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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

————————

FORM 20-F

————————

(Mark One)

☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
OR
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring shell company report ___________

Commission file number: 0-26046

CHINA NATURAL RESOURCES, INC.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

F4British Virgin Islands

(Jurisdiction of incorporation or organization)

Room 2205, 22/F, West Tower, Shun Tak Centre,

168-200 Connaught Road Central, Sheung Wan, Hong Kong 122001

(Address of principal executive offices)

F4 Zhu Youyi, Chief Financial Officer

Room 2205, 22/F, West Tower, Shun Tak Centre,

168-200 Connaught Road Central, Sheung Wan, Hong Kong 122001

0118 5228107205

zhuyouyi@chnr.net

(Name, telephone number, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol(s) | Name of each exchange on which registered
Common Shares, without par value | CHNR | Nasdaq Capital Market

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 8,377,897 common shares as of December 31, 2024.

Indicate by check mark if the issuer is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ |  | Accelerated Filer ☐ |
Non-Accelerated Filer ☒ |  | Emerging Growth Company ☐ |

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ |  | International Financial Reporting Standards as issued |  | Other ☐
|  | By the International Accounting Standards Board ☒ |  |

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

TABLE OF CONTENTS

|  | Page
| PART 1 |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | 1
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | 1
ITEM 3. | KEY INFORMATION | 1
ITEM 4. | INFORMATION ON THE COMPANY | 25
ITEM 4A. | UNRESOLVED STAFF COMMENTS | 43
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 43
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 53
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 61
ITEM 8. | FINANCIAL INFORMATION | 65
ITEM 9. | THE OFFER AND LISTING | 65
ITEM 10. | ADDITIONAL INFORMATION | 66
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 74
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 74
| PART II |
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 75
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 75
ITEM 15. | CONTROLS AND PROCEDURES | 75
ITEM 16. | [Reserved] | 75
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT | 76
ITEM 16B. | CODE OF ETHICS | 76
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 77
ITEM 16D. | EXEMPTION FROM THE LISTING STANDARDS FOR THE AUDIT COMMITTEE | 77

i

ITEM 16E. | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 78
ITEM 16F. | CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT | 78
ITEM 16G. | CORPORATE GOVERNANCE | 78
ITEM 16H. | MINE SAFETY DISCLOSURE | 78
ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 78
ITEM 16J. | INSIDER TRADING POLICIES | 78
ITEM 16K. | CYBERSECURITY | 79
| PART III |
ITEM 17. | FINANCIAL STATEMENTS | 79
ITEM 18. | FINANCIAL STATEMENTS | 79
ITEM 19. | EXHIBITS | 80
SIGNATURES | 82

ii

CONVENTIONS

Unless otherwise specified, all references in this annual report on Form 20-F (the “Annual Report”) to “U.S. Dollars,” “Dollars,” “US$,” or “$” are to United States dollars; all references to “HK$” are to Hong Kong dollars; and all references to “Renminbi,” “RMB” or “CNY” are to Chinese Yuan, which is the lawful currency of the People’s Republic of China. The accounts of the Company and its subsidiaries are maintained in Hong Kong dollars or Renminbi. The financial statements of the Company and its subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi to U.S. Dollars, and from Hong Kong dollars to U.S. Dollars, are for the convenience of the reader. Unless otherwise indicated, any translations from Renminbi to U.S. Dollars or from U.S. Dollars to Renminbi have been made at the single rate of exchange (the “CNY Exchange Rate”) as quoted by www.ofx.com on December 31, 2024, which was US$1.00 = CNY7.2980. Translations from Hong Kong dollars to U.S. Dollars have been made at the official pegged exchange rate of US$1.00 = HK$7.80 as of December 31, 2024, and from Hong Kong dollars to Renminbi have been made at the single rate of exchange as quoted by www.ofx.com on December 31, 2024, which was HK$1.00 = CNY0.9395. The Renminbi is not freely convertible into foreign currencies and no representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the CNY Exchange Rate or at all.

References to the “Acquisition” are to the Company’s pending acquisition of the indirect ownership of Williams Minerals (Pvt) Ltd (“Williams Minerals”), which is the company that holds the mining permit for the Zimbabwean lithium mine. At the time of entry into the sale and purchase agreement on February 27, 2023, Feishang Group, the Company’s controlling shareholder, owned 70% of the lithium mine, and the remaining 30% was owned by Top Pacific (China) Limited (“Top Pacific”), a non-affiliate (together, the “Sellers”). Completion of the Acquisition is contingent upon the satisfaction of a number of conditions, including, among other things, the transfer of ownership interests in Williams Minerals from the Sellers to the intermediate holding company, the issuance of independent technical reports, the actual quantity of qualified lithium oxide metal resources proven or estimated to exist in each mining area covered by the relevant report, and the Company’s full settlement of the purchase consideration in cash and restricted shares. There is no guarantee that the Acquisition will close or be completed at the anticipated valuation and terms, or at all. On December 22, 2023, the Company entered into an amendment agreement (the “Amendment Agreement”) to the sale and purchase agreement Dated as of February 27, 2023 by and among Feishang Group and Top Pacific (China) Limited (together, the “Sellers”), and the respective beneficial owner of the Sellers, Mr. Li Feilie and Mr. Yao Yuguang with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the Company entered into a second amendment agreement (the “Amendment Agreement II”) to the Zimbabwe SPA to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025.

References to “Bayannaoer Mining” are to Bayannaoer City Feishang Mining Company Limited, a company organized in the PRC and a wholly owned subsidiary of Yangpu Shuanghu.

References to the “BVI” are to the British Virgin Islands.

References to “China Coal” are to China Coal Mining Investment Limited, a company organized in Hong Kong and a wholly owned subsidiary of CHNR.

References to the “Company,” “CHNR,” “we,” “us,” and “our company” are to China Natural Resources, Inc., a BVI company. CHNR is not a Chinese operating company but a BVI holding company with operations conducted by subsidiaries established in the PRC and Hong Kong, and which owns equity interests, directly or indirectly, of the operating subsidiaries. See “Item 3.D. – KEY INFORMATION – Risk Factors – Risks Relating to Our PRC Operations and Doing Business in the PRC” for further information regarding the uncertainties associated with operating in the PRC.

References to “common shares” are to the common shares, without par value, of CHNR.

References to “Feishang Anthracite” and “FARL” are to Feishang Anthracite Resources Limited (formerly known as Wealthy Year Limited), a company organized in the BVI whose ordinary shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) on January 22, 2014. On August 17, 2020, CHNR acquired 120 million shares of FARL, which were transferred to Feishang Group on July 27, 2021 as part of the consideration for the acquisition of all of the outstanding shares of PST Technology.

References to “Feishang Dayun” are to Feishang Dayun Coal Mining Limited, a company organized in Hong Kong and a wholly owned subsidiary of Pineboom.

iii

References to “Feishang Enterprise” are to Feishang Enterprise Group Co., Ltd., a company organized in the PRC that is our affiliate and is controlled by Mr. Li Feilie, the principal beneficial owner of the Company and its former Chairman and CEO.

References to “Feishang Group” are to Feishang Group Limited, CHNR’s principal shareholder and a company organized in the BVI that is ultimately controlled by Mr. Li Feilie.

References to “Feishang Management” are to Shenzhen Feishang Management and Consulting Co., Limited, a company organized in the PRC and a wholly owned subsidiary of Yunnan Mining.

References to “Feishang Mining” are to Feishang Mining Holdings Limited, a company organized in the BVI and, since February 3, 2006, a wholly owned subsidiary of CHNR.

References to “Feishang Yongfu” are to Feishang Yongfu Mining Limited, a company organized in Hong Kong and a wholly owned subsidiary of Newhold.

References to the “five-to-one share combination” are to the five-to-one share combination of the Company’s issued and outstanding common shares, whereby every five issued and outstanding common shares were automatically converted into one issued and outstanding common share at marketing opening on April 3, 2023. The share combination was intended to increase the per share trading price of the Company’s common shares to satisfy the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market. The share combination did not affect the number of total maximum number of common shares which the Company is authorized to issue. As a BVI company, CHNR uses the term “share combination” to describe a reverse stock split.

References to “FMH Services” are to FMH Corporate Services Inc., a company organized in Florida and a wholly owned subsidiary of CHNR. FMH Services is currently inactive.

References to the “Group” are to the Company and its direct and indirect subsidiaries.

References to “HK” or “Hong Kong” are to Hong Kong Special Administrative Region.

References to “IFRS” or “IFRSs” are to International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”).

References to “LME” are to London Mercantile Exchange;

References to “Moruogu Tong Mine” are to Wulatehouqi Moruogu Tong Mine in Inner Mongolia;

References to “Newhold” are to Newhold Investments Limited, a company organized in the BVI and a wholly owned subsidiary of CHNR.

References to “Pineboom” are to Pineboom Investments Limited, a company organized in the BVI and a wholly owned subsidiary of CHNR.

References to the “PRC” or “China” are to the People’s Republic of China, and only in the context of describing PRC laws, regulations and other legal or tax matters in this annual report, excludes Taiwan, Hong Kong, and Macau.

References to “PST Technology” are to Precise Space-Time Technology Limited, a Hong Kong company and a wholly owned subsidiary of CHNR.

References to the “Related-Party Debtholders” are to the companies affiliated with Mr. Li Feilie, CHNR’s principal beneficial owner, including without limitation, Feishang Enterprise and Feishang Group.

References to “SHFE” are to Shanghai Futures Exchange;

References to “Shanghai Onway” are to Shanghai Onway Environmental Development Co., Limited, a company organized in the PRC and a 51%-owned subsidiary of Shenzhen Qianhai.

References to “Shaoguan Angrui” are to Shaoguan Angrui Environmental Technology Development Co., Limited, a company organized in the PRC and a 55%-owned subsidiary of Shanghai Onway.

References to “shareholders” of CHNR are to the members of the Company. “Members” under BVI law are the equivalent of “shareholders” under the laws of the several states of the United States.

References to “Shenzhen New PST” are to Shenzhen New Precise Space-Time Technology Co., Limited, a company organized in the PRC and a wholly owned subsidiary of PST Technology.

References to “Shenzhen Qianhai” are to Shenzhen Qianhai Feishang Environmental Investment Co., Limited, a company organized in the PRC and a wholly owned subsidiary of Shenzhen New PST.

iv

References to “Warrants” are to certain outstanding warrants that we issued to the investors pursuant to a securities purchase agreement dated February 16, 2024 to purchase up to 1,115,903 Common shares at an exercise price equal to $3.00 per share and to the president and the staff of FT Global pursuant to a placement agency agreement dated February 16, 2024 to purchase up to an aggregate of 74,394 Common shares at an exercise price equal to $2.20 per share;

References to “Yangpu Shuanghu” are to Yangpu Shuanghu Industrial Development Co., Limited, a company organized in the PRC and a wholly owned subsidiary of Feishang Yongfu.

References to “Yunnan Mining” are to Yunnan Feishang Mining Co., Limited, a company organized in the PRC and a wholly owned subsidiary of Yangpu Shuanghu.

References to “Zhejiang Xinyu” are to Zhejiang Xinyu Environmental Technology Co., Limited, a company organized in the PRC and a wholly owned subsidiary of Shanghai Onway.

References to the “Zimbabwean lithium mine” refer to a mining area of 8682 hectares situated in the Mining District of Manicaland, Zimbabwe, to which Williams Minerals owns the right to carry out prospecting/mining operations for lithium under the Special Grant No. 7507 (PART XIX) in accordance with Section 291 of the Mines and Minerals Act [Chapter 21:05]. The legal possession and control of the Zimbabwean lithium mine are the subject of the Acquisition.

We face various risks and uncertainties related to doing business in China. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business and accept foreign investments. For example, we face risks associated with regulatory approvals on offshore securities offerings, oversight on cybersecurity and data privacy. The PRC government has recently published new policies that significantly affected various industries, and we cannot rule out the possibility that it will in the future further release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. For a detailed description of risks relating to doing business in China, see “Item 3.D. Key Information—Risk Factors—Risks Relating to Our PRC Operations and Doing Business in PRC.”

v

Forward-Looking Statements

This annual report contains statements that constitute forward-looking statements within the meaning of the U.S. federal securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,” “possible,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions are intended to identify forward-looking statements. These statements appear in a number of places in this annual report and include, without limitation, statements regarding the belief and current expectations of the Company, its directors or its officers with respect to the Company’s policies regarding its business development, investments, dispositions, financings, conflicts of interest and other matters, and trends affecting the Company’s financial condition or results of operations. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statement as a result of various factors. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are:

| • | uncertainties regarding the governmental, economic and political circumstances in the PRC;

| • | the impact on the Company’s financial position, growth potential and business of the sale of PST Technology and Shanghai Onway specifically;

| • | uncertainties related to the Company’s ability to identify potential partners or acquisition targets as it considers strategic alternatives in other non-natural resources sectors;

| • | uncertainties associated with metal price volatility;

| • | uncertainties concerning the viability of mining and estimates of reserves at the Company’s Moruogu Tong Mine in Inner Mongolia;

| • | uncertainties regarding our ability to acquire a mining permit and to extract mineral reserves located in the Moruogu Tong Mine in an economically feasible manner;

| • | uncertainties related to our ability to fund operations and capital expenditures;

| • | uncertainties relating to the acquisition of Williams Minerals that were not discovered by us through our due diligence investigation;

| • | uncertainties related to the completion of the acquisition of Williams Minerals which is conditional upon satisfaction or waiver of various conditions;

| • | failure to complete the acquisition of Williams Minerals may have a material adverse effect on the Company’s business, financial condition and results of operations;

| • | uncertainties related to the realization of the anticipated benefits associated with it;

| • | the potential lack of appetite for the Company’s current holdings as consideration for a transaction;

| • | uncertainties related to geopolitical events and conflicts, such as the conflict between Russia and Ukraine;

| • | uncertainties regarding the impact of climate change on our operations and business;

| • | uncertainties related to possible future increases in operating expenses;

| • | the fluctuations of interest rates and foreign exchange rates;

| • | uncertainties related to the political situation between the PRC and the United States, and potential negative impacts on companies with operations in the PRC that are listed on exchanges in the United States; and

| • | other risks detailed from time to time in the Company’s filings with the SEC, including without limitation the information set forth in Item 3.D. of this annual report under the heading “Risk Factors.”

vi

With respect to forward-looking statements that include a statement of underlying assumptions or bases, the Company cautions that, while it believes such assumptions or bases to be reasonable and has formed them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material depending on the circumstances. When, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to future results, that expectation or belief is expressed in good faith and is believed to have a reasonable basis, but there can be no assurance that the stated expectation or belief will result or be achieved or accomplished. We qualify all of our forward-looking statements by these cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should read this annual report and the documents that we reference in this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

Market and Industry Data

This annual report includes market, economic, and industry data as well as certain statistics and information relating to our business, markets, and other industry data, which we obtained or extrapolated from industry publications, generated through internal estimates, our review and analysis of market conditions, surveys, customer feedback, and reports provided by various statistics providers, market research organizations, and others. While we believe that such data is reliable, we have not independently verified such data and cannot guarantee the accuracy or completeness thereof. Additionally, we cannot assure you that any of the assumptions underlying these statements are accurate or correctly reflect our position in the industry, and not all of our internal estimates have been verified by any independent sources. Furthermore, we cannot assure you that a third party using different methods to assemble, analyze, or compute market data would obtain the same results.

vii

PART I

| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

| ITEM 3. | KEY INFORMATION

The PRC government has significant authority to exert influence on the ability of a China-based company, like us, to conduct its business, accept foreign investments or be listed on a U.S. stock exchange. We also face risks associated with recent statements and regulatory actions by the PRC government, including those related to regulatory approvals of offshore securities offerings, anti-monopoly regulatory investigations and actions, cybersecurity and data privacy compliance. See “Item 4. Information on the Company – 4.A. History and Development of the Company – Recent Regulatory Development” for more information about these new laws and regulations. If the CSRC, CAC or other PRC regulatory agencies determine that prior approval is required for any of our offerings of securities overseas or maintenance of the trading status of the Common shares, we cannot guarantee that we will be able to obtain such approval in a timely manner, or at all. The CSRC, CAC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, not to proceed with such offering or maintain the trading status of our common shares. If we proceed with any of such offering or maintain the trading status of our common shares without obtaining the CSRC’s, CAC’s or other PRC regulatory agencies’ approval to the extent it is required, or if we are unable to comply with any new approval requirements which might be adopted for offerings that we have completed, we may face regulatory actions or other sanctions from the CSRC, CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China or accept foreign investments, delay or restrict the repatriation of the proceeds from offering of securities overseas into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of the Common shares.

The PRC government may also intervene with or influence our operations as it deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that affected various industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. While we believe that our business operations comply with relevant PRC laws and regulations currently in force in all material respects, we cannot guarantee that new rules or regulations promulgated in the future will not impose any additional requirement on us or otherwise tighten the regulations on companies like us. Any such action, once taken by the PRC government, could cause the value of our securities to significantly decline or become worthless.

We also face risks associated with the Holding Foreign Companies Accountable Act, or the HFCA Act, which was enacted on December 18, 2020. Pursuant to the HFCA Act, as amended by the Consolidated Appropriations Act, 2023, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, and our auditor was subject to that determination. On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in China completely. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China or Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA and as a result, NASDAQ may determine to delist our securities. See “Item 3.D. Key Information – Risk Factors - Risks Relating to Our PRC Operations and Doing Business in the PRC - The PCAOB had historically been unable to inspect our auditor and former auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections in the past has deprived our investors with the benefits of such inspections.” and “- Risks Relating to Our PRC Operations and Doing Business in the PRC - Our common shares may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.”

1

Transfers of Cash and Assets between Our Company and Our Subsidiaries

Cash and asset transfers through the Group are primarily attributed to shareholder loans from us to our subsidiaries. Our subsidiaries receive substantially all revenue in RMB, and the PRC or Hong Kong governments could prevent the RMB maintained in the PRC or Hong Kong from leaving, impose controls on its conversion into foreign currencies, restrict deployment of the RMB into the business of our subsidiaries and restrict the ability to pay dividends. Our PRC subsidiaries are permitted to pay dividends to their shareholders, and eventually to CHNR, only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Such payment of dividends by entities registered in China is subject to limitations, which could result in limitations on the availability of cash to fund dividends or make distributions to holders of our securities. For example, our PRC subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. See, “Item 3.D. Key Information – Risk Factors –Our PRC subsidiaries are subject to restrictions on paying dividends and making other payments to us.” There are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future. To the extent cash in the business is in the PRC or Hong Kong or our PRC or Hong Kong entities, the funds may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC or Hong Kong governments to transfer cash. We cannot assure you that the PRC or Hong Kong governments will not intervene in or impose restrictions on our ability to make intercompany cash transfers.

All cash or asset transfers between us and our subsidiaries for each of the three years ended December 31, 2022, 2023 and 2024, are set forth in the table below. The purpose of the outbound transfers, in the form of shareholder loans, was to pay off the subsidiaries’ expenses and provide working capital for the subsidiaries. The purpose of the inbound transfers, in the form of loan repayments, was to centralize the treasury function of the Company and our subsidiaries. There are no fixed repayment terms and we do not expect there to be any tax implications for such transfers. We did not make any capital contributions to, or receive any dividends from, our subsidiaries during these periods. Other than the assets and liabilities of the wastewater treatment business segment transferred to Mr. Li Feilie, our controlling shareholder, as the result of the sale of PST Technology which were accounted for as a deemed distribution of RMB20.38 million (US$2.79 million) to the controlling shareholder on July 28, 2024 with a corresponding deemed contribution from the controlling shareholder in the same amount and repayment of HK$8.4 million shareholder loan in 2024, no transfers, dividends or distributions have been made to investors during these periods. We currently have not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between the Company, our subsidiaries, or the investors. Rather, the funds can be transferred in accordance with the applicable laws and regulations in the PRC and other jurisdictions. PRC laws and regulations may restrict our ability to make dividends and distributions to investors, including U.S. investors.

|  |  |  | Year ended December 31, |
Transferor |  | Transferee |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  | HK$ |  |  | HK$ |  |  | HK$ |  |  | US$ |
Outbound Transfers
China Natural Resources, Inc. |  | Feishang Mining |  |  | — |  |  |  | 30,000 |  |  |  | — |  |  |  | — |
China Natural Resources, Inc. |  | China Coal |  |  | 8,000 |  |  |  | 8,000 |  |  |  | 8,000 |  |  |  | 1,026 |
China Natural Resources, Inc. |  | Feishang Yongfu |  |  | 8,000 |  |  |  | 38,000 |  |  |  | 8,000 |  |  |  | 1,026 |
China Natural Resources, Inc. |  | Feishang Dayun |  |  | 8,000 |  |  |  | 38,000 |  |  |  | 8,000 |  |  |  | 1,026 |
|  | Total |  |  | 24,000 |  |  |  | 114,000 |  |  |  | 24,000 |  |  |  | 3,078 |
Inbound Transfers
Feishang Mining |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
China Coal |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Feishang Yongfu |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Feishang Dayun |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | Total |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — | —

| A. | [Reserved]

| B. | Capitalization and Indebtedness

Not applicable.

| C. | Reasons for the Offer and Use of Proceeds

Not applicable.

2

| D. | Risk Factors

We are not a Chinese operating company but a BVI holding company with operations conducted by our subsidiaries established in the PRC and Hong Kong, and which owns equity interests, directly or indirectly, of the operating subsidiaries. See “Item 4.C. INFORMATION ON THE COMPANY – Organizational Structure” for further information regarding our subsidiaries’ names, places of incorporation, and equity ownership. We are subject to legal and operational risks associated with being based in the PRC and Hong Kong and having all of our operations in the PRC, discussed in greater detail below. The legal and operational risks associated with being based in and having operations in mainland China also apply to operations in Hong Kong and Macao. While entities and businesses in Hong Kong and Macao operate under different sets of laws from mainland China, the legal risks associated with being based in and having operations in mainland China could apply to a company’s operations in Hong Kong and Macao, if the laws applicable to mainland China become applicable to entities and business in Hong Kong and Macao in the future. As of the date of this annual report, we do not have material operations in Hong Kong or Macao. It is management’s understanding that there are no restrictions, limitations, rules, or regulations under Hong Kong law that are commensurate to those of the PRC with respect to (i) payment of dividends and other distributions from the Company’s subsidiaries to the Company, (ii) currency conversion that may affect payment of dividends or foreign currency denominated obligations, (iii) offshore financing activities, (iv) anti-monopoly laws, or (v) data protection and cybersecurity, that have impacted or may impact the Company’s ability to conduct its business, accept foreign investments, or list on a U.S. or other exchange. The Chinese government may intervene or influence the operation of our Hong Kong subsidiaries and PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our common shares. Further, rules and regulations in the PRC can change quickly with little advance notice, and any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Recent statements and regulatory actions by the Chinese government, such as those related to data security or anti-monopoly concerns, could have a significant impact on our ability to conduct our business, accept foreign investments, or maintain our listing on the Nasdaq Capital Market (“Nasdaq”) or list on another U.S. or foreign exchange. There have not been comparable developments in Hong Kong yet, but such developments may occur. For example, on June 10, 2021, the Standing Committee of the PRC National People’s Congress promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information. We believe that our business is not in an industry related to national security, but we cannot preclude the possibility that PRC government authorities may publish explanations contrary to our understanding or broaden the scope of such reviews in the future, in which case our future activities may be closely scrutinized or prohibited. Moreover, given the PRC authorities have significant discretion in interpreting and applying their laws, rules and regulations, if we undertake a transaction in the PRC that involves data security or an industry that the PRC government is focusing on, we could be subject to review by the China Securities Regulatory Commission (“CSRC”), Cyberspace Administration of China (“CAC”) or other applicable governmental agencies. Such review could be time consuming, could cause us to incur significant costs in responding to such agencies and/or rectifying any potential issues noted by such agencies or completely abandon a potential transaction. Further, on July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. On February 17, 2023, the CSRC, promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (“Overseas Listing Trial Measures”) and five relevant guidelines, which became effective on March 31, 2023. Pursuant to the Overseas Listing Trial Measures, a filing-based regulatory system will be applied to both “direct” and “indirect” overseas offering or listing of PRC domestic companies. As such, in connection with our future overseas securities offering or listing, we may be required to fulfill filing, reporting procedures or other administrative procedures with the CSRC or other PRC government authorities. In addition, we cannot guarantee that new rules or regulations promulgated in the future will not impose any additional requirement on us or otherwise to tighten the regulations on PRC companies seeking overseas offering or listing. Any failure to obtain the relevant approval or complete the filings and other relevant regulatory procedures may subject us to regulatory actions or other penalties from the CSRC or other PRC regulatory authorities, which may have a material adverse effect on our business, operations or financial conditions. See “Item 3.D. KEY INFORMATION – Risk Factors – Risks Relating to Doing Business in China – The approval of or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.”

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The Public Company Accounting Oversight Board (“PCAOB”) may determine that it is unable to inspect our auditor in relation to its audit work to its satisfaction, and our common shares may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023 (“HFCAA”), if the PCAOB is unable to inspect or fully investigate our auditor for two consecutive years. Our previous independent auditor, Ernst & Young Hua Ming LLP, was subject to the determinations announced by the PCAOB on December 16, 2021 that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. In June 2022, we were identified by the SEC in its “conclusive list of issuers identified under the HFCAA,” indicating that we were among those companies formally subject to the delisting provisions of the HFCAA (a “Commission-Identified Issuer”). The PCAOB, the CSRC and PRC Ministry of Finance entered into a Statement of Protocol on August 26, 2022, designed to allow the PCAOB to fully investigate auditors located in China. On December 15, 2022, the PCAOB issued a report vacating the previous determinations dated December 16, 2021. Accordingly, until such time as the PCAOB issues any new determination, we are not at risk of having our securities subject to a trading prohibition under the HFCAA because we do not expect to be identified as a Commission-Identified Issuer for a second consecutive year. If in the future the PCAOB determines it no longer can inspect or investigate completely our auditor because of a position taken by an authority in the PRC, the PCAOB will consider issuing a new determination.

An investment in our common shares involves a high degree of risk and should be considered speculative. You should carefully consider the following risks set out below and other information before investing in our common shares. If any event arising from these risks occurs, our business, prospects, financial condition, results of operations or cash flows could be adversely affected, the trading price of our common shares could decline and all or part of your investment may be lost.

Risk Factor Summary

Risks Relating to Our PRC Operations and Doing Business in the PRC

| • | Changes in China’s economic, political or social conditions or government policies could have a material and adverse effect on our business, financial condition and results of operations.

| • | Uncertainties with respect to the PRC legal system could adversely affect us.
| • | The PRC government may intervene or influence our operations at any time, or may exert more control over the China operations of an offshore holding company and offerings conducted overseas and foreign investment in China-based issuers, such as our PRC subsidiaries. Such control or influence may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

| • | Changes in PRC laws and regulations may have a material and adverse effect on our business.

| • | PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our ability to fund and expand our business.

| • | Inflation in the PRC, or a slowing PRC economy, could negatively affect our profitability and growth.

| • | Our PRC subsidiaries are subject to restrictions on paying dividends and making other payments to us.

| • | Governmental control of currency conversion may affect payment of any dividends or foreign currency denominated obligations, and it may adversely affect the value of your investment.

| • | The fluctuation of the Renminbi may materially and adversely affect your investment.

| • | The PRC SAFE regulations regarding offshore financing activities by PRC residents have undergone changes which may increase the administrative burden we face and create uncertainties that could adversely affect us, and a failure by our shareholders who are PRC residents to make any required applications and filings pursuant to such regulations may prevent us from being able to distribute profits and could expose us and our PRC resident shareholders to liability under PRC law.

| • | The PCAOB may determine that it is unable to inspect our auditor in relation to its audit work performed for our financial statements to its satisfaction, and any inability of the PCAOB to conduct inspections over our auditor may affect our investors’ ability to benefit from such inspections.
| • | Our common shares may be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect or fully investigate our auditor for two consecutive years. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.
| • | PRC regulations establish complex procedures for some acquisitions conducted by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
| • | We and our PRC subsidiaries are required to maintain a series of licenses, permits, and approvals from PRC authorities to operate our business in the PRC, and failure to maintain or renew such licenses, permits, or approvals in a timely manner could materially affect our business.

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| • | The approval of or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

| • | Failure to comply with PRC regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.

| • | We may be classified as a “resident enterprise” for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

| • | Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

| • | Failure to make adequate contributions to mandatory social security plans as required by PRC laws may subject us to penalties.

| • | Enforcement of stricter labor laws and regulations may increase our labor costs.

| • | If the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.

Risks Relating to Our Mine Exploration Activities in Inner Mongolia

| • | The Moruogu Tong Mine is in the exploration stage.

| • | The northern part of Moruogu Tong Mine is currently being explored under an agreement that reduces our share in any future profits.

| • | Any estimates of the reserves contained in the Moruogu Tong Mine may be inaccurate.

| • | There are no assurances that we can produce minerals on a commercially viable basis.

| • | Volatility in the market prices of metals may adversely affect the results of our operations.

| • | We are subject to government regulations in various aspects of our exploration activities and our failure to comply with applicable government regulations could adversely affect us.

| • | We do not have binding agreements with customers to purchase any future output of metals.
| • | ESG issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, and results of operations, could damage our reputation, and may increase costs.

Risks Relating to the Sale of PST Technology

| • | We face risks associated with the divesture of our wastewater treatment segment.

Risks Relating to the Potential Closing of the Acquisition of Williams Minerals and the Timing of Such Closing

| • | There may be unforeseen risks relating to the Acquisition that were not discovered by us through our due diligence investigation prior to our Acquisition.

| • | Completion of the Acquisition is conditional upon satisfaction or waiver of various conditions. There can be no assurance that the conditions will be fulfilled or waived, or that the Acquisition will be completed

| • | Failure to complete the Acquisition may have a material adverse effect on the Company’s business, financial condition and results of operations.

| • | Even if the Acquisition is completed, we may fail to realize the anticipated benefits associated with it, those benefits may take longer to realize than expected, and we may encounter significant difficulties.

Risks Relating to Additional Acquisitions and Expansion into Other Sectors

| • | We may acquire other businesses or form joint ventures that could negatively affect our operating results, dilute our shareholders’ ownership, increase our debt or cause us to incur significant expense.

| • | Future acquisitions or strategic investments could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute shareholder value and adversely affect our business, results of operations, and financial condition.

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| • | Because a majority of our management’s prior business experience has been limited to industries outside of other sectors that we are exploring, they may lack the necessary experience to assess a business combination with a target business in those industries.
| • | We may become subject to additional extensive and evolving regulatory requirements, noncompliance with which, or changes in which, may materially and adversely affect our business and prospects.

Risks Relating to Our Financial Condition and Business

| • | We have incurred losses from operations in each of the preceding three fiscal years of 2022, 2023, and 2024 and there is no assurance that we will generate profits from operations in the future.
| • | We will have to fund operating expenses from other sources until we are able to generate sufficient revenue to pay them.
| • | The loss of key personnel could affect our business and prospects.

| • | Any failure to maintain effective internal controls could have an adverse effect on our business, results of operations and the market price of our shares.

Risks Relating to Foreign Private Issuer Status

| • | Because our assets are located outside of the United States and all of our directors and officers reside outside of the United States, it may be difficult for you to enforce your rights based on the U.S. federal securities laws against us or our officers and directors or to enforce a judgment of a United States court against us or our officers and directors in the PRC.

| • | Our status as a foreign private issuer results in less information being available about us than about domestic reporting companies.

| • | Due to our status as a foreign private issuer, we have adopted IFRS accounting principles, which are different from accounting principles under U.S. generally accepted accounting principles (“U.S. GAAP”).

| • | As a foreign private issuer we are not subject to certain requirements that other Nasdaq-listed issuers are required to comply with, some of which are designed to provide information to and protect investors.
| • | Due to an exemption from Nasdaq rules applicable to foreign private issuers, our related party transactions may not receive the type of independent review process that those of other Nasdaq-listed companies receive; the terms of these transactions are not negotiated at arm’s-length and may not be as favorable as could be obtained from unrelated parties.

Risks Relating to Our common shares

| • | You may experience dilution to the extent that our common shares are issued upon the exercise of outstanding warrants or other securities that we may issue in the future.
| • | Substantial future sales or perceived potential sales of our common shares in the public market could cause the price of our common shares to decline.
| • | Certain of the Selling Shareholders may acquire their common shares at a price that is less than the market price of the common shares in the future, may earn a positive rate of return even if the price of the common shares declines and may be willing to sell their common shares at a price less than shareholders that acquired common shares in the public market.
| • | The price at which common shares are quoted on Nasdaq may increase or decrease due to a number of factors, which may negatively affect the price of the common shares.

| • | Our principal beneficial owner and his affiliates control us through their share ownership; and their interests may differ from those of other shareholders.
| • | We are not currently in compliance with the continued listing requirements for the Nasdaq Stock Market. If we do not regain compliance and continue to meet the continued listing requirements, our Common Shares may be delisted, which could affect the market price and liquidity for our Common Shares and reduce our ability to raise additional capital.

| • | The rights of our shareholders are governed by BVI law, which may not be as favorable to shareholders as U.S. law, and our directors may take actions with which you disagree without first receiving shareholder approval.

| • | The elimination of monetary liability against our directors, officers and employees under our Articles and the indemnification of our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.
| • | We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. shareholders.

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Risks Relating to Our PRC Operations and Doing Business in the PRC

Changes in China’s economic, political or social conditions or government policies could have a material and adverse effect on our business, financial condition and results of operations.

Currently, all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects are affected by economic, political and social conditions in China generally and by continued economic growth in China as a whole.

China’s economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. In recent decades, the Chinese government has implemented a series of reform measures, including, among others, the utilization of market forces for economic reform and the establishment of improved corporate governance in business enterprises. In addition, the Chinese government also plays a significant role in regulating industry development and has extensive influence over China’s economic growth through allocating resources, foreign exchange control and setting monetary and fiscal policy.

The growth of China’s economy has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China’s economy remained relatively stable, there is a possibility that China’s economic growth may fluctuate or even decline in the near future. Some of the government measures may benefit the overall Chinese economy but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. Any stimulus measures designed to boost the Chinese economy may contribute to higher inflation, which could adversely affect our results of operations and financial condition. For example, certain operating costs and expenses, such as employee compensation and office operating expenses, may increase as a result of higher inflation.

Additionally, the PRC government may promulgate laws, regulations or policies that seek to impose stricter scrutiny over the current regulatory regime in certain industries or in certain activities. Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over overseas securities offerings and foreign investments in China-based companies. Any such actions may adversely affect our subsidiaries’ operations, and limit our ability to offer or continue to offer securities to investors and cause the value of our securities to decline or be worthless.

Uncertainties with respect to the PRC legal system could adversely affect us.

We conduct our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our subsidiaries are generally subject to laws and regulations applicable to foreign investments in China. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.

PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China over the past several decades. However, recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties.

The PRC government may intervene or influence our operations at any time, or may exert more control over the China operations of an offshore holding company and offerings conducted overseas and foreign investment in China-based issuers, such as our PRC subsidiaries. Such control or influence may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

We conduct our business in China through our operating subsidiaries. Accordingly, our business, results of operations and financial condition may be influenced to a significant degree by the PRC political, economic and social conditions. The PRC government may intervene or influence our subsidiaries’ operations at any time, which could result in a material change in our operations and/or the value of the Company’s securities. We expect the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Additionally, the PRC government may promulgate laws, regulations or policies that seek to impose stricter scrutiny over current regulatory regime in certain industries or in certain activities. For instance, the PRC government has discretion over the business operations in China and may intervene with or influence specific industries or companies as it deems appropriate to further regulatory, political and societal goals, which could have a material and adverse effect on the future growth of the affected industries and the companies operating in such industries. Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over overseas securities offerings and foreign investments in China-based companies. Any such actions may adversely affect our subsidiaries’ operations, and limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to decline or be worthless.

Changes in PRC laws and regulations may have a material and adverse effect on our business.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. Rules and regulations in China can change quickly with little advance notice. We and our current subsidiaries are, and any future subsidiaries will be, considered foreign persons or foreign-invested enterprises under PRC laws, and as a result, we are and will be required to comply with PRC laws and regulations applicable to foreign persons or foreign-invested enterprises. These laws and regulations may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. Exploration and mining operations in the PRC are subject to environmental laws and regulations, and the imposition of more stringent environmental regulations may affect our ability to comply with, or our costs to comply with, such regulations. Such changes, if implemented, may adversely affect our business operations and may reduce our profitability. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses.

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PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our ability to fund and expand our business.

We are an offshore holding company conducting our operations in China. We may make loans to our PRC subsidiaries, or we may make additional capital contributions to our wholly foreign-owned subsidiaries in China. Any loans to our wholly foreign-owned subsidiaries in China, which are treated as foreign-invested enterprises under PRC law, are subject to PRC regulations and foreign exchange loan registration requirements. In addition, a foreign-invested PRC enterprise has limitations upon its uses of capital, including restrictions on such capital being: (i) directly or indirectly used for payments beyond the business scope of the enterprise or payments prohibited by relevant laws and regulations; (ii) used for the granting of loans to non-affiliated enterprises, except where expressly permitted in the foreign-invested PRC enterprise’s business license; and (iii) used for paying expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises). We may also decide to finance our PRC subsidiaries by means of capital contributions, in which case the PRC subsidiary is required to register the details of the capital contribution with the local branch of the State Administration for Market Regulation and submit a report on the capital contribution via the online enterprise registration system to the Ministry of Commerce.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our current PRC operating subsidiaries or with respect to future capital contributions by us to our current PRC operating subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Inflation in the PRC, or a slowing PRC economy, could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our products and services rise at a rate that is insufficient to compensate for the rise in the costs of supplies and services, it may have an adverse effect on our profitability. In order to control inflation in the past, the PRC government has imposed controls on bank credit, limits on loans for fixed assets and restrictions on bank lending. As a result, domestic and global economic conditions may improve, and the markets we intend to serve may grow, at a lower-than-expected rate or even experience a downturn, adversely affecting our future profitability and growth.

Our PRC subsidiaries are subject to restrictions on paying dividends and making other payments to us.

We are a holding company incorporated in the BVI. Under BVI law, we may only pay dividends to investors, including U.S. investors, from surplus (the excess, if any, at the time of the determination of the total assets of our company over the sum of our liabilities, as shown in our books of account, plus our capital), and we must be solvent before and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary course of business, and the realizable value of assets of our company will not be less than the sum of our total liabilities, other than deferred taxes as shown in our books of account, and our capital. As a result of our holding company structure, dividends and other distributions to our shareholders, including U.S. investors, will depend primarily upon dividend payments from our subsidiaries. However, PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined in accordance with PRC accounting standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after-tax profits as certain reserve funds according to PRC accounting standards and regulations. The PRC government also imposes controls on the conversion of CNY into foreign currencies and the remittance of currency out of China. We may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency. Furthermore, if our subsidiaries in China incur further debt in the future, debt covenants may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive dividends from our operating companies due to contractual or other limitations on the payment of dividends, we may be unable to pay dividends or make other distributions on our common shares.

