Major Shareholder:

• Xinghang Investment ¡V 33.61% interest
• Xinhuadu Industrial ¡V 20.19% interest
• Jinshan Trading ¡V 13.51% interest

Company Subsidiaries:

• Anhui Zijin (75.0%): Operates the Paodaoling gold mine
• Guizhou Zijin (51.0%): Operates the Shuiyindong gold mine
• Hunchun Zihin (67.0%): Operates gold copper mine

The Group is leading gold mining enterprise principally engaged in the exploration, mining, production, refining and sale of gold and other mineral resources in the PRC.

The principal operating assets of the Group are the Zijinshan Gold Mine and its ancillary gold refinery in Fuijan province. According to the PRC Gold Industry Yearbook 2002, Zijinshan Gold Mine is the single largest open pit gold mine by pro9duction output in the PRC in 2001. Beneath the gold reserves of the Zijinshan Gold Mine lie a large scale of copper resources (estimated at approximately 1.465 million tonnes of copper metal). The Group also participates in the mining of, and exploration for gold, copper and other mineral resources (such as zinc, silver and lead ) in the central and western parts of the PRC, and has secured the exploration rights for an aggregate of 704.3 sq.km. in Anhui, Guizhou, Jilin, Sichuan provinces and Xinjiang, According to SRK, it is estimated that the Group controls over 235.2 tonnes of gold resources and over 2.46 million tonnes of copper resources in the PRC.

The principal product of the Group is gold. The refinery of the Group produces gold bullion of 99.99% and 99.95% purity under the ¡§Zijin¡¨ brand. The quality of this gold bullion meets the standards recognized by the Shanghai Gold Exchange. The refinery of the Group is one of the first ten qualified gold refineries approved by the Shanghai Gold Exchange and has obtained ISO9001:2000 certification.

The Directors believe that the Group has the following competitive advantages:

• Advantage in resources ¡V the Group wholly owns the mining rights of the Zijinshan Gold Mine and the Zijishan Copper Mine in Fujian provinces. The Group also obtained controlling interests in the Shuiyindong Gold Mine in Guizhou province, the Hunchun Gold-copper Mine in Jilin province, the Parodaolng Gold Mine and Jiaochong gold-Base-Metals Mine in Anhui province, the Ashele Copper-Zinc Mine in Xinjiang and the Caodi gold Mine in Sichuan province.
• Advantage in scale ¡V the Group is one of the largest gold mining and refining enterprises in the PRC and owns the Zijinshan Gold Mine, the largest single open pit gold mine in the PRC
• Advantage in cost ¡V the Zijinshan Gold Mine is featured with geologically well-located deposits, simple hydrology and geological conditions, and highly oxidized gold ores which can be easily processed.
• Advantage in the technology ¡V the Group utilizes a hot pressure elution and electrowinning technique. The Directors believe the Group is in a leading poistion in gold refining in the PRC.
• Advantage in product ¡V the refinery of the Group produces gold bars of 99.99 and 99.95% purity under the ¡§Zijin¡¨ brand. The quality of these gold products meet the standard recognized by the Shanghai Gold Exchange.
• Advantage in human resources ¡V most members of the senior management of the Group posses extensive experience in the non-ferrous metal industry and the mining industry (including geology and metallurgy). Over 80% of the members of the senior management are of university level of higher.

• Price fluctuations of gold
• Uncertainty in the results of exploration for resources
• Reliance on operating performance of a single gold mine
• Technological risks
• Risk of contingent liabilities on guaranteed loans
• Reliance on stripping contractors
• Risk of supply of electricity

The Group intends to enhance the level of resources utilization, and to increase the quantity of recoverable gold resources through a comprehensive utilization of gold-containing tailings at the Zijinshan gold Mine, in order to maintain its gold throughput at about 9 tpa of metal.

The Group intends to increase the gold production volume by 2,500 kg of metal in the next two years at the Shuiyindong gold Mine, the Hunchun gold-Copper Mine and the Paodaoling gold Mine. The Group also plans to increase its number of gold development projects in the next five years, so that in 2008, the annual gold production volume of the Group will be 15,000 kg of metal.

Accordingly, the Group plans to enlarge its mineral resources through exploration as well as mergers and acquisitions. The Directors consider that there are opportunities in the central and western parts of the PRC. By capitalizing on the expertise and technological advantages (in particular, the hydormetallurgical techniques)of the Group, it will be able to focus on the development of low-grade and refractory gold deposits in the central and western parts of the PRC

The Group will enhance its strength in the research and development of the new techniques on chemical pre-oxidation, pressurized pre-oxidation (leaching) and biological pre-oxidation methods, and apply them in the treatment of refractory gold and complicated non-ferrous metal mine resources in the central and western parts of the PRC.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$934 million (based on the offer price HK$3.10 per shares). The Group at present intends to apply the net proceeds as follows: