its sole revenue-generating activity, highlighting a shift in business focus[16]. - The company may incur significant losses in the foreseeable future as it pivots to a new sector to generate revenues[16]. - The management has limited experience in acquiring businesses outside of their historical sectors, which may pose risks to future acquisitions[20]. - The company’s primary asset available for business combinations is 120,000,000 shares of FARL, which may not be attractive to potential targets due to liquidity concerns[20]. - The company is exploring potential investments in the healthcare sector in the PRC, driven by an aging population and increasing healthcare expenditures[63]. Exploration and Mining Activities - The exploration program at the Moruogu Tong Mine has indicated the presence of lead and silver, with potential for discovering other ores such as copper[23]. - The Moruogu Tong Mine's exploration is subject to geological survey protocols recognized in the PRC, which differ from those in the United States, potentially affecting reserve estimates[24]. - The exploration program at the Moruogu Tong Mine has involved 76 drill holes totaling 22,272.86 meters, with 1,467 samples collected[72]. - The Moruogu Tong Mine exploration program has identified lead and silver deposits, with an average grade of lead at 1.81%[75]. - Bayannaoer Mining incurred exploration expenses of approximately CNY 35.58 million (US$5.45 million) related to its exploration rights, with the current exploration permit for the Moruogu Tong Mine valid until September 2021[69]. Regulatory and Economic Environment - The company faces risks related to government regulations in the PRC, which could adversely affect operations and lead to penalties[29]. - The PRC government imposes restrictions on dividend payments from subsidiaries, which can affect the company's ability to distribute profits to shareholders[39]. - The effectiveness of newly enacted laws and regulations in the PRC may be delayed, creating uncertainties for foreign investors[36]. - The PRC economy has experienced a significant slowdown since the outbreak of COVID-19, impacting growth and profitability[37]. - The company faces regulatory uncertainties due to recent changes in SAFE regulations regarding offshore financing activities by PRC residents[41]. Financial Position and Liquidity - As of December 31, 2020, total cash and cash equivalents amounted to CNY 2,450,000 (US$ 375,000), down from CNY 3,444,000 in 2019[110]. - Net cash used in operating activities for 2020 was CNY 4,561,000, compared to CNY 3,333,000 in 2019[110]. - The current ratio improved significantly from 0.21x in 2019 to 4.57x in 2020, indicating enhanced liquidity[111]. - The company intends to fund future capital expenditures through loans from related-party debtholders and bank borrowings[90]. - The company has experienced difficulty in developing an active trading market for its securities, limiting its ability to use them for acquisitions[111]. Shareholder and Corporate Governance - The company is classified as a foreign private issuer, resulting in less information being available compared to domestic reporting companies[48]. - The company has adopted IFRS accounting principles, which differ from U.S. GAAP, and is not required to reconcile these principles[48]. - The company has not set aside or accrued any amounts for pension or retirement benefits for its directors[127]. - The Audit Committee is responsible for ensuring the accuracy and effectiveness of the annual audit of the financial statements[133]. - The company has a total of 24,539,685 shares beneficially owned by its officers and directors as a group, representing 64.66% of the class[141]. Market Conditions and Commodity Prices - The market prices for lead, silver, and copper have shown significant volatility, with SHFE lead prices ranging from CNY12,620 (US$1,932) to CNY16,585 (US$2,540) per ton in 2020[27]. - The average price of lead on the SHFE was CNY14,745 per ton at the end of 2020, reflecting a decline of approximately 3% compared to the beginning of the year[65]. - The average price of silver on the SHFE reached an annual high of CNY6,877 (US$1,053) per kg in mid-August 2020, following a significant drop earlier in the year[65]. - The average SHFE copper price reached CNY57,970 (US$8,843) per ton in 2020, representing an increase of approximately 17% compared to the opening price at the beginning of the year[68]. - World refined copper production in 2020 was 24,426 thousand tons, while global demand was 24,982 thousand tons, indicating a supply-demand imbalance[70]. COVID-19 Impact - The COVID-19 pandemic caused significant disruptions to operations, including restrictions on employee movement and delays in supply chains, impacting financial performance[60]. - The company experienced significant operational impacts due to COVID-19, including restrictions on employee movement and a slowdown in exploratory activities[97].

Part I [ITEM 3. KEY INFORMATION](index=7&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section presents key financial data and a comprehensive overview of operational, financial, regulatory, and market risks, including COVID-19 impacts, after the company's shift to mineral exploration and copper trading [Selected Financial Data](index=7&type=section&id=A.%20Selected%20Financial%20Data) This section presents selected IFRS financial data for 2015-2019, reflecting a shift to copper trading, significant losses from discontinued operations, declining assets, and a persistent equity deficit Selected Income Statement Data | Indicator | 2017 (CNY'000) | 2018 (CNY'000) | 2019 (CNY'000) | | :--- | :--- | :--- | :--- | | **Revenue (Continuing)** | — | — | 12,969 | | **Loss from continuing operations** | (6,179) | (6,176) | (5,645) | | **Loss from discontinued operations** | (23,817) | — | — | | **Total Loss for the year** | (29,996) | (6,176) | (5,645) | | **Loss per share (Basic)** | (1.20) | (0.25) | (0.23) | Selected Balance Sheet Data | Indicator | 2017 (CNY'000) | 2018 (CNY'000) | 2019 (CNY'000) | | :--- | :--- | :--- | :--- | | **Total assets** | 29,748 | 7,743 | 8,298 | | **Current liabilities** | 45,253 | 29,541 | 35,852 | | **Total equity (deficiency)** | (15,505) | (21,798) | (27,554) | - Financial statements for 2015 and 2016 were retrospectively restated due to the 2017 disposal of Wuhu Feishang and Double Grow, now classified as **discontinued operations**[30](index=30&type=chunk) [Risk Factors](index=9&type=section&id=D.%20Risk%20Factors) The company faces numerous high-degree risks, including speculative mine exploration, unprofitable copper trading, persistent operating losses, reliance on related-party funding, PRC regulatory uncertainties, and the disruptive impact of the COVID-19 pandemic - The Moruogu Tong Mine is in the exploration stage and may not generate revenue, with operations funded by a Cooperation Agreement that reduces CHNR's share of potential profits to **30%** for later discoveries[37](index=37&type=chunk)[41](index=41&type=chunk) - The company incurred operating losses from continuing operations of **CNY 6.18 million** in 2017, **CNY 6.18 million** in 2018, and **CNY 5.65 million** in 2019[55](index=55&type=chunk) - The company's auditor is in a jurisdiction where the PCAOB cannot conduct inspections, potentially leading to delisting under the HFCA Act and depriving investors of oversight benefits[76](index=76&type=chunk)[81](index=81&type=chunk) - The COVID-19 pandemic has severely disrupted operations by restricting employee movement, slowing the PRC economy, and creating extreme volatility in commodity prices, negatively impacting copper trading and mining activities[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=21&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, current business focus on metal exploration and copper trading, organizational structure, property, and the PRC regulatory environment [History and Development of the Company](index=21&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Incorporated in 1993, the company focuses on metals exploration and mining in the PRC, specifically lead and silver at Moruogu Tong Mine, and commenced copper ore trading in 2019 - The company's primary focus is on metals exploration and mining in the PRC, specifically exploring for **lead, silver, and other metals** in Inner Mongolia[103](index=103&type=chunk) - In 2019, Bayannaoer Mining commenced copper ore trading, involving both filling customer orders and purchasing for its own account for resale[105](index=105&type=chunk)[106](index=106&type=chunk) [Business Overview](index=22&type=section&id=B.%20Business%20Overview) The company's principal business involves metal exploration at Moruogu Tong Mine and copper ore trading, with an overview of market conditions and PRC mineral exploration regulations - The company's sole revenue from continuing operations over the past three years was **CNY 12.97 million** from copper ore trading activities started in 2019[114](index=114&type=chunk) - Moruogu Tong Mine exploration is funded by affiliates and a cooperation agreement with Jijincheng Mining, splitting interests in new discoveries **50/50** for the first 10 drill holes and **30/70** thereafter[138](index=138&type=chunk) Selected Metal Market Data (2019) | Metal | 2019 World Refined Production (k tons) | 2019 China Refined Production (k tons) | 2019 SHFE Average Price (CNY/ton) | | :--- | :--- | :--- | :--- | | **Lead** | 11,772 | 4,976 | 15,115 | | **Copper** | 23,929 | 9,784 | 49,280 | Selected Silver Market Data (2019) | Metal | 2019 World Production from Mines (tons) | 2019 SHFE Average Price (CNY/kg) | | :--- | :--- | :--- | | **Silver** | 25,492 | 4,432 | [Organizational Structure](index=31&type=section&id=C.%20Organizational%20Structure) CHNR is a BVI holding company with subsidiaries in BVI, Hong Kong, and PRC, with all current operations conducted by its PRC subsidiary, Bayannaoer Mining - CHNR is a holding company with subsidiaries in BVI, Hong Kong, and PRC, with all current business operations conducted by its **PRC subsidiary, Bayannaoer Mining**[165](index=165&type=chunk)[166](index=166&type=chunk) [Property, Plant and Equipment](index=31&type=section&id=D.%20Property%2C%20Plant%20and%20Equipment) The company's administrative offices are leased in Hong Kong and Shenzhen, with exploration operations at Moruogu Tong Mine covering **10.43 square kilometers**, and minimal capital expenditures in recent years - The company leases office premises in Hong Kong and Shenzhen through office sharing agreements with related parties, Anka Consultant Ltd. and Feishang Enterprise[168](index=168&type=chunk) - The company's primary operational asset is the exploration permit for the Moruogu Tong Mine in Inner Mongolia, covering **10.43 square kilometers**[171](index=171&type=chunk) Capital Expenditures | Year | Capital Expenditures (CNY) | | :--- | :--- | | 2017 | 4,210,000 | | 2018 | 5,000 | | 2019 | 5,000 | [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=32&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides management's discussion and analysis of financial condition and operations, detailing the business shift, 2017-2019 performance, liquidity reliance on related-party loans, critical accounting policies, and COVID-19 impacts [Operating Results](index=32&type=section&id=A.%20Operating%20Results) Operating results reflect a transition, with **CNY 12.97 million** revenue from 2019 copper trading, stable administrative expenses, a slight decrease in loss from continuing operations, and the adoption of IFRS 16 - In 2019, the company commenced copper ore trading, generating its first revenue from continuing operations in three years, totaling **CNY 12.97 million** with a gross profit of **CNY 0.22 million** (**1.67%** margin)[183](index=183&type=chunk)[184](index=184&type=chunk) Key Operating Metrics | Metric | 2018 (CNY million) | 2019 (CNY million) | Change | | :--- | :--- | :--- | :--- | | **Administrative Expenses** | 6.21 | 5.81 | Decreased due to tighter expense control | | **Loss for the Year** | 6.18 | 5.65 | Decreased due to gross profit from new trading business | - The company adopted IFRS 16 (Leases) on January 1, 2019, recognizing right-of-use assets and lease liabilities of **CNY 1.803 million** on the balance sheet[214](index=214&type=chunk)[218](index=218&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity is constrained, relying on non-interest-bearing loans from related parties, with a **CNY 28.38 million** working capital deficit and **CNY 3.44 million** cash as of December 31, 2019 - The company's primary liquidity sources are non-interest-bearing loans from related parties and funds from its Cooperation Agreement, as internally generated cash is insufficient[229](index=229&type=chunk) - Related parties Feishang Group and Feishang Enterprise provide continuous financial support, committing not to recall amounts due until the Group is financially stable[230](index=230&type=chunk) Key Liquidity Metrics | Metric | 2018 (CNY'000) | 2019 (CNY'000) | | :--- | :--- | :--- | | **Net cash used in operating activities** | (7,527) | (3,333) | | **Cash and cash equivalents at end of year** | 6,793 | 3,444 | | **Working capital** | (22,073) | (28,384) | [Trend Information](index=42&type=section&id=D.