Governmental control of currency conversion may affect payment of any dividends or foreign currency denominated obligations, and it may adversely affect the value of your investment.

The PRC government imposes controls on the convertibility of CNY into foreign currencies and, in certain cases, the remittance of currency out of the PRC. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or otherwise satisfy foreign currency denominated obligations. Under existing PRC foreign exchange regulations, the CNY is currently convertible under the “current account,” which includes trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,” without prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where CNY is to be converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of bank loans denominated in foreign currencies.

The PRC government may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay certain of our expenses as they come due, or pay dividends or make other distributions to investors, including U.S. investors.

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See “Item 10.D. ADDITIONAL INFORMATION – Exchange Controls” for further details regarding exchange controls in the PRC.

The fluctuation of the Renminbi may materially and adversely affect your investment.

The exchange rate of the Renminbi against the U.S. Dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. As most of our operating expenses are denominated in Renminbi, or CNY, any significant revaluation of the Renminbi may materially and adversely affect our cash flows and financial condition. Additionally, if we convert our CNY into U.S. Dollars, to pay dividends on our common shares or for other business purposes, depreciation of the CNY against the U.S. Dollar would negatively affect the amount of U.S. Dollars we convert our CNY into. Conversely, to the extent that we need to convert U.S. Dollars we receive from an offering of our securities or otherwise into CNY for our operations, the appreciation of the CNY against the U.S. Dollar could have an adverse effect on our financial condition and result in a charge to our income statement and a reduction in the value of these U.S. Dollar denominated assets.

PRC SAFE regulations regarding offshore financing activities by PRC residents have undergone changes which may increase the administrative burden we face and create regulatory uncertainties that could adversely affect us, and a failure by our shareholders who are PRC residents to make any required applications and filings pursuant to such regulations may prevent us from being able to distribute profits and could expose us and our PRC resident shareholders to liability under PRC law.

In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles (“SAFE Circular 37”). SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed PRC residents for foreign exchange administration purposes) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 further requires an amendment to a SAFE registration in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as a change in the PRC shareholders, the names of such special purpose vehicle, and the operation term of such special purpose vehicle, or any significant changes with respect to the offshore special purpose vehicle, such as an increase or decrease of capital, a share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. If our shareholders who are PRC residents fail to make the required SAFE registration or to update a previously filed registration, our PRC subsidiaries may be prohibited from distributing their profits or the proceeds from any capital reduction, share transfer or liquidation to us, and we may also be prohibited from making additional capital contributions to our PRC subsidiaries.

In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment (“SAFE Notice 13”) effective June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, shall be filed with qualified banks instead of SAFE. The qualified banks directly examine the applications and accept registrations under the supervision of SAFE. To date, no registration has been filed with SAFE regarding us, and accordingly, SAFE may prohibit distributions from our PRC subsidiaries, which would prevent us from paying dividends and may adversely affect our financial condition and potentially expose us to liability under PRC law.

The PCAOB had historically been unable to inspect our auditor and former auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections in the past has deprived our investors with the benefits of such inspections.

Our former auditor, Ernst & Young Hua Ming LLP (“EY”), the independent registered public accounting firm that issued the audit report for the fiscal years ended December 31, 2022 and 2023, which is included in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess such firms’ compliance with the applicable professional standards. On April 8, 2025, we engaged ARK Pro CPA &Co (“ARK”) as our independent registered public accounting firm that issues the audit report in our SEC filings, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. For more details, see “Item 16F. Changes in Registrant’s Certifying Accountant.”

Since our former auditor is located in China, and our auditor is located in Hong Kong, both are jurisdictions where the PCAOB had been previously unable to conduct inspections without the approval of the Chinese authorities, our former auditor and auditor were subject to the determinations announced by the PCAOB on December 16, 2021 that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. On December 15, 2022, the PCAOB issued a report vacating the previous determinations dated December 16, 2021. Accordingly, until such time as the PCAOB issues any new determination, we are not at risk of having our securities subject to a trading prohibition under the HFCAA because we do not expect to be a Commission-Identified Issuer for a second consecutive year. However, the inability of the PCAOB to conduct inspections of auditors in mainland China and Hong Kong in the past made it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of mainland China and Hong Kong that have been subject to the PCAOB inspections, which could cause investors and potential investors in our securities to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

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Our common shares may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.

Pursuant to the HFCAA, the SEC will identify an issuer as a Commission-Identified Issuer if the issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely, and will then impose a trading prohibition on an issuer after it is identified as a Commission-Identified Issuer for two consecutive years. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. The PCAOB identified our auditor as one of the registered public accounting firms that the PCAOB was unable to inspect or investigate completely. In June 2022, we were identified by the SEC as a “Commission-Identified Issuer” in their conclusive list of issuers identified under the HFCAA. On December 15, 2022, the PCAOB issued a report vacating the previous determinations dated December 16, 2021. Accordingly, until such time as the PCAOB issues any new determination, we are not at risk of having our securities subject to a trading prohibition under the HFCAA because we do not expect to be identified as a Commission-Identified Issuer for a second consecutive year. If in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will consider issuing a new determination.

Whether the PCAOB will continue to be able to conduct inspections of our auditor is subject to substantial uncertainty and depends on a number of factors out of our, and our auditor’s, control. A trading prohibition would substantially impair your ability to sell or purchase our common shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our common shares.

PRC regulations establish complex procedures for some acquisitions conducted by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), adopted by six PRC regulatory agencies in August 2006 and amended in June 2009, among other things, established procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. In addition, the Provisions of Ministry of Commerce on Implementation of Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, issued by the Ministry of Commerce in August 2011, specify that mergers and acquisitions by foreign investors involved in “an industry related to national security” are subject to strict review by the Ministry of Commerce, and prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.

On March 15, 2019, the PRC National People’s Congress enacted the Foreign Investment Law of the PRC (the “Foreign Investment Law”), which became effective on January 1, 2020. The Foreign Investment Law has replaced the previous major laws and regulations governing foreign investment in the PRC, including the Sino-foreign Equity Joint Ventures Enterprises Law of the PRC, the Sino-foreign Co-operative Enterprises Law of the PRC and the Wholly Foreign-invested Enterprise Law of the PRC. According to the Foreign Investment Law, “foreign-invested enterprises” refers to enterprises that are wholly or partly invested by foreign investors and registered under the PRC laws within China, and “foreign investment” refers to any foreign investor’s direct or indirect investment activities in China, including: (i) establishing foreign-invested enterprises in China either individually or jointly with other investors; (ii) obtaining stock shares, equity shares, shares in properties or other similar interests of Chinese domestic enterprises; (iii) investing in new projects in China either individually or jointly with other investors; and (iv) investing through other methods provided by laws, administrative regulations or provisions prescribed by the State Council.

On December 26, 2019, the State Council issued Implementation Regulations for the Foreign Investment Law of the PRC (the “Implementation Rules”) which came into effect on January 1, 2020, and replaced the Implementing Rules of the Sino-foreign Equity Joint Ventures Enterprises Law of the PRC, the Implementing Rules of the Sino-foreign Co-operative Enterprises Law of the PRC and the Implementing Rules of the Wholly Foreign-invested Enterprise Law of the PRC. According to the Implementation Rules, in the event of any discrepancy between the Foreign Investment Law, the Implementation Rules and the relevant provisions on foreign investment promulgated prior to January 1, 2020, the Foreign Investment Law and the Implementation Rules shall prevail. The Implementation Rules also set forth that foreign investors that invest in sectors on the “Negative List” in which foreign investment is restricted shall comply with special management measures with respect to, among others, shareholding and senior management personnel qualification in the Negative List. Pursuant to the Foreign Investment Law and the Implementation Rules, the existing foreign-invested enterprises established prior to the effective date of the Foreign Investment Law are allowed to keep their corporate organization forms for five years from the effectiveness of the Foreign Investment Law before such existing foreign-invested enterprises must change their organization forms and organization structures in accordance with the PRC Company Law, the Partnership Enterprise Law of the PRC and other applicable laws.

After the Foreign Investment Law and the Implementation Rules became effective on January 1, 2020, the provisions of the M&A Rules remained effective to the extent they are not inconsistent with the Foreign Investment Law and the Implementation Rules. We believe that our business is not in an industry related to national security, but we cannot preclude the possibility that the competent PRC government authorities may publish explanations contrary to our understanding or broaden the scope of such security reviews in the future, in which case our future acquisitions and investment in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Moreover, according to the Anti-Monopoly Law of the PRC, the SAMR shall be notified in advance of any concentration of undertaking if certain filing thresholds are triggered. We may grow our business in part by directly acquiring complementary businesses in China. Complying with the requirements of the laws and regulations mentioned above and other PRC regulations necessary to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the SAMR, may delay or inhibit our ability to complete such transactions, which could materially and adversely affect our ability to expand our business or maintain our market share.

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In December 2020, the National Development and Reform Commission and the Ministry of Commerce promulgated the Measures for the Security Review of Foreign Investment, which came into effect on January 18, 2021. According to the Security Review of Foreign Investment, for foreign investments that affect or may affect national security, security review shall be conducted in accordance with the provisions thereof. We cannot assure you that our current or new business operations will remain fully compliant, or that we can adapt our business operations to new regulatory requirements on a timely basis, or at all.

We and our PRC subsidiaries are required to maintain a series of licenses, permits and approvals from PRC authorities to operate our business in the PRC, and failure to maintain or renew such licenses, permits or approvals in a timely manner could materially affect our business.

Prior to the sale of PST Technology, our PRC subsidiaries carried out rural wastewater treatment and metal exploration activities in the PRC. After PST Technology’s disposition, we discontinued the operation in wastewater treatment segment and continue engaging in the exploration and mining business, which is subject to a series of PRC laws and regulations. Such business activities require us to obtain licenses, permits and approvals from different PRC authorities, including an exploration permit from the Natural Resources Department of the Inner Mongolia Autonomous Region with regards to our metal exploration activity and business licenses from local administration for market regulation as required upon company registration. As of the date of this annual report, as far as we are aware and in the judgment of management, we have obtained all necessary licenses, permits and approvals to operate our business in the PRC, and have not been denied any such licenses, permits or approvals. If we or our PRC subsidiaries fail to maintain or renew such licenses, permits and approvals in a timely manner in the future, our business may be materially affected.

The approval of or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

The M&A Rules require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear, and our offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we successfully obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of any successfully obtained approvals, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities. Sanctions could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition and results of operations.

On July 6, 2021, PRC government authorities issued the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. They proposed to take measures such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas listed companies.

As a follow-up, on February 17, 2023, CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures of Overseas Listing”) which have been effective on March 31, 2023. The Trial Measures of Overseas Listing require that 1) where a domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC; 2) initial public offerings or listings in overseas markets shall be filed with the CSRC within 3 working days after the relevant application is submitted overseas. And subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within 3 working days after the offering is completed; 3) any overseas offering and listing made by an issuer that meets both the following conditions will be determined as indirect overseas offering and listing: (a) 50% or more of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (b) the main parts of the issuer's business activities are conducted in the Chinese Mainland, or its main places of business are located in the Chinese Mainland, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in the Chinese Mainland. The determination as to whether or not an overseas offering and listing by domestic companies is indirect overseas offering and listing, shall be made on a substance over form basis.

Based on the Trial Measures of Overseas Listing, if our company issues new securities in the future, we need to fulfill the abovementioned filing procedures. If our company fails to file in time, we may be punished by the CSRC.

In addition, on February 24, 2023, CSRC, Ministry of Finance; National Administration of State Secrets Protection and National Archives Administration of China issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (“Revised Confidentiality and Archives Administration Provisions”) which have been effective on March 31, 2023. The Revised Confidentiality and Archives Administration Provisions require that in the overseas issuance and listing activities of domestic enterprises, the securities companies and securities service providers that undertake relevant businesses shall strictly abide by applicable laws and regulations of the PRC and the Revised Confidentiality and Archives Administration Provisions, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, take necessary measures to fulfill confidentiality and archives administration obligations, and shall not leak any state secret and working secret of government agencies, or harm national security and public interest.

Based on the Revised Confidentiality and Archives Administration Provisions, if our company violates relevant laws and regulations in the future, we may be punished by the competent authorities.

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As of the date of this annual report, as far as we are aware and in the judgment of management, we have received all requisite permissions or approvals in connection with our offshore offerings under PRC law, and have not been denied any such permissions or approvals. However, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval from and filing with the CSRC or other regulatory authorities or other procedures are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, including by our inadvertent conclusion that such approval or filing was not required when in fact it was, or a rescission of any such approval or filing if obtained by us, could subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations and prospects, as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the securities offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation and the trading price of our listed securities.

Failure to comply with PRC regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.

On December 28, 2021, the CAC, together with 12 other departments, adopted the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures require network platform operators possessing personal information of more than one million individual users to undergo a cybersecurity review by the CAC when they seek a listing on a foreign exchange. The Cybersecurity Review Measures provide that critical information infrastructure operators purchasing network products and services and network platform operators carrying out data processing activities, which affect or may affect national security, shall apply for cybersecurity review to the applicable local cyberspace administration in accordance with the provisions thereunder.

On July 30, 2021, the State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021. Pursuant to the Regulations on Security Protection of Critical Information Infrastructure, critical information infrastructure shall mean any important network facilities or information systems of an important industry or field, such as public communications and information services, energy, transportation, water conservation, finance, public services, e-government affairs and science and technology and national defense industries, which may seriously endanger national security, peoples’ livelihoods and the public interest in the event of damage, function loss or data leakage. In addition, the relevant administrative departments of each critical industry and sector shall be responsible for formulating eligibility criteria and determining the critical information infrastructure operator in the respective industry or sector. The operators shall be informed about the final determination as to whether they are categorized as critical information infrastructure operators. Among these industries, the energy and telecommunications industries are mandated to take measures to provide key assurances for the safe operation of critical information infrastructure in other industries and fields.

We and our PRC subsidiaries do not carry out business in China through any self-owned network platform and hold personal information of less than one million individuals from PRC operations. We and our PRC subsidiaries have not been identified as critical information infrastructure operators by any PRC authorities. The data collected from our China operations is mainly information related to our production, customers, suppliers and our employees. We believe that we and our PRC subsidiaries do not commit any acts that threaten or endanger the national security of the PRC, and to our knowledge we and our PRC subsidiaries have not received or been subject to any investigation, notice, warning or sanction from any PRC authority with respect to national security issues arising from our business operations. As of the date of this annual report, we do not believe that we need to proactively apply for the cybersecurity review required by the CAC.

Furthermore, the CAC promulgated the Security Assessment Measures for Outbound Data Transfers, which became effective on September 1, 2022, which require that to provide data abroad under any of the following circumstances, a data processor shall declare security assessment for its outbound data transfer to the CAC through the local cyberspace administration at the provincial level: (i) where a data processor provides critical data abroad; (ii) where a key information infrastructure operator or a data processor processing the personal information of more than one million individuals provides personal information abroad; (iii) where a data processor has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals in total abroad since January 1 of the previous year; and (iv) in other circumstances prescribed by the CAC for which declaration of a security assessment for outbound data transfers is required. As we and our PRC subsidiaries do not provide any data collected from China operations abroad, we do not believe it is necessary for us to declare any security assessments pursuant to the Security Assessment Measures for Outbound Data Transfers.

However, there remains uncertainty as to how these regulations will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules or detailed implementation and interpretation, and there is no assurance that PRC regulatory agencies, including the CAC, would take the same view as we do. There have not been comparable developments in Hong Kong, but those could occur, and we believe we are currently in compliance with all Hong Kong laws and regulations regarding data security. If any such new laws, regulations, rules or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. However, we cannot assure you that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity reviews and/or other requirements of the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, it is possible that we may be required to suspend the relevant business, or face other penalties, which could materially and adversely affect our business, financial condition, results of operations and/or the value of our securities, or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. As of the date of this annual report, we have not been informed that we have been identified as a critical information infrastructure operator by any governmental authorities. These laws and regulations are still new and there is uncertainty with respect to the interpretation and implementation of these data security laws and regulations. We will closely monitor the relevant regulatory environment and will assess and determine whether we are required to apply for the cybersecurity review.

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We may be classified as a “resident enterprise” for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

The Enterprise Income Tax Law provides that enterprises established outside of China whose “de facto management bodies” are located in China are considered PRC tax resident enterprises and will generally be subject to the uniform 25% PRC enterprise income tax rate on their global income. In 2009, the State Administration of Taxation (“SAT”) issued the Circular of the State Administration of Taxation on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance with the Standards of Actual Organizational Management (“SAT Circular 82”), which was partially amended by the Announcement on Issues concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions issued by the SAT on January 29, 2014, and further partially amended by the Decision on Issuing the Lists of Invalid and Abolished Tax Departmental Rules and Taxation Normative Documents issued by the SAT on December 29, 2017. SAT Circular 82, as amended, provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China, which include all of the following conditions: (i) the location where senior management members responsible for an enterprise’s daily operations discharge their duties; (ii) the location where financial and human resource decisions are made or approved by organizations or persons; (iii) the location where the major assets and corporate documents are kept; and (iv) the location where more than half (inclusive) of all directors with voting rights or senior management have their habitual residence. SAT Circular 82 further clarifies that the identification of the “de facto management body” must follow the “substance over form” principle. In addition, the SAT issued the Announcement of State Administration of Taxation on Promulgation of the Administrative Measures on Income Tax on Overseas Registered Chinese-funded Holding Resident Enterprises (Trial Implementation) (“SAT Bulletin 45”) on July 27, 2011, effective from September 1, 2011, and partially amended on April 17, 2015, June 28, 2016, and June 15, 2018, providing more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 clarifies matters including resident status determination, post-determination administration and competent tax authorities. Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises or PRC enterprise groups or by PRC or foreign individuals.

Currently, there are no detailed rules or precedents governing the procedures and specific criteria for determining “de facto management bodies” that are applicable to us or our overseas subsidiaries. We do not believe that CHNR meets all of the conditions for a PRC resident enterprise. The Company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities, and uncertainties remain with respect to the interpretation of the term “de facto management body.” There can be no assurance that the PRC government will ultimately take a view that is consistent with ours.

However, if the PRC tax authorities determine that CHNR is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. Such 10% tax rate could be reduced by applicable tax treaties or similar arrangements between China and the jurisdiction of our shareholders. For example, for shareholders eligible for the benefits of the tax treaty between China and Hong Kong, known as the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Double Taxation Arrangement”), the tax rate is reduced to 5% for dividends if relevant conditions are met, including without limitation that (a) the Hong Kong resident enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong resident enterprise must directly hold no less than 25% share ownership in the PRC resident enterprise during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong resident enterprise must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain a tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends paid by our PRC subsidiaries to their immediate holding companies. In addition, non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the sale or other disposition of common equity if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as a PRC resident enterprise.

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Provided that CHNR, as a BVI holding company, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares. However, under the Announcement of the State Administration of Taxation on Several Issues Relating to Enterprise Income Tax on Transfer of Assets between Non-resident Enterprises (the “SAT Circular 7”) issued by the SAT on February 3, 2015, where a non-resident enterprise conducts an “indirect transfer” by transferring taxable assets, including, in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee would be obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required to file a return and being taxed under SAT Circular 7, and we may be required to expend valuable resources to comply with SAT Circular 7, or to establish that we should not be taxed under SAT Circular 7.

In addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect. If we are required under the Enterprise Income Tax Law to withhold PRC income tax on our dividends payable to our foreign shareholders, including U.S. investors, or if you are required to pay PRC income tax on the transfer of our shares under the circumstances mentioned above, the value of your investment in our shares may be materially and adversely affected. These rates may be reduced by an applicable tax treaty, but it is unclear whether, if we are considered a PRC resident enterprise, holders of our shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. Any such tax may reduce the returns on your investment in our shares.

Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary of such overseas-listed company, and complete certain other procedures related to account establishment, funds transfer and remittance. In addition, an overseas-entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of corresponding shares and interests. We and our executive officers and other employees who have been PRC citizens or who have resided in the PRC for a continuous period of not less than one year and who are granted options or other awards under our equity incentive plan will be subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiaries’ ability to distribute dividends to us. As at the date of this annual report, we have already completed the SAFE registration and obtained the relevant approval of foreign exchange for our executive officers, consultants and other employees who have been granted options and are subject to the above regulations. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.

On July 14, 2022, the board of directors of the Company granted option covering an aggregate of 8,100,000 Common shares of the Company (or 1,620,000 Common shares of the Company as adjusted by a five-to-one share combination on April 3, 2023) to fifteen consultants and employees of the Company under the China Natural Resources, Inc. 2014 Equity Compensation Plan. SAT has issued circulars concerning employee share options, under which certain of our employees and consultants who are PRC tax residents and exercise share options will be subject to PRC individual income tax. The individual income tax of consultant grantees and employees shall be paid according to remuneration for personal services and wages and salaries respectively. Our PRC subsidiaries have obligations to file documents related to employee share options with relevant tax authorities and to withhold individual income taxes of those employees and consultants who exercise their share options. If our employees and consultants fail to pay or if we fail to withhold their individual income tax as required by relevant laws and regulations, we may face sanctions imposed by the PRC tax authorities or other PRC government authorities.

Failure to make adequate contributions to various mandatory social security plans as required by PRC regulations may subject us to penalties.

Under the PRC Social Insurance Law and the Administrative Measures on Housing Fund, our PRC subsidiaries are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and to contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees up to a maximum amount specified by the local government from time to time at locations where they operate the businesses. The requirements of employee benefit plans have not been implemented consistently by the local governments in China given the different levels of economic development in different locations. If the local governments deem our subsidiaries’ contribution to be insufficient, our subsidiaries may be subject to late contribution fees or fines in relation to any underpaid employee benefits, and our financial condition and results of operations may be adversely affected.

In Hong Kong, employers are required to select and join a provident fund scheme (“MPF Scheme”) in accordance with the statutory requirements of the Mandatory Provident Fund Schemes Ordinance for all employees in Hong Kong and to make contributions to the MPF Scheme based on the minimum statutory contribution requirement of 5% of the eligible employees’ relevant aggregate income, subject to a capped amount. Any non-compliance with statutory requirements with respect to our employees located in Hong Kong may result in enforcement being taken by the relevant authorities, which could lead to financial penalties or imprisonment.

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Enforcement of stricter labor laws and regulations may increase our labor costs.

China’s overall economy and the average wage have increased in recent years and are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers who pay for our services, our profitability and results of operations may be materially and adversely affected. The PRC Labor Contract Law and its implementing rules impose requirements concerning contracts entered into between an employer and its employees and establishes time limits for probationary periods and for how long an employee can be placed in a fixed-term labor contract. We cannot assure you that our or our subsidiaries’ employment policies and practices do not, or will not, violate the Labor Contract Law or its implementing rules or that we will not be subject to related penalties, fines or legal fees. If we or our subsidiaries are subject to large penalties or fees related to the Labor Contract Law or its implementing rules, our business, financial condition and results of operations may be materially and adversely affected. In addition, according to the Labor Contract Law and its implementing rules, if we intend to enforce the non-compete provision with an employee in a labor contract or non-competition agreement, we have to compensate the employee on a monthly basis during the term of the restriction period after the termination or ending of the labor contract, which may cause extra expenses to us. Furthermore, the Labor Contract Law and its implementation rules require certain terminations to be based upon seniority rather than merit, which significantly affects the cost of reducing workforce for employers. In the event we decide to significantly change or decrease our workforce in the PRC, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our circumstances or in a timely and cost-effective manner, thus our results of operations could be adversely affected.

If the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.

In China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries are generally held securely by personnel designated or approved by us in accordance with our internal control procedures. To the extent those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so. In addition, if the chops are misused by unauthorized persons, our PRC subsidiaries could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations.

Risks Relating to Our Mine Exploration Activities in Inner Mongolia

The Moruogu Tong Mine is in the exploration stage.

One of our operating subsidiaries, Bayannaoer Mining, is in the exploration stage at the Moruogu Tong Mine located in the Inner Mongolia Autonomous Region of the PRC, and, at this stage, we cannot predict whether ore can be mined on a profitable basis. During the exploration stage, a mine incurs operating expenses but does not generate revenues. We intend to fund mine exploration on the southern part of Moruogu Tong Mine through borrowings from related parties or cash on hand. Pursuant to Bayannaoer Mining’s mutual cooperation agreement (the “Cooperation Agreement”) with Bayannaoer Jijincheng Mining Co., Ltd. (“Jijincheng Mining”), Jijincheng Mining is currently running the exploration program for the northern part of Moruogu Tong Mine. To date, the exploration program of the northern part has indicated the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper. At this stage of exploratory activities, we cannot predict whether sufficient ore of acceptable quality will be found at the Moruogu Tong Mine to warrant further exploration and/or extraction.

The northern part of Moruogu Tong Mine is currently being explored under an agreement that reduces our share in any future profits.

On August 20, 2017, Bayannaoer Mining entered into the Cooperation Agreement with Jijincheng Mining, an unrelated third party. The Cooperation Agreement is intended to provide for financial support for the operating expenses of the northern part of Moruogu Tong Mine during the exploration stage, and the allocation of rights and responsibilities between Bayannaoer Mining and Jijincheng Mining. According to the Cooperation Agreement, Jijincheng Mining is responsible for engaging the exploration team and providing the required funding. Pursuant to the Cooperation Agreement: (i) Bayannaoer Mining contributed the existing exploration results for the northern part of Moruogu Tong Mine; (ii) Jijincheng Mining provides the necessary funds for further exploration at the mine; (iii) Bayannaoer Mining enjoys full rights to any resources already discovered and confirmed by its independent exploration work conducted prior to commencement of the cooperative exploration project; (iv) Bayannaoer Mining and Jijincheng Mining will each receive a 50% interest in any newly discovered resources from the first 10 drilling holes in the cooperative exploration project; and (v) Bayannaoer Mining and Jijincheng Mining will receive 30% and 70% interests, respectively, in any newly discovered resources from drilling work beyond the first 10 drilling holes in the cooperative exploration project. As of the date of this annual report, 21 holes have been drilled using funding provided by Jijincheng Mining pursuant to the Cooperation Agreement. Other details of the Cooperation Agreement, including allocations and distributions upon completion of exploration work, remain to be negotiated between the parties. There is no assurance that the details of the arrangement that remain to be negotiated will be resolved in a manner satisfactory to the Company. Moreover, because the Cooperation Agreement provides us with a minority interest in the resources discovered as part of the cooperative exploration project, we will not be able to enjoy the full economic benefits of the resources we discover in the northern part of Moruogu Tong Mine for the duration of the Cooperation Agreement.

Any estimates of the reserves contained in the Moruogu Tong Mine may be inaccurate.

The Moruogu Tong Mine is the subject of a geological survey prepared in conformity with procedures and protocols recognized in the PRC. These procedures and protocols are different from those generally recognized in the United States. In addition, reserve estimation is an interpretive process based upon available data and various assumptions that are believed to be reasonable, and the economic value of ore reserves may be adversely affected by price fluctuations in the metals markets, reduced recovery rates or a rise in production costs as a result of inflation or other technical problems arising in the course of extraction. If the assumptions upon which we conduct the reserve study prove to be inaccurate, we may reach incorrect conclusions as to the nature and extent of resources present at the Moruogu Tong Mine, and we may not be able to generate revenues from the Moruogu Tong Mine in an amount that would lead to such activities being profitable or at all.

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There are no assurances that we can produce minerals on a commercially viable basis.

The Company’s ability to generate revenue and profit from the Moruogu Tong Mine is expected to occur, if at all, through the exploration, evaluation, development and operation of that property. The economic feasibility of a project depends on numerous factors, including the cost of mining and production facilities required to extract the desired minerals, the total mineral deposits that can be mined at a given facility, the proximity of the mineral deposits to refining facilities, and the market price of the minerals at the time of sale. There is no assurance that our current or future exploration programs or any acquisitions will result in the identification of deposits that can be mined profitably.

Volatility in the market prices of metals may adversely affect the results of our operations.

The market prices of lead, silver and other metals have experienced significant volatility in recent years. Market prices depend upon many factors beyond our control, which include industry specific factors such as supply and demand and the level of customer inventories, as well as factors such as local and world-wide general economic conditions and disruptions caused by unforeseen domestic or international crises such as the global outbreak of COVID-19, or geopolitical tensions, including the ongoing military conflict between Russia and Ukraine. The uncertainties surrounding the market prices of metals and the costs of extraction may adversely affect our ability to operate on a profitable basis if our mining exploration proves fruitful.

During 2024, prolonged geopolitical conflicts, elevated interest rates across major economies, and ongoing Sino-US tensions continued to weigh on the global economy and businesses. These factors disrupted the global commodity market, causing significant volatility in the prices of lead, silver and copper. In 2024, the Shanghai Futures Exchange (“SHFE”) lead price hit a low of CNY15,790 (US$2,164) per ton and a high of CNY20,050 (US$2,747) per ton, the SHFE silver price reached a low of CNY5,743 (US$787) per kilogram (“kg”) and a high of CNY8,733 (US$1,197) per kg, and the SHFE copper price hit a low of CNY67,380 (US$9,233) per ton and a high of CNY88,940 (US$12,187) per ton, each reflecting high volatility. The extent to which demand and prices will be supported in the future is highly uncertain, as persistent high interest rates, particularly in the U.S., the ongoing geopolitical tensions, and newly imposed U.S. tariffs continue to cause disruptions to the global economy and to business activities at all levels. Intensifying trade frictions or further geopolitical tensions could significantly and adversely impact market sentiment and the real economy, leading to a sharp decline in global trade, major supply chain disruptions and broad-based downturns in commodity prices and economic growth. Aggressive monetary policies of major economies could also cause unexpected consequences beyond mere economic downturns, such as large-scale bankruptcy and even financial crisis, which will have significant and negative impacts on the commodity markets. Therefore, demand and price volatility in the commodity markets may continue for a prolonged period or further deteriorate, which may adversely affect our ability to sell minerals from the Moruogu Tong Mine on a profitable basis.

We are subject to government regulations in various aspects of our exploration activities and our failure to comply with applicable government regulations could adversely affect us.

Bayannaoer Mining, our subsidiary that acquired exploration rights to the Moruogu Tong Mine, is and will continue to be subject to the regulations of various aspects of its operations by a variety of laws, rules and regulations administered by the national and local Chinese government, including laws, rules and regulations relating to: exploration activities; environmental protection; the use and preservation of dangerous substances; employment practices; as well as land use laws and a variety of local business laws and rules. Our failure to comply with applicable laws, rules, and regulations could adversely affect our operations and subject us to fines and other penalties including suspension or termination of our business permits.

We do not have binding agreements with customers to purchase any future output of metals.

While we believe there is a robust market for lead, silver and other metals not only in China but also in other countries (although our operations are currently limited to the PRC and we are not currently producing any metals), we do not currently have any commitments from any customers to purchase any future output of metals. As a result, we may not be able to sell any metals that we are able to successfully extract at prices that are acceptable to us or at all.

ESG issues, including those related to health, safety, climate change and sustainability, may have an adverse effect on our business, financial condition, and results of operations, could damage our reputation, and may increase costs.

There is an increasing focus from certain investors, customer, partners and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow and change, and may continue to shift based on political conditions in the countries in which we operate and do business. If our ESG practices fail to meet regulatory requirements, our medium- and long-term ESG commitments, or investors, customers, partners or other stakeholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, support for local communities, human capital management, employee health and safety practices, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted.

Investors, customers, partners and other stakeholders are increasingly focusing on environmental issues, including climate change, dams, energy and water use, and other sustainability concerns. Concern over climate change, in particular, may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.

If we do not adapt to or comply with new regulations, or if we fail to comply with disclosure requirements and consequently fail to meet evolving regulatory, investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in us, customers and partners may choose to stop the cooperation with us, which could have a material adverse effect on our reputation, business or financial condition.

In addition, our ESG practices and initiatives may result in increased operational costs, including monitoring and reporting costs, equipment costs, energy costs, and other costs to comply with our developing practices and initiatives. These additional costs could have a material impact on our business, results of operations and financial condition.

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Risks Relating to the Sale of PST Technology

We face risks associated with the divesture of our wastewater treatment segment.

In July 2021, we acquired PST Technology for consideration of three million of the Company’s newly issued restricted common shares, 120 million shares of FARL, and approximately CNY10.3 million (US$1.41 million). Through our acquisition of PST Technology, we obtained a 51% equity interest in Shanghai Onway, a company principally engaged in services related to rural wastewater treatment. In addition to the purchase price, we incurred significant non-recurring expenses in connection with the acquisition, including legal, accounting, financial advisory, integration planning and other expenses, and have incurred integration costs arising out of this transaction.

On July 28, 2023, we entered into a Sale and Purchase Agreement (“SPA”) with Feishang Group Limited (“Feishang Group”), pursuant to which, we agreed to sell 100% equity interest of Precise Space-Time Technology Limited to Feishang Group, together with PST Technology’s outstanding payable owed to us, for consideration of approximately CNY95,761,119 comprising: (i) CNY-34,197,300, the fair value of 100% equity interest of PST Technology as determined by the independent valuation report dated July 28, 2023; and (ii) CNY129,958,419, the book value of PST Technology’s outstanding payable owed to us. After PST Technology’s disposition, we discontinued the operation in wastewater treatment segment and continue engaging in the exploration and mining business. This divestiture may adversely affect our business, results of operations or financial condition if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested waste water treatment business, or otherwise achieve the anticipated benefits or cost savings from the divestiture.

In addition, we may divest in the future businesses as part of ongoing efforts to refine our portfolio and redefine our strategic priorities. We may not be able to successfully achieve the expected benefits of such divestitures and such divestitures may not have the desired effect of enhancing the status of our portfolio of businesses. Our divestitures could result in exposure to contingent or unexpected liabilities, such as litigation, indemnification claims, regulatory claims and earn-out obligations. Furthermore, businesses under consideration for, or otherwise subject to, divestiture may be adversely impacted prior to completion of the divestiture, which could adversely affect our business, results of operations or financial condition.

Risks Relating to the Potential Closing of the Acquisition of Williams Minerals and the Timing of Such Closing

There may be unforeseen risks relating to the Acquisition that were not discovered by us through our due diligence investigation prior to our Acquisition.

Although we have conducted due diligence in connection with the Acquisition, and such due diligence investigation concluded on April 14, 2023, an unavoidable level of risk remains regarding any undisclosed or unknown issues concerning the prospects of the Zimbabwean lithium mine, including the actual presence and extraction of minerals therein. We may learn additional information about the Zimbabwean lithium mine that could materially adversely affect us. There may be unforeseen risks relating to our ability to locate and execute on strategic opportunities; the presence of lithium or precious minerals in the Zimbabwean lithium mine; the vesting of the legal possession and control of the relevant regions of the Zimbabwean mine and the timing thereof; the level of demand for lithium and other precious minerals; and the availability of internally generated funds and funds for the payment of operating expenses, capital expenditures and the Company’s growth strategy.

Completion of the Acquisition is conditional upon satisfaction or waiver of various conditions. There can be no assurance that the conditions will be fulfilled or waived, or that the acquisition will be completed.

The completion of the Acquisition is subject to a number of conditions, including, among other things, the transfer of ownership interests in Williams Minerals from the Sellers to the intermediate holding company; the Company’s payment of the first installment of US$140 million, in cash or by way of promissory notes, to the Sellers; the issuance of independent technical reports regarding the amount of qualified measured, indicated and inferred resources quantity of lithium oxide proven to be in each region of the mining area; the settlement of the then-total consideration accumulated in cash and restricted shares, as calculated in reference to the issued independent technical reports; and the transfer of ownership rights to the Company for each region of the mining area. Pursuant to the Zimbabwe SPA, for each relevant region of the lithium mine, until the Company’s legal possession and control vests, the Sellers will maintain legal possession and control, including the right of exploration, sale of lithium, and the revenue derived therefrom, as well as liability for operational costs and third-party claims. The Company’s legal possession and control of each relevant region only vests upon its settlement of the then-total consideration accumulated. There can be no certainty, nor can we provide any assurance, that all conditions will be satisfied or waived, or, if satisfied or waived, when they will be satisfied or waived and, accordingly, the acquisition may not be completed. On December 22, 2023, the Company entered into an amendment agreement (the “Amendment Agreement”) to the Zimbabwe SPA with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the Acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the acquisition from December 31, 2023 to December 31, 2024. In addition, the parties entered into the Amendment Agreement II to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025. See “Item 4.A. – INFORMATION OF THE COMPANY – History and Development of the Company – Acquisition of Williams Minerals” for additional information. Although we expect that the last independent technical report will be completed, and accordingly ownership rights to the last mining region (as described above) will vest with the Company, in 2026, there is no guarantee that the Acquisition will be completed on such timeline, or at all.

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Failure to complete the Acquisition may have a material adverse effect on the Company’s business, financial condition and results of operations.

If the Acquisition is not completed, the ongoing businesses of the Company may be adversely affected and the Company will be subject to several risks, including (i) having to pay certain costs relating to the Acquisition, such as legal, accounting, and external consultant fees, (ii) the focus of management on the Acquisition instead of on pursuing other opportunities that could be beneficial, (iii) negative reactions from the financial markets, which could cause a decrease in the market price of our shares, particularly if the market price reflects market assumptions that the Acquisition will be completed or completed on certain terms; and (iv) negative reactions from regulators, rating agencies, prospective customers, counterparties and employees; all without having fully realized the anticipated benefits of the Acquisition. Failure to complete the Acquisition or a change in the terms of the Acquisition could each have a material adverse effect on the Company’s business, financial condition and results of operations, as well as on our ability to attract future acquisition opportunities.

Even if the Acquisition is completed, we may fail to realize the anticipated benefits associated with it, those benefits may take longer to realize than expected, and we may encounter significant difficulties.

Even if we are successful in completing the Acquisition, we may fail to realize the anticipated benefits of it. The anticipated benefits of the Acquisition and the projected cash costs necessary to achieve these benefits may be affected by changes in the overall economic, political and regulatory environment, including applicable tax regimes and fluctuations in foreign exchange rates, the viability of mining and estimates of reserves at the Zimbabwean lithium mine, the issuance and accuracy of the independent technical reports, the demand for lithium and other precious minerals, and the realization of the other risks relating to our business described herein. The benefits we expect to realize from this Acquisition will depend, in part, on our ability to successfully extract lithium or precious minerals, if found, and to capitalize on our mining expertise and sales and distribution platform. If we are not able to achieve these objectives, the anticipated benefits of the Acquisition may not be realized fully or at all or may take longer to realize than expected.

