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China Shen Zhou Mining & Resources, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2010 (All figures are in U.S. dollars)

BEIJING, Nov. 12, 2010 /PRNewswire via COMTEX/ -- China Shen Zhou Mining & Resources, Inc. ("China Shen Zhou", or the "Company"), a company engaged in the exploration, development, mining and processing of fluorite, zinc, lead, copper, and other nonferrous metals in China, today announced the financial results for the third quarter ended September 30, 2010.

Third Quarter 2010 Highlights: Net revenues increased by 110% in the third quarter of 2010 as compared to the same period in 2009 to US $3.62 million from US $1.72 million.

Gross profit increased by approximately 600% in the third quarter of 2010 as compared to the same period in 2009 to US$1.74 million from US$0.25 million.

Gross margin was 48% as compared to 14% in the same period of the prior fiscal year.

Net income attributable to the Company and subsidiaries increased in the third quarter of 2010 to US$0.52 million as compared to a net loss of US$2.15 million in the same period in 2009.

Basic and diluted net income (loss) per share from continuing operations was US$0.02 in the third quarter of 2010 and minus US$0.08 in the third quarter of 2009.

"In the third quarter, we achieved a significant change in operations. Our major processing plants have begun operating at full scale in the third quarter of this year. We believe that this is a new beginning for our business since September 2008 after the crisis. Along with the increase in the price of our final products, this situation brings a positive change to our financial results. We expect that such full-scale operations in our plants will continue to be carried out in 2011." said Ms. Xiaojing Yu, the Chairwoman and CEO of the Company.

About China Shen Zhou Mining & Resources, Inc.

China Shen Zhou Mining & Resources, Inc., through its subsidiary, American Federal Mining Group ("AFMG"), is engaged in the exploration, development, mining, and processing of fluorite 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) zinc/copper/lead exploration, mining and processing in Wulatehouqi of Inner Mongolia; and (c) zinc/copper exploration, mining and processing in Xinjiang.

For more information, please visit http://www.chinaszmg.com/ Safe Harbor Statement Certain of the statements made in the press release constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward- looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in the People's Republic of China, variations in cash flow, fluctuation in mineral prices, risks associated with exploration and mining operations, and the potential of securing additional mineral resources, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.

For more information, please contact: In China: Fulun Song Office of the Board of Directors China Shen Zhou Mining & Resources, Inc.

Tel: +86-10-8890-9976 Fax: +86-10-8890-6927 Cell: 13146358911 Email: investors@chinaszky.com ------------------------------ Web: http://www.chinaszmg.com ------------------------------ In the U.S.: David Elias Investor Relations DME Capital LLC Tel: +1-516-967-0205 Email: dave@dmecapital.com -------------------------- Financial Tables to Follow HINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) September December 30, 31, ---------- --------- 2010 2009 ---- ---- (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $1,497 $333 Accounts receivable, net 266 302 Other deposits and prepayments, net 1,189 855 Inventories 7,950 3,721 Restricted assets 8 740 --- --- Total current assets 10,910 5,951 Prepayment for office rent 133 280 Available for sale investment 149 146 Property, machinery and mining assets, net 34,699 34,902 ------ ------ Total assets $45,891 $41,279 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,885 $4,694 Short term loans 10,792 3,603 Other payables and accruals 5,283 6,667 Taxes payable 655 333 --- --- Total current liabilities 19,615 15,297 Due to related parties 2,322 2,297 ----- ----- Total liabilities 21,937 17,594 STOCKHOLDERS' EQUITY: Common stock ($0.001 par value; 50,000,000 shares authorized; 27,974,514 shares and 27,214,514 shares issued and outstanding as of September 30, 2010 and December 31, 2009 respectively) 28 27 Additional paid-in capital 29,270 28,518 Statutory reserves 1,672 1,672 Accumulated other comprehensive income 4,180 3,839 Accumulated deficit (11,144) (10,342) ------- ------- Stockholders' equity -China Shen Zhou Mining & Resources, Inc. and Subsidiaries 24,006 23,714 Noncontrolling interest (52) (29) --- --- Total stockholders' equity 23,954 23,685 ------ ------ Total liabilities and stockholders' equity $45,891 $41,279 ======= ======= CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Amounts in thousands, except per share data) For the Three Months Ended -------------------- September September 30, 30, ---------- ---------- 2010 2009 ---- ---- (Unaudited) (Unaudited) Net revenue $3,619 $1,715 Cost of sales 1,878 1,469 ----- ----- Gross profit 1,741 246 Operating expenses: Selling and distribution expenses 16 52 General and administrative expenses 1,131 982 ----- --- Total operating expenses 1,147 1,034 Net income (loss) from operations 594 (788) --- ---- Other income (expense): Interest expense (193) (936) Other, net 106 (8) --- --- Total other income (loss) (87) (944) Income (loss) from continuing operations before income taxes 507 (1,732) --- ------ Income tax expenses - - --- --- Income (loss) from continuing operations 507 (1,732) Discontinued operations : Loss from operations of discontinued component, net of taxes - (414) --- ---- Loss from discontinued operations - (414) --- ---- Net income (loss) 507 (2,146) Less: Noncontrolling interests attributable to the noncontrolling interests 8 - --- --- Net income (loss) -attributable to China Shen Zhou Mining & Resources, Inc. and Subsidiaries 515 (2,146) Other comprehensive income: Foreign currency translation adjustments 295 25 --- --- Comprehensive income (loss) $810 $(2,121) ==== ======= Net income (loss) per common share - basic and diluted From continuing operations 0.02 (0.08) From discontinued operations - (0.02) --- ----- $0.02 $(0.10) ===== ====== Weighted average common shares outstanding - Basic and Diluted 27,975 22,215 ====== ====== For the Nine Months Ended ------------------- September September 30, 30, ---------- ---------- 2010 2009 ---- ---- (Unaudited) (Unaudited) Net revenue $6,722 $3,060 Cost of sales 4,455 2,593 ----- ----- Gross profit 2,267 467 Operating expenses: Selling and distribution expenses 67 70 General and administrative expenses 3,043 3,166 ----- ----- Total operating expenses 3,110 3,236 Net income (loss) from operations (843) (2,769) ---- ------ Other income (expense): Interest expense (387) (2,893) Other, net 406 109 --- --- Total other income (loss) 19 (2,784) Income (loss) from continuing operations before income taxes (824) (5,553) ---- ------ Income tax expenses - - --- --- Income (loss) from continuing operations (824) (5,553) Discontinued operations : Loss from operations of discontinued component, net of taxes - (660) --- ---- Loss from discontinued operations - (660) --- ---- Net income (loss) (824) (6,213) Less: Noncontrolling interests attributable to the noncontrolling interests 22 22 --- --- Net income (loss) -attributable to China Shen Zhou Mining & Resources, Inc. and Subsidiaries (802) (6,191) Other comprehensive income: Foreign currency translation adjustments 341 216 --- --- Comprehensive income (loss) $(461) $(5,975) ===== ======= Net income (loss) per common share - basic and diluted From continuing operations (0.02 (0.25) From discontinued operations - (0.03) --- ----- $(0.02 $(0.28) ====== ====== Weighted average common shares outstanding - Basic and Diluted 27,878 22,215 ====== ====== CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except share data) For the Nine Months Ended September 30, 2010 2009 ---- ---- (Unaudited) (Unaudited) Cash flows from operating activities: Net loss $(802) $(6,191) Adjustments to reconcile net loss to net cash used in operating activities: Loss from operations of discontinued component, net of income tax benefits - 660 Depreciation and amortization 2,226 1,865 Fair value adjustment of warrants - 17 Accrual of coupon interests and accreted principal - 1,169 Amortization of deferred financing costs - 1,207 Amortization of debt issuance costs - 318 Noncontrolling interests (22) (22) Forgiveness of payroll payables (300) - Changes in operating assets and liabilities: (Increase) decrease in - Accounts receivable 41 (61) Other deposits and prepayments (317) (174) Prepayment for office rent 147 152 Inventories (4,157) (615) Restricted assets 746 (733) Increase (decrease) in - Accounts payable (1,900) 973 Other payables and accruals (460) 1,001 Taxes payable 316 (94) --- --- Net cash provided by (used in) operating activities from continuing operations (4,482) (528) Net cash provided by (used in) operating activities from discontinued operations - 1 --- --- Net cash used in operating activities (4,482) (527) ------ ---- Cash flows from investing activities: Purchases of property, machinery and mining assets (1,374) (752) Sales of property, machinery and mining assets 28 - --- --- Net cash used in investing activities from continuing operations (1,346) (752) Net cash provided by disposal of discontinued operations - - --- --- Net cash used in investing activities (1,346) (752) ------ ---- Cash flows from financing activities: Due to related parties (20) (620) Repayment at short-term loans (3,464) - Proceeds from short-term loans 10,583 1,846 ------ ----- Net cash provided by financing activities 7,099 1,226 ----- ----- Foreign currency translation adjustment (107) (5) ---- --- Net increase in cash and cash equivalents 1,164 (58) Cash and cash equivalents at the beginning of the period 333 205 --- --- Cash and cash equivalents at the end of the period $1,497 $147 ====== ==== Non-cash investing and financing activities Shares issued to employees as share based compensation $752 $ - Supplemental disclosures of cash flow information: Cash paid for interest expenses $285 $166 ==== ==== Cash paid for income tax $ - $ - === === === === SOURCE China Shen Zhou Mining & Resources, Inc.

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