%20Trend%20Information) The COVID-19 pandemic is the most significant trend, causing major economic disruptions, severely impacting operations, and making reported financial results not indicative of future performance - The COVID-19 pandemic and containment efforts have caused significant economic and financial disruptions, severely affecting the company's exploration and copper trading operations[244](index=244&type=chunk) - Due to major uncertainties from COVID-19, the company cautions that reported financial results may not be indicative of future prospects and results of operations[244](index=244&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=43&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, board structure, and employees, including executive officers, nominal executive compensation, the equity plan, board committees, and total employee count [Directors and Senior Management](index=43&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership includes Chairman and CEO Wong Wah On Edward, CFO Yue Ming Wai Bonaventure, and three non-employee directors, while principal owner Mr. Li Feilie provides strategic guidance - Key executive officers include **Wong Wah On Edward** (Chairman & CEO), **Tam Cheuk Ho** (Director), and **Yue Ming Wai Bonaventure** (Director & CFO)[251](index=251&type=chunk) - Mr. Li Feilie, the principal beneficial owner, controls the company through subsidiary directorships, share ownership, and significant debt holdings, despite not being an officer or director of the parent company[92](index=92&type=chunk)[252](index=252&type=chunk) [Compensation](index=46&type=section&id=B.%20Compensation) Executive compensation is nominal at **US$1.00** annually, while non-employee directors received **US$15,385** each in 2019, and no awards have been granted under the 2014 Equity Compensation Plan 2019 Director and Executive Compensation | Name | Position | 2019 Compensation (US$) | | :--- | :--- | :--- | | Wong Wah On Edward | Chairman, CEO | 1 | | Yue Ming Wai Bonaventure | Director, CFO | 1 | | Lam Kwan Sing | Non-employee Director | 15,385 | | Ng Kin Sing | Non-employee Director | 15,385 | | Yip Wing Hang | Non-employee Director | 15,385 | - The 2014 Equity Compensation Plan reserves **4,982,183** common shares for issuance, but no options or awards were outstanding as of December 31, 2019[263](index=263&type=chunk)[266](index=266&type=chunk) [Board Practices](index=48&type=section&id=C.%20Board%20Practices) The Board has a classified structure with three independent directors comprising the Audit, Nominating, and Compensation Committees, and as a foreign private issuer, the company is exempt from certain Nasdaq governance rules - The Board has established Audit, Nominating, and Compensation Committees, each composed of the three independent directors: **Yip Wing Hang, Lam Kwan Sing, and Ng Kin Sing**[272](index=272&type=chunk)[276](index=276&type=chunk) - As a foreign private issuer, the company is exempt from certain Nasdaq rules, not requiring a majority-independent board or independent director approval for related-party transactions[270](index=270&type=chunk)[280](index=280&type=chunk) [Share Ownership](index=51&type=section&id=E.%20Share%20Ownership) As of June 12, 2020, Mr. Li Feilie is the principal beneficial owner, controlling **59.33%** of the **24,910,916** outstanding common shares, with officers and directors collectively owning **62.07%** Beneficial Ownership of Common Shares (as of June 12, 2020) | Name of Beneficial Owner | Amount of Beneficial Ownership | Percent of Class | | :--- | :--- | :--- | | Li Feilie | 14,780,593 | 59.33% | | Officers and directors as a group (8 persons) | 15,462,519 | 62.07% | [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=52&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section identifies Mr. Li Feilie as the controlling shareholder and details significant related-party transactions, including financial support through interest-free loans and office sharing agreements [Major Shareholders](index=52&type=section&id=A.%20Major%20Shareholders) As of June 12, 2020, Mr. Li Feilie is the controlling shareholder, beneficially owning **14,780,593** common shares, representing **59.33%** of the class - Mr. Li Feilie is the controlling shareholder, beneficially owning **59.33%** of the company's outstanding common shares as of June 12, 2020[290](index=290&type=chunk) [Related Party Transactions](index=52&type=section&id=B.