Risks Relating to Additional Acquisitions and Expansion into Other Sectors

We may acquire other businesses or form joint ventures that could negatively affect our operating results, dilute our shareholders’ ownership, increase our debt or cause us to incur significant expense.

We are actively seeking opportunities to enter other industries in the PRC, as well as other potentially attractive opportunities; however, we cannot offer any assurance that acquisitions of businesses, assets and/or entering into strategic alliances or joint ventures will be successful. We may not be able to find suitable partners or acquisition candidates and may not be able to complete such transactions on favorable terms, if at all. If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing infrastructure. In addition, in the event we acquire any existing businesses we could assume unknown or contingent liabilities.

Any future acquisitions could result in incurrence of debt, contingent liabilities or future write-offs of intangible assets or goodwill, any of which could have a negative impact on our cash flows, financial condition and results of operations. Integration of an acquired company may also disrupt ongoing operations and require management resources that otherwise would be focused on developing and expanding the acquired business. We may experience losses related to potential investments in other companies, which could harm our financial condition and results of operations. Further, we may not realize the anticipated benefits of any acquisition, strategic alliance or joint venture if such investments do not materialize.

To finance any acquisitions or joint ventures, we may choose to issue common shares, or a combination of debt and equity as consideration, which could significantly dilute the ownership of our existing shareholders or provide rights to such target shareholders in priority over our common shareholders. Additional funds may not be available on terms that are favorable to us, or at all. If the price of our common shares is low or volatile, we may not be able to acquire other companies or fund a joint venture project using shares as consideration.

Future acquisitions or strategic investments could be difficult to identify and integrate, divert the attention of management, and could disrupt our business, dilute shareholder value and adversely affect our business, results of operations, and financial condition.

As part of our growth strategy, we may acquire or invest in other businesses, assets or technologies that are outside of the sectors we have historically operated in but fit within our strategic goals. Any acquisition or investment may divert the attention of management and require us to use significant amounts of cash, issue dilutive equity securities or incur debt. We have limited experience in acquiring other businesses. In addition, we may be exposed to unknown risks, any of which could adversely affect our business, results of operations, and financial condition, including risks arising from:

| • | difficulties in integrating the operations, technologies, product or service offerings, administrative systems, and personnel of acquired businesses, especially if those businesses operate outside of our core competency or geographies in which we currently operate;

| • | potential loss of key employees of the acquired business;

| • | inability to maintain key business relationships and reputation of the acquired business;

| • | litigation arising from the acquisition or the activities of the acquired business, including claims from terminated employees, customers, former shareholders or other third parties;

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| • | assumption of contractual obligations that contain terms that are not beneficial to us, require us to license, or increase our risk of liability;

| • | complications in the integration of acquired businesses or diminished prospects, including as a result of the domestic and global economic downturns;

| • | failure to generate the expected financial results related to an acquisition in a timely manner or at all;

| • | failure to accurately forecast the impact of an acquisition transaction; and

| • | implementation or remediation of effective controls, procedures, and policies for acquired businesses.

Risks Relating to Our Financial Condition and Business

We have incurred losses from operations in each of the preceding three fiscal years of 2022, 2023 and 2024 and there is no assurance that we will generate profits from operations in the future.

For the three years ended December 31, 2022, 2023 and 2024, we incurred operating losses of CNY24.55 million, CNY9.14 million and RMB7.20 million (US$0.99 million), respectively. Our operating losses mainly represent administrative expenses, such as legal and professional fees, payroll expenses, our cost of sales and estimated uncollectible receivables, as well as equity-settled share-based compensation for certain eligible individuals under the 2014 Equity Compensation Plan (the “2014 Plan”) granted on July 14, 2022. Any future profitability will be dependent upon many factors, including our successful integration and profitable operations of our newly acquired and existing businesses; our ability to fund our exploration and operating expenses, successfully produce metal outputs, and sell our production output to third parties; and the successful execution of our plans to pivot to other industries. Other factors, such as uncertainty over the demand and market price for lead, silver and other metals, or the availability of attractive acquisition targets in other industries, are outside of our control. There is no assurance that we will be successful in our efforts to achieve profitability, and we expect to incur significant losses for the foreseeable future. We can provide no assurance to investors that we will achieve profitable operations in the future.

We will have to fund operating expenses from other sources until we are able to generate sufficient revenue to pay them.

We have generated losses from operations over each of the past three fiscal years, and we have generated revenues from our current operations in recent periods prior to the cessation of these two businesses. We will continue to incur operating expenses in connection with our exploratory activities, and we intend to fund those expenses with internal resource and/or the proceeds of loans from our Related-Party Debtholders, if available, payments pursuant to the Cooperation Agreement and, to the extent deemed necessary and available, further bank borrowings. We may incur substantial expenses in connection with developing our current operations or identifying an additional focus for our business. There is no assurance that we will be able to secure amounts sufficient to fund our operating expenses until such time as we are able to generate revenues sufficient to pay those expenses.

The loss of key personnel could affect our business and prospects.

We believe that our future success depends in part upon our ability to attract, retain and motivate qualified personnel necessary for the development of our business, particularly as our management has limited experience in industries in which we are exploring potential business opportunities. If one or more members of our management team or other key technical personnel become unable or unwilling to continue in their present positions, and if additional key personnel cannot be hired and retained as needed, our business and prospects for growth could be adversely affected. Intense competition for these personnel in these industries could cause our compensation costs to increase, which could have a material adverse effect on our results of operations. Our future success and ability to grow our business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified personnel. If we are unable to attract and retain qualified employees, we may be unable to meet our business and financial goals.

Any failure to maintain effective internal controls could have an adverse effect on our business, results of operations and the market price of our shares.

The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), adopted rules requiring most public companies to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. In addition, if we become an accelerated or large accelerated filer, as defined in the SEC’s rules, we will be required to provide an annual attestation from an independent registered public accounting firm on management’s assessment of the effectiveness of the Company’s internal control over financial reporting.

Our management has concluded that our internal control over financial reporting as of December 31, 2024, was effective. However, we cannot assure you that our management will not identify material weaknesses in the future, or our independent public registered accounting firm will not identify material weaknesses if it assesses our internal control over financial reporting in the future. In addition, because of the inherent limitations of any internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. As a result, if we fail to maintain effective internal control over financial reporting or should we be unable to prevent or detect material misstatements due to error or fraud on a timely basis, investors could lose confidence in the reliability of our financial statements, which in turn could harm our business and results of operations, negatively impact the market price of our shares, and harm our reputation. Furthermore, we have incurred and expect to continue to incur considerable costs and to use significant management time and other resources in an effort to comply with Section 404 of and other requirements of SOX.

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Risks Relating to Foreign Private Issuer Status

Because our assets are located outside of the United States and all of our directors and officers reside outside of the United States, it may be difficult for you to enforce your rights based on the U.S. federal securities laws against us or our officers and directors or to enforce a judgment of a United States court against us or our officers and directors in the PRC.

We are a BVI company, all of our directors are located outside the United States in Hong Kong, all of our assets and officers are located outside the United States in the PRC, and our operations are conducted in the PRC. We do not maintain a business presence in the United States. Therefore, it may not be possible to effect service of process on such persons in the United States, and it may be difficult to enforce any judgments rendered against us or them. Moreover, there is doubt whether courts in the BVI, the PRC or Hong Kong would enforce (a) judgments of United States courts against us, our directors or officers based on the civil liability provisions of the securities laws of the United States or any state, or (b) in original actions brought in the BVI, the PRC or Hong Kong, liabilities against us or any nonresidents based upon the securities laws of the United States or any state.

Our status as a foreign private issuer results in less information being available about us than about domestic reporting companies.

We are a foreign private issuer and are not required to file as much information about us as domestic issuers are required to file. In this regard:

| • | we are not required to file quarterly reports on Form 10-Q and our annual reports on Form 20-F are subject to disclosure requirements that differ from annual reports on Form 10-K;

| • | we are exempt from the provisions of Regulation FD aimed at preventing issuers from making selective disclosures;

| • | the SEC proxy statement and information statement rules do not apply to us; and

| • | our officers, directors and principal shareholder are not required to file reports under Section 16 of the Exchange Act detailing their beneficial ownership of our shares; and they are not subject to the short-swing profit provisions under Section 16.

Since there is generally greater and more timely information available about domestic issuers than about foreign private issuers such as us, you will not be afforded the same protections or information as would be available to you if you were investing in a U.S. domestic issuer.

Due to our status as a foreign private issuer, we have adopted IFRS accounting principles, which are different from accounting principles under U.S. GAAP.

We have adopted and presented our financial statements in accordance with IFRS accounting principles. IFRS is an internationally recognized body of accounting principles that are used by many companies outside of the United States to prepare their financial statements, and the SEC permits foreign private issuers such as the Company to prepare and file their financial statements in accordance with IFRS rather than U.S. GAAP. IFRS accounting principles are different from those of U.S. GAAP, and SEC rules do not require us to provide a reconciliation of IFRS accounting principles to those of U.S. GAAP. Accordingly, we suggest that readers of our financial statements familiarize themselves with the provisions of IFRS accounting principles in order to better understand the differences between these two sets of principles.

As a foreign private issuer we are not subject to certain requirements that other Nasdaq-listed issuers are required to comply with, some of which are designed to provide information to and protect investors.

Our common shares are currently listed on Nasdaq and, for so long as our securities continue to be listed, we will remain subject to the rules and regulations established by Nasdaq applicable to listed companies. However, we have elected to claim certain exemptions afforded to foreign private issuers by relevant Nasdaq rules, and as a result:

| • | a majority of the members of our board of directors (the “Board of Directors” or the “Board”) are not independent as defined by Nasdaq rules;

| • | our independent directors do not hold regularly scheduled meetings in executive session;

| • | while executive compensation is recommended by our Compensation Committee, which is comprised of independent directors, the compensation of our executive officers is ultimately determined by the Board of Directors rather than an independent committee of the Board or by the independent members of the Board of Directors;

| • | related party transactions are not required to be reviewed or approved by our Audit Committee or other independent body of the Board of Directors;

| • | we are not required to solicit shareholder approval of stock plans or issuances of securities, including those in which our officers or directors may participate; share issuances that will result in a change in control; the issuance of our shares in related party transactions or other transactions in which we may issue 20% or more of our outstanding common shares; or below market issuances of 20% or more of our outstanding shares to any person; and

| • | we are not required to hold an in-person annual meeting to elect directors and transact other business customarily conducted at an annual meeting.

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Due to an exemption from Nasdaq rules applicable to foreign private issuers, our related party transactions may not receive the type of independent review process that those of other Nasdaq-listed companies receive; the terms of these transactions are not negotiated at arm’s-length and may not be as favorable as could be obtained from unrelated parties.

We have historically engaged in a substantial number of transactions with related parties in the ordinary course of business, predominantly with our principal beneficial owner and former Chairman and Chief Executive Officer and/or companies that he owns or controls. These transactions are described in greater detail elsewhere in this annual report. In general, Nasdaq rules require that related party transactions be reviewed by an audit committee or other committee comprised of independent directors. However, under Nasdaq rules applicable to foreign private issuers such as our company, we are exempt from certain Nasdaq requirements, including requirements applicable to independent director review of related party transactions. This exemption is available to us because the laws of the BVI, our home jurisdiction, do not mandate independent review of related party transactions.

Notwithstanding the foregoing, nonrecurring related party transactions (i.e., related party transactions that are not in the ordinary course of business) are submitted for approval by our Board of Directors, following disclosure of the related party’s interest in the transaction, and, in all cases, Board approval has historically included the unanimous approval of our independent directors. In addition, our annual audited financial statements, including the related party transactions reported therein, are approved by our Audit Committee, which is comprised solely of independent directors. However, except to the limited extent described above, these transactions are not individually reviewed or approved solely by independent directors. While management believes that our related party transactions have been on terms at least as favorable to the Company as could be obtained from unrelated parties, there is no assurance that such is the case or will be so in the future, or that shareholders would not be better protected if we were not exempt from, or we chose to voluntarily comply with, the applicable Nasdaq rules.

Risks Relating to Our Common Shares

You may experience dilution to the extent that our common shares are issued upon the exercise of outstanding warrants or other securities that we may issue in the future.

You may experience dilution to the extent that our common shares are issued upon the exercise of our outstanding warrants, and if we issue additional equity securities, or there are any issuances and subsequent exercises of stock options issued in the future. Up to 1,115,903 Common shares may be issued with the exercise of warrants at a per share exercise price of $3.00 issued to the investors and up to 74,394 Common shares may be issued with the exercise of warrants at a per share exercise price of $2.20 issued to the placement agent in a private placement (the “Private Placement”) in connection with a registered offering of 1,487,870 Common shares to the same investors at a price of $2.20 per Common Share (the “Registered Offering”) in February 2024. Up to 1,620,000 common shares may be issued with the exercise of options at a per share exercise price of $3.115 issued to certain eligible individuals under the Company’s 2014 Plan as adjusted by a five-to-one share combination on April 3, 2023. See, “Item 10.C. Additional Information — Material Contracts.”

Substantial future sales or perceived potential sales of our common shares in the public market could cause the price of our common shares to decline.

Sales of our common shares in the public market, or the perception that these sales could occur, could cause the market price of our common shares to decline. As of the date of this annual report, we have 9,865,767 Common shares issued and outstanding. On February 16, 2024, the Company entered into a securities purchase agreement with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, up to an aggregate of 1,487,870 of common shares, no par value of the Company at a per Share purchase price of $2.20, and (ii) in a concurrent private placement, warrants initially exercisable for the purchase of an aggregate of 1,115,903 common shares of the Company (the “Investors Warrants”), for gross proceeds of approximately $3.27 million, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. In connection will the Registered Offering and Private Placement pursuant to the terms of a placement agency agreement, dated February 16, 2024 between the Company and Placement Agent (the “Placement Agent Agreement”), the Company agreed to issue to the Placement Agent warrants to purchase an aggregate of up to 74,394 Common shares at a per share exercise price of $2.20 (the “Placement Agent Warrants”, and together with the Investors Warrants, the “Warrants”). Assuming exercise of all of the Warrants by cash and without adjustment, a maximum of 1,190,297 Common shares underlying the Warrants will be offered for sale, subject to any restrictions as applicable under the Securities Act.

Certain of the Selling Shareholders may acquire their Common shares at a price that is less than the market price of the Common shares in the future, may earn a positive rate of return even if the price of the Common shares declines and may be willing to sell their Common shares at a price less than shareholders that acquired Common shares in the public market.

Certain of our Selling Shareholders may purchase their respective common shares at prices lower than the market prices in the future and may therefore experience a positive rate of return on their investment, even if our public shareholders experience a negative rate of return on their investment. As a result, the Selling Shareholders are able to recognize a greater return on their investment than shareholders that acquired Common shares in the public market. Up to 1,115,903 Common shares may be issued with the exercise of the Investor Warrants at a per share exercise price of $3.00 and up to 74,394 Common shares may be issued with the exercise of the Placement Agent Warrants at a per share exercise price of $2.20. Furthermore, the Selling Shareholders may earn a positive rate of return even if the price of the Common shares declines significantly. As a result, the Selling Shareholders may be willing to sell their shares at a price less than shareholders that acquired their Common shares in the public market or at higher prices than the price paid by such Selling Shareholders, the sale of which would result in the Selling Securityholder realizing a significant gain even if other CHNR shareholders experience a negative rate of return.

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There is a limited number of our common shares in the public float and trading in our shares is not active; therefore, our common shares tend to experience price volatility.

There are currently approximately 4,357,828 of our common shares in the public float and, in general, there has not been an active trading market for our shares. Our shares tend to trade along with other shares of public companies whose operations are based in the PRC, and, at times, in tandem with other natural resource companies. These shares tend to exhibit periods of extreme volatility and price fluctuations, even when there are no events peculiar to the Company that appear to warrant price changes. We cannot assure you that price volatility will not continue in the future or, as a result thereof, that market prices will reflect actual values of our company.

As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The share price could, for example, decline precipitously in the event that a large number of shares are sold on the market without commensurate demand. As a consequence of this enhanced risk, more risk-adverse investors may, due to the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be in the case of the stock of a seasoned issuer, negatively impacting the trading price of our common shares.

The price at which common shares are quoted on Nasdaq may increase or decrease due to a number of factors, which may negatively affect the price of the common shares.

The price at which the common shares are quoted on Nasdaq may increase or decrease due to a number of factors. These factors may cause the common shares to trade at prices above or below the prices at which the common shares were first offered without regard to our operations and financial performance. Some of the factors which may affect the price of the common shares include:

• |  | fluctuations in the domestic and international market for listed stocks;
• |  | general economic conditions, including interest rates, inflation rates, exchange rates, commodity and oil prices;
• |  | changes to government fiscal, monetary or regulatory policies, legislation or regulation;
• |  | inclusion in or removal from market indices;
• |  | acquisition and dilution;
• |  | climate change and pandemic risk;
• |  | the nature of the markets in which we operate; and
• |  | general operational and business risks.

Other factors which may negatively affect investor sentiment and influence the Company, specifically or the stock market more generally include acts of terrorism, an outbreak of international hostilities or tensions, fires, floods, earthquakes, labor strikes, civil wars, natural disasters, outbreaks of disease or other man-made or natural events. In addition, during 2024, prolonged geopolitical conflicts, elevated interest rates across major economies, and ongoing Sino-US tensions continued to weigh on the global economy and businesses and have disrupted the global commodity market. See “Item 3.D. Risk Factors — Risks Relating to Our Mine Exploration Activities in Inner Mongolia — Volatility in the market prices of metals may adversely affect the results of our operations.” We have limited ability to insure against some of the risks mentioned above.

We are not currently in compliance with the continued listing requirements for the Nasdaq Stock Market. If we do not regain compliance and continue to meet the continued listing requirements, our Common Shares may be delisted, which could affect the market price and liquidity for our Common Shares and reduce our ability to raise additional capital.

On July 5, 2024, we received a deficiency letter from the Listing Qualifications Staff of the Nasdaq Capital Market, LLC (“Nasdaq”) notifying that for the preceding 30 consecutive business days, the closing bid price for our Common Shares was below the minimum $1.00 per share requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). In accordance with Nasdaq rules, the Company was provided an initial period of 180 calendar days, or until January 2, 2025 to regain compliance with the Bid Price Requirement. The Company was unable to regain compliance with the Bid Price Requirement by January 2, 2025

On January 3, 2025, Nasdaq granted the Company an additional 180 calendar days, or until June 30, 2025, to regain compliance with the Bid Price Requirement. Nasdaq’s determination to grant the second compliance period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of the Bid Price Requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. To regain compliance, the bid price of our Common Shares must close at or above $1.00 per share for a minimum of ten consecutive trading days at any time during the second 180-day compliance period. We intend to monitor the closing bid price of our Common Shares and may, if appropriate, consider implementing available options. There can be no assurance that we will be able to regain compliance with the Bid Price Requirement or maintain compliance with the other listing requirements necessary for us to maintain the listing of our Common Shares on Nasdaq.

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In the event we do not regain compliance with the Bid Price Requirement by the end of the second compliance period, Nasdaq will issue a Staff Delisting Determination under Nasdaq Listing Rule 5810 with respect to our Common Shares. If we receive such delisting notice, we can request a hearing before a Nasdaq hearings panel (the “Panel”), however, Nasdaq may not grant our request for a hearing, or if Nasdaq grants our request for a hearing, the Panel may not grant our request for continued listing of the Common Shares on The Nasdaq Capital Market. Pursuant to Nasdaq rules, a request from a company for a hearing shall not stay the suspension of the securities from trading where the matter relates to a request made by a company that was afforded second 180-day compliance period and that failed to regain compliance with the Bid Price Requirement during that period.

If we seek to implement a reverse stock split in order to remain listed on Nasdaq, the announcement or implementation of such a reverse stock split could negatively affect the price of our Common Shares. While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Bid Price Requirement, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, Nasdaq may determine that it is not in the public interest to maintain the Company’s listing, even if we regain compliance with the Bid Price Requirement. In addition, Nasdaq rules state that if a listed company that fails to meet the Bid Price Requirement after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the company is not eligible for a Compliance Period. Nasdaq rules further states that if a company’s security fails to meet the Bid Price Requirement and the company has effected a reverse stock split over the prior one-year period, then the company shall not be eligible for any compliance period specified in Nasdaq Rule 5810(c)(3)(A) and the Listing Qualifications Department shall issue a Delisting Determination with respect to that security

We may fail to regain compliance with the Bid Price requirement during the second compliance period or maintain compliance with the other Nasdaq listing requirements. Any non-compliance may be costly, divert management’s time and attention, and could have a material adverse effect on our business, reputation, financing, and results of operation. A delisting could substantially decrease trading in the Common Shares, adversely affect the market liquidity of the Common Shares as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, materially adversely affect its ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of the Common Shares may decline further and stockholders may lose some or all of their investment.

Our principal beneficial owner and his affiliates control us through their share ownership; and their interests may differ from those of other shareholders.

Mr. Li Feilie, beneficial owner of a majority of our outstanding common shares, beneficially owns approximately 54.5% of our outstanding common shares, and as a result, Mr. Li is and will continue to be able to influence the outcome of shareholder votes on various matters, including the election of directors and extraordinary corporate transactions such as business combinations. Through his related companies, Mr. Li also provides funding to support the Company’s operating expenses and holds a substantial amount of the Company’s debt (see “Item 7.B. Major Shareholders and Related Party Transactions – Related Party Transactions,” below). Mr. Li’s interests may differ from those of other shareholders. Additional information relating to the beneficial ownership of our securities is contained elsewhere in this annual report under “Item 6.E. Directors, Senior Management and Employees – Share Ownership.”

The rights of our shareholders are governed by BVI law, the provisions of which may not be as favorable to shareholders as under U.S. law, and our directors may take actions with which you disagree without first receiving shareholder approval.

Our directors have the power to take certain actions without shareholder approval, including the amendment of our Amended and Restated Memorandum of Association (the “Memorandum”) and our Articles of Association (the “Articles”) (save and except that such amendments may not restrict the rights or power of our shareholders to amend the Memorandum or the Articles, and may not change the percentage of shareholders required to pass a resolution to amend the Memorandum or the Articles, and further that our directors may not amend the Memorandum or the Articles in circumstances where they may not be amended by our shareholders), and also including an increase or reduction in the maximum number of shares which our company is authorized to issue, which would require shareholder approval under the laws of most jurisdictions in the United States. In addition, the directors of a BVI company, subject in certain cases to court approval but without shareholder approval, may, among other things, implement a reorganization, certain mergers or consolidations with a subsidiary, the sale, transfer, exchange or disposition of any assets, property, part of the business, or securities of the company, or any combination of the foregoing, if they determine it is in the best interests of the company. Our ability to amend our Memorandum and Articles without shareholder approval could allow our directors to implement provisions to those documents that have the effect of delaying, deterring or preventing a change in our control without any further action by the shareholders, including a tender offer to purchase our common shares at a premium over then current market prices, as could the ability of our directors to issue blank check preferred shares.

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The elimination of monetary liability against our directors and officers under our Articles and the indemnification of our directors and officers may result in substantial expenditures by us and may discourage lawsuits against our directors and officers.

Our Articles contain provisions that indemnify our directors and officers against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they may incur as a result of any act or failure to act in carrying out their functions, other than such liability that they may incur by reason of their own actual fraud or wilful default. No such indemnified person shall be liable to our company for any loss or damage incurred by our company as a result of carrying out their functions unless that liability arises through the actual fraud or wilful default of such indemnified person. We may provide contractual indemnification obligations under agreements with our directors, officers and employees. These indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlements or damage awards against directors, officers and employees, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against directors, officers and employees for breach of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit the Company and our shareholders.

We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. shareholders.

We have not made a determination whether we will or will not be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes in the current tax year or in subsequent tax years. Whether we are a PFIC is determined on a year-by-year basis, and we cannot assure you that we are not and we will not be a PFIC for our future tax years. A non-U.S. corporation is generally a PFIC if either (i) at least 75% of its gross income is passive income for a tax year or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a tax year) are attributable to assets that produce or are held for the production of passive income. The market value of our assets may be determined to a large extent by the market price of our common shares. If we are treated as a PFIC for any tax year in which U.S. shareholders hold common shares, certain adverse U.S. federal income tax consequences could apply to such U.S. shareholders. For further discussion of the implications of PFIC status, please refer to “Item 10.E. Additional Information – Taxation – United States Federal Income Taxation.”

It is not possible to foresee all risks that may affect us. Moreover, we cannot predict whether we will successfully effectuate our current business plans. Each prospective purchaser of our common shares is encouraged to carefully analyze the risks and merits of an investment in the common shares and should take into consideration when making such analysis the Risk Factors discussed above, among others.

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| ITEM 4. | INFORMATION ON THE COMPANY

| A. | History and Development of the Company

China Natural Resources, Inc. was incorporated in the BVI on December 14, 1993, and is a company limited by shares incorporated under the BVI Business Companies Act. We are not a Chinese operating company but a BVI holding company with operations conducted by our subsidiaries established in the PRC. See, “Risk factors — Risks Relating Our Operations and the Doing Business in the PRC — The PRC government may intervene or influence our operations at any time, or may exert more control over the China operations of an offshore holding company and offerings conducted overseas and foreign investment in China-based issuers, such as our PRC subsidiaries. Such control or influence may significantly limit our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.”

Prior to the sale of PST Technology in July 2023, the Company operated in two reportable operating segments: wastewater treatment and exploration and mining. During 2021, the Company entered the rural wastewater treatment industry in the PRC by acquiring a 51% equity interest in its operating subsidiary Shanghai Onway. Additionally, the Company is engaged in metal exploration and mining activities in Inner Mongolia Autonomous Region of the PRC, including exploring for lead, silver and other nonferrous metal. After the sale of Precise Space-Time Technology Limited and the disposal of the wastewater treatment segment in July 2023, the Company is solely engaged in metal exploration and mining activities in Inner Mongolia Autonomous Region of the PRC, including exploring for lead, silver and other nonferrous metal.

In February 2023, the Company entered into a material definitive agreement with Feishang Group, the Company’s controlling shareholder, and Top Pacific, a non-affiliate, and Mr. Li Feilie and Mr. Yao Yuguang, to acquire Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine. In December 2023, the Company entered into an amendment agreement to the sale and purchase agreement dated as of February 27, 2023 by and among the Company, Feishang Group, the Company’s controlling shareholder, and Top Pacific, a non-affiliate, and Mr. Li Feilie and Mr. Yao Yuguang for the extension of the long stop date for closing the Acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the Company entered into the Amendment Agreement II to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025.

The Company is also actively exploring business opportunities in other non-natural resource sectors.

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Acquisition of Williams Minerals

On February 27, 2023, the Company entered into a material definitive agreement (the “Zimbabwe SPA”) with Feishang Group and Top Pacific, as well as Mr. Li Feilie and Mr. Yao Yuguang, to indirectly acquire all interests in Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine. At the time of the entry into the Zimbabwe SPA, Feishang Group owned 70% of Williams Minerals, and Top Pacific, a non-affiliate, owned the remaining 30%. Under the Zimbabwe SPA, it is expected that the Company will indirectly acquire all interests in Williams Minerals in the second fiscal quarter of 2023, and that the Company’s “ownership” (which, as defined in the Zimbabwe SPA, relates to its legal possession and control) of the Zimbabwean lithium mine will vest cumulatively, region by region from 2024 through 2026, contingent upon the issuance of independent technical reports and the Company’s full settlement of the purchase consideration in cash and restricted shares. For each relevant region of the lithium mine, until the Company’s legal possession and control vests, the Sellers will maintain legal possession and control, including the right of exploration, sale of lithium, and the revenue derived therefrom, as well as liability for operational costs and third-party claims.

Subject to the terms and conditions of the Zimbabwe SPA, the Company plans to issue restricted shares as 50% of the consideration for the Acquisition, with the remaining 50% of the consideration comprised of a promissory note and/or cash, for maximum consideration of US$1.75 billion (3.5 million estimated tons of measured, indicated and inferred resources of lithium oxide (grade 1.06% or above in accordance with the standard under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves) priced at US$500 per ton). The Company may issue restricted CHNR shares at a discount to the market price to secure a portion of the required capital. On April 14, 2023, the Company announced that it completed its due diligence investigation with satisfactory results and decided to proceed with the Acquisition. The Company paid an aggregate of $35 million by way of promissory notes (instead of cash) as a deposit on April 21, 2023, and will pay an aggregate of $140 million by way of promissory notes and/or cash as an initial installment.

Completion of the Acquisition is contingent upon the satisfaction of a number of conditions, including, among other things, the issuance of independent technical reports, the actual quantity of qualified lithium oxide metal resources proven or estimated to exist in each mining area covered by the relevant report, and the Company’s full settlement of the purchase consideration in cash and restricted shares. There is no guarantee that the Acquisition will close or be completed at the anticipated valuation and terms, or at all.

On December 22, 2023, the Company entered into an amendment agreement (the “Amendment Agreement”) to the sale and purchase agreement dated as of February 27, 2023 by and among Feishang Group and Top Pacific (China) Limited (together, the “Sellers”), and the respective beneficial owner of the Sellers, Mr. Li Feilie and Mr. Yao Yuguang with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the Company entered into the Amendment Agreement II to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025.

The foregoing description of the Zimbabwe SPA, the Amendment Agreement and the Amendment Agreement II, is only a summary and is qualified in its entirety by reference to the sale and purchase agreement dated February 27, 2023, the amendment agreement to the sale and purchase agreement dated December 22, 2023, and the second amendment agreement to the sale and purchase agreement dated December 31, 2024 by and among the Company, Feishang Group Limited, Top Pacific (China) Limited, Li Feilie, and Yao Yuguang, a copy of each of which is incorporated by reference as Exhibit 4.17, Exhibit 4.20 and Exhibit 4.23 to this annual report.

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Acquisition and Sale of PST Technology

We diversified our business by entering the environmental protection sector, which provides compelling synergies with our current operations, through the acquisition of PST Technology. On July 27, 2021, the Company entered into a Sale and Purchase Agreement with Li Feilie, pursuant to which the Company issued three million restricted common shares, no par value, and transferred 120 million shares of FARL, as well as approximately CNY10.3 million (US$1.41 million), to Feishang Group, in exchange for all outstanding shares of PST Technology and the transfer to the Company of approximately CNY130.0 million (US$17.81 million) of PST Technology’s outstanding debt previously owed to Mr. Li, which debt was eliminated upon consolidation. PST Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway. Shanghai Onway is principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC projects and public-private partnership (“PPP”) projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. The total value of the consideration that the Company provided to Mr. Li was approximately CNY104.1 million (US$14.26 million), which amount was a 20% discount to the valuation (including the assigned debt) of PST Technology provided by an independent valuation firm.

On July 28, 2023, the Company entered into a Sale and Purchase Agreement with Feishang Group Limited (“Feishang Group”). Pursuant to the agreement, the Company agreed to sell 100% equity interest of PST Technology to Feishang Group, together with PST Technology’s outstanding payable owed to the Company, for consideration of approximately CNY95,761,119 comprising: (i) CNY -34,197,300, the fair value of 100% equity interest of PST Technology as determined by the independent valuation report dated July 28, 2023; (ii) CNY 129,958,419, the book value of PST Technology’s outstanding payable owed to the Company.

PST Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway and Shanghai Onway’s subsidiaries which are principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. After PST Technology’s disposition, the Company discontinued the operation in wastewater treatment segment and continues engaging in the exploration and mining business.

Acquisition of FARL Shares

On August 17, 2020, we acquired 120 million shares of FARL, a company that is traded on the main board of the Hong Kong Stock Exchange under ticker 1738, representing approximately 8.7% of the outstanding equity of that company. On August 17, 2020, the Company entered into a sale and purchase agreement with Feishang Group pursuant to which the Company issued 9,077,166 of the Company’s common shares, no par value, to Feishang Group, in exchange for 120 million shares of FARL, with an approximate aggregate value of HK$87,522,000 (determined at a price of HK$1.006 per share, representing the average closing price of FARL on the five trading days before August 17, 2020, adjusted for a 27.5% discount based on an independent valuation report). Feishang Group is the largest stockholder in the Company, and is wholly owned by Mr. Li Feilie, who also beneficially owns 53.53% of the outstanding equity of FARL. For more information, see “Item 7.B. – Major Shareholders And Related Party Transactions – Related Party Transactions – Acquisition of FARL Shares in Exchange for Newly Issued Company Shares.” The 120 million shares of FARL were transferred as part of the consideration for the acquisition of all the outstanding shares of PST Technology. See, “Item 4.A. Information on the Company - History and Development of the Company — Acquisition and Sale of PST Technology.”

Exploration Activities in Inner Mongolia

In November 2017, we acquired all of the issued and outstanding capital stock of Bayannaoer Mining for a purchase price of CNY716,900. Bayannaoer Mining holds an exploration permit issued by the Land and Resources Department of Inner Mongolia Autonomous Region covering the Moruogu Tong Mine, located in Wulatehouqi, Bayannaoer City, Inner Mongolia. The exploration permit evidences Bayannaoer Mining’s right to explore for minerals at the Moruogu Tong Mine. Initial results of the exploration program indicate the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper. We anticipate that our working capital and capital expenditures for our exploration activities will be funded by non-interest-bearing loans from our affiliates and funds provided pursuant to the Cooperation Agreement. See “Item 4.B. – Information on The Company – Business Overview – Metal Exploration Activities” below for more information and a discussion of developments at the Moruogu Tong Mine.

Other Matters

We made capital expenditures of CNY0.02 million, CNY0.01 million and CNY3,680 (US$504) in 2022, 2023 and 2024, respectively. Our capital expenditures for 2022, 2023 and 2024 consisted primarily of the purchase of property, plant and equipment for office use.

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Recent Regulatory Development

Cybersecurity Review

On December 28, 2021, the Cyberspace Administration of China (the “CAC”), and 12 other PRC government authorities jointly published the amended Cybersecurity Review Measures, which came into effect on February 15, 2022. The final Cybersecurity Review Measures provide that a “network platform operator” that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review. Any network product or service or any data processing activity that affects or may affect national security as deemed by member organizations of the cybersecurity review mechanism shall be reviewed under the Cybersecurity Review Measures after the Cybersecurity Review Office reports it to the Central Cyberspace Affairs Commission for review, as per the procedure.

We and our PRC subsidiaries do not carry out business in China through any self-owned network platform and hold personal information of less than one million individuals from PRC operations. We and our PRC subsidiaries have not been identified as critical information infrastructure operators by any PRC authorities. The data collected from our China operations is mainly information related to our production, customers, suppliers and our employees. We believe that we and our PRC subsidiaries do not commit any acts that threaten or endanger the national security of the PRC, and to our knowledge we and our PRC subsidiaries have not received or been subject to any investigation, notice, warning or sanction from any PRC authority with respect to national security issues arising from our business operations. As of the date of this annual report, we do not believe that we need to proactively apply for the cybersecurity review required by the CAC. See, “Item 3.D. Risk Factors —  Risks Relating to Our PRC Operations and Doing Business in the PRC — Failure to comply with PRC regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.”

CSRC Filing Requirements

On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, along with five supporting guidelines, or the New Overseas Listing Rules. These regulations became effective on March 31, 2023. According to the New Overseas Listing Rules, PRC domestic companies that seek to offer and list securities in overseas markets, either through direct or indirect means, are required to complete the filing procedure with the CSRC and report relevant information.

The New Overseas Listing Rules provide that if the issuer meets the following criteria at the same time, the overseas securities offering and listing conducted by such issuer will be deemed as an indirect overseas offering subject to the filing procedures as set forth under the New Overseas Listing Rules: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited combined financial statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in the mainland China, or its main place(s) of business are located in the mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in the mainland China.

According to the New Overseas Listing Rules, issuers shall file with the CSRC within three business days after the initial submission of the registration statement to the SEC for its nonpublic review and to report to the CSRC upon the completion of the reported offering. Moreover, the New Overseas Listing Rules mandate that overseas-listed issuers conducting follow-on securities offerings in the same overseas market must file with the CSRC within three business days after the completion of such offering. Additionally, issuers listed overseas are required to report “material events” to the CSRC within three business days following the occurrence and public announcement of such events. These material events include change of control, voluntary delisting or being ordered to delist, and investigations or penalties by overseas securities regulatory bodies, among other things. Failure to fulfill these obligations to make timely filings or reports to the CSRC may result in fines, legal or administrative sanctions and other adverse consequences and could materially and adversely affect our ability to raise funds in overseas markets. For details of the associated risks, see “Item 3.D. Risk Factors — Risks Relating to Our PRC Operations and Doing Business in the PRC — The filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to complete such filing.” We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC, the CAC, or other PRC regulatory authorities required for overseas listings and securities offerings. As of the date of this annual report, we have not received any inquiry, notice, warning, sanctions or regulatory objection from the CSRC in this regard.

On February 24, 2023, the Provisions on Strengthening the Confidentiality and Archives Administration of Overseas Securities Issuance and Listing by Domestic Enterprises was promulgated, or the Provision on Confidentiality, which became effective on March 31, 2023. Pursuant to the Provision on Confidentiality, where a domestic enterprise publicly discloses or provides documents and materials involving state secrets and working secrets of state organs, or Relevant Documents and Materials, to the relevant securities companies, securities service institutions, overseas regulatory authorities and other entities and individuals, or provides or publicly discloses Relevant Documents and Materials through its overseas listing subjects, it shall report to the competent department with the examination and approval authority for approval in accordance with the law, and submit to the secrecy administration department of the same level for filing. Where a domestic enterprises provides accounting archives or copies of such archives to entities and individuals such as securities companies, securities service institutions and overseas regulatory authorities, it shall complete the corresponding procedures pursuant to relevant rules of the State. The working materials formed within the territory of the PRC by the securities companies and securities service institutions that provide corresponding services for the overseas issuance and listing of domestic enterprises shall be kept within the territory of the PRC, and outbound transfers of such materials shall go through approval procedures in accordance with relevant rules of the State.

