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China Shen Zhou Mining & Resources, Inc. Announces Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2009

(All figures are in U.S. dollars)

BEIJING, March 31 /PRNewswire-Asia-FirstCall/ -- China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ) ("China Shen Zhou", or the "Company"), a leading 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 fourth quarter and fiscal year ended December 31, 2009.

China Shen Zhou will file its annual report on Form 10-K for the fiscal year ended December 31, 2009 on March 31, 2010.

    Fourth Quarter 2009 Highlights:
    -- Net sales were $1.1 million, representing a decrease of approximately
       $1.2 million as compared to $2.3 million for the fourth quarter in
       2008.
    -- Gross profit was -$0.21 million, representing a decrease of
       approximately 132% as compared to $0.66 million of the fourth quarter
       in 2008.
    -- Gain of convertible debt cancellation was $14.0 million. The
       transaction of redemption of convertible notes was closed in December
       2009.
    -- Net income for the fourth quarter in 2009 was $9.2 million,
       representing an increase of approximately $14 million as compared to
       net loss of $4.6 million for the fourth quarter in 2008.

    Full Year 2009 Highlights:
    -- Net sales were $4.2 million, representing a decrease of approximately
       $2.9 million as compared to $7.1 million for fiscal year 2008.
    -- Gross profit was $0.26 million, representing a decrease of
       approximately 80% as compared to $1.31 million of fiscal year 2008.
    -- Net income for 2009 was $3.0 million, or $0.13 per diluted share,
       representing an increase of approximately 15.1 million as compared to
       net loss of $12.1 million, or -$0.55 per diluted share, for the fiscal
       year 2008.

"Though the commodities market is still terrible at this moment, we have many reasons to be optimistic in 2010. For example, the price of non-ferrous metals has risen. Coupled with the extreme scarcity and non-renewable nature of fluorite, the new policy of restricting the excessive exploitation of fluorite mineral resources and higher entrance limitation of fluorite enterprises from China's government will stimulate the increase of fluorite price. As the world economy had passed over the most difficult time in 2009, the demand for fluorite and non-ferrous metals will increase gradually in 2010," said Ms. Xiaojing Yu, China Shen Zhou's Chairwoman and CEO. "We are very encouraged by the news from Xiangzhen Mining about approval of RMB 50 million yuan of credit from a local bank in Inner Mongolia on March 30, 2010. We believe we will have a better operational performance in 2010."

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. In addition, AFMG owns 100% of Kichi-Chaarat Closed Joint Stock Company, whose major assets include a copper-gold mine located in the Kuru-Tegerek region of western Kyrgyzstan.

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
     Email: [email protected]
     Web:   http://www.chinaszmg.com

    In the U.S.:
     David Elias
     Investor Relations
     DME Capital LLC
     Tel:   +1-516-967-0205
     Email: [email protected]




                          Financial Tables to Follow



            CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (Amounts in thousands, except share data)

                                                               December 31,
                                                              2009      2008
    ASSETS

    Current assets:
      Cash and cash equivalents                               $333      $200
      Accounts receivable, net                                 302       561
      Other deposits and prepayments, net                      855     1,111
      Inventories                                            3,721     2,958
      Restricted assets                                        740        --
      Assets - Discontinued operations                          --    10,915
        Total current assets                                 5,951    15,745

    Prepayment for office rent                                 280       505
    Available for sale investment                              146       146
    Property, machinery and mining assets, net              34,902    36,862
    Deferred debt issuance costs                                --     1,755
        Total assets                                       $41,279   $55,013


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
    Accounts payable                                        $4,694    $3,470
    Fair value of detachable warrants liability                 --        33
    Short term bank loans                                    3,603     1,756
    Other payables and accruals                              6,667     4,639
    Taxes payable                                              133       415
    Due to related parties                                      --     2,490
    Liabilities - Discontinued operations                       --       328
        Total current liabilities                           15,097    13,131

    Due to related parties                                   2,297        --
    Convertible notes payable                                   --    24,251
        Total liabilities                                   17,394    37,382

    STOCKHOLDERS' EQUITY:
    Common Stock ($0.001 par value; 50,000,000 shares
     authorized; 27,214,514 shares and 22,214,514
     shares issued and outstanding as of December 31,
     2009 and 2008, respectively                               $27       $22
    Additional paid-in capital                              28,518    25,251
    PRC statutory reserves                                   1,672     1,672
    Accumulated other comprehensive income                   3,839     4,020
    Accumulated deficit                                    (10,142)  (13,356)
    Stockholders' equity - China Shen Zhou Mining &
     Resources, Inc. and Subsidiaries                       23,914    17,609
    Noncontrolling interest                                    (29)       22
        Total stockholders' equity                          23,885    17,631
          Total liabilities and stockholders' equity       $41,279   $55,013



            CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in thousands, except per share data)


                                            For the Year Ended December 31,
                                                  2009          2008
    Net revenue                                 $4,192        $7,137
    Cost of sales                                3,934         5,830
    Gross profit                                   258         1,307

