China Daye Non-Ferrous Metals Mining (China Daye) has made a further announcement in relation to the arbitration proceedings initiated by Nomin Deposit LLC (the Mongolian JV Partner) against China Reservoir Mining Limited (CRML) (a 51%-owned subsidiary of China Daye) with respect to the alleged failure on the part of CRML to develop the Aleinuer Mine in accordance with the terms of the various agreements signed between the parties (the Mongolian Proceedings).

As announced in October, the Mongolian National Arbitration Center at the Mongolian National Chamber of Commerce and Industry (the Mongolian Arbitration Center) issued an arbitral award in relation to the Mongolian Proceedings, pursuant to which the Mongolian Arbitration Center ruled that the mining right to the Aleinuer Mine had to be returned by Reservoir Moly Mongolia LLC (Reservoir Moly) to the Mongolian JV Partner.

The Mongolian JV Partner and CRML own 45% and 55% equity interests in Reservoir Moly, which owns the Aleinuer Mine.

On 12 October 2011, CRML lodged an appeal to the Court of Appeal of Mongolia against such arbitral award. The appeal was heard on 21 November 2011. On 1 December 2011, CRML received the written ruling issued by the Court of Appeal of Mongolia, which annulled the arbitral award issued by the Mongolian Arbitration Center on the basis of procedural irregularities and directed the dispute to be re-heard by the Mongolian Arbitration Center. No further appeal is possible under Mongolian law with respect to this decision of the Court of Appeal of Mongolia. According to the advice of CRML's Mongolian legal advisers, pending the outcome of the re-hearing by the Mongolian Arbitration Center, the mining right to the Aleinuer Mine remains vested in Reservoir Moly.