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Material Licenses and Permits

Except as disclosed in “Item 3.D. Risk Factors — Risk Related to Our PRC Operations and Doing Business in the PRC — We and our PRC subsidiaries are required to maintain a series of licenses, permits and approvals from PRC authorities to operate our business in the PRC, and failure to maintain or renew such licenses, permits or approvals in a timely manner could materially affect our business,” We believe that as of the date of this annual report, we and our subsidiaries have received from the PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, which solely include the business licenses that authorize the scope of business operations, and no permission or approval has been denied. These licenses, permits and filings include, exploration and mining licenses, among others. Given the changes and developments of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain additional licenses, permits, or approvals or complete additional filings for our and our subsidiaries’ business operations in the future. If we or any of our subsidiaries is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals in a timely manner, or at all, the competent PRC regulatory authorities would have discretion to take action regarding such violations or failures. In addition, if we had inadvertently concluded that any approvals, permits, registrations or filings were not required, or if applicable laws, regulations or interpretations change in a way that requires us to obtain additional approvals, permits, registrations or filings in the future, we may be unable to obtain such necessary approvals, permits, registrations or filings in a timely manner, or at all. Such approvals, permits, registrations or filings may be rescinded even if obtained. Any such circumstance may subject us to fines and other regulatory, civil or criminal liabilities, and we may be ordered by the competent government authorities to suspend relevant operations, which will materially and adversely affect our business operations. For risks relating to licenses and approvals required for our operations in China, see “Item 3.D. Risk Factors — Risk Related to Our PRC Operations and Doing Business in the PRC — We and our PRC subsidiaries are required to maintain a series of licenses, permits and approvals from PRC authorities to operate our business in the PRC, and failure to maintain or renew such licenses, permits or approvals in a timely manner could materially affect our business.”

Transfers of Cash and Assets between Our Company and Our Subsidiaries

Cash and asset transfers through the Group are primarily attributed to shareholder loans from us to our subsidiaries. Our subsidiaries receive substantially all revenue in RMB, and the PRC or Hong Kong governments could prevent the RMB maintained in the PRC or Hong Kong from leaving, impose controls on its conversion into foreign currencies, restrict deployment of the RMB into the business of our subsidiaries and restrict the ability to pay dividends. Our PRC subsidiaries are permitted to pay dividends to their shareholders, and eventually to CHNR, only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Such payment of dividends by entities registered in China is subject to limitations, which could result in limitations on the availability of cash to fund dividends or make distributions to holders of our securities. For example, our PRC subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. See, “Item 3.D. Risk Factors – Our PRC subsidiaries are subject to restrictions on paying dividends and making other payments to us.” There are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future. To the extent cash in the business is in the PRC or Hong Kong or our PRC or Hong Kong entities, the funds may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC or Hong Kong governments to transfer cash. We cannot assure you that the PRC or Hong Kong governments will not intervene in or impose restrictions on our ability to make intercompany cash transfers.

All cash or asset transfers between us and our subsidiaries for each of the three years ended December 31, 2022, 2023 and 2024, are set forth in the table below. The purpose of the outbound transfers, in the form of shareholder loans, was to pay off the subsidiaries’ expenses and provide working capital for the subsidiaries. The purpose of the inbound transfers, in the form of loan repayments, was to centralize the treasury function of the Company and our subsidiaries. There are no fixed repayment terms and no tax implication for these transfers. We did not make any capital contributions to, or receive any dividends from, our subsidiaries during these periods. Other than the assets and liabilities of the wastewater treatment business segment transferred to Mr. Li Feilie, our controlling shareholder, as the result of the sale of PST Technology which were accounted for as a deemed distribution of RMB20.38 million (US$2.79 million) to the controlling shareholder on July 28, 2024 with a corresponding deemed contribution from the controlling shareholder in the same amount and repayment of HK$8.4 million shareholder loan in 2024, no transfers, dividends or distributions have been made to investors during these periods. We currently have not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between the Company, our subsidiaries, or the investors. Rather, the funds can be transferred in accordance with the applicable laws and regulations in the PRC and other jurisdictions. PRC laws and regulations may restrict our ability to make dividends and distributions to investors, including U.S. investors.

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|  |  |  | Year ended December 31, |
Transferor |  | Transferee |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  | HK$ |  |  | HK$ |  |  | HK$ |  |  | US$ |
Outbound Transfers
China Natural Resources, Inc. |  | Feishang Mining |  |  | — |  |  |  | 30,000 |  |  |  | — |  |  |  | — |
China Natural Resources, Inc. |  | China Coal |  |  | 8,000 |  |  |  | 8,000 |  |  |  | 8,000 |  |  |  | 1,026 |
China Natural Resources, Inc. |  | Feishang Yongfu |  |  | 8,000 |  |  |  | 38,000 |  |  |  | 8,000 |  |  |  | 1,026 |
China Natural Resources, Inc. |  | Feishang Dayun |  |  | 8,000 |  |  |  | 38,000 |  |  |  | 8,000 |  |  |  | 1,026 |
|  | Total |  |  | 24,000 |  |  |  | 114,000 |  |  |  | 24,000 |  |  |  | 3,078 |
Inbound Transfers
Feishang Mining |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
China Coal |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Feishang Yongfu |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Feishang Dayun |  | China Natural Resources, Inc. |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | Total |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

Implications of the Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, and our auditor was subject to that determination. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China or Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA and as a result, NASDAQ may determine to delist our securities. See “Item 3.D. Risk Factors - Risks Relating to Our PRC Operations and Doing Business in the PRC - The PCAOB may determine that it is unable to inspect our auditor in relation to its audit work performed for our financial statements to its satisfaction, and the inability of the PCAOB to conduct inspections over our auditor may affect our investors’ ability to benefit from such inspections.”, “— Risk Factors - Risks Relating to Our PRC Operations and Doing Business in the PRC - Our common shares may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.” and “— Risks Relating to Our PRC Operations and Doing Business in the PRC - Our common shares may be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect or fully investigate our auditor for three consecutive years, or two consecutive years if proposed changes to the HFCAA are enacted. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.”

| B. | Business Overview

We are dedicated to becoming a leading multi-resources company in China, and is devoted to exploring the opportunities presented by other sectors as well, through complying with high international standards of corporate governance, continually expanding operations with profit growth potentials, enhancing overall cost effectiveness and productivity performance, collaborating with governments, communities and non-governmental organizations, optimizing our technical talent teams and innovation programs and maintaining responsible environmental practices.

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We are committed to:

· delivering superior long-term value to our shareholders;
· providing a safe, healthy and fulfilling work environment for our employees while improving production efficiency and operating effectiveness;
· contributing to the economic and social development of the regions where we operate; and
· responsibly managing the environmental impact of all our operations.

We are principally engaged in exploration for lead, silver and other metals in the Inner Mongolia Autonomous Region of the PRC and exploration of attractive opportunities in other sectors. Our operating subsidiary, Bayannaoer City Feishang Mining Company Limited (“Bayannaoer Mining”) holds an exploration permit issued by the Land and Resources Department of Inner Mongolia Autonomous Region covering the Moruogu Tong Mine, located in Wulatehouqi, Bayannaoer City, Inner Mongolia. The exploration permit evidences Bayannaoer Mining’s right to explore for minerals at the Moruogu Tong Mine. Initial results of the exploration program indicate the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper. We are also actively seeking opportunities of exploration and mining of other metals outside of the PRC. See, “Corporate History and Structure — Acquisition of Williams Minerals.”

We continuously pivot our business by exploring new opportunities for growth or diversification. Between July 2021 and July 2023, we also engaged in the rural wastewater treatment business in China through the acquisition of PST Technology, which held 51% equity interest of Shanghai Onway, a PRC company which is principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. We ceased the wastewater treatment business segment following the disposition of PST Technology in July 2023. See “Item 4.A. Information on the Company - History and Development of the Company — Acquisition and Sale of PST Technology Limited.”

Metal Exploration Activities

Lead, Silver and Copper Industry and Market

Lead (chemical element symbol Pb) is a supple and ductile heavy metal that is denser than most common materials. In its pure state, lead is bluish-white and tarnishes to a dull gray color when exposed to air. It is extensively used in construction, plumbing, batteries, bullets and shot, weights, solders, pewters, fusible alloys, white paints, leaded gasoline, and radiation shielding. Lead’s properties of high density, low melting point, ductility and relative inertness to oxidation allow it to be used in a wide range of applications, of which use in lead-acid batteries is by far the most prevalent. The reactions in the battery between lead, lead dioxide, and sulfuric acid provide a reliable source of voltage. Despite having lower energy density and charge-discharge efficiency than lithium-ion batteries, lead-acid batteries have stable electromotive force when discharging and steady working voltage, while being significantly cheaper. These properties and their ability to supply high surge currents and operate under a wide range of temperatures make them useful in the automobile industry.

Lead is an internationally traded commodity, the price of which is established on commodity markets throughout the world. During 2024, prolonged geopolitical conflicts, elevated interest rates across major economies, and ongoing Sino-US tensions continued to weigh on the global economy and businesses. These factors disrupted the global commodity market, causing significant volatility in the prices of lead, silver and copper. During the year, both world refined lead production and usage decreased. Lead prices were volatile due to global uncertainty. The SHFE lead price started the year at CNY15,900 (US$2,179) per ton and soon hit an annual low of CNY15,790 (US$2,164) per ton in late February 2024. It then rose notably until mid-July 2024 and reached an annual high of CNY20,050 (US$2,747) per ton. After that, lead price declined quickly before it stabilized since mid-September 2024. The closing price at the end of 2024 was CNY16,765 (US$2,297) per ton, representing an annual increase of approximately 5.61%.

The following table shows the world refined lead supply and usage over the past five years:

|  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |
World mine production (thousand tons) |  |  | 4,437 |  |  |  | 4,552 |  |  |  | 4,433 |  |  |  | 4,459 |  |  |  | 4,511 |
World refined production (thousand tons) |  |  | 12,545 |  |  |  | 13,039 |  |  |  | 12,829 |  |  |  | 13,271 |  |  |  | 13,029 |
World refined usage (thousand tons) |  |  | 12,392 |  |  |  | 12,995 |  |  |  | 13,006 |  |  |  | 13,104 |  |  |  | 12,998 |
London Mercantile Exchange (“LME”) average price (US$/ton)* |  |  | 1,994 |  |  |  | 2,304 |  |  |  | 2,293 |  |  |  | * |  |  |  | * |
SHFE average price (CNY/ton) |  |  | 14,745 |  |  |  | 15,370 |  |  |  | 15,930 |  |  |  | 15,860 |  |  |  | 16,765 |

———————

Source: International Lead and Zinc Study Group, LME, SHFE.

*Certain data are not available.

Silver (chemical element symbol Ag) is a soft, ductile, and malleable metal with the highest electrical conductivity, thermal conductivity and reflectivity of any metal. It has a brilliant white metallic luster that can take a high polish and has similar physical and chemical properties with copper and gold. Most silver is produced as a byproduct during refining of copper, gold, lead, or zinc. Despite being more abundant than gold, silver has long been valued as a precious metal and used in currency and as an investment medium (bullion coins) alongside gold. It is also used as an industrial metal in jewelry, silverware, medicine, electronics, brazing alloys, chemical equipment, catalysis, photography, etc.

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Silver is an internationally traded commodity, the price of which is established on commodity markets throughout the world. Silver tends to trend in lockstep with gold, but it also has its own unique market trend because it has stronger industrial attributes compared with gold. During 2024, there was still a forecasted silver supply deficit. Although the world economy faced many risks and uncertainties caused by the Russia-Ukraine conflict, the Israel Hamas war, and persistent high inflation and interest rate in many major economies, global industrial demand for silver remained strong in 2024. This was mainly attributed to the rapidly developing and prosperous photovoltaic industry, new energy vehicle industry and AI industry. The price of silver was strongly supported by an increase in industrial demand, a rise in the price of gold, and an expected potential decline in the US Dollar index and US Treasury yields. During the year, the SHFE silver price started out at CNY5,972 (US$818) per kg and soon dropped to its annual low of CNY5,743 (US$787) per kg in late January 2024. It then rose notably until late May 2024 and reached an annual high of CNY8,733 (US$1,197) per kg. After that, silver price fluctuated within a narrower range until the end of the year. The closing price at the end of 2024 was CNY7,470 (US$1,024) per kg, representing an annual increase of approximately 25%.

The following table shows the world silver supply and demand over the past five years:

|  |  | 2020 |  |  |  | 2021 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2024 |
World mine production (million ounces) |  |  | 783.4 |  |  |  | 829.0 |  |  |  | 836.7 |  |  |  | 830.5 |  |  |  | 823.5 |
World total supply (million ounces) |  |  | 957.4 |  |  |  | 1,004.3 |  |  |  | 1,015.4 |  |  |  | 1,010.7 |  |  |  | 1,003.8 |
World total demand (million ounces) |  |  | 926.8 |  |  |  | 1,099.6 |  |  |  | 1,278.9 |  |  |  | 1,195.0 |  |  |  | 1,219.1 |
COMEX average price (US$/oz) |  |  | 26.4 |  |  |  | 23.4 |  |  |  | 24.0 |  |  |  | 24.1 |  |  |  | * |
SHFE average price (CNY/kg) |  |  | 5,585 |  |  |  | 4,845 |  |  |  | 5,349 |  |  |  | 6,012 |  |  |  | 7,499 |

———————

Source: Silver Institute, COMEX, SHFE.

*Certain data are not available.

Copper (chemical element symbol Cu) is a ductile metal with excellent electric conductivity and is rather supple in its pure state and has a pinkish luster. Copper was one of the first metals used by man. It is now primarily used as a heat conductor, an electrical conductor, a building material, and a constituent of various metal alloys. Copper alloys have excellent mechanical properties and low resistivity, among which bronze and brass are the most important. Copper is also a durable metal that can be recycled many times without losing its mechanical properties. Copper’s properties of high electrical and thermal conductivity, together with good workability, allow it to be used in a wide range of applications, of which wire and cable and other electrical uses are by far the most prevalent. The primary uses of copper are in electrical and electronic products, the building and construction industry and, to a lesser extent, industrial machinery and equipment, consumer and general products and transportation.

Copper is an internationally traded commodity, the price of which is established on commodity markets throughout the world. Traditionally, the price of copper is closely related to economic cycles and largely determined by supply and demand. China has relatively small copper reserves, yet has the greatest copper demand globally, so it relies on copper imports to meet that demand. Demand for copper in China and the U.S. plays a major role in global price determination. Global consumption of refined copper has increased annually, and the shortage of supply was reversed in 2024. During 2024, SHFE copper price fluctuated at relatively high levels as a result of complex interactions among various factors. The SHFE copper price saw strong gains in the first half of 2024, increasing from CNY68,750 (US$9,420) per ton to all-year high of CNY88,940 (US$12,187) per ton in mid-May, but then price declined notably before it stabilized since mid-August 2024. The closing price at the end of 2024 was CNY73,770 (US$10,108) per ton, representing an annual increase of approximately 7.04%.

The following table shows the world refined copper production and usage over the past five years:

|  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |
World mine production (thousand tons) |  |  | 20,743 |  |  |  | 21,223 |  |  |  | 21,911 |  |  |  | 22,368 |  |  |  | 22,983 |
World refined production (thousand tons) |  |  | 24,621 |  |  |  | 24,900 |  |  |  | 25,272 |  |  |  | 26,502 |  |  |  | 27,486 |
World refined usage (thousand tons) |  |  | 24,948 |  |  |  | 25,259 |  |  |  | 25,857 |  |  |  | 26,604 |  |  |  | 27,348 |
China’s refined production (thousand tons) |  |  | 10,025 |  |  |  | 10,487 |  |  |  | 11,063 |  |  |  | 12,988 |  |  |  | 13,640 |
China’s refined usage (thousand tons) |  |  | 14,229 |  |  |  | 13,840 |  |  |  | 14,027 |  |  |  | 14,703 |  |  |  | 15,321 |
LME average price (US$/ton)* |  |  | 7,766 |  |  |  | 9,721 |  |  |  | 8,372 |  |  |  | * |  |  |  | * |
SHFE average price (CNY/ton) |  |  | 57,970 |  |  |  | 70,120 |  |  |  | 66,120 |  |  |  | 68,970 |  |  |  | 73,800 |

———————

Source: International Copper Study Group, LME, SHFE.

*Certain data are not available.

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Overview of Bayannaoer Mining

Bayannaoer Mining was established in 2005 to engage in mineral exploration activities in Bayannaoer City, located in the Inner Mongolia Autonomous Region of the PRC. The registered capital of Bayannaoer Mining is CNY59.48 million.

In 2005, Bayannaoer Mining obtained 11 exploration rights from the Land and Resources Department of Inner Mongolia Autonomous Region. Following completion of preliminary exploration activities and evaluation, management determined to retain exploration rights solely to the Moruogu Tong Mine; and, to date, has received a series of license renewals. Total exploration expenses related to these 11 exploration rights (exclusive of capitalized expenses that have not yet fully depreciated or amortized and administrative expenses) borne by Bayannaoer Mining incurred to date amount to approximately CNY35.60 million (US$4.88 million). The current exploration permit for the Moruogu Tong Mine runs until September 2026 and covers a site area of 7.81 square kilometers.

The Moruogu Tong Mine is located in Wulatehouqi, Bayannaoer City, in the Inner Mongolia Autonomous Region of the PRC. In 2006, Bayannaoer Mining engaged the Land and Resources Exploration and Development Institute of Inner Mongolia to carry out prospecting, including geophysical and drilling works. To date, exploration expenses of approximately CNY23.54 million (US$3.23 million), inclusive of amounts paid by Jijincheng Mining, have been incurred for the Moruogu Tong Mine, which were paid for by Bayannaoer Mining with self-owned capital, loans from a related party, and funds received pursuant to its Cooperation Agreement with Jijincheng Mining of approximately CNY6.72 million (US$0.92 million).

Pursuant to the Cooperation Agreement, Jijincheng Mining is responsible for engaging the exploration team for the northern part of Moruogu Tong Mine and providing the required funding. During the field exploration process, Bayannaoer Mining did not have its own exploration equipment. The exploration equipment – drilling machines – used at the Moruogu Tong Mine was provided and operated by third-party contractors until drilling work was done. Drilling machines at the mine were mainly powered by a diesel generator set, and a state power substation near the mine area. To date, the exploration program at the northern part of Moruogu Tong Mine has primarily involved the completion of mine geological surveying and mapping at 1:2000 covering an area of 3.22 square kilometers, which included trenching exploration works totaling 2,291.88 cubic meters in 16 trenches and 76 drilling holes (of which 55 predate the Collaboration Agreement) for a total of 22,272.86 meters. 1,641 different samples, including basic analysis samples, chemical analysis samples, spectra samples and aqueous analysis samples, etc., have been collected thus far during the exploration program.

Initial results of the northern part exploration program indicate the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper. During 2021, activities at the Moruogu Tong Mine included the taking of five additional basic analysis samples and ten additional combined analysis samples; in addition, the exploration report was completed and approved by the government. The report reviews the geology of the mine and the previous exploration work, and evaluates the resources of 13 ore bodies in the mine, which are confirmed to contain lead and silver. At this stage of exploratory activities, we cannot predict whether sufficient ore of acceptable quality will be found at the Moruogu Tong Mine to warrant further exploration and/or extraction.

The current exploration work stage of the northern part of Moruogu Tong Mine has been completed. The future amount for the exploration project, including drilling expenses, site construction costs, grassland compensation fees and simple infrastructure construction costs in order to apply for a mining rights permit, is anticipated to be approximately CNY11.38 million (US$1.56 million). Bayannaoer Mining and Jijincheng Mining intend to seek other investors to play roles similar to those of Jijincheng Mining in order to proceed with the further exploration and analysis of the northern part of Moruogu Tong Mine, with an aim to apply for a mining rights permit. This exploration project is expected to be financed by funds received pursuant to the Cooperation Agreement and/or any new or similar cooperation agreement, and loans from a related party. While the results of preliminary prospecting suggest that the northern part of Moruogu Tong Mine contains mineable quantities of lead and silver, until further exploration and analysis is completed, the Company cannot predict the nature and extent of minerals contained at the mine or the commercial viability of pursuing a plan of extraction. It is possible that further exploration and analysis will not confirm initial findings and that continued activities in furtherance of mining operations will cease.

Exploration conducted in 2013 revealed geochemical anomalies associated with nickel and gold in the southern part of Moruogu Tong Mine but did not indicate any concentration. No exploration work has been carried out since 2013 in the southern part of the mine area with nickel and gold anomalies. Bayannaoer Mining plans to accelerate exploration progress and increase capital expenditures by another six drilling holes of 600 meters deep with an expected initial investment of CNY2.16 million in the southern part of the Moruogu Tong Mine to continue to explore the presence of nickel and other minerals

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Moruogu Tong Mine

The Moruogu Tong Mine is a concealed deposit or an underground mine, with minimum depth of about 40 meters below ground.

The main outcrop strata in and around the mine area are the third lithological member of Agulugou Formation of Zhaertaishan Group in the middle and upper Proterozoic, followed by the quaternary Holocene strata. There is no magmatic rock in the exploration area, and Permian granodiorite is found locally. In addition, gabbro dike, diabase dike and quartz dike are found in the area. The geotectonic location of the mine area is in the north wing of the Wolf Mountain anticline, with frequent tectonic activities and multiple periods of magma intrusion. The strata of the mine area are damaged by transformation, and the fold structure is not complete. The outcrop strata in the mine area are relatively simple, which are a monoclinal structure with a northeast-to-southwest strike and a southeastern tilt.

The Moruogu Tong Mine is located in the fault bundle of the Huogeqi dome at the north wing of the Haorige Mountain syncline. Monoclinal structures predominates and the strike is north-eastern. The lead ore (mineralized) bodies are produced in the third lithological member of Agulugou Formation, where quartzite and quartz schist with strong silicification are the main host rocks. The ore bodies are distributed in an area of 3,000 meters long from east to west and 1,000 meters wide from south to north, and 14 lead ore bodies have been delineated with orebody numbers of I-1, I-2, II-1, II-2, II-3, III, IV-1, IV-2, IV-3, IV-4, IV-5, IV-6, IV-7, and V.

The Moruogu Tong Mine is mainly a lead deposit associated with silver. The ore bodies occur in certain strata, whose genetic type belongs to air-exhaled sedimentary type, with lead deposit then transformed by hydrothermal process. The ore mineral compositions mainly include galena, sphalerite, pyrite, chalcopyrite, arsenopyrite and gangue mineral quartz, calcite, and mica, etc. The depth of the oxidized zone and mixed zone in this mine area is about 15 meters below ground. The primary zone is below 15 meters underground. The lead ore bodies delineated in this deposit are all in the primary zone, and the natural type of the ore is primary lead sulfide ore. Because the main useful constituent of this deposit is lead, with an associated useful constituent of silver, it is classified as a lead and silver deposit.

The key industrial indicators of the deposit are as follows:

| • | Cutoff grade: Pb>0.3%;

| • | Minimum industrial grade: Pb>0.7%;

| • | Minimum minable thickness: >1.0m;

| • | Average grade of deposit: Pb>1.81%;

| • | Band rejected thickness: >2m;

| • | When the orebody thickness is less than the minable thickness and the grade is high, meter percentage can be used as an indicator: Pb>0.70 meter percentage; and

| • | Industrial grade of associated useful constituent: Ag>2g/t.

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Cooperation Agreement

On August 20, 2017, Bayannaoer Mining entered into the Cooperation Agreement with Jijincheng Mining, an unrelated third party. The Cooperation Agreement is intended to provide for financial support by Jijincheng Mining for the exploration and operating expenses of the northern part of Moruogu Tong Mine during the exploration stage such that Bayannaoer Mining is not required to make any further capital contribution for exploration activities, and for the allocation of rights and responsibilities between Bayannaoer Mining and Jijincheng Mining. According to the Cooperation Agreement, Jijincheng Mining is also responsible for engaging the exploration team and directing their activities. Pursuant to the Cooperation Agreement: (i) Bayannaoer Mining contributed the existing exploration results for the northern part of Moruogu Tong Mine; (ii) Jijincheng Mining provides the necessary funds for further exploration at the mine; (iii) Bayannaoer Mining enjoys full rights to any resources already discovered and confirmed by its independent exploration works conducted prior to commencement of the cooperative exploration project; (iv) Bayannaoer Mining and Jijincheng Mining will each receive a 50% interest in any newly discovered resources from the first 10 drilling holes in the cooperative exploration project; and (v) Bayannaoer Mining and Jijincheng Mining will receive 30% and 70% interests, respectively, in any newly discovered resources from drilling works beyond the first 10 drilling holes in the cooperative exploration project. Other details of the Cooperation Agreement, including allocations and distributions upon completion of exploration works, remain the subject of continuing discussion between the parties. To date, the total exploration expenses paid by Jijincheng Mining amount to approximately CNY6.72 million (US$0.92 million).

The foregoing description of the Cooperation Agreement is only a summary and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which has been translated into English and incorporated by reference as Exhibit 4.5 to this annual report.

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Geography

The following map shows the geography of Bayannaoer Mining’s exploration site and its surrounding areas:

The Moruogu Tong Mine of Bayannaoer Mining is located in Wulatehouqi, Bayannaoer City, in the Inner Mongolia Autonomous Region of the PRC. The mine is approximately 45 kilometers to Chaogewenduer Town and 40 kilometers to Qingshan Town. The Qingxian Road passes through the southern part of the mine and transportation is very convenient. Connectivity to water, electric and other necessary services will be addressed at the time of mine construction and development.

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Government Regulation of Mineral Exploration Activities

Under the Mineral Resources Law of the PRC, all mineral resources in the PRC are owned by the state. Exploration and mining rights granted by the state permit recipients to conduct exploration or mining activities in a specific mining area during the specified license period. Although Bayannaoer Mining believes its exploration licenses will continue to be renewed as necessary, there can be no assurance that such will be the case or that Bayannaoer Mining will be able to obtain a mining license in the future and exploit the entire mineral resources of the Moruogu Tong Mine during its license period. If Bayannaoer Mining fails to renew its exploration rights upon expiry or if it cannot obtain a mining license and effectively extract the resources within the license period, the operation and performance of Bayannaoer Mining will be adversely affected.

Bayannaoer Mining’s exploration permit entitles it to undertake exploration activities in compliance with applicable laws and regulations, within the specific area covered by the license during the license period. Bayannaoer Mining is required to complete a prospecting report and a final appraisal and file with the relevant government authority before it can apply for mining rights and proceed to mine construction. A mining rights permit entitles the holder to undertake mining activities and infrastructure and ancillary work, in compliance with applicable laws and regulations, within the specific area covered by the license during the license period. Entities seeking mining rights are also obligated to pay natural resources fees in relation to sales of metal concentrates.

The competent department of environmental protection under the State Council shall supervise and manage environmental protection work throughout the country in a consistent manner. The competent departments of environmental protection of the local governments at the county level or above shall supervise and manage environmental protection work within their respective administrative areas in a consistent manner.

The state practices classified control over the environmental protection in construction projects based on the extent of environmental impact of construction projects in accordance with the following provisions:

(1) an environmental impact report shall be compiled for a construction project that may have a material impact on the environment, giving comprehensive assessment of their environmental impacts;

(2) an environmental impact statement shall be compiled for a construction project that may have a non-material impact on the environment, providing analysis or specialized assessment of their environmental impacts; and

(3) a registration form shall be filled out and submitted for a construction project that may have a minor impact on the environment and necessitates no environmental impact evaluation.

The pollution prevention and control facilities in construction projects shall be designed, built and commissioned along with the project simultaneously. The pollution prevention and control facilities shall meet the requirements specified in the approved documents regarding the environmental impact assessment and shall not be dismantled or left idle without authorization.

The State implements the pollution discharge license management system in accordance with the law. Enterprises, public institutions and other producers and operators that implement the pollution discharge license management shall discharge pollutants in accordance with the requirements of the pollution discharge license; those that fail to obtain the pollution discharge license shall not discharge pollutants. Where enterprises, public institutions and other producers and operators discharge pollutants in violation of the law without obtaining the pollutant discharge license refuse to stop such violations after suspension order has been delivered, besides the penalty in accordance with the provisions of the relevant laws and regulations, the competent departments of environmental protection of the local governments at the county level or above and other departments responsible for supervision and management on environmental protection shall transfer the case to the public security authority and impose a detention for not less than ten days and not more than 15 days on the persons directly in charge and other persons directly responsible; if the consequences of such violations are less severe, a detention for not less than five days and not more than ten days shall be imposed.

Management believes that Bayannaoer Mining is in material compliance with all applicable environmental protection requirements of the state.

Copper Trading Activities

We no longer trade copper ore, which was our sole revenue-generating operation before we engaged in the rural wastewater treatment segment. Beginning from 2019, we had traded copper ore and enjoyed related revenues of CNY12.97 million in 2019 and approximately CNY6.87 million in the first half of 2020. We discontinued our copper ore trading activities in the second half of 2020, due to volatile fluctuations in the price of copper. Our copper ore trading activities were not affected by seasonality.

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DISCONTINUED SEGMENT - Rural Wastewater Treatment Activities

Acquisition and Sale of PST Technology

We no longer operate in the rural wastewater treatment segment following the sale of PST Technology in July 2023, which was one of our two reportable operating segments in addition to exploration and mining.

We diversified our business by entering the environmental protection sector through the acquisition of PST Technology in 2021. PST Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway and Shanghai Onway’s subsidiaries which are principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. After PST Technology’s disposition, the Company discontinued the operation in wastewater treatment segment and continue engaging in the exploration and mining business. For details, see “Corporate History and Structure — Acquisition and Sale of PST Technology.”

Overview of Shanghai Onway

Shanghai Onway is an environmental protection technology enterprise incorporated in July 2015 in the PRC. The registered capital of Shanghai Onway is approximately CNY20.41 million. It is currently 51% owned by Shenzhen Qianhai (an indirect wholly owned subsidiary of the Company prior to the sale of PST Technology in July 2023), 25% owned by Anxon Envirotech Pte. Ltd (a direct wholly owned subsidiary of AnnAik Limited, which is listed on the Singapore Stock Exchange under ticker “A52”), and 24% owned by Shanghai Xingyu Environment Engineering Co., Ltd. Shanghai Onway is principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services.

During its time as a subsidiary of the Company, Shanghai Onway had a team of well-regarded experts with deep industry experience in the field of wastewater treatment and carries out its rural wastewater treatment business using proprietary wastewater treatment technologies including five patents, namely (i) bio-trickling filter packing frame with uniform water distribution and automatic reoxygenation effects; (ii) wastewater reinforced phosphorous removal packing and preparation method thereof; (iii) shore bank step combination formula non-point source pollution control system; (iv) modularization ecological substrate composite biological chinampa with primary and secondary connector link; and (v) water distributor.

Since its incorporation, Shanghai Onway has leveraged its proprietary wastewater treatment technologies to undertake 258 EPC projects, mainly in Zhejiang province, Jiangsu province and Shanghai, among which 3 projects are currently in progress as of July 2023, the date on which Shanghai Onway ceased to be our subsidiary. In July 2018, Shanghai Onway was awarded its maiden PPP project, Wujiang District Rural Domestic Waste and Wastewater Treatment Infrastructure, by the Housing and Urban-Rural Development Bureau (“HURDB”) of Wujiang District in Shaoguan City, Guangdong province of the PRC (the “Wujiang Project”). In 2021, 2022, and for the period from January 1, 2023 to July 31, 2023, revenues derived from the EPC projects amounted to CNY12.39 million, CNY14.63 million, and CNY9.12 million respectively, and those derived from the Wujiang Project were CNY6.35 million, CNY5.51 million and CNY3.63 million, respectively.

Government Regulation and National Policy of Rural Wastewater Treatment Industry

The development of the rural wastewater treatment industry is highly supported by national policies in the PRC. Some of the regulations and policies are summarized below.

In 2010, in order to promote domestic wastewater treatment in rural areas of the PRC, the Ministry of Housing and Urban-Rural Development issued the “Technical Guidelines for Rural Domestic Wastewater Treatment by Regions.” The document set out the characteristics, discharge requirements and drainage systems of rural domestic wastewater in each region of the PRC, as well as rural domestic wastewater treatment technologies (including parameters and schematic diagrams), selection of technologies, management of facilities and engineering examples.

In 2010, the Ministry of Environmental Protection issued the “Technical Specifications for Control of Domestic Pollution in Rural Areas” and the “Technical Policy on Prevention and Control of Domestic Pollution in Rural Areas.” The former document introduced several technologies for controlling rural domestic wastewater pollution, including source control, household biogas digesters, decentralized wastewater treatment with low energy consumption, centralized wastewater treatment, and rainwater collection and discharge. The latter document set out that the technical route of rural domestic pollution prevention and control should be based on source control, decentralized treatment with some support of centralized treatment, and resource reutilization.

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In 2014, the Eighth Session of the Standing Committee of the Twelfth National People’s Congress of the PRC revised the “Environmental Protection Law of the People’s Republic of China.” The document sets out that governments at all levels in the PRC should allocate funds in their budgets to support environmental protection work, including protection of rural drinking water sources, treatment of domestic wastewater and other waste, prevention and control of pollution from livestock and poultry breeding, prevention and control of soil pollution and control of pollution from rural industries and mines.

In 2014, the “Guiding Opinions of the General Office of the State Council on Improving the Rural Living Environment” proposed to accelerate comprehensive improvement of the rural environment focusing on the treatment of rural waste and wastewater. Where conditions permit, urban waste and wastewater treatment facilities and services may be extended to rural areas. For villages with large populations far away from cities and towns, village-level centralized wastewater treatment facilities may be built, and for villages with small populations, household wastewater treatment facilities may be built.

In 2017, the “Thirteenth Five-Year Plan for Comprehensive Improvement of the National Rural Environment” highlighted the importance of protection of rural drinking water sources and treatment of domestic waste and wastewater. In 2018, the “Three-Year Action Plan for the Improvement of Rural Living Environment” promoted the treatment of rural domestic wastewater using technologies with low costs, low energy consumption, easy maintenance and high efficiency, and encouraged the adoption of ecological treatment technologies.

In 2018, the Ministry of Ecology and Environment and the Ministry of Housing and Urban-Rural Development issued the “Notice on Accelerating the Formulation of Rural Domestic Wastewater Discharge Standards by Regions.” Local governments were encouraged to speed up the formulation of standards for rural wastewater treatment and discharge according to local conditions. In 2019, the “Technical Standards for Rural Domestic Wastewater Treatment Projects” issued by the Ministry of Housing and Urban-Rural Development optimized the specific technical parameters of rural wastewater treatment to adapt to the characteristics of rural wastewater in China.

In 2020, a group of three standards were set up, namely the “Standard for Small Domestic Wastewater Treatment Equipment,” the “Evaluation Specification for Small Domestic Wastewater Treatment Equipment,” and the “Technical Regulations for Operation and Maintenance of Village Domestic Wastewater Treatment Facilities.” The first document set out some standardized information for small-scale domestic wastewater treatment equipment, including information registration, design, manufacturing, transportation and installation. The second document set out a standardized evaluation process suitable for China’s national conditions for small-scale wastewater treatment equipment, after considering the experience of such evaluation systems in developed countries and the relevant climatic, geographical and economic conditions of different regions in China. The third document set out the operation and maintenance standards on the operation and maintenance of facilities (collection systems and treatment facilities), operation and maintenance process, operation and maintenance personnel, and operation and maintenance service organization, among other standards.

In 2021, the “Guidelines on Accelerating the Modernization of Rural Houses and Villages” highlighted the importance of promoting rural domestic wastewater treatment in accordance with local conditions. Rural areas should adopt small-scale, ecological and decentralized wastewater treatment models and processes, set appropriate discharge standards, and promote local resource reutilization of rural domestic wastewater.

In 2022, the “Opinions of the CPC Central Committee and the State Council on Completing the Key Work of Comprehensively Promoting Rural Revitalization in 2022” set out that a five-year campaign to improve rural living environment should continue to be carried out. Toilets in rural areas should be upgraded based on the actual needs of farmers, and efforts should be coordinated to ensure water supply and sewage treatment. The treatment of domestic sewage in rural areas should be promoted on a case-by-case basis in accordance with local conditions. Priority should be given to sewage treatment in densely populated villages, and for those areas that are not suitable for centralized treatment, miniaturized ecological treatment and sewage resource utilization should be promoted. Efforts to control black and odorous water bodies in rural areas should be accelerated. Household waste should be reduced and classified at source, and the construction of facilities for the comprehensive disposal and utilization of organic waste in villages should be strengthened to promote the use and treatment of organic waste in situ.

Cybersecurity

As an exploration company, we have limited digital operations and our business activity to date has been identifying, acquiring, and exploring mineral properties, and we have not yet adopted formal cybersecurity risk management programs or formal processes for assessing cybersecurity risks. We understand the importance of managing material risks from cybersecurity threats and are committed, as part of our continuing growth, to implementing and maintaining an adequate information security program to manage such risks and safeguard our systems and data.

We currently manage our cybersecurity risk through a variety of practices that are applicable to all users of our information technology and information assets, including our employees and contractors. We use a combination of technology, policies, training, and monitoring to promote security awareness and prevent security incidents.

We believe we have limited exposure to cyber threats other than emails and project data storage. Financial transactions are enabled through well-stablished financial institutions and accounting and employee information storage are outsourced to an external accounting firm.

We have not, as of the date of this prospectus, experienced a cybersecurity threat or incident in the last three years, that materially affected or is reasonably likely to affect our business, results of operations, or financial condition. However, there can be no guarantee that we will not experience such an incident in the future. For more information,

Our board of directors oversees cybersecurity risk as part of its role of overseeing enterprise-wide risk.

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Environmental, Social and Governance (ESG) Initiatives

ESG is an important imperative for us. We have focused our ESG initiatives on the following areas:

| • | Environment: We will pay close attention to the impacts of our operations on biodiversity, ecosystem services, water management, mine waste/ tailings, air, noise, energy, climate change (carbon footprint, greenhouse gas), hazardous substances, and mine closure;

| • | Social: We will evaluate the impacts of our actions in the fields, such as human rights, land use, resettlement, vulnerable people, gender, labour practices, worker/community health & safety, security, artisanal miners, and mine closure / after use.

| • | Governance: We will assess our activities from the perspectives of legal compliance, ethics, anti-bribery and corruption, and transparency.

In particular, we will consider whether there are environmental, social or governance risks that may affect our ability to raise capital, obtain permits, work with communities, regulators and NGOs, and protect our assets from impairments. And then there may be opportunities for us to reduce energy and water bills or carbon emissions, improve operational performance, enhance community and regulatory relationships and manage closure viability.

As an exploration company, we do not carry out any mining operation. However, we prioritize initiatives that not only align with our corporate values but also contribute to sustainable development, stakeholder trust, and long-term profitability. We will implement environmentally responsible mining practices, such as reducing water and energy consumption, minimizing waste generation and rehabilitating mined areas post-extraction, to mitigate ecological degradation. We will also implement efficient water management strategies, including recycling and treating mine water, to minimize water usage and prevent contamination of local water sources. Furthermore, we will invest in community development projects that address pressing social needs, such as education, healthcare, infrastructure, and economic diversification. We will also develop robust risk management frameworks to identify, assess and mitigate ESG-related risks associated with our operations.

