Xinjiang Xinxin Mining Industry (HKG:3833) warns that its financial results for the year ended 31 December 2011 are expected to decrease significantly as compared to those for the year ended 31 December 2010.

The company considers that the significant decrease was mainly attributable to the following reasons: the average selling price of nickel cathode of the group decreased, especially during second half of 2011, owing to the European debt crisis and the slow recovery of global economy; the average production cost of the group increased; and 2011 as compared to the corresponding period of the previous year; and the fact that the year 2010 was the last year in which the group could enjoy the old preferential tax policies under the Western Development Programme as granted by the Xinjiang government. The group calculated income tax temporarily at a rate of 25% in 2011.