%20Related%20Party%20Transactions) The company engages in significant related-party transactions, including interest-free loans and financial support from Mr. Li Feilie's entities, with **CNY 12.17 million** in payables as of December 31, 2019, and office sharing agreements - The company receives continuous financial support through interest-free loans from entities controlled by its principal shareholder, Mr. Li Feilie[293](index=293&type=chunk) Payables to Related Parties | Payable to Related Party | 2018 (CNY'000) | 2019 (CNY'000) | | :--- | :--- | :--- | | Feishang Enterprise | 4,041 | 5,077 | | Feishang Group (Shareholder) | 6,973 | 7,097 | | **Total** | **11,014** | **12,174** | - The company has commercial transactions with related parties, including an office sharing agreement with Anka Consultants Limited, owned by directors **Wong Wah On Edward** and **Tam Cheuk Ho**[295](index=295&type=chunk)[298](index=298&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=55&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers supplementary corporate information, including material contracts, PRC exchange controls restricting Renminbi conversion, and taxation implications for U.S. holders (PFIC risk), BVI, and PRC [Exchange Controls](index=55&type=section&id=D.%20Exchange%20Controls) The company's operations are subject to PRC's strict foreign exchange controls, requiring SAFE approval for capital account transactions and restricting the use of converted RMB capital, potentially impacting funding and profit distribution - The PRC government imposes strict controls on Renminbi convertibility, requiring SAFE approval or registration for capital account transactions, while current account transactions are permissible[308](index=308&type=chunk) - SAFE Circular 19 allows converted RMB capital for PRC equity investments but restricts its use for purposes beyond the company's approved business scope[308](index=308&type=chunk) [Taxation](index=56&type=section&id=E.%20Taxation) This section summarizes U.S., BVI, and PRC tax implications, highlighting potential adverse U.S. tax consequences if classified as a PFIC, BVI tax exemptions, and PRC enterprise income and withholding taxes - The company has not determined its PFIC status for U.S. federal income tax purposes, and if classified as such, U.S. shareholders could face adverse tax consequences[96](index=96&type=chunk)[326](index=326&type=chunk) - The company is exempt from income, corporate, and capital gains taxes in its jurisdiction of incorporation, the **British Virgin Islands (BVI)**[343](index=343&type=chunk) - If PRC tax authorities deem the company a "resident enterprise," a **10%** withholding tax could be imposed on dividends and gains from share sales for non-PRC resident holders[346](index=346&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=63&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section presents management's assessment that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no material changes reported - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2019[354](index=354&type=chunk)[356](index=356&type=chunk) - Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2019[361](index=361&type=chunk) Part III [ITEM 18. FINANCIAL STATEMENTS](index=66&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for 2017-2019, prepared under IFRS, detailing financial position, operations, equity, and cash flows, including discontinued operations Consolidated Balance Sheet Data | (Amounts in thousands) | Dec 31, 2018 (CNY) | Dec 31, 2019 (CNY) | | :--- | :--- | :--- | | **Total Assets** | 7,743 | 8,298 | | **Total Liabilities** | 29,541 | 35,852 | | **Total Equity (Deficiency)** | (21,798) | (27,554) | Consolidated Statement of Comprehensive Loss Data | (Amounts in thousands) | 2017 (CNY) | 2018 (CNY) | 2019 (CNY) | | :--- | :--- | :--- | :--- | | **Revenue (Continuing)** | — | — | 12,969 | | **Loss from Continuing Operations** | (6,179) | (6,176) | (5,645) | | **Loss from Discontinued Operations** | (23,817) | — | — | | **Net Loss for the Year** | (29,996) | (6,176) | (5,645) | - The independent auditor, **Ernst & Young Hua Ming LLP**, issued an **unqualified opinion** on the consolidated financial statements[387](index=387&type=chunk) - The financial statements were prepared on a **going concern basis**, relying on financial support letters from related parties who committed not to recall amounts due until the Group has sufficient liquidity[413](index=413&type=chunk)