Enforcement of Civil Liabilities

British Virgin Islands

We are incorporated in the BVI to take advantage of certain benefits associated with being a BVI business company, such as:

| • | political and economic stability;

| • | an effective judicial system;

| • | a favorable tax system;

| • | the absence of exchange control or currency restrictions; and

| • | the availability of professional and support services.

However, certain disadvantages accompany incorporation in the BVI. These disadvantages include:

| • | the BVI has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors; and

| • | BVI companies do not have standing to sue before the federal courts of the United States.

Our Articles provide that any differences between us and our shareholders or their executors, administrators or assigns relating to the intent, construction, incidences or consequences of our Articles or the BVI Business Companies Act (as amended), including any breach or alleged breach of our Articles or the BVI Business Companies Act (as amended), or relating to our affairs, shall be resolved by arbitration before two arbitrators (unless the parties agree to arbitrate before one arbitrator), who shall jointly appoint an umpire.

Service of process upon us and upon our directors, all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because all of our directors are located outside the United States in Hong Kong, and all of our assets and officers are located outside the United States in the PRC (other than Mr. Wong Wah On Edward, our Chairman and Chief Executive Officer, who is located in Hong Kong), any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States.

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There is doubt as to the enforceability of civil liabilities under the Securities Act and the Exchange Act in original actions instituted in the PRC. PRC courts may refuse to hear a claim based on a violation of U.S. securities laws, including because the PRC is not the most appropriate forum to bring such a claim. In addition, even if a PRC court agrees to hear a claim, it may determine that PRC law, and not U.S. law, is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law may have to be proven in court as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by PRC law. There is little binding case law in the PRC addressing the matters described above. Many of the same doubts apply to similar suits that may be brought in the BVI or Hong Kong and as to the enforceability of any judgment rendered by a court in the BVI or Hong Kong. Moreover, we have no assets in the BVI that may be used to satisfy a judgment rendered by a court located there.

We have appointed Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

PRC

We have been advised by Commerce & Finance Law Offices, our PRC legal advisor, that there is uncertainty as to whether the courts of the PRC would enforce judgments of United States courts or British Virgin Islands courts obtained against us or these persons predicated upon the civil liability provisions of the United States federal and state securities laws. Commerce & Finance Law Offices has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. If a legally effective judgment or ruling made by a foreign court requires recognition and enforcement by the PRC People's Court, the parties may directly apply to the intermediate people's court with jurisdiction for recognition and enforcement, or the foreign court may request recognition and enforcement by the PRC People's Court in accordance with the provisions of international treaties concluded or participated in by the country and the PRC, or in accordance with the principle of reciprocity. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment if they decide that the judgment violates the basic principles of the PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or in the British Virgin Islands. Under the PRC Civil Procedures Law, foreigners, foreign enterprises and organizations who bring or respond to lawsuits in the PRC People's Court shall have the same litigation rights and obligations as citizens, legal persons and other organizations of the PRC. Where foreign courts impose restrictions on the civil litigation rights of citizens, legal persons and other organizations of the PRC, the People's courts of the PRC shall apply the principle of reciprocity to the civil litigation rights of citizens, enterprises and organizations of that country. In a foreign-related civil case accepted by the PRC People's Court, if the defendant raises an objection to jurisdiction, and the following circumstances occur at the same time, it may rule to reject the suit and inform the plaintiff to file a suit in a more convenient foreign court: (1) The basic facts of the dispute do not occur within the territory of the PRC, and it is obviously inconvenient for the PRC People’s Court to try the case and for the parties to participate in the proceedings; (2) There is no agreement between the parties to choose the jurisdiction of the PRC People's Court; (3) the case does not fall under the exclusive jurisdiction of the PRC People's Court; (4) The case does not involve the sovereignty, security or public interests of the PRC; (5) It is more convenient for foreign courts to hear cases.

| C. | Organizational Structure

CHNR is a holding company directly or indirectly owning the following subsidiaries, to the extent indicated (as of December 31, 2024):

All current operations are conducted by Bayannaoer Mining. See “Item 4.B. INFORMATION ON THE COMPANY – Business Overview” for further information regarding Bayannoer Mining.

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Feishang Management

Feishang Management was incorporated in the PRC in October 2008. It is a wholly owned subsidiary of Yunnan Mining and is engaged in providing management and consulting services to the other companies in the Group. Feishang Management currently serves as a cost center for the Group.

Inactive Subsidiaries

The following subsidiaries are not currently engaged in active operations but remain in good standing in their home jurisdictions and are poised to participate in future opportunities, should they arise:

China Coal

China Coal was incorporated in Hong Kong in January 2008. It is a wholly owned subsidiary of CHNR.

Feishang Dayun

Feishang Dayun was incorporated in Hong Kong in June 2008. It is a wholly owned subsidiary of Pineboom.

Feishang Mining

Feishang Mining was incorporated in the BVI in September 2004. It is a wholly owned subsidiary of CHNR.

Feishang Yongfu

Feishang Yongfu was incorporated in Hong Kong in June 2008. It is a wholly owned subsidiary of Newhold.

FMH Services

FMH Services is a Florida company incorporated in November 2007 in connection with a proposed transaction that was not consummated. FMH Services, which is wholly owned by CHNR, is currently dormant.

Newhold

Newhold was incorporated in the BVI in July 2008. It is a wholly owned subsidiary of CHNR.

Pineboom

Pineboom was incorporated in the BVI in May 2008. It is a wholly owned subsidiary of CHNR.

Yangpu Shuanghu

Yangpu Shuanghu was incorporated in the PRC in May 2004. It is a wholly owned subsidiary of Feishang Yongfu.

Yunnan Mining

Yunnan Mining was incorporated in the PRC in June 2007. It is a wholly owned subsidiary of Yangpu Shuanghu.

| D. | Property, Plant and Equipment

The Company’s administrative offices and its principal subsidiaries are located in Hong Kong, Shenzhen (Guangdong province) and Bayannaoer City (Inner Mongolia Autonomous Region) in the PRC.

On April 1, 2017, the Company signed an office sharing agreement with Anka Consultants Ltd. (“Anka”), a related party, which superseded all previously signed agreements between the parties, pursuant to which the Company shares 184 square meters of the total area of the office premises. The agreement also provides that the Company shares certain costs and expenses in connection with its use of the office, in addition to certain accounting and secretarial services and day-to-day office administration services provided by Anka. Anka’s current lease with the unrelated landlord is for two years, from July 1, 2024, to June 30, 2025. For the years ended December 31, 2022, 2023 and 2024, the Company paid its share of rental expenses and rates to Anka amounting to approximately CNY776,086, CNY730,149 and CNY370,923 (US$50,825), respectively.

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On January 1, 2018, Feishang Management signed an office sharing agreement with Feishang Enterprise. On October 1, 2024, Feishang Management signed a new contract with Feishang Enterprise, which expired on September 30, 2025. Pursuant to the agreement, Feishang Management shared 40 square meters of the office premises, and annual rent was CNY165,600, CNY165,600 and CNY165,600 (US$22,691) for the years ended December 31, 2022, 2023 and 2024, respectively.

Bayannaoer Mining

The offices and exploration site of Bayannaoer Mining are located in Bayannaoer City, Inner Mongolia Autonomous Region in the PRC. The property, plant and equipment of Bayannaoer Mining mainly includes buildings, vehicles, office equipment and furniture, with a total net value as of December 31, 2024, of approximately CNY0.05 million (US$0.01 million). On May 1, 2024, Bayannaoer Mining signed an annual lease agreement with private individuals pursuant to which Bayannaoer Mining leases office premises located at 9/F, Huaao Building, Shengli North Road in Bayannaoer City. The office covers an area of 162 square meters, and annual rent is CNY24,300 (US$3,330).

The Moruogu Tong Mine exploration site is located in Northwestern Qingshan Town, Wulatehouqi in Bayannaoer City and covers an area of approximately 7.81 square kilometers. As is typical in the PRC, the PRC government owns all of the land on which the exploration activities are carried out. Bayannaoer Mining assumed the rights to use the land when it obtained the exploration right from the Land and Resources Department of Inner Mongolia Autonomous Region in 2005. We are still in the exploration stage of mining the Moruogu Tong Mine, and have not yet produced any silver, lead or copper. To date, the exploration program has indicated the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper.

In the event we determine to pursue a mining permit and thereafter engage in mining at the Moruogu Tong Mine, we will be required, among other things, to construct and develop the mine, including roads and making provision for water and electricity at the mine site. There will be significant capital expense for these and other projects. We intend to fund those capital expenditures from internal resource and/ or the proceeds of loans from our Related-Party Debtholders, if available, payments pursuant to the Cooperation Agreement and, to the extent deemed necessary, bank borrowings.

See “Item 4.B. INFORMATION ON THE COMPANY – Business Overview – Government Regulation of Mineral Exploration Activities,” above, for a discussion of environmental laws affecting the Moruogu Tong Mine.

| ITEM 4A. | UNRESOLVED STAFF COMMENTS

None.

| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of the results of operations and the Company’s financial position should be read in conjunction with the audited consolidated financial statements and accompanying notes included elsewhere herein. The consolidated financial statements of the Company have been prepared in accordance with IFRS as issued by the IASB. This section contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of our future performance or results and our actual results could materially differ from those disclosed in the forward-looking statements. In evaluating our business, you should carefully consider the information provided in “Item 3.D. Key Information – Risk Factors.”

| A. | Operating Results

Overview

We are principally engaged in exploration for lead, silver and other metals in the Inner Mongolia Autonomous Region of the PRC and exploration of attractive opportunities in other sectors in the PRC. Our operating subsidiary, Bayannaoer City Feishang Mining Company Limited (“Bayannaoer Mining”) holds an exploration permit issued by the Land and Resources Department of Inner Mongolia Autonomous Region covering the Moruogu Tong Mine, located in Wulatehouqi, Bayannaoer City, Inner Mongolia. The exploration permit evidences Bayannaoer Mining’s right to explore for minerals at the Moruogu Tong Mine. Initial results of the exploration program indicate the presence of lead and silver, with the prospect that further surveying and exploration may indicate the presence of other ores such as copper. We are also actively seeking opportunities of exploration and mining of other metals outside of the PRC. See, “Item 4.A. Information on the Copany – History and Development of the Company — Acquisition of Williams Minerals.”

We continuously pivot our business by exploring new opportunities for growth or diversification. Between July 2021 and July 2023, we also engaged in the rural wastewater treatment business in China through the acquisition of PST Technology, which held 51% equity interest of Shanghai Onway, a PRC company which is principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services.

We ceased the wastewater treatment business segment following the disposition of PST Technology in July 2023. See “Item 4.A. Information on the Company - History and Development of the Company — Acquisition and Sale of PST Technology Limited.”

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Continuing Operations

Administrative Expenses

Administrative expenses primarily consist of salaries and staff welfare expenses, professional service fees, travel and entertainment expenses, depreciation and amortization, option awards granted to certain eligible parties and other general corporate function related expenses.

Other Income

Other income primarily consists of government reimbursements, grants and tax refunds, and other non-operating income or expenses.

Fair Value Gain/(Loss) on Financial Instruments, net

Fair value gain or loss on financial instruments, the net changes in fair value of warrants issued to investors on January 20, 2021 and February 21, 2024.

Finance Costs

Finance costs consist primarily of interest expense on loans and lease liabilities, and foreign currency exchange differences.

Finance Income

Finance income consists primarily of interest income on bank deposits.

Income Tax Expense

The Company is not subject to taxes in the United States.

Under the current laws of the BVI, dividends and capital gains arising from the Company’s investments in the BVI are not subject to income or capital gains taxes and no withholding tax is imposed on payments of dividends to the Company.

The Company’s subsidiaries in Hong Kong are subject to the Hong Kong Profits Tax rate of 16.5%, while foreign-derived income is exempted from income tax. There is no withholding tax in Hong Kong on the remittance of dividends.

The Company’s subsidiaries in the PRC are subject to a PRC enterprise income tax rate of 25% applicable to both foreign invested enterprises and domestic companies.

Discontinued Operations

Revenue

Revenue from our discontinued operations primarily consists of revenue from construction contracts, operation and maintenance services, operation services and construction services for the Wujiang Project, which we refer to as the “service concession arrangement.”

Cost of Sales

Cost of sales of our discontinued operations primarily consists of costs relating to the construction of water treatment facilities, such as raw materials, spare parts, consumables, and outsourced costs charged by subcontractors.

Selling and Distribution Expenses

Selling and distribution expenses primarily consist of business development expenses, payroll, travel expenses and related expenses for employees involved in selling and distribution activities.

Profit/(loss) for the year from discontinued operations, net of tax

Profit/(loss) for the year from discontinued operations, net of tax represents operating results from PST Technology and its subsidiaries until its disposition on July 28, 2023.

44

Results of Operations

The following table sets out our consolidated results of operations for the periods indicated:

|  | Year Ended December 31, |
|  | (Amounts in thousands, except per share data) |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Consolidated Statements of Profit or Loss Data CONTINUING OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |
Administrative expenses |  |  | (25,248 | ) |  |  | (12,883 | ) |  |  | (7,199 | ) |  |  | (986 | )
Other income |  |  | 699 |  |  |  | 3,742 |  |  |  | 2 |  |  |  | 1 |
Fair value gain on financial instruments, net |  |  | 1,007 |  |  |  | 847 |  |  |  | 3,996 |  |  |  | 548 |
Finance costs |  |  | 191 |  |  |  | (48 | ) |  |  | (28 | ) |  |  | (4 | )
Finance income |  |  | 13 |  |  |  | 5 |  |  |  | 69 |  |  |  | 9 |
LOSS BEFORE INCOME TAX |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
Income tax expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit/ (loss) for the year from discontinued operations, net of tax |  |  | 1,042 |  |  |  | (4,106 | ) |  |  | — |  |  |  | — |
LOSS FOR THE YEAR |  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )
ATTRIBUTABLE TO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  | (23,884 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
From discontinued operations |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |  |  |  | — |
Non-controlling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
From discontinued operations |  |  | 2,327 |  |  |  | 1,398 |  |  |  | — |  |  |  | — |
|  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )
LOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic and diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- For loss from continuing operations |  |  | (2.85 | ) |  |  | (1.01 | ) |  |  | (0.33 | ) |  |  | (0.04 | )
- For loss from discontinued operations |  |  | (0.15 | ) |  |  | (0.67 | ) |  |  | — |  |  |  | — |
Loss per share |  |  | (3.00 | ) |  |  | (1.68 | ) |  |  | (0.33 | ) |  |  | (0.04 | )

45

Years Ended December 31, 2024 and 2023

Administrative Expenses. Administrative expenses decreased by CNY5.68 million (US$0.78 million) from CNY12.88 million for the year ended December 31, 2023 to CNY7.20 million (US$0.99 million) for the year ended December 31, 2024. The decrease was mainly caused by the decrease of professional fees (mainly legal and audit fees) as a result of expense control.

Other Income. Other income decreased by CNY3.74 million (US$0.51 million) from CNY3.74 million for the year ended December 31, 2023 to CNY2.00 thousand for the year ended December 31, 2024. The decrease in other income was mainly caused by government compensation received in 2023 for termination of 5 mine exploration rights in Dengkou County, Inner Mongolia Autonomous Region.

Fair Value Gain on Financial Instruments, net. Fair value gain on financial instruments, net increased by CNY3.15 million (US$0.43 million) from CNY0.85 million for the year ended December 31, 2023 to CNY4.00 million (US$0.55 million) for the year ended December 31, 2024. The increase was caused by the fluctuation of fair values of the Company’s outstanding warrants.

Profit/(loss) for the year from discontinued operations, net of tax. The loss for the year from discontinued operations, net of tax decreased by CNY4.11 million from CNY4.11 million for the period ended July 31, 2023 to nil for the year ended December 31, 2024. The decrease was a result of the disposal of PSTT in 2023.

Net Loss. As a result of the foregoing, our net loss decreased by CNY9.28 million (US$1.27 million), from CNY12.44 million for the year ended December 31, 2023 to CNY3.16 million (US$0.43 million) for the year ended December 31, 2024.

Years Ended December 31, 2023 and 2022

Administrative Expenses. Administrative expenses decreased by CNY12.37 million from CNY25.25 million for the year ended December 31, 2022 to CNY12.88 million for the year ended December 31, 2023. The decrease was mainly caused by the one-off option awards granted on July 14, 2022 to certain eligible individuals covering an aggregate of 8,100,000 of the Company’s common shares under the 2014 Plan.

Other Income. Other income increased by CNY3.04 million from CNY0.70 million for the year ended December 31, 2022 to CNY3.74 million for the year ended December 31, 2023. The increase was mainly caused by government compensation received in 2023 for termination of 5 mine exploration rights in Dengkou County, Inner Mongolia Autonomous Region.

Fair Value Gain/(Loss) on Financial Instruments, net. Fair value gain on financial instruments, net decreased by CNY0.16 million from CNY1.01 million for the year ended December 31, 2022 to CNY0.85 million for the year ended December 31, 2023. The decrease was caused by the fluctuation of fair values of the Company’s outstanding warrants.

Profit/(loss) for the year from discontinued operations, net of tax. The profit for the year from discontinued operations, net of tax decreased by CNY5.15 million from CNY1.04 million for the year ended December 31, 2022 to a loss of CNY4.11 million for the period ended July 31, 2023. The loss in 2023 was the result of an expected credit loss assessment of receivables and contract assets, due to the fact that the amount of uncollected and aged receivables and contract assets was relatively higher than the amount in 2022.

Net Profit/(Loss). As a result of the foregoing, our net loss decreased by CNY9.86 million from CNY22.30 million for the year ended December 31, 2022 to CNY12.44 million for the year ended December 31, 2023.

46

Results of Operations – Discontinued Operations

The following table sets out the results of operations of our discontinued operations for the periods indicated:

|  | Year Ended December 31, |
|  | (Amounts in thousands, except per share data) |
|  | 2021 |  |  | 2022 |  |  | For the period from January 1, 2023 to July 28, 2023 |
|  | CNY |  |  | CNY |  |  | CNY |
Revenue |  |  | 18,735 |  |  |  | 20,306 |  |  |  | 12,748 |
Cost of sales |  |  | (18,494 | ) |  |  | (14,485 | ) |  |  | (5,872 | )
Gross profit |  |  | 241 |  |  |  | 5,821 |  |  |  | 6,876 |
Selling and distribution expenses |  |  | (922 | ) |  |  | (700 | ) |  |  | (442 | )
Administrative expenses |  |  | (11,793 | ) |  |  | (11,501 | ) |  |  | (5,699 | )
Other (losses)/income |  |  | (782 | ) |  |  | 205 |  |  |  | 142 |
Impairment (losses)/reversal on financial assets |  |  | (3,330 | ) |  |  | 1,073 |  |  |  | (9,931 | )
Finance costs |  |  | (4,193 | ) |  |  | (3,586 | ) |  |  | (1,906 | )
Finance income |  |  | 16,922 |  |  |  | 15,594 |  |  |  | 8,785 |
(LOSS)/PROFIT BEFORE INCOME TAX |  |  | (3,857 | ) |  |  | 6,906 |  |  |  | (2,175 | )
Income tax expense |  |  | (7,230 | ) |  |  | (5,864 | ) |  |  | (1,931 | )
(LOSS)/PROFIT FOR THE YEAR/PERIOD FROM THE DISCONTINUED OPERATIONS |  |  | (11,087 | ) |  |  | 1,042 |  |  |  | (4,106 | )
Attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Owners of the company |  |  | (4,268 | ) |  |  | (1,285 | ) |  |  | (5,504 | )
Non-controlling interests |  |  | (6,819 | ) |  |  | 2,327 |  |  |  | 1,398 |

The Period Ended July 28, 2023 and The Year Ended December 31, 2022

Revenue. Revenue from discontinued operations decreased by CNY7.56 million from CNY20.31 million for the year ended December 31, 2022 to CNY12.75 million for the period ended July 28, 2023. The decrease in revenues was mainly caused by the shorter operating period of the discontinued operations due to our disposal of PST Technology in July 2023.

Cost of sales. Cost of sales from discontinued operations decreased by CNY8.62 million from CNY14.49 million for the year ended December 31, 2022 to CNY5.87 million for the period ended July 28, 2023. The decrease in cost of sales was mainly caused by the shorter operating period of the discontinued operations due to our disposal of PST Technology in July 2023.

Selling and Distribution Expenses. Selling and distribution expenses from discontinued operations decreased by CNY0.26 million from CNY0.70 million for the year ended December 31, 2022 to CNY0.44 million for the period ended July 28, 2023. The decrease was mainly due to tighter expense control efforts in 2023 and the shorter operating period of the discontinued operations due to our disposal of PST Technology in July 2023.

Administrative Expenses. Administrative expenses from discontinued operations decreased by CNY5.80 million from CNY11.50 million for the year ended December 31, 2022 to CNY5.70 million for the period ended July 28, 2023. The decrease was mainly caused by one-off technology consultancy fees incurred in 2022 for certain water treatment projects.

Other Income/(Losses). Other income/(loss) from discontinued operations decreased by CNY0.07 million from CNY0.21 million of loss for the year ended December 31, 2022 to CNY0.14 million of income for the period ended July 28, 2023. No material fluctuation was noted.

47

Impairment (Losses)/Reversal on Financial Assets. Impairment (losses)/reversal on financial assets from discontinued operations decreased by CNY11.00 million from CNY1.07 million of reversal for the year ended December 31, 2022 to a loss of 9.93 million for the period ended July 28, 2023. The decrease was the result of an expected credit loss assessment of receivables and contract assets, due to the fact that the amount of uncollected and aged receivables and contract assets was relatively higher than the amount in 2022.

Finance Costs. Finance costs from discontinued operations decreased by CNY1.68 million from CNY3.59 million for the year ended December 31, 2022 to CNY1.91 million for the period ended July 28, 2023. This was mainly due to the shorter operating period of the discontinued operations due to our disposal of PST Technology in July 2023.

Finance Income. Finance income from discontinued operations decreased by CNY6.80 million from CNY15.59 million for the year ended December 31, 2022 to CNY8.79 million for the period ended July 28, 2023. The decrease in finance income was mainly due to the decrease of interest income from the service concession arrangement relating to a financing component, which arose due to a guaranteed 28-year-long collection period for construction services for the Wujiang Project and the shorter operating period of the discontinued operations due to our disposal of PST Technology in July 2023.

Income Tax Expense. Income tax expense from discontinued operations decreased by CNY3.93 million from CNY5.86 million for the year ended December 31, 2022 to CNY1.93 million for the period ended July 28, 2023. The decrease was mainly caused by lower revenue in 2023.

(Loss)/Profit. As a result of the foregoing, profit for discontinued operations decreased by CNY5.15 million, from CNY1.04 million of profit for the year ended December 31, 2022 to CNY4.11 million of loss for the period ended July 28, 2023.

Impact of Government Policies on the Company’s Operations

In 2024, the government maintained a series of targeted expansionary fiscal and monetary policies, along with supportive industrial policies, to bolster economic stability. In particular, a package of incremental policies was adopted in September 2024, which greatly boosted social confidence and speeded up recovery. Macroeconomic policies will largely impact on economic cycles, growth rates, inflation and interest rates, and eventually result in changes in supply and demand dynamics and price fluctuations in the markets we intend to serve. Industrial policies will more directly impact specific industries and to some extent determine market access, market potential, intensity of competition and profitability.

Our metals exploration activities are subject to government regulations in various aspects, including but not limited to laws, rules and regulations relating to exploration activities; environmental protection; the use and preservation of dangerous substances; employment practices; as well as land use laws and a variety of local business laws and rules. Our failure to comply with applicable government regulations could adversely affect our operations and subject us to fines and other penalties including suspension or termination of our business permits. For further details of the impact of governmental policies on our metals exploration activities, please refer to “Item 3.D. KEY INFORMATION – Risk Factors – Risks Relating to Our Mine Exploration Activities in Inner Mongolia – We are subject to government regulations in various aspects of our exploration activities and our failure to comply with applicable government regulations could adversely affect us,” “Item 4.B. INFORMATION ON THE COMPANY – Business Overview – Government Regulation of Mineral Exploration Activities,” and “Item 5.D. – OPERATING AND FINANCIAL REVIEW AND PROSPECTS – Trend Information”.

Similarly, if we are successful in completing the acquisition of Williams Minerals, which holds the lithium mine in Zimbabwe, our ability to realize the anticipated benefits of it may be affected by changes in the overall economic, political and regulatory environment, including but not limited to applicable tax regimes, fluctuations in prices and foreign exchange rates, import and export regulations, local rules and regulations in relation to exploration and mining activities, and a variety of other local business laws and rules. Our failure to comply with applicable government regulations could adversely affect our operations and subject us to fines and other penalties including suspension or termination of our business permits.

Non-GAAP Financial Measures

Not applicable.

48

| B. | Liquidity and Capital Resources

The Company’s primary liquidity needs are to fund operating expenses, capital expenditures and acquisitions. As of December 31, 2024, the Company financed its working capital requirements and capital expenditures through internally generated cash from prior years, non-interest-bearing loans from the Related-Party Debtholders, funds provided pursuant to the Cooperation Agreement, and the sale of 3,960,000 common shares and associated warrants to purchase up to 1,487,870 common shares at an offering price of US$2.20 per share in February 2024. See “Item 10.C. ADDITIONAL INFORMATION – Material Contracts.” In view of the cessation of the wastewater treatment business and the pre-revenue exploration stage of the Moruogu Tong Mine, the Company expects that the availability of internally generated funds to sustain operations will decrease for the foreseeable future. As we are actively exploring new business opportunities in lithium resources in Zimbabwe, we may face growing shortage of working capital in the near future. Although we believe that our working capital is sufficient for our present requirements and to continue our current operations over the next 12 months, we envisage engaging in further capital-raising activities in pursuit of other business opportunities in the PRC to diversify our operations as we move into our next phase of growth.

We have received letters from Feishang Group and Feishang Enterprise, entities controlled by Mr. Li Feilie, the principal beneficial shareholder of the Company, which state that Feishang Group and Feishang Enterprise will provide continuous financial support to the Group in relation to the going concern of its operations, and will not recall any amounts due to them until the Group has sufficient liquidity to finance its operations , and that Feishang Enterprise will pay debts on behalf of the Group when needed. As such, we believe that we will be able to obtain adequate amounts of cash to meet our requirements beyond the next 12 months.

The revenue and expenses of our PRC subsidiaries are denominated in Renminbi. We pay our corporate expenses in either Hong Kong dollars or U.S. Dollars. The conversion of Renminbi into other currencies is strictly regulated by the PRC government. See “Item 3.D. – KEY INFORMATION – Risk Factors” and “Item 10.D. ADDITIONAL INFORMATION – Exchange Controls” for discussion of exchange controls in the PRC.

Under PRC laws and regulations, we are subject to various restrictions on intercompany fund transfers and foreign exchange controls. See “Item 3.D. KEY INFORMATION – Transfers of Cash and Assets Between Our Company and Our Subsidiaries” for further details of impacts on liquidity and capital resources as a result of cash and assets transfer restrictions and limitations.

As of December 31, 2024, the breakdown of cash (in thousands) held in different currencies is as follows:

Currency and Amount |  | CNY Equivalent |  |  | US$ Equivalent |
CNY1,469 |  |  | 1,469 |  |  |  | 201 |
HK$263 |  |  | 247 |  |  |  | 34 |
US$187 |  |  | 1,366 |  |  |  | 187 |
Total |  |  | 3,082 |  |  |  | 422 |

The Company expects to maintain a balanced portfolio of foreign currencies in order to meet its cash obligations in different currencies for its expenses, capital expenditures and acquisitions. Management does not anticipate the payment of dividends or any similar profit distribution from the Company’s PRC subsidiaries in the foreseeable future.

Cash Flows

The following table sets forth the Company’s cash flows (in thousands) for each of the three years ended December 31, 2022, 2023, and 2024:

|  | Years Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Cash and cash equivalents at beginning of year |  |  | 58,359 |  |  |  | 31,695 |  |  |  | 4,753 |  |  |  | 671 |
Net cash (used in)/from operating activities |  |  | (12,786 | ) |  |  | 13,328 |  |  |  | (7,417 | ) |  |  | (1,025 | )
Net cash from/(used in) investing activities |  |  | 7,050 |  |  |  | (1,054 | ) |  |  | 1 |  |  |  | — |
Net cash (used in)/from financing activities |  |  | (22,833 | ) |  |  | (37,930 | ) |  |  | 15,111 |  |  |  | 2,070 |
Net (decrease)/ increase in cash and cash equivalents |  |  | (28,569 | ) |  |  | (25,656 | ) |  |  | 7,695 |  |  |  | 1,045 |
Effect of exchange rate changes on cash |  |  | 1,905 |  |  |  | (1,286 | ) |  |  | (9,366 | ) |  |  | (1,294 | )
Cash and cash equivalents at end of year |  |  | 31,695 |  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |

49

Operating Activities

Net cash used in operating activities was CNY7.42 million (US$1.03 million) in 2024, compared to net cash inflow of CNY13.33 million in 2023. The cash outflows were mainly attributable to settlements of other payables and accruals in 2024.

Net cash generated from operating activities was CNY13.33 million in 2023, compared to net cash used in operating activities of CNY12.79 million in 2022. The increase of cash inflows from operations in 2023 was mainly attributable to decreased operating loss in 2023.

Investing Activities

Net cash from investing activities was CNY1.00 thousand (US$0.14 million) in 2024, compared to net cash outflows of CNY1.05 million in 2023. The cash inflows in 2024 mainly represents proceeds from disposal of property, plant and equipment.

Net cash used in investing activities was CNY1.05 million in 2023, as compared to net cash from investing activities of CNY7.05 million in 2022. The cash inflows from investing activities in 2022 mainly represents loan interests received from loan due from Shenzhen Chaopeng Investment Co., Limited (“Shenzhen Chaopeng”), an unrelated company.

Financing Activities

Net cash from financing activities was CNY15.11 million (US$2.07 million) in 2024, compared to CNY37.93 million in 2023. The cash inflows in 2024 mainly represent net proceeds received from private placement on February 21, 2024.

Net cash used in financing activities was CNY37.93 million in 2023, as compared to net cash used in financing activities of CNY22.83 million in 2022. The increase in cash outflows in financing activities was the combined effect of a decrease in the amount of net repayments to related parties in 2023 and cash outflows as a result of disposal of PST Technology on July 28, 2023.

Equity Financing

On February 21, 2024, we raised approximately US$3.01 million in net proceeds through our registered direct offering of common shares and private placement of warrants after deducting placement agent’s fees and other fees and expenses. On January 20, 2021, we raised approximately US$6.37 million in net proceeds through our registered direct offering of common shares and private placement of warrants after deducting placement agent’s fees and other fees and expenses. See “Item 10.C. ADDITIONAL INFORMATION – Material Contracts.”

Capital Expenditures

Our capital expenditures were incurred primarily in connection with the purchase of property, plant and equipment for office use. Our capital expenditures were CNY0.02 million, CNY0.01 million and CNY3,680 (US$504) in 2022, 2023 and 2024, respectively. We will continue to make capital expenditures to meet the expected growth of our operations and expect cash generated from internally generated cash from prior years, non-interest-bearing loans from the Related-Party Debtholders, and the proceeds from private placements in 2021 and 2024 will continue to meet our capital expenditure needs in the foreseeable future. However, as we are actively exploring new business opportunities in lithium resources in Zimbabwe, we may face growing shortage of working capital in the near future, and we envisage engaging in further capital-raising activities in pursuit of other business opportunities in the PRC to diversify our operations as we move into our next phase of growth. In addition, Feishang Group Limited and Feishang Enterprise Group Company Limited, related parties which have provided non-interest-bearing loans, have confirmed they will not recall any amounts due to them until the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

Material Cash Requirement

Other than the ordinary cash requirements for our operations and capital expenditures, our material cash requirements as of December 31, 2024 primarily include our contractual obligations.

In February 2023, the Company entered into the Zimbabwe SPA with Feishang Group, Top Pacific, Mr. Li Feilie and Mr. Yao Yuguang to acquire Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine for maximum consideration of US$1.75 billion (subject to the terms and conditions of the Zimbabwe SPA). The Company does not have the adequate cash to pay for the purchase consideration. In addition to the promissory note payment arrangement as contemplated by the Zimbabwe SPA, the Company may issue restricted or non-restricted CHNR shares at a discount to the market price if market sentiment permits.

50

Contractual Obligations

The following table summarizes our contractual obligations (in thousands) as of December 31, 2024:

|  | Payments due by period |
|  | Total |  |  | Within 1 year |  |  | 1 to 3 years |  |  | 3 to 5 years |  |  | Thereafter |
|  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |
Lease liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Long-term debt obligations, including current portion |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

Our primary lease liabilities are composed of motor vehicles and office and warehouse rent expenses. For details about our long-term debt obligations, see “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions.”

Other Known Contractual and Other Obligations

Please refer to “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions” for a discussion of amounts due to and from our affiliates.

Except as disclosed above and discussed under “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions – Acquisition of FARL Shares in Exchange for Newly Issued Company Shares,” “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions – Acquisition of PST Technology,” “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions –Acquisition of Williams Minerals,” and “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions –Sale of PST Technology,” there have been no significant changes in the Company’s financial condition and liquidity during the years ended December 31, 2022, 2023 and 2024.

Under the Cooperation Agreement, Jijincheng Mining, rather than the Company, is the party to any contracts relating to exploratory work relating to the northern part of Moruogu Tong Mine. In the event we determine to pursue a mining permit and thereafter engage in mining at the Moruogu Tong Mine, we will be required, among other things, for mine construction and development, to build roads and make provision for water and electricity at the mine site. There will be significant capital expense for these and other projects. We intend to fund those capital expenditures from the proceeds of loans from our Related-Party Debtholders, if available, payments pursuant to the Cooperation Agreement and, to the extent deemed necessary, bank borrowings.

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be material to investors.

| C. | Research and Development, Patents and Licenses, Etc.

The Company did not make any significant expenditures on Company-sponsored research and development activities during each of the last three fiscal years.

51

| D. | Trend Information

We believe that the following factors which impact our various revenue and expense items (as described below) have had, and will continue to have, a significant effect on the development of our business, financial position and results of operation.

In February 2023, the Company entered into the Zimbabwe SPA with Feishang Group, Top Pacific, Mr. Li Feilie and Mr. Yao Yuguang to acquire Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine. Under the Zimbabwe SPA, it is expected that the Company will indirectly acquire all interests in Williams Minerals in the second fiscal quarter of 2023, and that the Company’s “ownership” (as defined in the Zimbabwe SPA) of the Zimbabwean lithium mine will vest cumulatively, region by region from 2024 through 2026, contingent upon the issuance of independent technical reports and the Company’s full settlement of the purchase consideration in cash and restricted shares. For each relevant region of the lithium mine, until the Company’s ownership vests, the Sellers will maintain legal possession and control, including the right of exploration, sale of lithium, and the revenue derived therefrom, as well as liability for operational costs and third-party claims. On April 14, 2023, the Company announced that it completed its due diligence investigation with satisfactory results and decided to proceed with the Acquisition. The Company paid an aggregate of $35 million by way of promissory notes (instead of cash) as a deposit on April 21, 2023, and will pay an aggregate of $140 million by way of promissory notes and/or cash as an initial installment. Completion of the Acquisition is contingent upon the satisfaction of a number of conditions, including, among other things, the transfer of ownership interests in Williams Minerals from the Sellers to the intermediate holding company; the issuance of independent technical reports, the actual quantity of qualified lithium oxide metal resources proven or estimated to exist in each mining area covered by the relevant report, and the Company’s full settlement of the purchase consideration in cash and restricted shares. There is no guarantee that the Acquisition will close or be completed at the anticipated valuation and terms, or at all.

On December 22, 2023, the Company entered into the Amendment Agreement to the Zimbabwe SPA by and among Feishang Group and Top Pacific (China) Limited (together, the “Sellers”), and the respective beneficial owner of the Sellers, Mr. Li Feilie and Mr. Yao Yuguang with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the Acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the Acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the Company entered into a second amendment agreement to the Zimbabwe SPA to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025.

Our exploration and mining operations are highly speculative due to the high-risk nature of our exploration and mining business, which may include the acquisition, financing, exploration, and development of mineral properties and operation of mines. There is no assurance that our current or future exploration programs at the Zimbabwean lithium mine, the Moruogu Tong Mine or any future acquisitions will result in the identification of deposits that can be mined profitably. The economic viability of a mining project may be adversely affected by many factors, including failure to identify sufficient ore reserves, reduced recovery rates, a rise in production costs as a result of inflation or other technical problems, and significant price fluctuations in the commodities markets. There is no guarantee that the Acquisition of the Zimbabwean lithium mine will close or be completed at the anticipated valuation and terms, or at all. In addition, the fact that the northern part of Moruogu Tong Mine is currently being explored under a Cooperation Agreement means that our share in any future profits from mineral extraction at the mine is effectively reduced, the details of which are still subject to negotiation. We currently do not generate revenues from our exploration and mining operations, and we will have to fund exploration expenses until we are able to generate sufficient revenue to pay them.

During 2024, the world witnessed prolonged geopolitical conflicts, persistent high inflation and interest rate in many major economies and ongoing Sino-US friction, which led to disruptions to and notable fluctuations in the commodity market worldwide. The Chinese government stepped up policy efforts and maintained a series of targeted expansionary fiscal and monetary policies, along with supportive industrial policies, to bolster economic stability. In particular, a package of incremental policies was adopted in late September, which greatly boosted social confidence and speeded up recovery. Macroeconomic policies will largely impact economic cycles, growth rates, inflation and interest rates, and eventually result in changes in supply and demand dynamics and price fluctuations in the markets we intend to serve. Industrial policies will more directly impact specific industries and to some extent determine market access, market potential, intensity of competition and profitability. In the near future, we are likely to see further a series of highly supportive macroeconomic and industrial policies in various fields, but the extent and speed of economic recovery remains highly uncertain due to risks relating to the real estate sector, local government debt, escalating trade frictions, the ongoing geopolitical tensions and high interest rates of major economies, which might adversely affect the Chinese economy, our business operations and profitability. For further details on the impact of government policies, market uncertainties and high interest rates, please refer to “Item 3.D. KEY INFORMATION – Risk Factors – Risks Relating to Our Mine Exploration Activities in Inner Mongolia – Volatility in the market prices of metals may adversely affect the results of our operations,” and “Item 5.A. OPERATING AND FINANCIAL REVIEW AND PROSPECTS – Operating Results – Impact of Government Policies on the Company’s Operations.”