    Operating expenses:
    Selling and distribution expenses               94           146
    General and administrative expenses          5,853         8,213
    Total operating expenses                     5,947         8,359

    Net income (loss) from operations           (5,689)       (7,052)

    Other income (expense):
    Interest expense                            (2,989)       (2,744)
      Gain on convertible debt
       extinguishment                           13,959            --
      Impairment of goodwill                        --        (1,127)
    Other, net                                      98           380
    Total other income (loss)                   11,068        (3,491)

    Income (loss) from continuing
     operations before income taxes              5,379       (10,543)

    Income tax expenses                             --          (544)

    Income (loss) from continuing
     operations                                  5,379       (11,087)

    Discontinued operation:
    Loss from operations of discontinued
     component, net of taxes                      (740)       (1,192)
    Loss on disposal of discontinued
     subsidiary, net of taxes                   (1,476)           --
    Loss from discontinued operations           (2,216)       (1,192)

    Net income (loss)                            3,163       (12,279)
    Less: Noncontrolling interests
     attributable to the noncontrolling
     interests                                      51           130
    Net loss - attributable to China Shen
     Zhou Mining & Resources, Inc. and
     Subsidiaries                                3,214       (12,149)

    Other comprehensive income (loss):
      Foreign currency translation
       adjustments                                (181)        1,908
    Comprehensive income (loss)                 $3,033      $(10,241)

    Net income (loss) per common share -
     basic and diluted
    From continuing operations                   $0.21        $(0.50)
    From discontinued operations                 (0.09)        (0.05)
                                                 $0.12        $(0.55)

    Weighted average common shares
     outstanding
    - Basic and Diluted                         24,743        22,215



             CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Amounts in thousands)
                                                          For the year Ended
                                                             December 31
                                                          2009          2008
    Cash flows from operating activities:
    Net loss                                            $3,214      $(12,149)
    Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
      Loss from operations of discontinued
       component, net of income tax benefits               740         1,192
      Write off deferred tax abilities of
       discontinued operations                              --        (1,201)
      Loss on sale of discontinued operations, net
       of  income taxes                                  1,476            --
      Gain on sale of repurchase convertible notes     (13,959)           --
      Provision for doubtful accounts                       --            (2)
      Provision for deferred tax asset                      --           685
      Impairment provision for inventories                  34            --
      Impairment of goodwill                                --         1,127
      Depreciation and amortization                      2,514         4,343
      Write off of deferred tax abilities                   --            --
      Loss from investments                                 --            --
      Deferred income tax benefits                          --          (178)
      Fair value adjustment of warrants                    (33)       (1,067)
      Loss on disposal of property, machinery and
       mining  assets                                       15            --
      Accrual of coupon interests and accreted
       principal                                         1,169         1,489
      Amortization of deferred financing costs           1,207         1,576
      Amortization of debt issuance costs                  318           415
      Noncontrolling interests                             (51)         (122)
      Changes in operating assets and liabilities:
    (Increase) decrease in -
      Accounts receivable                                  259         1,922
      Other deposits and prepayments                       256            40
      Prepayment for office rent                           225          (505)
      Inventories                                         (797)       (1,319)
      Due from related companies                            --          (625)
      Restricted assets                                   (740)           --
    Increase (decrease) in -
      Accounts payable                                   1,224           989
      Other payables and accruals                        2,028         1,200
      Taxes payable                                       (282)          167
        Net cash used in operating activities from
         continuing operations                          (1,183)       (2,023)
        Net cash used in operating activities from
         discontinued operations                           (33)         (213)
            Net cash used in operating activities       (1,216)       (2,236)

    Cash flows from investing activities:
      Purchases of property, machinery and mining
       assets                                          $(2,520)      $(1,894)
      Sales of property, machinery and mining
       assets                                            1,987            --
        Net cash used in investing activities from
         continuing operations                            (533)       (1,894)
        Net cash provided by disposal of
         discontinued operations                         8,200            --
          Net cash provided by (used in) investing
           activities                                    7,667        (1,894)
    Cash flows from financing activities:
      Repayment at the convertible notes                (8,000)           --
      Due to related parties                              (193)          604
      Repayment at short-term bank loans                (2,518)
      Proceeds from short-term bank loans               $4,362          $442
      Net cash (used in) provided by financing
       activities                                       (6,349)        1,046
    Foreign currency translation adjustment                 31           335

    Net decrease in cash and cash equivalents              133        (2,749)

    Cash and cash equivalents at the beginning of
     the period                                            200         2,949
    Cash and cash equivalents at the end of the
     period                                               $333          $200

    Non-cash investing and financing activities
    (None)

    Supplemental disclosures of cash flow
     information:
    Cash paid for interest expenses                       $241          $254
    Cash paid for income tax                               $--           $--


SOURCE China Shen Zhou Mining & Resources, Inc.

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