Acquisition and Corporate Structure - The company reported a significant acquisition of Feishang Mining, which was treated as a reverse acquisition, with former shareholders holding 86.4% of outstanding common shares[28]. - The company is classified as not being a shell company as per the Exchange Act[5]. - Mr. Li Feilie controls approximately 59% of the company's outstanding common shares, influencing shareholder votes and corporate transactions[93]. - The company has not been involved in any bankruptcy or similar proceedings, maintaining a stable operational status[113]. - The company’s status as a foreign private issuer results in less information being available compared to domestic reporting companies, complicating investment decisions[86]. Financial Performance - For the year ended December 31, 2018, the profit before income tax from continuing operations was a loss of CNY 6,176,000, compared to a loss of CNY 6,179,000 in 2017[33]. - The total assets decreased significantly from CNY 29,748,000 in 2017 to CNY 7,743,000 in 2018[34]. - Current liabilities decreased from CNY 45,253,000 in 2017 to CNY 29,541,000 in 2018, indicating improved liquidity[34]. - The total equity attributable to owners of the Company showed a deficiency of CNY 21,798,000 in 2018, compared to a deficiency of CNY 15,505,000 in 2017[34]. - The company incurred operating losses from continuing operations of CNY4.52 million, CNY6.20 million, and CNY6.21 million (US$0.90 million) for the fiscal years ended December 31, 2016, 2017, and 2018 respectively[50]. - The company has not paid any dividends and has no plans to do so in the foreseeable future, intending to retain earnings for business development[34]. - The company generated no revenue during the fiscal years 2018 and 2017 due to the cessation of its copper smelting business and ongoing exploration activities[176][191]. Exploration and Mining Activities - The exploration program at Moruogu Tong Mine has indicated the presence of a "mid-size" deposit of lead and silver ore, warranting further exploration[41]. - The Company intends to fund mine exploration through bank borrowings and funds received from a cooperation agreement with Jijincheng Mining[41]. - The average LME price for silver in 2018 was US$2,021 per tonne, a decrease from US$2,531 per tonne in 2017[124]. - The company focused its resources on metals exploration and mining activities in the Inner Mongolia Autonomous Region of the PRC following the disposal of its previous operations[175]. - The company acquired Bayannaoer Mining in November 2017, which holds an exploration permit for the Moruogu Tong Mine, believed to contain lead and silver resources[174]. Regulatory and Compliance Issues - The company is subject to various government regulations that could adversely affect operations, including environmental protection and land use laws[48]. - The PRC government imposes controls on the convertibility of Renminbi into foreign currencies, which may affect the company's ability to remit dividends[69]. - The company has not filed any registrations with the SAFE regarding offshore investment activities, which may create regulatory uncertainties[75]. - PCAOB inspections of firms outside China have identified deficiencies, raising concerns about the effectiveness of the audit procedures of the company's auditor[79]. - SEC proceedings against PRC-based accounting firms could lead to financial statements being deemed non-compliant with the Securities Exchange Act of 1934[80]. Financial Reporting and Accounting - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS)[16]. - The financial data for the years ended December 31, 2016, 2017, and 2018 are derived from audited consolidated financial statements, with unqualified auditor's reports issued by Ernst & Young Hua Ming LLP[29]. - The company maintains its accounts in Hong Kong Dollars and Renminbi, with financial statements prepared in Renminbi[23]. - The company has not disclosed any information regarding directors, senior management, and advisors in this report[26]. - The company recognizes asset retirement obligations at fair value when it is probable that an outflow of resources will be required, and a reasonable estimate of fair value can be made[205]. Market Conditions and Risks - The company faces risks related to changes in PRC government policies that could impact business operations and profitability[62]. - The company has incurred losses for each of the preceding three fiscal years, raising concerns about future profitability[49]. - The company does not currently generate revenues from operations and will continue to incur operating expenses until revenue-producing activities commence[51]. - The average exchange rate for the Renminbi against the U.S. Dollar in 2018 was 6.6363, reflecting a slight depreciation compared to previous years[39]. - The annual cumulative depreciation of the Renminbi against the U.S. dollar was 5.71% in 2018, while it appreciated by 2.42% from the beginning of 2019 to March 31, 2019[73].