Other than as disclosed above and elsewhere in this annual report, the Company does not believe that there have been any other recent known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Company’s revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

| E. | Critical Accounting Estimates

Not applicable.

New IFRS Pronouncements

For a detailed discussion of new accounting pronouncements, please see Notes 2.4 and 2.5 to our audited consolidated financial statements.

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| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

| A. | Directors and Senior Management

Executive Officers and Directors

The following table identifies the current directors and executive officers of the Company, and sets forth their ages and positions with the Company:

Name |  | Age |  | Position
Wong Wah On Edward |  | 61 |  | Chairman of the Board of Directors, President and Chief Executive Officer
Tam Cheuk Ho |  | 62 |  | Director
Zhu Youyi |  | 44 |  | Chief Financial Officer and Corporate Secretary
Lam Kwan Sing |  | 55 |  | Non-employee Director
Ng Kin Sing |  | 62 |  | Non-employee Director
Yip Wing Hang |  | 58 |  | Non-employee Director
Li Feilie |  | 59 |  | Director of Subsidiaries

Mr. Wong Wah On Edward was appointed as a director in April 2015, and as Chairman of the Board of Directors, President and Chief Executive Officer in August 2016. Mr. Wong has served as the director of Feishang Anthracite since February 2013. He served as a director of the Company from January 1999 to January 2014, as its financial controller from December 2004 to January 2008, as its secretary from February 1999 to January 2014, and as its chief financial officer from January 2008 to January 2014. Mr. Wong is a co-owner and has been principally employed as a director of Anka, a privately held company, since April 2008. Mr. Wong has also served as an independent non-executive director of Quali-Smart Holdings Limited, a company listed in Hong Kong since September 2015. He received a professional diploma in Company Secretaryship and Administration from the Hong Kong Polytechnic University. He is a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants, and an associate member of the Hong Kong Chartered Governance Institute. He is also a certified public accountant (practicing) in Hong Kong.

Mr. Tam Cheuk Ho was appointed as a director in April 2015. Mr. Tam has served as the director of Feishang Anthracite since February 2013. He served as a director of the Company from December 1993 to December 1994 and from December 1997 to January 2014. He was also the Chief Financial Officer and Executive Vice President of the Company, from December 2004 to January 2008, and from January 2008 to January 2014, respectively. Mr. Tam is also a director and co-owner of Anka. He is a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. He is also a certified public accountant (practicing) in Hong Kong. He holds a Bachelor of Business Administration degree from the Chinese University of Hong Kong.

Mr. Zhu Youyi joined the Company in 2009 and has served the Company for over 10 years with various roles in accounting, internal audit and compliance functions. He was appointed as Chief Financial Officer and Corporate Secretary in July 2020. Prior to joining the Company, Mr. Zhu worked at the audit department of an international certified public accountant firm, providing audit services to clients in a variety of business sectors. Mr. Zhu holds a bachelor’s degree in Accountancy from Southwestern University of Finance and Economics, and is a member of the Chinese Institute of Certified Public Accountants.

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Mr. Lam Kwan Sing has been a non-employee director and a member of CHNR’s Audit Committee and Nominating and Governance committee since December 2004, and a member of its Compensation Committee since November 2007. Mr. Lam has been an independent non-executive director of Summit Ascent Holdings Limited, a Hong Kong listed company, from June 2019 to January 2024. From November 2016 to June 2022, Mr. Lam was the chief executive officer and executive director of SFund International Holdings Ltd., a Hong Kong listed company. He is also an independent non-executive director of Aceso Life Science Group, a Hong Kong listed company, since August 2012. Mr. Lam holds a bachelor’s degree in Accountancy from the City University of Hong Kong.

Mr. Ng Kin Sing has been a non-employee director and a member of CHNR’s Audit Committee and Nominating and Governance Committee since December 2004, and a member of its Compensation Committee since November 2007. From March 2012 to the present, Mr. Ng has been the director of Sky Innovation Limited, a private investment company. Mr. Ng holds a bachelor’s degree in Business Administration from the Chinese University of Hong Kong.

Dr. Yip Wing Hang has been a non-employee director and a member of CHNR’s Audit Committee and Nominating and Governance Committee since June 2006, and a member of its Compensation Committee since November 2007. From January 2018 to the present, Dr. Yip has been the senior director of Winsome Asset Management Ltd., where he is responsible for managing high-net-worth clients’ assets on a discretionary basis. Dr. Yip has served as adjunct associate professor at the Institute of China Business, the University of Hong Kong since 2013. Dr. Yip holds a doctorate degree from the University of Wales TSD, a master’s degree in Sustainability from the University of Cambridge, a master’s degree in Management from Harvard University and a master’s degree in Accounting and Finance from the Lancaster University, United Kingdom. He is also a Chartered Banker in the United Kingdom and a Certified Banker in Hong Kong.

Mr. Li Feilie served as a director, Chief Executive Officer and Chairman of the Board of CHNR from February 2006 to August 2016. He currently serves as director of Feishang Mining, Newhold, Pineboom, China Coal, Feishang Dayun, Feishang Yongfu and FMH Services, each of which is a subsidiary of CHNR. While Mr. Li is not an officer or director of the Company, he ultimately controls the Company through his services as an officer and/or director of certain of the Company’s subsidiaries, his beneficial ownership of the Company’s shares, his ability to elect the Board of Directors and his direct ownership of a substantial amount of Company debt. In addition to his directorships, Mr. Li provides strategic guidance relating to the various businesses in which he and his controlled companies invest. Through his related companies, Mr. Li also provides funding to support the Company’s operating expenses and indirectly holds a substantial amount of the Company’s debt (see “Item 7.B. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions,” below). Mr. Li has been the chairman of Feishang Enterprise, Wuhu City Feishang Industrial Co., Ltd. and Wuhu Feishang Port Co., Ltd., companies beneficially owned by him, since June 2000, from December 2001 to July 2011 and since October 2002, respectively. Mr. Li graduated from Peking University with a bachelor’s degree and a master’s degree in Economics.

Key Employees

The following table identifies the senior management of Bayannaoer Mining, and his age and position:

Name |  | Age |  | Position
Yu Jun |  | 57 |  | General Manager of Bayannaoer Mining

Mr. Yu Jun was appointed as general manager of Bayannaoer Mining in January 2015. He has served as finance manager and chief financial officer of Bayannaoer Mining since 2005. Mr. Yu has over 25 years of experience in corporate finance. Prior to joining Bayannaoer Mining, he served in the positions of finance manager and financial controller of several companies including subsidiary companies of Sichuan University. Mr. Yu graduated from the University of Electronic Science and Technology of China in 1989 and was awarded a bachelor’s degree from Southwestern University of Finance and Economics in 2004.

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Family Relationships and Other Arrangements

There are no family relationships between any of the individuals identified above. There are no arrangements or understandings between major shareholders, customers, suppliers or others pursuant to which any of the individuals identified above was selected as a director or member of senior management, other than the fact that each was elected by Mr. Li Feilie.

| B. | Compensation

Executive Compensation

The following table sets forth the amount of compensation that was paid, earned and/or accrued and awards made under the Company’s equity compensation plan during the fiscal year ended December 31, 2024, to each of the individuals identified in “Item 6.A. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Directors and Senior Management” above.

Name |  | Compensation (US$) |  |  | Number of options to purchase common shares |  |  | Exercise price (US$/share) |  |  | Expiration date |
Directors and Executive Officers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lam Kwan Sing |  |  | 15,385 |  |  |  | — |  |  |  | — |  |  |  | — |
Li Feilie1 |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Ng Kin Sing |  |  | 15,385 |  |  |  | — |  |  |  | — |  |  |  | — |
Peng Wenlie |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Tam Cheuk Ho2 |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Wong Wah On Edward2 |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Yip Wing Hang |  |  | 15,385 |  |  |  | — |  |  |  | — |  |  |  | — |
Zhu Youyi |  |  | 27,610 |  |  |  | — |  |  |  | — |  |  |  | — |
Zou Yu |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Key Employees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yu Jun |  |  | 10,619 |  |  |  | — |  |  |  | — |  |  |  | — |

———————

| 1 | Mr. Li serves as director of certain subsidiaries of the Company. The amount does not include payments under an office sharing agreement pursuant to which Feishang Enterprise, a company controlled by Mr. Li, provides our subsidiary Feishang Management with certain shared office space (see “Item 7.B. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions – Commercial Transactions with Related Companies,” below).

| 2 | The amounts do not include payments to Anka under an office sharing agreement pursuant to which Anka provides certain accounting, administrative and secretarial services to the Company (see “Item 7.B. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions – Commercial Transactions with Related Companies,” below). Anka is jointly owned by Messrs. Wong Wah On Edward and Tam Cheuk Ho.

On April 2, 2015, we entered into service agreements with Mr. Tam Cheuk Ho (a director) and Mr. Wong Wah On Edward (our Chairman, Chief Executive Officer and President). Each of the agreements is for an initial term of one year and, thereafter, continues unless and until terminated by either party on not less than one month’s notice. Each of the agreements also provides for the payment to the individual of an annual fee of US$1.00, plus such equity awards as may from time to time be determined by our Compensation Committee.

On March 7, 2019, we entered into an employment agreement with Mr. Yu Jun for his services as general manager of Bayannaoer Mining for a term of one year expiring on March 6, 2020. The agreement was renewed on March 7, 2020, March 7, 2021, and March 7, 2022, respectively, with the same initial terms. For his services, Mr. Yu receives a basic salary at the rate of CNY5,000 (US$685) per month, and is eligible for a bonus. Mr. Yu also enjoys certain perquisites and is eligible for bonuses. These amounts are included in the table above.

On July 14, 2020, we entered into a service agreement with Mr. Zhu Youyi (our Chief Financial Officer and Corporate Secretary). The agreement is for an initial term of one year and, thereafter, continues unless and until terminated by either party on not less than one month’s notice. The agreement also provides for the payment of an annual fee of US$1.00, plus such equity awards as may from time to time be determined by our Compensation Committee.

On October 22, 2020, we entered into a service agreement with Mr. Zou Yu (Vice President). The agreement is for an initial term of one year and, thereafter, continues unless and until terminated by either party on not less than one month’s notice. The agreement also provides for the payment of an annual fee of US$1.00, plus such equity awards as may from time to time be determined by our Compensation Committee.

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On March 22, 2021, we entered into a service agreement with Dr. Peng Wenlie (Vice President). The agreement is for an initial term of one year and, thereafter, continues unless and until terminated by either party on not less than one month’s notice. The agreement also provides for the payment of an annual fee of US$1.00, plus such equity awards as may from time to time be determined by our Compensation Committee.

On January 1, 2019, we entered into an employment agreement with Mr. Ma Xiongbing for his services as general manager of Shanghai Onway for a term of five years expiring on December 31, 2024. For his services, Mr. Ma receives a basic salary at the rate of CNY31,200 (US$4,275) per month. Mr. Ma Xiongbing is no longer considered as an executive officer of the Company after the sale of PST Technology.

There are no current contracts, agreements or understandings to increase the annual cash compensation payable to any of our executive officers or directors. For each of the three years ended December 31, 2022, 2023 and 2024, no increases in cash compensation were determined by the Compensation Committee under the service agreements, and we paid or accrued nil, nil and nil, respectively, for cash compensation to our executive officers for their services as such.

The Company has no other employment contracts with any of its executive officers or directors and maintains no retirement, fringe benefit or similar plans for the benefit of its executive officers or directors. The Company may, however, enter into employment contracts with its officers and key employees, adopt various benefit plans and begin paying compensation to its officers and directors as it deems appropriate to attract and retain the services of such persons. The Company and its subsidiaries have not set aside or accrued any amounts to provide pension, retirement or similar benefits to the Company’s directors.

Non-Employee Director Compensation

We pay our independent directors a monthly director’s fee equal to HK$10,000 (US$1,282). We do not otherwise pay fees to directors for their attendance at meetings of the Board of Directors or of committees; however, we may adopt a policy of making such payments in the future. We reimburse out-of-pocket expenses incurred by directors in attending Board and committee meetings. During the fiscal year ended December 31, 2024, no long-term incentive plans or pension plans were in effect with respect to any of the Company’s executive officers or directors.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information relating to our outstanding stock option plans as of the date of this annual report:

Plan Category |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |  |  | Weighted-average exercise price of outstanding options, warrants and rights |  |  | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
Equity compensation plans approved by security holders 2014 Equity Compensation Plan |  |  | 1,620,000 |  |  | $ | 3.115 |  |  |  | N/A |
Equity compensation plans approved by security holders 2024 Equity Compensation Plan |  |  | — |  |  |  | — |  |  |  | 1,973,153 |
Equity compensation plans not approved by security holders |  |  | — |  |  |  | N/A |  |  |  | — |
Total |  |  | 1,620,000 |  |  | $ | 3.115 |  |  |  | 1,973,153 |

Stock Option Plan

The 2024 Plan was authorized by our Board of Directors on June 20, 2024, and was ratified and approved by members on October 24, 2024.

The purposes of the 2024 Plan are to:

| • | Encourage ownership of our common shares by our officers, directors, employees and advisors;

| • | Provide additional incentive for them to promote our success and our business; and

| • | Encourage them to remain in our employ by providing them with the opportunity to benefit from any appreciation of our common shares.

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The 2024 Plan is administered by the Board of Directors or a committee designated by the Board (the “Plan Committee”). The 2024 Plan allows the Board or Plan Committee to grant various incentive equity awards not limited to stock options. The Company has reserved a number of common shares equal to 20% of the issued and outstanding common shares of the Company, from time to time, for issuance pursuant to options granted (“Plan Options”) or for restricted stock awarded (“Stock Grants”) under the 2024 Plan. Stock appreciation rights may be granted as a means of allowing participants to pay the exercise price of Plan Options. Stock Grants may be made upon such terms and conditions as the Board or Plan Committee determines. Stock Grants may include deferred stock awards under which receipt of Stock Grants is deferred, with vesting to occur upon such terms and conditions as the Board or Plan Committee determines.

The Board or Plan Committee may determine, from time to time, those of our officers, directors, employees and consultants to whom Stock Grants and Plan Options will be granted, the terms and provisions of the respective Stock Grants and Plan Options, the dates such Plan Options will become exercisable, the number of shares subject to each Plan Option, the purchase price of such shares and the form of payment of such purchase price. Plan Options and Stock Grants will be awarded based upon the fair market value of our common shares at the time of the award. All questions relating to the administration of the 2024 Plan and the interpretation of the provisions thereof are to be resolved at the sole discretion of the Board or Plan Committee.

A total of 1,675,579 common shares (as adjusted by a five-to-one share combination on April 3, 2023) were reserved for issuance under the 2014 Plan. On July 14, 2022, option awards have been granted to certain eligible individuals covering an aggregate of 1,620,000 (as adjusted by a five-to-one share combination on April 3, 2023) of the Company’s common shares under the 2014 Plan. The 2014 Plan terminates on June 19, 2024. A total of 1,973,153 common shares have been reserved for issuance under the 2024 Plan at the time of adoption of the 2024 Plan by the Board of Directors. No awards have yet been made under the 2024 Plan as of the date of this annual report. The 2024 Plan terminates on September 25, 2034.

| C. | Board Practices

As provided by our Memorandum and Articles, each director is to hold office for a three-year term expiring at the annual meeting of shareholders held in the third year after his or her appointment. At the annual meeting of shareholders in 2024, Messrs. Lam Kwan Sing and Yip Wing Hang were elected to serve as Class II directors until the annual meeting to be held in 2027. Mr. Ng Kin Sing serves as Class I directors until the annual meeting to be held in 2026. Messrs. Wong Wah On Edward and Tam Cheuk Ho serve as Class III directors until the annual meeting to be held in 2025.

Messrs. Lam Kwan Sing, Yip Wing Hang and Ng Kin Sing are each an “independent director” as such term is used in applicable rules and regulations of the SEC and in Nasdaq Marketplace Rule 5605(a)(2). We are not required to maintain a Board of Directors consisting of a majority of independent directors based upon an exemption from Nasdaq requirements applicable to foreign private issuers whose home jurisdiction does not require the board of directors to consist of a majority of independent directors.

Our officers are elected annually at the meeting of the Board of Directors following each annual meeting of shareholders, and hold office until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal, and the terms of applicable employment agreements.

Please see “Item 6.B. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Compensation – Executive Compensation,” above, for information regarding our service contracts with Messrs. Tam Cheuk Ho and Wong Wah On Edward.

Audit Committee

Our Board of Directors has established an Audit Committee that operates pursuant to a written charter. Our Audit Committee, whose members currently consist of Yip Wing Hang (Chairman), Lam Kwan Sing and Ng Kin Sing, is principally responsible for ensuring the accuracy and effectiveness of the annual audit of the financial statements. The duties of the Audit Committee include, but are not limited to:

| • | Appointing and supervising our independent registered public accounting firm;

| • | Assessing the organization and scope of the company’s interim audit function;

| • | Reviewing the scope of audits to be conducted, as well as the results thereof;

| • | Approving audit and non-audit services provided to us by our independent registered public accounting firm; and

| • | Overseeing our financial reporting activities, including our internal controls and procedures and the accounting standards and principles applied.

Each member of the Audit Committee is an “independent director,” as such term is used in applicable rules and regulations of the SEC and in Nasdaq Marketplace Rule 5605(a)(2).

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Nominating and Corporate Governance Committee; Shareholder Nominees for Director

Our Board of Directors has established a Nominating and Corporate Governance Committee that operates pursuant to a written charter. The current members of the Nominating and Corporate Governance Committee are Ng Kin Sing, Lam Kwan Sing and Yip Wing Hang. Each member of the Nominating and Corporate Governance Committee is an “independent director,” as such term is used in Nasdaq Marketplace Rule 5605(a)(2).

The Nominating and Corporate Governance Committee is responsible for providing oversight on a broad range of issues surrounding the composition and operation of our Board of Directors. In particular, the responsibilities of the Nominating and Corporate Governance Committee include:

| • | Identifying individuals qualified to become members of the Board of Directors;

| • | Determining the slate of nominees to be recommended for election to the Board of Directors;

| • | Reviewing corporate governance principles applicable to us, including recommending corporate governance principles to the Board of Directors and administering our Code of Ethics;

| • | Assuring that at least one Audit Committee member is an “audit committee financial expert” within the meaning of regulatory requirements; and

| • | Carrying out such other duties and responsibilities as may be determined by the Board of Directors.

The Nominating and Corporate Governance Committee is required to meet at least once annually, and more frequently if the committee deems it to be appropriate. The committee may delegate authority to one or more members of the committee, provided that any decisions made pursuant to such delegated authority are presented to the full committee at its next scheduled meeting. Discussions pertaining to the nomination of directors are required to be held in executive session.

The Nominating and Corporate Governance Committee will consider candidates for directors proposed by shareholders, although no formal procedures for submitting the names of candidates for inclusion on management’s slate of director nominees have been adopted. Until otherwise determined by the Nominating and Corporate Governance Committee, a member who wishes to submit the name of a candidate to be considered for inclusion on management’s slate of nominees at the next annual meeting of shareholders must notify our Corporate Secretary, in writing, no later than June 30 of the year in question of its desire to submit the name of a director nominee for consideration. The written notice must include information about each proposed nominee, including name, age, business address, principal occupation, telephone number, shares beneficially owned and a statement describing why inclusion of the candidate would be in our best interests. The notice must also include the proposing member’s name and address, as well as the number of shares beneficially owned. A statement from the candidate must also be furnished, indicating the candidate’s desire and ability to serve as a director. Adherence to these procedures is a prerequisite to the Board’s consideration of the shareholder’s candidate. Once a candidate has been identified, the Nominating and Corporate Governance Committee reviews the individual’s experience and background, and may discuss the proposed nominee with the source of the recommendation. If the Nominating and Corporate Governance Committee believes it to be appropriate, committee members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management’s slate of director nominees to be submitted for election to the Board.

Compensation Committee

Our Board of Directors has established a Compensation Committee that operates pursuant to a written charter. The current members of the Compensation Committee are Ng Kin Sing, Lam Kwan Sing and Yip Wing Hang. Each member of the Compensation Committee is an “independent director,” as such term is used in Nasdaq Marketplace Rule 5605(a)(2).

The Compensation Committee is responsible for:

| • | Formulating corporate goals and objectives relevant to compensation payable to the CEO and other executive officers;

| • | Evaluating the performance of the CEO and other executive officers in light of these goals and objectives;

| • | Recommending to the Board for its adoption and approval compensation payable to the CEO and other executive officers, including (a) annual base salary level, (b) annual incentive opportunity level, (c) long-term incentive opportunity level, (d) employment agreements, severance arrangements, and change in control agreement/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits;

| • | Administering and supervising the Company’s incentive compensation plans, including equity compensation plans;

| • | Recommending to the Board for its adoption and approval awards to be made under the Company’s incentive compensation plans, including equity compensation plans; and

| • | Generally supporting the Board of Directors in carrying out its overall responsibilities relating to executive compensation.

The Compensation Committee is required to meet at least once annually, and more frequently if the committee deems it to be appropriate. The committee may delegate authority to one or more members of the committee; provided, that any decisions made pursuant to such delegated authority are promptly communicated to all other committee members. The committee’s current compensation decisions are reflective of our current financial position.

Nasdaq Requirements

Our common shares are currently listed on the Nasdaq Capital Market and, for so long as our securities continue to be listed, we will remain subject to the rules and regulations established by Nasdaq Stock Market as being applicable to listed companies. Nasdaq has adopted, and from time to time adopts, amendments to its Marketplace Rule 5600 that impose various corporate governance requirements on issuers of listed securities. Section (a)(3) of Marketplace Rule 5615 provides that foreign private issuers such as our company are required to comply with certain specific requirements of Marketplace Rule 5600, but, as to the balance of Marketplace Rule 5600, foreign private issuers are not required to comply if the laws of their home jurisdiction do not otherwise mandate compliance with the same or substantially similar requirement.

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We currently comply with the applicable specifically mandated provisions of Marketplace Rule 5600. In addition, we have elected to voluntarily comply with certain other provisions of Marketplace Rule 5600, notwithstanding that our home jurisdiction does not mandate compliance with the same or substantially similar requirements; although we may in the future determine to cease voluntary compliance with those provisions of Marketplace Rule 5600 that are not mandatory. However, we have elected not to comply with the following provisions of Marketplace Rule 5600, since the laws of the BVI do not require compliance with the same or substantially similar requirements:

| • | A majority of our directors are not independent as defined by Nasdaq rules;

| • | Our independent directors do not hold regularly scheduled meetings in executive session (rather, all Board members may attend all meetings of the Board of Directors);

| • | The compensation of our executive officers is recommended but not determined by an independent committee of the Board or by the independent members of the Board of Directors; and our CEO is not prevented from being present in the deliberations concerning his compensation;

| • | Related party transactions are not required to be reviewed;

| • | We are not required to solicit member approval of stock plans or securities issuances, including those in which our officers or directors may participate; share issuances that will result in a change in control; the issuance of our shares in related party acquisitions or other acquisitions in which we may issue 20% or more of our outstanding shares; or below market price issuances of 20% or more of our outstanding shares to any person; and

| • | We are not required to hold an in-person annual meeting to elect directors and transact other business customarily conducted at an annual meeting (rather, we complete these actions by written consent of holders of a majority of our voting securities).

We may in the future determine to voluntarily comply with one or more of the foregoing provisions of Marketplace Rule 5600.

| D. | Employees

As of the date of this annual report, we employed a total of nine employees on a full-time basis consisting of six employees engaged in metal exploration, and three executive and administrative employees in corporate services. The Company believes that its relations with employees are generally good.

The following table sets out the number of employees as of December 31, 2022, 2023, and 2024, including their principal category of activity and geographic location.

|  |  |  | Years Ended December 31, |
|  |  |  | 2022 |  |  | 2023 |  |  | 2024 |
Hong Kong |  | Accounting, administration and management |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
|  |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
The PRC |  | Accounting, administration and management (Shenzhen) |  |  | 1 |  |  |  | 1 |  |  |  | 1 |
|  | Accounting, administration and management (Bayannaoer) |  |  | 4 |  |  |  | 4 |  |  |  | 4 |
|  | Accounting, administration and management (Shanghai Onway) |  |  | 36 |  |  |  | — |  |  |  | — |
|  | Sales and purchasing |  |  | 3 |  |  |  | — |  |  |  | — |
|  | Cashier |  |  | 4 |  |  |  | 1 |  |  |  | 1 |
|  | Construction management |  |  | 16 |  |  |  | — |  |  |  | — |
|  | Mining exploration |  |  | 1 |  |  |  | 1 |  |  |  | 1 |
|  |  |  |  | 65 |  |  |  | 9 |  |  |  | 9 |
Total |  |  |  |  | 67 |  |  |  | 9 |  |  |  | 9 |

| E. | Share Ownership

The following table sets forth, as of the date of this annual report, the share ownership of the Company’s common shares by:

| · | each of the individuals disclosed in response to Item 6.B. of this annual report; and

| · | each person known to us to beneficially own more than 5% of our common shares.

The calculations in the table below are based on 9,865,767 common shares issued and outstanding as of the date of this annual report, excluding a total of 1,190,297 common shares that represent common shares underlying the Warrants that are issuable upon exercise of the Warrants by cash and without adjustment.

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Unless otherwise indicated, each person has sole investment and voting power with respect to all shares shown as beneficially owned. The term “beneficial owner” of securities refers to any person who, even if not the record owner of the securities, has or shares the underlying benefits of ownership. These benefits include the power to direct the voting or the disposition of the securities or to receive the economic benefit of ownership of the securities. A person also is considered to be the “beneficial owner” of securities that the person has the right to acquire within 60 days by option or other agreement. Beneficial owners include persons who hold their securities through one or more trustees, brokers, agents, legal representatives or other intermediaries, or through companies in which they have a “controlling interest,” which means the direct or indirect power to direct the management and policies of the entity. The Company’s directors and executive officers, and Mr. Li Feilie, do not have different voting rights than other shareholders of the Company.

Name of Beneficial Owner |  | Amount and Nature of Beneficial Ownership |  |  | Percentage of Class |
Directors and Executive Officers |  |  |  |  |  |  |  |
Li Feilie |  |  | 5,371,553 | (1) |  |  | 54.45 | %
Wong Wah On Edward |  |  | 80,000 |  |  |  | 0.81 | %
Tam Cheuk Ho |  |  | 56,386 |  |  |  | 0.57 | %
Lam Kwan Sing |  |  | — |  |  |  | — |
Ng Kin Sing |  |  | — |  |  |  | — |
Yip Wing Hang |  |  | — |  |  |  | — |
Yu Jun |  |  | — |  |  |  | — |
Zhu Youyi |  |  | — |  |  |  | — |
Officers and directors as a group (8 persons) |  |  | 5,507,939 |  |  |  | 55.83 | %
Principal Shareholders |  |  |  |  |  |  |  |
Li Feiwen |  |  | 770,773 | (2) |  |  | 7.36 | %
Woo Chun Kei Kackie |  |  | 740,000 | (3) |  |  | 6.98 | %
Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B |  |  | 557,951 | (4) |  |  | 5.66 | %

______________________________

† For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after the date of this Annual Report.

Except as indicated otherwise below, the business address of our directors and executive officers is Room 2205, 22/F, West Tower, Shun Tak Centre,168-200 Connaught Road Central, Sheung Wan, Hong Kong, People’s Republic of China.

| (1) | Mr. Li is not an officer or director of CHNR but is an officer and/or director of certain of our subsidiaries, and ultimately controls the Company through his beneficial ownership of our shares, his ability to elect the Board of Directors and his ownership of a substantial amount of Company debt. This number consists of (a) 5,311,553 outstanding common shares held in the name of Feishang Group, a BVI corporation that is wholly owned by Mr. Li, and (b) 60,000 outstanding common shares held by Mr. Li.

| (2) | This number consists of (a) 170,773 outstanding common shares held in the name of Mr. Li, and (b) 600,000 options held in his name that is exercisable within 60 days as of the date hereof.

| (3) | This number consists of 740,000 options held in the name of Mr. Woo that is exercisable within 60 days as of the date hereof.

| (4) | This number represents 557,951 common shares issuable upon exercise of certain warrants held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B. Ayrton Capital LLC, the investment manager to Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B, has discretionary authority to vote and dispose of the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B and may be deemed to be the beneficial owner of these shares. Waqas Khatri, in his capacity as Managing Member of Ayrton Capital LLC, may also be deemed to have investment discretion and voting power over the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B. ‌Ayrton Capital LLC and Mr. Khatri each disclaim any beneficial ownership of these shares. The address of Ayrton Capital LLC is 55 Post Rd West, 2nd Floor, Westport, CT 06880.

Please refer to the discussion of our equity compensation plan and securities authorized for issuance thereunder under “Item 6.B. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Compensation – Securities Authorized for Issuance Under Equity Compensation Plans” above.

F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not Applicable.

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| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

| A. | Major Shareholders

Major Shareholders

Please refer to “Item 6.E. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Share Ownership.”

Significant Changes in Ownership

In January 2021, we issued 3.96 million common shares in a registered offering, and concurrently privately placed warrants exercisable for up to 1.98 million common shares. See “Item 10.C. ADDITIONAL INFORMATION – Material Contracts.” In July 2021, we issued 3.0 million common shares, and transferred our 120 million shares of Feishang Anthracite, as well as approximately CNY10.3 million (US$1.41 million), to Feishang Group in exchange for all outstanding shares of PST Technology and the transfer to us of approximately CNY130.0 million (US$17.81 million) of PST Technology’s outstanding debt previously owed to Mr. Li Feilie. On July 28, 2023, we transferred 100% equity interest of PST Technology to Feishang Group, together with PST Technology’s outstanding payable owned to the Company, for consideration of approximately CNY95,761,119, comprising: (i) CNY-34,197,300, the fair value of 100% equity interest of PST Technology as determined by the independent valuation report dated July 28, 2023; (ii) CNY 129,958,419, the book value of PST Technology’s outstanding payable owed to the Company. See “Item 4.A. – Information on the Company – History and Development of the Company – Acquisition and Sale of PST Technology.” In February 2024, we issued 1.49 million common shares in a registered offering, and concurrently privately placed warrants exercisable for up to 1.19 million common shares. See “Item 10.C. ADDITIONAL INFORMATION – Material Contracts.” Other than the foregoing events, there have been no significant changes in the percentage of ownership held by the major shareholder during the past three years.

Geographic Breakdown of Shareholders

Based upon a review of our shareholder records as of April 30, 2025, on that date our common shares were held of record by approximately 179 persons, 157 of whom, holding approximately 37.8% of our outstanding common shares on that date, were located in the United States (host country). Shares registered in the name(s) of intermediaries were assumed to be held by residents of the same country in which the intermediary was located.

Control

To our knowledge, there are no arrangements the operation of which may, at a subsequent date, result in a change in control of the Company, and, except as otherwise disclosed in this annual report, we are not directly or indirectly owned or controlled by any other corporation, by any foreign government or by any other natural or legal person, severally or jointly.

| B. | Related Party Transactions

Employment Agreements and Indemnification Agreements

See “Item 6. Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements and Indemnification Agreements.”

Share Incentives

See “Item 6. Directors, Senior Management and Employees—6.B. Compensation—Share Incentive Plan.”

Other Related Party Transactions

In 2024, we received an aggregate amount of HK$1.00 million (US$0.13 million) from Anka in the form of interest-free loans to us.

We have received letters from Feishang Group and Feishang Enterprise, entities controlled by Mr. Li Feilie, the principal beneficial shareholder of the Company, both dated May 15, 2025 which state that Feishang Group and Feishang Enterprise will provide continuous financial support (in the form of interest-free loans) to us in relation to the going concern of our operations, including not recalling any amounts due to them until we are in a position to settle the amounts due without having a detrimental impact on our financial resources, and that Feishang Enterprise will pay debts on our behalf when needed. As far as the Company understands, there are no limitations on the amount, provision or duration of support from Feishang Group or Feishang Enterprise.

Feishang Enterprise and Feishang Group are each beneficially owned by Mr. Li Feilie, the principal beneficial owner of the Company, and members of his family. Mr. Li is also the former Chief Executive Officer and Chairman of the Company and currently serves as a director of certain subsidiaries of the Company. Mr. Wong Wah On Edward, the Chief Executive Officer and Chairman of the Company, is also a director of certain affiliates of Feishang Group.

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Acquisition of FARL Shares in Exchange for Newly Issued Company Shares

On August 17, 2020, the Company entered into a sale and purchase agreement with Feishang Group pursuant to which the Company issued 9,077,166 of the Company’s common shares, no par value, to Feishang Group, in exchange for 120 million shares of FARL, with an approximate aggregate value of HK$87,522,000 (determined at a price of HK$1.006 per share, representing the average closing price of FARL on the five trading days before August 17, 2020, adjusted for a 27.5% discount based on an independent valuation report). Feishang Group is the largest stockholder in the Company, and is wholly owned by Mr. Li Feilie, who also beneficially owns 53.53% of the outstanding equity of FARL. The 120 million shares of FARL were transferred as part of the consideration for the acquisition of all the outstanding shares of PST Technology in July 2021.

Transfer of Equity Interests of Yangpu Lianzhong

On April 28, 2021, the Company’s subsidiary China Coal entered into an equity transfer agreement to transfer 100% of the equity interests of Yangpu Lianzhong Mining Co., Limited (“Yangpu Lianzhong”) to the Company’s external related party, Shenzhen Feishang Energy Investment Co., Limited (“Feishang Energy”), for a total consideration of CNY103.767 million (US$14.22 million). Rather than receiving cash as a result of this transaction, the consideration offset amounts due to Feishang Energy under a series of creditor right transfer agreements. Please see Note 28 of our audited consolidated financial statements for more information. Feishang Energy is a wholly owned subsidiary of Feishang Enterprise, which is controlled by our principal beneficial owner Mr. Li Feilie. Because of the transfer of the equity interests, Yangpu Lianzhong is no longer a subsidiary of the Company.

Acquisition and Sale of PST Technology

On July 27, 2021, the Company entered into the PST Technology SPA with Mr. Li Feilie pursuant to which the Company issued three million restricted shares of the Company’s common shares, and transferred its 120 million shares of Feishang Anthracite, as well as approximately CNY10.3 million (US$1.41 million), to Feishang Group in exchange for all outstanding shares of PST Technology Limited and the transfer to the Company of approximately CNY130.0 million (US$18.4 million) of PST Technology’s outstanding debt previously owed to Mr. Li, which debt was eliminated upon consolidation. PST Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway. Shanghai Onway is principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC projects and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. The total value of the consideration that the Company provided to Mr. Li was approximately CNY104.1 million (US$14.26 million), which amount was a 20% discount to the valuation (including the assigned debt) of PST Technology provided by an independent valuation firm.

On July 28, 2023, the Company entered into a Sale and Purchase Agreement with Feishang Group Limited (“Feishang Group”). Pursuant to the agreement, the Company agreed to sell 100% equity interest of PST Technology to Feishang Group, together with PST Technology’s outstanding payable owed to the Company, for consideration of approximately CNY95,761,119 comprising: (i) CNY -34,197,300, the fair value of 100% equity interest of PST Technology as determined by the independent valuation report dated July 28, 2023; (ii) CNY 129,958,419, the book value of PST Technology’s outstanding payable owed to the Company.

PST Technology, through its wholly owned subsidiaries, owns a 51% equity interest in Shanghai Onway and Shanghai Onway’s subsidiaries which are principally engaged in the development of rural wastewater treatment technologies, the provision of equipment and materials for rural wastewater treatment, undertaking EPC and PPP projects in relation to rural wastewater treatment, and the provision of consulting and professional technical services. After PST Technology’s disposition, the Company discontinued the operation in wastewater treatment segment and continue engaging in the exploration and mining business.

The description of the PSTT SPA is qualified in its entirety by reference to the PST SPA and the letter between Feishang Group and the Company, dated July 28, 2023, a copy of which has been filed as Exhibit 4.18.

Acquisition of Williams Minerals

On February 27, 2023, the Company entered into the Zimbabwe SPA with Feishang Group, Top Pacific, Mr. Li Feilie and Mr. Yao Yuguang, to indirectly acquire all interests in Williams Minerals, which owns the mining permit for a Zimbabwean lithium mine. At the time of the entry into the Zimbabwe SPA, Feishang Group owned 70% of Williams Minerals, and Top Pacific, a non-affiliate, owned the remaining 30%. Under the Zimbabwe SPA, it is expected that the Company will indirectly acquire all interests in Williams Minerals in the second fiscal quarter of 2023, and that the Company’s “ownership” (which, as defined in the Zimbabwe SPA, relates to its legal possession and control) of the Zimbabwean lithium mine will vest cumulatively, region by region from 2024 through 2026, contingent upon the issuance of independent technical reports and the Company’s full settlement of the purchase consideration in cash and restricted shares. For each relevant region of the lithium mine, until the Company’s legal possession and control vests, the Sellers will maintain legal possession and control, including the right of exploration, sale of lithium, and the revenue derived therefrom, as well as liability for operational costs and third-party claims.

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Subject to the terms and conditions of the Zimbabwe SPA, the Company plans to issue restricted shares as 50% of the consideration for the Acquisition, with the remaining 50% of the consideration comprised of a promissory note and/or cash, for maximum consideration of US$1.75 billion (3.5 million estimated tons of measured, indicated and inferred resources of lithium oxide (grade 1.06% or above in accordance with the standard under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves) priced at US$500 per ton). The Company may issue restricted CHNR shares at a discount to the market price to secure a portion of the required capital. On April 14, 2023, the Company announced that it completed its due diligence investigation with satisfactory results and decided to proceed with the Acquisition. The Company paid an aggregate of $35 million by way of promissory notes (instead of cash) as a deposit as a deposit on April 21, 2023, and will pay an aggregate of $140 million by way of promissory notes and/or cash as an initial installment.

Completion of the Acquisition is contingent upon the satisfaction of a number of conditions, including, among other things, the transfer of ownership interests in Williams Minerals from the Sellers to the intermediate holding company; the issuance of independent technical reports, the actual quantity of qualified lithium oxide metal resources proven or estimated to exist in each mining area covered by the relevant report, and the Company’s full settlement of the purchase consideration in cash and restricted shares. There is no guarantee that the Acquisition will close or be completed at the anticipated valuation and terms, or at all.

On December 22, 2023, the Company entered into an amendment agreement (the “Amendment Agreement”) to the sale and purchase agreement Dated as of February 27, 2023 by and among Feishang Group and Top Pacific (China) Limited (together, the “Sellers”), and the respective beneficial owner of the Sellers, Mr. Li Feilie and Mr. Yao Yuguang with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the parties entered into the Amendment Agreement II to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025.

The foregoing description of the Zimbabwean SPA, as amended, is only a summary and is qualified in its entirety by reference to the Sale and Purchase Agreement dated February 27, 2023, the Amendment Agreement dated December 22, 2023, and the Amendment Agreement II dated December 31, 2024, by and among China Natural Resources, Inc., Feishang Group Limited, Top Pacific (China) Limited, Li Feilie and Yao Yuguang, a copy of each of which has been incorporated by reference as Exhibit 4.17, Exhibit 4.20 and Exhibit 4.23 to this annual report.

Commercial Transactions with Related Companies

Commercial transactions with related companies (in thousands) are summarized as follows:

|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
CHNR’s share of office rental, rates and others to Anka (1) |  |  | 1,175 |  |  |  | 445 |  |  |  | 797 |  |  |  | 109 |
Feishang Management’s share of office rental to Feishang Enterprise (2) |  |  | 166 |  |  |  | 166 |  |  |  | 166 |  |  |  | 23 |
Shenzhen New PST’s share of office rental to Feishang Enterprise (3) |  |  | 90 |  |  |  | 53 |  |  |  | — |  |  |  | — |

———————

| (1) | The Company signed a contract with Anka to lease 184 square meters of office premises for 2 years, from July 1, 2018 to June 30, 2020, subsequently extended to June 30, 2025. The agreement also provides that the Company shares certain costs and expenses in connection with its use of the office, in addition to some of the accounting and secretarial services and day-to-day office administration services provided by Anka. Costs presented here include both rent and services.

| (2) | On January 1, 2018, Feishang Management signed an office sharing agreement with Feishang Enterprise. Pursuant to the agreement, Feishang Management shares 40 square meters of office premises for 33 months. Feishang Management signed a new contract with Feishang Enterprise in October 2024, which will expire on September 30, 2025.

| (3) | The Company’s then subsidiary, Shenzhen New PST, signed a contract with Feishang Enterprise to lease 96 square meters of office premises for 12-month period from March 14, 2022 to March 13, 2023 and renewed the contract with same terms for another 12-month period from March 14, 2023 to March 13, 2024.

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Balances with Related Parties

|  | (Amounts in thousands) |
|  | As of December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Payables to related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Feishang Enterprise (1)(2) |  |  | 495 |  |  |  | 6,078 |  |  |  | 10,422 |  |  |  | 1,428 |
Feishang Group (1)(3) |  |  | 7,153 |  |  |  | 85,673 |  |  |  | 78,567 |  |  |  | 10,766 |
Anka Capital Limited (“Anka Capital”) (4) |  |  | 2,913 |  |  |  | 2,991 |  |  |  | 939 |  |  |  | 129 |
Lease liabilities to related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Anka (4) |  |  | 1,022 |  |  |  | 360 |  |  |  | — |  |  |  | — |

———————

| (1) | Feishang Enterprise and Feishang Group are entities controlled by Mr. Li Feilie, who is the principal beneficial owner of the Company.

| (2) | The payable to Feishang Enterprise by Feishang Management represents the net amount of advances from Feishang Enterprise. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

| (3) | The payable to Feishang Group represents the net amount of advances from Feishang Group. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

| (4) | Anka Capital and Anka are each jointly owned by Messrs. Wong Wah On Edward and Tam Cheuk Ho, who are officers of the Company. The payable to Anka Capital represents the net amount of advances from Anka Capital. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

| C. | Interests of Experts and Counsel

Not applicable.

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| ITEM 8. | FINANCIAL INFORMATION

| A. | Consolidated Statements and Other Financial Information

The Company’s audited consolidated financial statements filed as part of this annual report on Form 20-F are included herewith as Appendix A and are incorporated herein by reference.

Legal Proceedings

There are no legal or arbitration proceedings (including governmental proceedings pending or known to be contemplated), including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, significant effects on the Company’s financial position or profitability. Moreover, there are no material proceedings in which any director, any member of senior management, or any of our affiliates is either a party adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries.

Dividend Policy

The Company has not paid any dividends with respect to its common shares and has no present plan to pay any dividends in the foreseeable future. The Company intends to retain its earnings to support the development of its business. Any dividends paid in the future by the Company will be paid at the discretion of the Board of Directors and will be dependent upon distributions, if any, made by its subsidiaries, and on the Company’s results of operations, its financial condition and other factors deemed relevant by the Board of Directors. In accordance with the relevant PRC regulations and the Articles of Association of companies incorporated in the PRC, appropriations of net income of wholly owned foreign enterprises and Sino-foreign joint venture companies as reflected in their statutory financial statements are to be allocated to either (i) each of the general reserve, the enterprise expansion reserve and the staff bonus and welfare reserve, respectively, or (ii) the statutory reserve, as determined by the resolution of the Board of Directors annually.

| B. | Significant Changes

Except as otherwise disclosed in this annual report, we have not experienced any significant changes since the date of the annual financial statements included herein.

| ITEM 9. | THE OFFER AND LISTING

| A. | Offer and Listing Details

The principal United States market for our common shares, our only class of outstanding equity securities, is the Nasdaq Capital Market. Our common shares are traded on the Nasdaq Capital Market under the symbol “CHNR.” We are not aware of any principal market for any of our securities outside of the United States. There is no established trading market for the Warrants and we do not intend to list the Warrants on any exchange or other trading system.

| B. | Plan of Distribution

Not applicable.

| C. | Markets

Our common shares have been listed on the Nasdaq Capital Market since November 22, 2004, under the symbol “CHNR.” From August 7, 1995, until November 22, 2004, our common shares were listed on the Nasdaq SmallCap Market under the symbol “CHRB.”

As previously announced, we received a notification letter from Nasdaq on April 27, 2022, advising the Company that we were not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The notification letter provided that the Company had 180 calendar days, or until October 24, 2022, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company’s common shares must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

On October 25, 2022, we received a second notice letter from Nasdaq, in which Nasdaq granted us an additional 180 days, or until April 24, 2023, to regain compliance, because the Company met the continued listing requirement for market value of publicly held shares and all other applicable requirements, except the bid price requirement.

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On April 3, 2023, we effected a five-to-one share combination of issued and outstanding shares, which was intended to increase the per share trading price of the Company’s common shares to satisfy the $1.00 minimum bid price required for continued listing on Nasdaq.

On April 18, 2023, we received a notice letter from Nasdaq confirming that the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2).

On July 5, 2024, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of Nasdaq notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company’s Common Shares was below the minimum $1.00 per share requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq rules, the Company was provided an initial period of 180 calendar days, or until January 2, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2). The Company was unable to regain compliance with Nasdaq Listing Rule 5550(a)(2) by January 2, 2025.

On January 3, 2025, Nasdaq granted the Company an additional 180 calendar days, or until June 30, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2). Nasdaq's determination to grant the second compliance period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of Nasdaq Listing Rule 5550(a)(2), and the Company's written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

| D. | Selling Shareholders

Not applicable.

| E. | Dilution

Not applicable.

| F. | Expenses of the Issue

Not applicable.

| ITEM 10. | ADDITIONAL INFORMATION

| A. | Share Capital

Not applicable.

| B. | Memorandum and Articles of Association

The information contained in our Registration Statement on Form F-3 (File No. 333-268454), declared effective by the SEC on February 10, 2023, under the heading “Our Charter and Certain Provisions of BVI Law” is hereby incorporated by reference.

| C. | Material Contracts

On January 20, 2021, the Company entered into a Securities Purchase Agreement with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, up to an aggregate of 3.96 million common shares of the Company at a per share purchase price of $1.85 (the “Registered Offering”), and (ii) in a concurrent private placement, warrants initially exercisable for the purchase of an aggregate of 1,584,000 common shares of the Company (the “Investors Warrants”), for gross proceeds of approximately $7.3 million, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. The Registered Offering closed on January 22, 2021.

The Investors Warrants are exercisable immediately as of the date of issuance until 36 months after the date of issuance at an initial exercise price of $2.35 per share. The exercise price of the Investors Warrants is subject to full-ratchet anti-dilution adjustment in the case of future issuances of common shares of the Company below the Investors Warrants’ exercise price then in effect, as well as customary adjustment in case of share splits, share dividends, share combinations and similar recapitalization transactions. On July 14, 2022, the exercise price has been reduced to $0.623. A holder of the Investors Warrants also will have the right to exercise such warrants on a cashless basis if a registration statement or Annual Report contained therein is not available for the issuance of all common shares issuable upon exercise thereof. The exercisability of the Investors Warrants may also be limited if, upon exercise, the holder and its affiliates would in aggregate beneficially own more than 4.99% or 9.99% of the Company’s common shares, which percentage shall be elected by the holder on or prior to the issuance date.

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FT Global Capital, Inc. (the “Placement Agent”) acted as the exclusive placement agent in connection with the Registered Offering and the private placement pursuant to the terms of a placement agency agreement, dated January 20, 2021, between the Company and the Placement Agent (the “Placement Agent Agreement”). Pursuant to the Placement Agent Agreement, the Company agreed to pay the Placement Agent a cash fee equal to 8% of the aggregate proceeds received by the Company from the sale of its securities to investors introduced to the Company by the Placement Agent. In addition to the cash fee, the Company agreed to issue to the Placement Agent warrants to purchase an aggregate of up to 10% of the aggregate number of shares sold in the Registered Offering (the “Placement Agent Warrants”). The Placement Agent Warrants are on the same terms and conditions as the Investors Warrants, exercisable at a price of $2.35 per share, subject to a 180-day delay in the exercise period. On July 14, 2022, the exercise price has also been reduced to $0.623.

On June 30, 2021, Shenzhen Qianhai signed a loan agreement with Shenzhen Chaopeng, pursuant to which Shenzhen Chaopeng borrowed CNY80.0 million from Shenzhen Qianhai with an annual interest rate of 9% and a term of one year. The loan agreement was renewed for another year on June 30, 2022. See “Item 5.B. – OPERATING AND FINANCIAL REVIEW AND PROSPECTS – Liquidity and Capital Resources – Other Receivables” for additional information.

On July 21, 2021, we issued 3.0 million common shares, and transferred our 120.0 million shares of Feishang Anthracite, as well as approximately CNY10.3 million (US$1.41 million), to Feishang Group in exchange for all outstanding shares of PST Technology and the transfer to us of approximately CNY130.0 million (US$17.81 million) of PST Technology’s outstanding debt previously owed to Li Feilie. See “Item 7.B. – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions – Acquisition and Sale of PST Technology” for additional information.

On February 27, 2023, the Company entered into the Zimbabwe SPA with Feishang Group, Top Pacific, Li Feilie and Yao Yuguang, to acquire the entire share capital of Williams Minerals. See “Item 4.A. – INFORMATION OF THE COMPANY – History and Development of the Company – Acquisition of Williams Minerals” for additional information.

The Company is a beneficiary of letters from Feishang Group and Feishang Enterprise regarding their provision of financial support to the Company, executed on May 15, 2023, copies of which are incorporated by reference as Exhibit 4.7 and 4.8 to this annual report.

On July 28, 2023, the Company entered into a sale and purchase agreement with Feishang Group. Pursuant to the agreement, the Company agreed to sell 100% equity interest of PST Technology to Feishang Group, together with PST Technology’s outstanding payable owed to the Company, for consideration of approximately CNY95,761,119 comprising: (i) CNY-34,197,300, the fair value of 100% equity interest of PST Technology as determined by the independent valuation report dated July 28, 2023; (ii) CNY129,958,419, the book value of PST Technology’s outstanding payable owed to the Company. See “Item 4.A. – INFORMATION OF THE COMPANY – History and Development of the Company – Acquisition and Sale of PST Technology” for additional information.

On August 3, 2023, the Company entered into a set-off letter with Feishang Group, the Company’s controlling shareholder, pursuant to which the Company and Feishang Group agreed to set off the amount of CNY95,761,119 payable from the Company to Feishang Group under the PST Technology sale and purchase agreement against the promissory note in the amount of US$245,000,000 the Company issued to Feishang Group on April 23, 2023 at an exchange rate of US$1.00 = CNY7.1427 such that a sum of US$13,406,852 shall be deducted from the principal amount due under the promissory note.

On December 22, 2023, the Company entered into an amendment agreement (the “Amendment Agreement”) to the Zimbabwe SPA with the parties thereto. As the Sellers are still in the process of satisfying conditions precedent to the closing of the Acquisition in accordance with the Zimbabwe SPA, including but not limited to obtaining requisite governmental approvals, the parties entered into the Amendment Agreement to extend the long stop date for closing the acquisition from December 31, 2023 to December 31, 2024. On December 31, 2024, the Company entered into the Amendment Agreement II to further extend the long stop date for closing the acquisition from December 31, 2024 to December 31, 2025. See “Item 4.A. – INFORMATION OF THE COMPANY – History and Development of the Company – Acquisition of Williams Minerals” for additional information.

On February 16, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering, up to an aggregate of 1,487,870 of common shares, no par value (the “Shares”) of the Company at a per Share purchase price of $2.20 (the “Registered Offering”), and (ii) in a concurrent private placement, warrants initially exercisable for the purchase of an aggregate of 1,115,903 common shares of the Company (the “Investors Warrants”), for gross proceeds of approximately $3.01 million, before deducting fees to the placement agent and other estimated offering expenses payable by the Company.

The Investors Warrants are exercisable immediately as of the date of issuance until 42 months after the date of issuance at an initial exercise price of $3.00 per share. The exercise price of the Investors Warrants is subject to full-ratchet anti-dilution adjustment in the case of future issuances of common shares of the Company below the Investors Warrants’ exercise price then in effect, as well as customary adjustment in case of stock splits, stock dividends, stock combinations and similar recapitalization transactions. A holder of the Investors Warrants also will have the right to exercise such warrants on a cashless basis if the registration statement or prospectus contained therein is not available for the issuance of all common shares issuable upon exercise thereof. The exercisability of the Investors Warrants may also be limited if, upon exercise, the holder and its affiliates would in aggregate beneficially own more than 4.99% or 9.99% of the Company’s common shares, which percentage shall be elected by the holder on or prior to the issuance date.

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Pursuant to the provisions of the Purchase Agreement, the Company and the Investors have agreed that: (i) subject to certain exceptions, the Company will not, within the 60 calendar days following the closing of this offering enter into any agreement to issue or announce the issuance or disposition or proposed issuance or disposition of any securities (each, a “Subsequent Placement”); (ii) within one year following the execution of the Purchase Agreement, the Company will not enter into an agreement to effect a “Variable Rate Transaction,” as that term is defined in the Purchase Agreement; and (iii) within one year following the closing of this offering, the Company shall not effect any Subsequent Placement unless the Investors are offered a participation right, subject to certain terms and conditions as set forth in the Purchase Agreement, to subscribe, on a pro rata basis, up to 35% of the securities offered in the Subsequent Placement.

FT Global Capital, Inc. (the “Placement Agent”) acted as the exclusive placement agent in connection with the Registered Offering and the Private Placement pursuant to the terms of a placement agency agreement, dated February 16, 2024, between the Company and Placement Agent (the “Placement Agency Agreement”). Pursuant to the Placement Agency Agreement, the Company agreed to pay Placement Agent a cash fee equal to eight percent (8%) of the aggregate proceeds received by the Company from the sale of its securities to investors introduced to the Company by the Placement Agent. Placement Agent is also entitled to additional tail compensation for any financings consummated within the 12-month period following the termination of the Placement Agent Agreement to the extent that such financing is provided to the Company by investors that the Placement Agent had introduced to the Company. In addition to the cash fee, the Company agreed to issue to the Placement Agent warrants to purchase an aggregate of up to five percent (5%) of the aggregate number of Shares sold in the Registered Offering (the “Placement Agent Warrants”). The Placement Agent Warrants shall generally be on the same terms and conditions as the Investors Warrants except that they will be exercisable at a price of $2.20 per share.

| D. | Exchange Controls

There is no exchange control legislation under British Virgin Islands law and accordingly there are no exchange control regulations imposed under British Virgin Islands law. Our company and all dividends, interest, rents, royalties, compensation and other amounts paid by our company to persons who are not resident in the BVI and any capital gains realised with respect to any shares, debt obligations, or other securities of our company by persons who are not resident in the BVI are exempt from all provisions of the Income Tax Ordinance in the BVI. BVI law and our Memorandum and Articles impose no limitations on the right of nonresident or foreign owners to hold or vote our common shares. However, we operate through subsidiaries located in the PRC, and the payment of dividends by PRC companies is subject to certain restrictions imposed under PRC law. See “Item 3.D. – KEY INFORMATION – Transfers of Cash and Assets Between Our Company and Our Subsidiaries” for further information.

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, most recently amended in August 2008. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, the reinvestment of lawful income derived by foreign investors in the PRC (e.g. profits, the proceeds of a sale of equity, a capital reduction, liquidation or the early repatriation of an investment), and purchase and remittance of foreign exchange as a result of such lawful income in a foreign-invested enterprise no longer requires SAFE approval, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible before. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, specifying that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to direct investment in the PRC based on the registration information provided by SAFE and its branches.

In February 2015, SAFE promulgated the Circular on Further Simplifying and Improving Policies for Foreign Exchange Administration for Direct Investment (“SAFE Circular 13”), which took effect on June 1, 2015. Under SAFE Circular 13, the foreign exchange procedures are further simplified, and foreign exchange registrations of direct investment will be handled by the banks designated by the foreign exchange authority instead of SAFE and its branches. However, the foreign invested enterprises were still prohibited by SAFE Circular 13 to use the RMB converted from foreign currency-registered capital to extend entrustment loans, repay bank loans or inter-company loans.

In October 2019, SAFE issued the Circular on Further Promoting the Facilitation of Cross Border Trade and Investment, which allows noninvestment foreign-invested enterprises to use their capital funds to make equity investments in China, provided that such investments do not violate the negative list and the target investment projects are genuine and in compliance with laws.

In addition, our wholly owned subsidiaries are required to distribute their after-tax profits for the current financial year. They shall reserve 10% of their profits as the company's statutory common reserve, provided that a company with an aggregate common reserve of more than 50% of the company's registered capital may elect not to make additional statutory common reserves. Where any company has made a statutory common reserve from its after-tax profits, it may, subject to a resolution of the shareholders' meeting or the general meeting of shareholders, draw a discretionary common reserve from its after-tax profits. A company's common reserves shall be used to cover losses made in past years, to enhance the company's productivity and expand its business or to increase its registered capital; however a company's capital reserve shall not be used to cover the company's losses.

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| E. | Taxation

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below), BVI tax consequences of an investment in our common shares, and PRC tax considerations.

United States Federal Income Taxation

General

The following is a general discussion of certain material U.S. federal income tax considerations applicable to U.S. Holders (as defined below) with respect to their ownership and disposition of Common shares. This summary is limited to U.S. federal income tax considerations relevant to U.S. Holders that hold Common shares as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of Common shares that is for U.S. federal income tax purposes:

| · | An individual who is a U.S. citizen or resident;

| · | A corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;

| · | An estate the income of which is subject to U.S. federal income taxation regardless of its source; or

| · | A trust that (a) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

This discussion is based on current provisions of the Code, existing, temporary and proposed Treasury Regulations promulgated thereunder, published administrative pronouncements of the Internal Revenue Service (the “IRS”), and other applicable authorities, all of which are subject to change or to differing interpretation, possibly with retroactive effect. Any such change or differing interpretation could alter the tax consequences described in this discussion. There can be no assurance that the IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling with respect to the U.S. federal income tax consequences to a U.S. Holder of the ownership or disposition of Common Stock.

This summary does not address the U.S. federal income tax considerations of ownership or disposition of Common shares by U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) broker-dealers, dealers, or traders in securities or currencies that elect to apply a “mark-to-market” accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that own Common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquire Common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold Common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) U.S. Holders that own directly, indirectly, or by attribution, 10% or more, by voting power or value, of the outstanding stock of the Company; (i) U.S. Holders subject to Section 451(b) of the Code; and (j) U.S. expatriates or former long-term residents of the U.S. U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisors regarding all U.S. federal, U.S. state and local, and non-U.S. tax consequences (including the potential application and operation of any income tax treaties) relating to the acquisition, ownership, or disposition of Common shares. Except to the extent described below, this summary also does not address the U.S. federal income tax considerations of ownership or disposition of the Warrants by U.S. Holders.

If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common shares, the U.S. federal income tax considerations to such partnership and the partners (or other owners) of such partnership of the ownership, or disposition of the Common shares generally will depend on the activities of the partnership and the status of such partners (or other owners). This summary does not address the U.S. federal income tax considerations for any such partner or partnership (or other “pass-through” entity or its owners). Owners of entities and arrangements that are classified as partnerships (or other “pass-through” entities) for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax considerations of the ownership or disposition of Common shares.

THIS SUMMARY DOES NOT PURPORT TO BE A COMPREHENSIVE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF ACQUIRING, OWNING AND DISPOSING OF COMMON SHARES. HOLDERS OF COMMON SHARES SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE PARTICULAR TAX CONSIDERATIONS TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL, STATE, LOCAL, AND OTHER TAX LAWS.

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Taxation of Distributions

Subject to the possible applicability of the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income as a dividend the amount of any distribution paid on Common shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Subject to the PFIC rules described below, distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in Common shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Common shares. We do not expect to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles. You therefore should expect that distributions generally will be treated as dividends for U.S. federal income tax purposes.

With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate provided that Common shares are readily tradable on an established securities market in the United States, and we are not treated as a PFIC in the year the dividend is paid or in the preceding year and certain holding period and other requirements are met. U.S. Treasury Department guidance indicates that shares listed on Nasdaq (on which Common shares are listed) will be considered readily tradable on an established securities market in the United States. Even if the Common shares are listed on the Nasdaq, there can be no assurance that the Common shares will be considered readily tradable on an established securities market in future years. U.S. Holders should consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to Common shares.

Sale or Other Taxable Disposition of Common shares

Subject to the PFIC rules discussed below, upon the sale or other taxable disposition of Common shares, a U.S. Holder generally will recognize a capital gain or loss in an amount equal to the difference between the amount realized and such U.S. Holder’s adjusted tax basis in such Common shares. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period in such Common shares exceeds one year. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. The deduction of capital losses is subject to certain limitations.

Exercise or Lapse of a Warrant

Subject to the PFIC rules discussed below, and except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of Common shares on the exercise of a Warrant. A U.S. Holder’s tax basis in Common shares received upon exercise of the Warrant generally will be an amount equal to the sum of the U.S. Holder’s tax basis in the Warrant exchanged therefor and the exercise price. The U.S. Holder’s holding period for a Common shares received upon exercise of the Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Warrant and will not include the period during which the U.S. Holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the Warrant.

The tax consequences of a cashless exercise of a warrant are not clear under current law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a “recapitalization” for U.S. federal income tax purposes. Although we expect a U.S. Holder’s cashless exercise of our warrants (including after we provide notice of our intent to redeem Warrants for cash) to be treated as a recapitalization, a cashless exercise could alternatively be treated as a taxable exchange in which gain or loss would be recognized.

Because of the absence of authority on the U.S. federal income tax treatment of a cashless exercise, a U.S. Holder should consult its tax advisor regarding the tax consequences of a cashless exercise.

PFIC Status of the Company

The Company has not performed an analysis of whether or not it will be deemed a “passive foreign investment company” within the meaning of Section 1297 of the Code (“PFIC”) for its current taxable year. If the Company is or becomes a PFIC, the foregoing description of the U.S. federal income tax considerations to U.S. Holders of the acquisition, ownership and disposition of Common shares could be materially different. The U.S. federal income tax consequences of owning and disposing of Common shares if the Company is or becomes a PFIC are described below under the heading “Tax Consequences if the Company is a PFIC.”

A non-U.S. corporation is a PFIC for each tax year in which (i) 75% or more of its gross income is passive income (as defined for U.S. federal income tax purposes) (the “income test”) or (ii) 50% or more (by value) of its assets (based on an average of the quarterly values of the assets during such tax year) either produce or are held for the production of passive income (the “asset test”). For purposes of the PFIC provisions of the Code, “passive income” generally includes dividends, interest, certain rents and royalties, certain gains from commodities or securities transactions and the excess of gains over losses from the disposition of certain assets which produce passive income. If a non-U.S. corporation owns at least 25% (by value) of the stock of another corporation, the non-U.S. corporation is treated, for purposes of the income test and asset test, as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation’s income.

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Under certain attribution and indirect ownership rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or indirect equity interest in any company that is also a PFIC (a “Subsidiary PFIC”), and will be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of Common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of Common shares are made.

The determination of PFIC status is inherently factual, is subject to a number of uncertainties, and can be determined only annually at the close of the tax year in question. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. There can be no assurance that the Company will or will not be determined to be a PFIC for the current tax year or any prior or future tax year, and no opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or will be requested. U.S. Holders should consult their own U.S. tax advisors regarding the PFIC status of the Company.

Tax Consequences if the Company is a PFIC

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of Common shares and, in the case of Common shares, the U.S. Holder did not make a qualified electing fund (“QEF”) election or a “mark-to-market” election (within the meaning of Section 1296 of the Code), such U.S. Holder generally would be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its Common shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Common shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Common shares).

Under the default PFIC rules:

· |  | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Common shares;

· |  | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which we were a PFIC, will be taxed as ordinary income;

· |  | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and

· |  | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.

In general, a U.S. Holder may avoid the adverse PFIC tax consequences described above in respect of the Common shares by making and maintaining a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder must make a QEF election for the Company and each Subsidiary PFIC if it wishes to have this treatment. To make a QEF election, a U.S. Holder will need to have an annual information statement from the Company setting forth the ordinary earnings and net capital gains for the year and the Company may not provide this statement, in which case a QEF election cannot be made.

In general, a U.S. Holder must make a QEF election on or before the due date for filing its income tax return for the first year to which the QEF election will apply. Under applicable Treasury Regulations, a U.S. Holder will be permitted to make retroactive elections in particular, but limited, circumstances, including if it had a reasonable belief that the Company was not a PFIC and filed a protective election. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs. U.S. Holders should be aware that there can be no assurance that the Company has satisfied or will satisfy the recordkeeping requirements that apply to a QEF or that the Company has supplied or will supply U.S. Holders with information such U.S. Holders require to report under the QEF rules in the event that the Company is a PFIC for any tax year.

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Alternatively, if we are a PFIC and the Common shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, at the close of the first taxable year in which it holds (or is deemed to hold) Common shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Common shares at the end of such year over its adjusted basis in its Common shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Common shares over the fair market value of its Common shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Common shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Common shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to Warrants.

The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq (on which Common Shares are listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. However, there is no assurance that the Common Shares will remain “regularly traded” for this purpose. Moreover, a mark-to-market election made with respect to Common Shares would not apply to a U.S. Holder’s indirect interest in any Subsidiary PFIC in which we own an equity interest. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to Common Shares under their particular circumstances.

Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective QEF election (including a “pedigreed” QEF election where necessary) for the Company and any Subsidiary PFIC.

Receipt of Foreign Currency

The amount of any distribution or proceeds paid in any currency other than U.S. dollars to a U.S. Holder in connection with the ownership of Common Shares, or on the sale or other taxable disposition of Common Shares will be included in the gross income of a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of actual or constructive receipt of the payment, regardless of whether the currency is converted into U.S. dollars at that time. If the currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in non-U.S. currency and engages in a subsequent conversion or other disposition of the currency may have a foreign currency exchange gain or loss that would generally be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method with respect to foreign currency.

Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of non-U.S. currency.

Information Reporting; Backup Withholding

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a non-U.S. corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of “specified foreign financial assets” includes not only financial accounts maintained in non-U.S. financial institutions, but also, if held for investment and not in an account maintained by certain financial institutions, any stock or security issued by a non-U.S. person, any financial instrument or contract that has an issuer or counterparty other than a U.S. person and any interest in a non-U.S. entity. A U.S. Holder may be subject to these reporting requirements unless such U.S. Holder’s Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns on IRS Form 8938, and, if applicable, filing obligations relating to the PFIC rules, including possible reporting on an IRS Form 8621. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.

A U.S. Holder of Common Shares may be subject to information reporting and “backup withholding,” currently at the rate of 24%, with respect to (a) distributions paid on Common Shares and (b) proceeds arising from the sale or other taxable disposition of Common Shares, in each case if the distribution or proceeds are paid by a paying agent, broker or other intermediary in the United States or by a U.S. broker or certain United States-related brokers to the holder outside the United States. Backup withholding may be avoided by the holder of Common Shares if such holder:

· |  | is a corporation or comes within other exempt categories; or

· |  | provides a correct taxpayer identification number, certifies that such holder is not subject to backup withholding and otherwise complies with the backup withholding rules.

Backup withholding is not an additional tax. Rather, any amounts withheld under the backup withholding rules from a payment to a holder will be refunded or credited against the U.S. Holder’s U.S. federal income tax liability, if any, provided that amount withheld is claimed as federal taxes withheld on the U.S. Holder’s U.S. federal income tax return relating to the year in which the backup withholding occurred and the requisite information is timely furnished to the IRS. A U.S. Holder who is not otherwise required to file a U.S. income tax return must generally file a claim for refund.

The discussion of reporting requirements set forth above is not intended to constitute an exhaustive description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period in which the IRS can assess a tax, and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL U.S. TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE OWNERSHIP, EXERCISE OR DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.

72

BVI Taxation

This summary has been prepared based upon management’s understanding of applicable tax consequences, but has not been reviewed by counsel or other experts in U.S. or BVI taxation. This summary does not address all possible tax consequences relating to an investment in our common shares and does not purport to deal with the tax consequences applicable to all categories of investors, some of which, such as dealers in securities, insurance companies and tax-exempt entities, may be subject to special rules. In particular, the discussion does not address the tax of non-BVI tax laws, except to the extent described above under “Taxation – United Stated Federal Income Taxation.” Accordingly, each prospective investor should consult its own tax advisor regarding the particular tax consequences to it of an investment in the common shares. The discussion below is based upon laws and relevant interpretations in effect as of the date of this prospectus, all of which are subject to change. Under the BVI Business Companies Act (as amended) as currently in effect, companies incorporated or registered under the BVI Business Companies Act are currently exempt from income and corporate tax. In addition, the BVI currently does not levy capital gains tax on companies incorporated or registered under the BVI Business Companies Act.

A holder of our common shares who is not a resident of BVI is exempt from BVI income tax on dividends paid with respect to the common shares and any capital gains realized with respect to any common shares. In addition, the common shares are not subject to transfer taxes, stamp duties or similar charges for so long as we do not hold an interest in real estate in the BVI.

There are no estate, gift or inheritance taxes levied by the BVI on companies incorporated or registered under the BVI Business Companies Act.

There is no income tax treaty or convention currently in effect between the United States and the BVI that is applicable to any payments made by or to a company incorporated or registered under the BVI Business Companies Act.

PRC Taxation

If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a withholding tax of 10% may be imposed by us on any dividends that non-PRC resident holders of our common shares receive from us and on gains realized on their sale or other disposition of common shares, if such income is considered as income derived from within the PRC.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

The documents concerning the Company that are referred to in this annual report may be inspected at the Company’s principal executive offices at Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong. The Company does not currently maintain an agent in the United States. Certain documents described in response to Item 19. of this annual report are filed with this annual report and others are incorporated by reference to documents previously filed by the Company with the SEC. The documents that are filed herewith or incorporated by reference can be viewed on the SEC’s website at www.sec.gov.

I. Subsidiary Information

Not applicable.

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| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Equity Price Risk

We were not exposed to equity price risk as of December 31, 2024, following the disposal of FARL’s equity securities in July 2021.

Foreign Currency Exchange Rate Risk

Revenue and expenses of our PRC subsidiaries are denominated in Renminbi. The administrative expenses of the Company’s head office in Hong Kong are denominated either in United States dollars or Hong Kong dollars. As the reporting currency of the Company’s consolidated financial statements is Renminbi, the Company has market risk with respect to currency fluctuation between Hong Kong dollars and United States dollars to Renminbi and translation difference may arise on consolidation. The Company may also suffer an exchange loss when it converts Renminbi to other currencies, such as Hong Kong dollars or United States dollars. If market conditions allow, the Company endeavors to match the currency used in operating/investing activities with that used in financing activities. We have not engaged any foreign currency contracts to hedge our potential foreign currency exchange exposure, if any.

Interest Rate Risk

None of our outstanding debt bears interest at a floating rate. Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank accounts. We have not used derivative financial instruments in our investment portfolio. Interest earning instruments carry a degree of interest rate risk. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market interest rates. However, our future interest income may fall short of expectations due to changes in market interest rates.

Commodity Price Risk

We were not exposed to commodity price risk as of December 31, 2024, as we did not have any copper ore in inventory on that date.

| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

74

PART II

| ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

| ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

| ITEM 15. | CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act. As of December 31, 2024, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.

In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based upon that evaluation and subsequent evaluations conducted in connection with the audit of the Company’s consolidated financial statements for the year ended December 31, 2024, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported, within the periods specified by the SEC’s rules and regulations.

Management’s Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Exchange Act defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS issued by the IASB and includes those policies and procedures that:

| • | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

| • | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS issued by IASB, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

| • | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, we used the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission (the “COSO criteria”). Based on our evaluation and the COSO criteria, we determined that, as of December 31, 2024, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.

Since the Company is not an accelerated filer, the auditor’s attestation report pursuant to SOX Section 404(b) is not required in this annual report.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the fiscal year 2024 and that has materially affected, or is reasonably likely to affect, the Company’s internal control over financial reporting.

| ITEM 16. | [Reserved]

75

| ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT

In general, an “audit committee financial expert” within the meaning of Item 16.A. of Form 20-F is an individual member of the Audit Committee who:

| • | understands generally accepted accounting principles and financial statements;

| • | is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;

| • | has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity of our financial statements, or experience actively supervising one or more persons engaging in such activities;

| • | understands internal controls over financial reporting; and

| • | understands audit committee functions.

An “audit committee financial expert” may acquire the foregoing attributes through:

| • | education and experience as a principal financial officer, principal accounting officer, controller, public accountant, auditor or person serving similar functions;

| • | experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person serving similar functions;

| • | experience overseeing or assessing the performance of companies or public accounts with respect to the preparation, auditing or evaluation of financial statements; or

| • | other relevant experience.

Our Board of Directors has determined that Mr. Yip Wing Hang and Mr. Lam Kwan Sing is each an “audit committee financial expert” within the meaning of Item 16A of Form 20-F. Each of our “audit committee financial experts” is independent as that term is used in Nasdaq Marketplace Rule 5605(a)(2).

| ITEM 16B. | CODE OF ETHICS

A Code of Ethics is a written standard designed to deter wrongdoing and to promote:

| • | honest and ethical conduct,

| • | full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements,

| • | compliance with applicable laws, rules and regulations,

| • | the prompt reporting violation of the code, and

| • | accountability for adherence to the Code of Ethics.

We have adopted a Code of Business Conduct and Ethics that is applicable to all of our employees, and also contains provisions that apply only to our Chief Executive Officer, principal financial and accounting officers and persons performing similar functions. It is a “Code of Ethics” as defined in Item 16B of Form 20-F promulgated by the SEC. The full text of the Code of Business Conduct and Ethics is posted on our website at https://www.chnr.net/CorporateGovernance/39.html, and a copy is incorporated by reference as Exhibit 11 to this annual report. Information contained on, or that can be accessed through, our website does not constitute a part of this a part of this annual report and is not incorporated by reference herein. If we make any amendment to the Code of Business Conduct and Ethics or grant any waivers, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations of the SEC. We have not granted any waivers under our Code of Business Conduct and Ethics.

76

| ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table shows the fees that we paid for audit and other services provided by Ernst & Young Hua Ming LLP (PCAOB ID No. 1408), Beijing, China, and ARK Pro CPA & Co (PCAOB ID No. 3299), our independent registered public accounting firms, for fiscal years 2023 and 2024, respectively.

|  | Fiscal Year 2023 |  | Fiscal Year 2024
Ernst & Young Hua Ming |  |  |  |  |  |  |  |  |  |  |  |
Audit Fees |  | US$ |  |  | 395,766 |  |  | US$ |  |  | 20,000 |
Audit-Related Fees |  |  |  |  | — |  |  | US$ |  |  | 189,958 |
Tax Fees |  | US$ |  |  | 35,337 |  |  |  |  |  | — |
All Other Fees |  |  |  |  | — |  |  |  |  |  | — |
Total |  | US$ |  |  | 431,103 |  |  | US$ |  |  | 209,958 |
ARK Pro CPA & Co |  |  |  |  |  |  |  |  |  |  |  |
Audit Fees |  | US$ |  |  | — |  |  | US$ |  |  | — |
Audit-Related Fees |  |  |  |  | — |  |  |  |  |  | — |
Tax Fees |  |  |  |  | — |  |  |  |  |  | — |
All Other Fees |  |  |  |  | — |  |  |  |  |  | — |
Total |  | US$ |  |  | — |  |  | US$ |  |  | — |

Audit Fees – This category includes the audit of our annual financial statements and services that are normally provided by the independent auditors in connection with engagements for those fiscal years. Since ARK Pro CPA & Co have been appointed as the Company’s auditor subsequent to December 31, 2024, no fee was billed during the year then ended.

Audit-Related Fees – This category includes the fees for the related filing of a resale registration statement on Form F-1, F-3 and Form S-8 in 2023 and 2024.

Tax Fees – This category includes the aggregate fees billed or to be billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

All Other Fee – This category includes the aggregate fees billed or to be billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above.

The Audit Committee has adopted a procedure for pre-approval of all fees charged by the Company’s independent registered public accounting firm. Under the procedure, the Audit Committee approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the entire Audit Committee, or, in the period between meetings, by a designated member of the Audit Committee. Any such approval by the designated member is disclosed to the entire Audit Committee at the next meeting. All the audit fees, audit related fees and tax fees paid to Ernst & Young Hua Ming LLP with respect to fiscal years 2023 and 2024 were approved by the Audit Committee, respectively.

| ITEM 16D. | EXEMPTION FROM THE LISTING STANDARDS FOR THE AUDIT COMMITTEE

Not applicable.

| ITEM 16E. | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

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| ITEM 16F. | CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT

Effective April 8, 2025, we engaged ARK Pro CPA & Co (“ARK”) as our independent registered public accounting firm. The change of our independent registered public accounting firm and the appointment of ARK was made after a careful and thorough evaluation process and has been approved by the audit committee and board of directors.

On April 3, 2025, we dismissed Ernst & Young Hua Ming LLP (“EY”) as our independent registered public accounting firm. The audit report of EY on the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 did not contain an adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles.

During the audit for the fiscal year ended December 31, 2023 and the subsequent period through the dismissal date of April 3, 2025, there have been (i) no disagreements (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions thereto) between the Company and EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of EY, would have caused EY to make reference to the subject matter of the disagreements in connection with its report on the consolidated financial statements for such year, and (ii) no “reportable events” (as defined in Item 16F(a)(1)(v) of Form 20-F).

For the fiscal years ended December 31, 2022 and 2023 and the subsequent interim period through April 8, 2025, neither the Company nor anyone acting on its behalf consulted with ARK on either (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company by ARK that ARK concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (b) any matter that was the subject of a disagreement (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions thereto) or a reportable event (as defined in Item 16F(a)(1)(v) of Form 20-F).

We had provided a copy of this disclosure to EY and requested that EY furnish us with a letter addressed to the SEC indicating whether it agrees with such disclosure. A copy of EY’s letter dated April 8, 2025 is attached hereto as Exhibit 16.1.

| ITEM 16G. | CORPORATE GOVERNANCE

Our common shares are currently listed on the Nasdaq Capital Market and, for so long as our securities continue to be listed, we will remain subject to the rules and regulations established by the Nasdaq Stock Market that apply to listed companies. Nasdaq rules include various corporate governance requirements applicable to listed securities. While all Nasdaq-listed companies are subject to certain of these corporate governance requirements, foreign private issuers such as our company are exempt from other corporate governance requirements if the laws of their home jurisdiction do not otherwise require compliance. Since our home jurisdiction does not mandate compliance with some of these Nasdaq rules, we have opted out of compliance with them. A more detailed description of the Nasdaq requirements that we are not subject to is contained elsewhere in this annual report under “Item 6.C. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Board Practices – Nasdaq Requirements.”

| ITEM 16H. | MINE SAFETY DISCLOSURE

Not applicable.

| ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

| ITEM 16J. | INSIDER TRADING POLICIES

Our insider trading policy is included in our code of ethics, which is filed as Exhibit 11.1 to this Annual Report on Form 20-F, and the terms of which are incorporated by reference herein. See “Item 16B. Code of Ethics” and “Item 19. Exhibits.”

78

| ITEM 16K. | CYBERSECURITY

As an exploration company, we have limited digital operations and our business activity to date has been identifying, acquiring, and exploring mineral properties, and we have not yet adopted formal cybersecurity risk management programs or formal processes for assessing cybersecurity risks. We understand the importance of managing material risks from cybersecurity threats and are committed, as part of our continuing growth, to implementing and maintaining an adequate information security program to manage such risks and safeguard our systems and data.

We currently manage our cybersecurity risk through a variety of practices that are applicable to all users of our information technology and information assets, including our employees and contractors. We use a combination of technology, policies, training, and monitoring to promote security awareness and prevent security incidents.

We believe we have limited exposure to cyber threats other than emails and project data storage. Financial transactions are enabled through well-stablished financial institutions and accounting and employee information storage are outsourced to an external accounting firm.

We have not, as of the date of this prospectus, experienced a cybersecurity threat or incident in the last three years, that materially affected or is reasonably likely to affect our business, results of operations, or financial condition. However, there can be no guarantee that we will not experience such an incident in the future.

Our board of directors oversees cybersecurity risk as part of its role of overseeing enterprise-wide risk.

PART III

| ITEM 17. | FINANCIAL STATEMENTS

We have elected to provide financial statements pursuant to Item 18.

| ITEM 18. | FINANCIAL STATEMENTS

Our audited consolidated financial statements are attached hereto as Appendix A beginning on page F-1 of this annual report.

79

| ITEM 19. | EXHIBITS

The following exhibits are filed as part of this annual report on Form 20-F. Certain exhibits have been previously filed with the SEC pursuant to the Exchange Act, as amended (Commission File Number 000-26046).

Exhibit No. |  | Exhibit Description
1.1 |  | Amended and Restated Memorandum and Articles of Association of the Registrant (included as Exhibit 99.1 to the Current Report on Form 6-K furnished January 30, 2014, and incorporated herein by reference).
2.1 |  | Description of China Natural Resources, Inc.’s Securities Registered under Section 12 of the Securities Exchange Act of 1934, as Amended (included as Exhibit 2.1 to the Annual Report on Form 20-F filed June 12, 2020, and incorporated herein by reference).
2.2 |  | Form of Investors Warrant (included as Exhibit 2.1 to the Current Report on Form 6-K furnished February 21, 2024, and incorporated herein by reference).
2.3 |  | Form of Placement Agent Warrant (included as Exhibit 2.2 to the Current Report on Form 6-K furnished February 21, 2024, and incorporated herein by reference).
4.1 |  | 2014 Equity Compensation Plan (included as Annex A of Exhibit 99.1 to the Current Report on Form 6-K furnished August 13, 2014, and incorporated herein by reference).
4.2 |  | Service Agreement dated as of April 2, 2015, by and between the Company and Tam Cheuk Ho (included as Exhibit 99.1 to the Current Report on Form 6-K furnished April 6, 2015, and incorporated herein by reference).
4.3 |  | Service Agreement dated as of April 2, 2015, by and between the Company and Wong Wah On Edward (included as Exhibit 99.2 to the Current Report on Form 6-K furnished April 6, 2015, and incorporated herein by reference).
4.4 |  | License Agreement dated April 1, 2017, by and between Anka Consultants Limited and China Natural Resources, Inc. (included as Exhibit 4.15 to the Annual Report on Form 20-F filed June 19, 2017, and incorporated herein by reference).
4.5 |  | Inner Mongolia Wulatehouqi Moruogu Tong Mine Cooperation Agreement on Mineral Exploration dated August 20, 2017, by and between Bayannaoer City Feishang Mining Company Limited and Bayannaoer Jijincheng Mining Co., Ltd. (included as Exhibit 4.25 to the Annual Report on Form 20-F filed April 30, 2018, and incorporated herein by reference).
4.6 |  | Sale and Purchase Agreement dated July 27, 2021, by and between China Natural Resources, Inc. and Li Feilie (included as Exhibit 4.1 to the Current Report on Form 6-K furnished July 27, 2021, and incorporated herein by reference).
4.7 |  | Confirmation of Financial Support to China Natural Resources, Inc., dated May 15, 2023, from Feishang Group Ltd. (included as Exhibit 4.7 to the Annual Report on Form 20-F filed May 15, 2023, and incorporated herein by reference).
4.8 |  | Confirmation of Financial Support to China Natural Resources, Inc., dated May 15 2023, from Feishang Enterprise Group Co., Ltd. (included as Exhibit 4.8 to the Annual Report on Form 20-F filed May 15, 2023, and incorporated herein by reference).
4.9 |  | Domestic Garbage and Sewage Treatment Infrastructure at Villages and Towns, Wujiang District, Whole PPP Project Package, PPP Project Contract – Purchaser: Housing and Urban-Rural Development Bureau of Wujiang District, Shaoguan City, by and among Shanghai Onway Environmental Development Co., Ltd., Guangzhou Ruiyi Environmental Protection Technology Co., Ltd., Guangdong Xifu Environmental Protection Technology Co., Ltd., Guangdong Xinzhen Construction Engineering Co., Ltd., and Shaoguan Angrui Environmental Technology Development Co. Ltd., dated August 2018 (included as Exhibit 4.9 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.10 |  | Fixed Assets Loan Contract, between the Bank of Communications Co., Ltd. and Shaoguan Angrui Environmental Technology Development Co. Ltd., dated August 29, 2019(included as Exhibit 4.10 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.11 |  | Guarantee Contract, between Bank of Communications Co., Ltd. and Feishang Enterprise Group Co., Ltd., dated August 29, 2019 (included as Exhibit 4.11 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.12 |  | Guarantee Contract, between Bank of Communications Co., Ltd. and Shanghai Onway Environmental Development Co., Ltd., dated August 29, 2019 (included as Exhibit 4.12 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.13 |  | Accounts Receivable Pledge Contract, between Bank of Communications Co., Ltd. and Shaoguan Angrui Environmental Technology Development Co., Ltd., dated August 29, 2019 (included as Exhibit 4.13 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.14 |  | Equity Pledge Contract, between Bank of Communications Co., Ltd. and Shanghai Onway Environmental Development Co., Ltd., dated August 29, 2019 (included as Exhibit 4.14 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference).
4.15 |  | Loan Agreement, between Shenzhen Qianhai Feishang Environmental Investment Co., Ltd and Shenzhen Chaopeng Investment Co., Ltd, dated June 30, 2021 (included as Exhibit 4.15 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference ).
4.16 |  | Irrevocable Letter of Guarantee for Joint and Several Liability, dated June 30, 2021, from Shenzhen Feishang Investment Co., Ltd. (included as Exhibit 4.16 to the Annual Report on Form 20-F filed May 15, 2023, and incorporated herein by reference).
4.17 |  | Sale and Purchase Agreement dated February 27, 2023, by and among the Company, Feishang Group Limited, Top Pacific (China) Limited, Li Feilie and Yao Yuguang (included as Exhibit 99.2 to the Current Report on Form 6-K furnished February 28, 2023, and incorporated herein by reference).
4.18 |  | Sale and Purchase Agreement dated July 28, 2023 by and between the Company and Feishang Group Limited (incorporated by reference to Exhibit 99.1 to our Form 6-K filed on July 28, 2023)

80

Exhibit No. |  | Exhibit Description
4.19 |  | Set-off letter dated August 3, 2023 by and between the Company and Feishang Group Limited (included as Exhibit 4.19 to the Annual Report on Form 20-F filed April 30, 2024 and incorporated herein by reference)
4.20 |  | Amendment Agreement dated as of December 22, 2023 to Sale and Purchase Agreement dated as of February 27, 2023 by and among the Company, Feishang Group and Top Pacific (China) Limited, Li Feilie and Yao Yuguang (incorporated by reference to Exhibit 99.1 to our Form 6-K filed on December 22,2023)
4.21 |  | Form of Securities Purchase Agreement by and between the Company and the Investors (incorporated by reference to Exhibit 4.1 to our Form 6-K filed on February 21, 2024)
4.22 |  | Placement Agency Agreement dated February 15, 2024 by and between the Company and FT Global Capital, Inc. (incorporated by reference to Exhibit 4.2 to our Form 6-K filed on February 21, 2024)
4.23 |  | Amendment Agreement II dated December 31, 2024 to Sale and Purchase Agreement dated as of February 27, 2023 by and among the Company, Feishang Group and Top Pacific (China) Limited, Li Feilie and Yao Yuguang (incorporated by reference to Exhibit 99.1 to our Form 6-K filed on December 31, 2024)
8 |  | Subsidiaries of the Registrant (filed herewith).
11.1 |  | Code of Business Conduct and Ethics (filed as Exhibit 14 to Annual Report on Form 10-KSB filed March 30, 2004, and incorporated herein by reference)
12.1 |  | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
12.2 |  | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
13.1 |  | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(furnished herewith).
13.2 |  | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
15.1 |  | Consent of ARK Pro CPA & Co(filed herewith).
15.2 |  | Consent of Ernst & Young Hua Ming LLP(filed herewith).
15.3 |  | Press Release dated May 15, 2025 (filed herewith).
97 |  | Clawback Policy (included as Exhibit 97 to the Annual Report on Form 20-F filed April 30, 2024 and incorporated herein by reference)
101.INS |  | Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document.
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

81

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

| CHINA NATURAL RESOURCES, INC.
Date: May 15, 2025 | By: | /s/ WONG WAH ON EDWARD |
|  | Wong Wah On Edward, CEO |

APPENDIX A

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm, together with the consolidated financial statements for the Company and its subsidiaries, including:

| a. | Consolidated statements of profit or loss for the years ended December 31, 2022, 2023 and 2024

| b. | Consolidated statements of comprehensive income for the years ended December 31, 2022, 2023 and 2024

| c. | Consolidated statements of financial position as of January 1, 2021, December 31, 2023 and 2024

| d. | Consolidated statements of changes in equity for the years ended December 31, 2022, 2023 and 2024

| e. | Consolidated statements of cash flows for the years ended December 31, 2022, 2023 and 2024

| f. | Notes to the consolidated financial statements

CHINA NATURAL RESOURCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

| Pages
Report of Independent Registered Public Accounting Firm (PCAOB ID: 3299) | F-2 – F-3
Report of Independent Registered Public Accounting Firm (PCAOB ID: 1408) | F-4
Consolidated statements of profit or loss for the years ended December 31, 2022, 2023 and 2024 | F-5
Consolidated statements of comprehensive income for the years ended December 31, 2022, 2023 and 2024 | F-6
Consolidated statements of financial position as of December 31, 2023 and 2024 | F-7 – F-8
Consolidated statements of changes in equity for the years ended December 31, 2022, 2023 and 2024 | F-9
Consolidated statements of cash flows for the years ended December 31, 2022, 2023 and 2024 | F-10 – F-11
Notes to the consolidated financial statements | F-12 – F-75

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Shareholders of

China Natural Resources, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of financial position of China Natural Resources, Inc. and subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statements of comprehensive income, changes in stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has accumulated deficit from recurring net losses and significant net operating cash outflow for the year ended December 31, 2024. All these factors raise doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 3 to the consolidated financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that there are no critical audit matters.

/s/ ARK Pro CPA & Co

ARK Pro CPA & Co

We have served as the Company’s auditor since 2025.

Hong Kong, China

May 15, 2025

PCAOB ID: 3299

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of China Natural Resources, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of financial position of China Natural Resources, Inc. (the “Company”) as of December 31, 2023, the related consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023,and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young Hua Ming LLP

We have served as the Company’s auditor from 2015 to 2025.

Beijing, the People’s Republic of China

April 30, 2024

F-4

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands, except share and per share data)

|  |  |  |  | Year Ended December 31, |
|  |  |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
|  | Notes |  |  |  |  |  |  |  |  |  |  |  |  |
CONTINUING OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Administrative expenses |  |  |  |  |  | (25,248 | ) |  |  | (12,883 | ) |  |  | (7,199 | ) |  |  | (986 | )
Other income |  |  |  |  |  | 699 |  |  |  | 3,742 |  |  |  | 2 |  |  |  | 1 |
Fair value gain on financial instruments, net |  |  |  |  |  | 1,007 |  |  |  | 847 |  |  |  | 3,996 |  |  |  | 548 |
Finance costs |  |  |  |  |  | 191 |  |  |  | (48 | ) |  |  | (28 | ) |  |  | (4 | )
Finance income |  |  |  |  |  | 13 |  |  |  | 5 |  |  |  | 69 |  |  |  | 9 |
LOSS BEFORE INCOME TAX |  | 5 |  |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
Income tax expense |  | 7 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS |  |  |  |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit/(loss) for the year from discontinued operations, net of tax |  | 3 |  |  |  | 1,042 |  |  |  | (4,106 | ) |  |  | — |  |  |  | — |
LOSS FOR THE YEAR |  |  |  |  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )
ATTRIBUTABLE TO: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  |  |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
From discontinued operations |  |  |  |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |  |  |  | — |
Non-controlling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
From discontinued operations |  |  |  |  |  | 2,327 |  |  |  | 1,398 |  |  |  | — |  |  |  | — |
LOSS FOR THE YEAR |  |  |  |  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )
LOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic and diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- For loss from continuing operations |  | 8 |  |  |  | (2.85 | ) |  |  | (1.01 | ) |  |  | (0.33 | ) |  |  | (0.04 | )
- For loss from discontinued operations |  | 8 |  |  |  | (0.15 | ) |  |  | (0.67 | ) |  |  | — |  |  |  | — |
- Loss per share |  | 8 |  |  |  | (3.00 | ) |  |  | (1.68 | ) |  |  | (0.33 | ) |  |  | (0.04 | )

F-5

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands)

|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
LOSS FOR THE YEAR |  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )
Other comprehensive income/(loss) that will be reclassified to profit or loss in subsequent periods: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments of the subsidiaries |  |  | (8,094 | ) |  |  | (2,810 | ) |  |  | (4,053 | ) |  |  | (556 | )
Other comprehensive (loss)/income that will not be reclassified to profit or loss in subsequent periods: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments of the Company |  |  | 9,593 |  |  |  | 1,421 |  |  |  | 5,590 |  |  |  | 766 |
Total other comprehensive (loss)/income for the year, net of tax |  |  | 1,499 |  |  |  | (1,389 | ) |  |  | 1,537 |  |  |  | 210 |
TOTAL COMPREHENSIVE LOSS FOR THE YEAR |  |  | (20,797 | ) |  |  | (13,832 | ) |  |  | (1,623 | ) |  |  | (222 | )
Attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owners of the Company |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  | (21,839 | ) |  |  | (9,726 | ) |  |  | (1,623 | ) |  |  | (222 | )
From discontinued operations |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |  |  |  | — |
Non-controlling interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
From discontinued operations |  |  | 2,327 |  |  |  | 1,398 |  |  |  | — |  |  |  | — |
TOTAL COMPREHENSIVE LOSS FOR THE YEAR |  |  | (20,797 | ) |  |  | (13,832 | ) |  |  | (1,623 | ) |  |  | (222 | )

F-6

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2023 AND 2024

(Amounts in thousands)

|  |  |  |  | December 31, |
|  |  |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | US$ |
|  | Notes |  |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NON-CURRENT ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  | 9 |  |  |  | 53 |  |  |  | 49 |  |  |  | 7 |
Right-of-use assets |  | 10 |  |  |  | 346 |  |  |  | — |  |  |  | — |
Other non-current assets |  | 11 |  |  |  | 247,530 |  |  |  | 256,484 |  |  |  | 35,144 |
TOTAL NON-CURRENT ASSETS |  |  |  |  |  | 247,929 |  |  |  | 256,533 |  |  |  | 35,151 |
CURRENT ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prepayments |  |  |  |  |  | 1,107 |  |  |  | 1,242 |  |  |  | 170 |
Other receivables |  | 12 |  |  |  | 18 |  |  |  | 32 |  |  |  | 4 |
Cash and cash equivalents |  | 13 |  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |
TOTAL CURRENT ASSETS |  |  |  |  |  | 5,878 |  |  |  | 4,356 |  |  |  | 596 |
TOTAL ASSETS |  |  |  |  |  | 253,807 |  |  |  | 260,889 |  |  |  | 35,747 |

F-7

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)

AS OF DECEMBER 31, 2023 AND 2024

(Amounts in thousands)

|  |  |  |  | December 31, |
|  |  |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | US$ |
|  | Notes |  |  |  |  |  |  |  |  |  |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade payables |  | 14 |  |  |  | 100 |  |  |  | 280 |  |  |  | 38 |
Other payables and accruals |  | 15 |  |  |  | 82,610 |  |  |  | 3,536 |  |  |  | 485 |
Derivative financial liabilities |  | 16 |  |  |  | — |  |  |  | 2,138 |  |  |  | 293 |
Lease liabilities |  | 10 |  |  |  | 360 |  |  |  | — |  |  |  | — |
Due to related companies |  |  |  |  |  | 9,069 |  |  |  | 11,361 |  |  |  | 1,557 |
Due to the Shareholder |  |  |  |  |  | 85,673 |  |  |  | — |  |  |  | — |
TOTAL CURRENT LIABILITIES |  |  |  |  |  | 177,812 |  |  |  | 17,315 |  |  |  | 2,373 |
NON-CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other payables |  | 15 |  |  |  | — |  |  |  | 76,945 |  |  |  | 10,543 |
Due to the Shareholder |  |  |  |  |  | — |  |  |  | 78,567 |  |  |  | 10,766 |
TOTAL NON-CURRENT LIABILITIES |  |  |  |  |  | — |  |  |  | 155,512 |  |  |  | 21,309 |
TOTAL LIABILITIES |  |  |  |  |  | 177,812 |  |  |  | 172,827 |  |  |  | 23,682 |
EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issued capital |  | 19 |  |  |  | 450,782 |  |  |  | 450,782 |  |  |  | 61,768 |
Other capital reserves |  | 19 |  |  |  | 758,775 |  |  |  | 772,465 |  |  |  | 105,845 |
Accumulated losses |  |  |  |  |  | (1,122,851 | ) |  |  | (1,126,011 | ) |  |  | (154,291 | )
Other comprehensive losses |  |  |  |  |  | (10,711 | ) |  |  | (9,174 | ) |  |  | (1,257 | )
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY |  |  |  |  |  | 75,995 |  |  |  | 88,062 |  |  |  | 12,065 |
NON-CONTROLLING INTERESTS |  |  |  |  |  | — |  |  |  | — |  |  |  | — |
TOTAL EQUITY |  |  |  |  |  | 75,995 |  |  |  | 88,062 |  |  |  | 12,065 |
TOTAL LIABILITIES AND EQUITY |  |  |  |  |  | 253,807 |  |  |  | 260,889 |  |  |  | 35,747 |

F-8

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands)

|  | Attributable to Owners of the Company |  |  |  |  |  |  |
|  | Issued capital |  |  | Other capital reserves |  |  | Accumulated losses |  |  | Other comprehensive (loss)/income |  |  | Total |  |  | Non-controlling interests |  |  | Total equity |
|  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |  |  | CNY |
Balance as of January 1, 2022 |  |  | 450,782 |  |  |  | 719,110 |  |  |  | (1,084,387 | ) |  |  | (10,821 | ) |  |  | 74,684 |  |  |  | 107,353 |  |  |  | 182,037 |
(Loss)/income for the year |  |  | — |  |  |  | — |  |  |  | (24,623 | ) |  |  | — |  |  |  | (24,623 | ) |  |  | 2,327 |  |  |  | (22,296 | )
Foreign currency translation adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,499 |  |  |  | 1,499 |  |  |  | — |  |  |  | 1,499 |
Total comprehensive (loss)/income for the year |  |  | — |  |  |  | — |  |  |  | (24,623 | ) |  |  | 1,499 |  |  |  | (23,124 | ) |  |  | 2,327 |  |  |  | (20,797 | )
Equity-settled share-based payments (Note 21) |  |  | — |  |  |  | 16,209 |  |  |  | — |  |  |  | — |  |  |  | 16,209 |  |  |  | — |  |  |  | 16,209 |
Balance as of December 31, 2022 |  |  | 450,782 |  |  |  | 735,319 |  |  |  | (1,109,010 | ) |  |  | (9,322 | ) |  |  | 67,769 |  |  |  | 109,680 |  |  |  | 177,449 |
Balance as of January 1, 2023 |  |  | 450,782 |  |  |  | 735,319 |  |  |  | (1,109,010 | ) |  |  | (9,322 | ) |  |  | 67,769 |  |  |  | 109,680 |  |  |  | 177,449 |
(Loss)/income for the year |  |  | — |  |  |  | — |  |  |  | (13,841 | ) |  |  | — |  |  |  | (13,841 | ) |  |  | 1,398 |  |  |  | (12,443 | )
Foreign currency translation adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,389 | ) |  |  | (1,389 | ) |  |  | — |  |  |  | (1,389 | )
Total comprehensive (loss)/income for the year |  |  | — |  |  |  | — |  |  |  | (13,841 | ) |  |  | (1,389 | ) |  |  | (15,230 | ) |  |  | 1,398 |  |  |  | (13,832 | )
Disposal of PSTT (Note 3) |  |  | — |  |  |  | 20,382 |  |  |  | — |  |  |  | — |  |  |  | 20,382 |  |  |  | (111,078 | ) |  |  | (90,696 |
Equity-settled share-based payments (Note 21) |  |  | — |  |  |  | 3,074 |  |  |  | — |  |  |  | — |  |  |  | 3,074 |  |  |  | — |  |  |  | 3,074 |
Balance as of December 31, 2023 |  |  | 450,782 |  |  |  | 758,775 |  |  |  | (1,122,851 | ) |  |  | (10,711 | ) |  |  | 75,995 |  |  |  | — |  |  |  | 75,995 |
Balance as of January 1, 2024 |  |  | 450,782 |  |  |  | 758,775 |  |  |  | (1,122,851 | ) |  |  | (10,711 | ) |  |  | 75,995 |  |  |  | — |  |  |  | 75,995 |
Loss for the year |  |  | — |  |  |  | — |  |  |  | (3,160 | ) |  |  | — |  |  |  | (3,160 | ) |  |  | — |  |  |  | (3,160 | )
Foreign currency translation adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,537 |  |  |  | 1,537 |  |  |  | — |  |  |  | 1,537 |
Total comprehensive (loss)/income for the year |  |  | — |  |  |  | — |  |  |  | (3,160 | ) |  |  | 1,537 |  |  |  | (1,623 | ) |  |  | — |  |  |  | (1,623 | )
Issue of shares |  |  | — |  |  |  | 13,207 |  |  |  | — |  |  |  | — |  |  |  | 13,207 |  |  |  | — |  |  |  | 13,207 |
Share-based payments (Note 21) |  |  | — |  |  |  | 483 |  |  |  | — |  |  |  | — |  |  |  | 483 |  |  |  | — |  |  |  | 483 |
Balance as of December 31, 2024 |  |  | 450,782 |  |  |  | 772,465 |  |  |  | (1,126,011 | ) |  |  | (9,174 | ) |  |  | 88,062 |  |  |  | — |  |  |  | 88,062 |
Balance as of December 31, 2024 (US$) |  |  | 61,768 |  |  |  | 105,845 |  |  |  | (154,291 | ) |  |  | (1,257 | ) |  |  | 12,065 |  |  |  | — |  |  |  | 12,065 |

F-9

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands)

|  |  |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | US$ |
|  |  | Notes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss before income tax for the year |  |  |  |  |  |  | (16,432 | ) |  |  | (10,512 | ) |  |  | (3,160 | ) |  |  | (432 | )
From continuing operations |  |  |  |  |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
From discontinued operations |  |  |  |  |  |  | 6,906 |  |  |  | (2,175 | ) |  |  | — |  |  |  | — |
Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expenses |  |  |  |  |  |  | 4,015 |  |  |  | 1,977 |  |  |  | 6 |  |  |  | 1 |
Interest income |  |  |  |  |  |  | (6,883 | ) |  |  | (4,013 | ) |  |  | — |  |  |  | — |
Gain on disposal of property, plant and equipment |  |  |  |  |  |  | (5 | ) |  |  | — |  |  |  | (2 | ) |  |  | (1 | )
Consultants share-based payment expenses |  |  | 5 |  |  |  | 16,152 |  |  |  | 3,074 |  |  |  | 125 |  |  |  | 17 |
Expenses related to issuance of shares |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 1,354 |  |  |  | 186 |
Fair value gain on financial instruments, net |  |  | 5 |  |  |  | (1,007 | ) |  |  | (847 | ) |  |  | (3,996 | ) |  |  | (548 | )
Depreciation of property, plant and equipment |  |  | 5 |  |  |  | 304 |  |  |  | 100 |  |  |  | 4 |  |  |  | 1 |
Depreciation of right-of-use assets |  |  | 5 |  |  |  | 1,413 |  |  |  | 1,050 |  |  |  | 346 |  |  |  | 47 |
Amortization of intangible assets |  |  | 5 |  |  |  | 813 |  |  |  | 460 |  |  |  | — |  |  |  | — |
Impairment (reversal)/loss on trade receivables |  |  | 5 |  |  |  | (3,989 | ) |  |  | 383 |  |  |  | — |  |  |  | — |
Impairment losses on contract assets |  |  | 5 |  |  |  | 171 |  |  |  | 3,545 |  |  |  | — |  |  |  | — |
Impairment losses on other receivables |  |  | 5 |  |  |  | 2,745 |  |  |  | 6,003 |  |  |  | — |  |  |  | — |
Impairment reversal on amounts due from related companies |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Changes in working capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Inventories |  |  |  |  |  |  | 257 |  |  |  | (182 | ) |  |  | — |  |  |  | — |
Trade and bills receivables |  |  |  |  |  |  | (10,764 | ) |  |  | (4,406 | ) |  |  | — |  |  |  | — |
Contract assets |  |  |  |  |  |  | (5,165 | ) |  |  | (1,550 | ) |  |  | — |  |  |  | — |
Prepayments |  |  |  |  |  |  | 504 |  |  |  | 765 |  |  |  | (136 | ) |  |  | (19 | )
Other receivables |  |  |  |  |  |  | 321 |  |  |  | 18 |  |  |  | (14 | ) |  |  | (2 | )
Other current assets |  |  |  |  |  |  | 1,829 |  |  |  | — |  |  |  | — |  |  |  | — |
Trade payables |  |  |  |  |  |  | (792 | ) |  |  | 1,297 |  |  |  | 180 |  |  |  | 25 |
Other payables and accruals |  |  |  |  |  |  | 3,280 |  |  |  | 5,749 |  |  |  | (2,124 | ) |  |  | (300 | )
Provisions |  |  |  |  |  |  | 494 |  |  |  | (494 | ) |  |  | — |  |  |  | — |
Cash (used in)/from operations |  |  |  |  |  |  | (12,739 | ) |  |  | 14,329 |  |  |  | (7,417 | ) |  |  | (1,025 | )
Income tax paid |  |  |  |  |  |  | (47 | ) |  |  | (1,001 | ) |  |  | — |  |  |  | — |
Net cash flows (used in)/from operating activities |  |  |  |  |  |  | (12,786 | ) |  |  | 13,328 |  |  |  | (7,417 | ) |  |  | (1,025 | )
INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest received |  |  |  |  |  |  | 7,291 |  |  |  | — |  |  |  | — |  |  |  | — |
Proceed from disposal of property, plant and equipment |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 1 |
Purchase of property, plant and equipment |  |  |  |  |  |  | (17 | ) |  |  | (12 | ) |  |  | (4 | ) |  |  | (1 | )
Purchase of intangible assets |  |  |  |  |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | — |
Prepayment for right-of-use assets |  |  |  |  |  |  | (228 | ) |  |  | — |  |  |  | — |  |  |  | — |
Purchase of structured deposit products |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Disposal of property, plant and equipment |  |  |  |  |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | — |
Disposal of a subsidiary |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loan to an unrelated company |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Repayment from loans due from related companies |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Proceeds from maturity of structured deposit products |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Expenditures on mine development |  |  |  |  |  |  | — |  |  |  | (1,042 | ) |  |  | — |  |  |  | — |
Net cash flows from /(used in) investing activities |  |  |  |  |  |  | 7,050 |  |  |  | (1,054 | ) |  |  | 1 |  |  |  | — |

F-10

CHINA NATURAL RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands)

|  |  |  |  | Year Ended December 31, |
|  |  |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
|  | Notes |  |  |  |  |  |  |  |  |  |  |  |  |
FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Repayments of bank loans |  |  |  |  |  |  | (3,000 | ) |  |  | (1,500 | ) |  |  | — |  |  |  | — |
Advances from related companies |  |  |  |  |  |  | — |  |  |  | 3,932 |  |  |  | 1,292 |  |  |  | 177 |
Repayment to related companies |  |  |  |  |  |  | (2,765 | ) |  |  | — |  |  |  | (3,150 | ) |  |  | (432 | )
Advances from Shareholder |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 6,898 |  |  |  | 946 |
Repayments to the Shareholder |  |  |  |  |  |  | (6,885 | ) |  |  | — |  |  |  | (7,892 | ) |  |  | (1,083 | )
Payment of principal portion of lease liabilities |  |  |  |  |  |  | (1,120 | ) |  |  | (925 | ) |  |  | (373 | ) |  |  | (53 | )
Payment of interest expenses on lease liabilities |  |  |  |  |  |  | (133 | ) |  |  | (99 | ) |  |  | (6 | ) |  |  | (1 | )
Net proceed from issuance of shares |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 18,342 |  |  |  | 2,516 |
Dividends paid to non-controlling shareholders |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Dividends paid to former non-controlling shareholders |  |  |  |  |  |  | (5,048 | ) |  |  | — |  |  |  | — |  |  |  | — |
Net cash outflow for the distribution of CHNR's 100% equity interest of PSTT |  |  |  |  |  |  | — |  |  |  | (37,460 | ) |  |  | — |  |  |  | — |
Interest paid |  |  |  |  |  |  | (3,882 | ) |  |  | (1,878 | ) |  |  | — |  |  |  | — |
Net cash flows (used in)/from financing activities |  |  |  |  |  |  | (22,833 | ) |  |  | (37,930 | ) |  |  | 15,111 |  |  |  | 2,070 |
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS |  |  |  |  |  |  | (28,569 | ) |  |  | (25,656 | ) |  |  | 7,695 |  |  |  | 1,045 |
NET FOREIGN EXCHANGE DIFFERENCE |  |  |  |  |  |  | 1,905 |  |  |  | (1,286 | ) |  |  | (9,366 | ) |  |  | (1,294 | )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |  |  |  |  |  |  | 58,359 |  |  |  | 31,695 |  |  |  | 4,753 |  |  |  | 671 |
CASH AND CASH EQUIVALENTS AT END OF YEAR |  |  | 13 |  |  |  | 31,695 |  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |

|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and bank balances attributable to continued operations |  |  | 6,040 |  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |
Cash, bank balances and short-term deposits attributable to discontinued operations |  |  | 25,655 |  |  |  | — |  |  |  | — |  |  |  | — |
Cash and cash equivalents as stated in the statement of cash flows |  |  | 31,695 |  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |

F-11

CHINA NATURAL RESOURCES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024

(Amounts in thousands, except share and per share data)

1. |  | ORGANIZATION AND PRINCIPAL ACTIVITIES

China Natural Resources, Inc. (“CHNR” or the “Company”) is a British Virgin Islands (“BVI”) holding company incorporated in 1993. The address of the principal executive office is Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong. The Company’s principal activity is investment holding. The Company’s subsidiaries (collectively with CHNR, the “Group”) are primarily involved in the exploration and mining in the People’s Republic of China (“PRC”).

CHNR’s principal shareholder is Feishang Group Limited (“Feishang Group” or the “Shareholder”), a BVI corporation. Mr. Li Feilie is the controlling shareholder of Feishang Group. In the opinion of the directors of the Company (the “Directors”), the ultimate parent of CHNR is Laitan Investment Limited, a BVI corporation.

As of 31 December 2024, the Company had direct and indirect interests in the following subsidiaries, the particulars of which are set out below:

Schedule of direct and indirect interests in subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Place of incorporation/ registration and operations |  | Nominal value of issued common/ registered share capital |  | Percentage of equity attributable to the Company |  |  | Principal activities
Name |  |  |  |  |  | Direct |  |  | Indirect |  |  |
China Coal Mining Investment Limited (“China Coal”) |  | Hong Kong |  | * |  |  | 100 |  |  |  | — |  |  | Investment holding
FMH Corporate Services Inc. |  | United States |  | * |  |  | 100 |  |  |  | — |  |  | Dormant
Feishang Dayun Coal Mining Limited |  | Hong Kong |  | * |  |  | — |  |  |  | 100 |  |  | Investment holding
Feishang Mining Holdings Limited |  | BVI |  | * |  |  | 100 |  |  |  | — |  |  | Investment holding
Feishang Yongfu Mining Limited |  | Hong Kong |  | * |  |  | — |  |  |  | 100 |  |  | Investment holding
Newhold Investments Limited |  | BVI |  | * |  |  | 100 |  |  |  | — |  |  | Investment holding
Pineboom Investments Limited |  | BVI |  | * |  |  | 100 |  |  |  | — |  |  | Investment holding
Shenzhen Feishang Management and Consulting Co., Limited (“Feishang Management”) |  | PRC/Mainland China |  | CNY10,000 |  |  | — |  |  |  | 100 |  |  | Provision of management and consulting services to other companies in the Group
Yangpu Shuanghu Industrial Development Co., Limited |  | PRC/Mainland China |  | CNY1,000 |  |  | — |  |  |  | 100 |  |  | Investment holding
Yunnan Feishang Mining Co., Limited |  | PRC/Mainland China |  | CNY50,000 |  |  | — |  |  |  | 100 |  |  | Investment holding
Bayannaoer City Feishang Mining Company Limited |  | PRC/Mainland China |  | CNY59,480 |  |  | — |  |  |  | 100 |  |  | Exploration and development of lead mines

* Insignificant

The consolidated financial statements of the Group for the year ended December 31, 2024 were authorized for issuance in accordance with a resolution of the Directors executed on May 15, 2025.

F-12

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.1 |  | BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements have been prepared on a historical cost basis, except for structured deposit, derivative financial liabilities and equity financial assets that have been measured at fair value. The consolidated financial statements are presented in Chinese Yuan (“CNY”) and all values are rounded to the nearest thousand, except when otherwise indicated. US$ indicates U.S. dollars. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.

2.1.1. |  | GOING CONCERN BASIS

The Group incurred net losses for the years ended December 31, 2023 and 2024, respectively and net cash from operating activities was CNY13 million 13,328 for the year ended December 31, 2023 and net cash used in operating activities was CNY7.4 million (7,417) for the year ended December 31 2024. The Group assesses its liquidity by its ability to generate cash from operating activities and attract additional capital and/or finance funding.

During the year ended December 31, 2023, the Group has, through its subsidiary, sold all its water treatment segment assets and liabilities. This means there will be no revenues, but administrative and other operating expenses incurred in the near future as the mining and exploration segment is still at a developing stage. As of December 31, 2024, the Group had net current liabilities of CNY12.96 million and cash and cash equivalents of CNY3.08 million. 3,082

The Group expects that its existing cash and cash equivalents will be sufficient to fund its operations and meet all of its obligations as they fall due for at least twelve months from the date of the consolidated financial statements. In addition, the Group has received a financial support letter from its major shareholder. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenues while controlling operating costs and expenses, generating operational cash flows as well as continuing to gain support from outside sources of financing. Based on the above considerations, the Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

F-13

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.2 |  | BASIS OF CONSOLIDATION

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the years ended December 31. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).

Generally, there is a presumption that a majority of voting rights results in control. When the Company has less than a majority of the voting or similar right of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

| (a) | the contractual arrangement with the other vote holders of the investee;
| (b) | rights arising from other contractual arrangements; and
| (c) | the Group’s voting rights and potential voting rights.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control and continue to be consolidated until the date that such control ceases.

Profit or loss and each component of other comprehensive income are attributed to owners of the Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment retained and any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

2.3 |  | CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the following new and revised IFRSs for the first time for the current year’s consolidated financial statements:

Amendments to IAS 1 | Classification of Liabilities as Current or Non-current (the “2020 Amendments”)
Amendments to IAS 1 | Non-current Liabilities with Covenants (the “2022 Amendments”)

The nature and the impact of the new and revised IFRSs that are applicable to the Group are described below:

| (a) | Amendments to IAS 1 require entities to disclose their material accounting policy information rather than their significant accounting policies. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. Amendments to IFRS Practice Statement 2 Making Materiality Judgements provide non-mandatory guidance on how to apply the concept of materiality to accounting policy disclosures. The Group has disclosed the material accounting policy information in note 2.5 to the financial statements. The amendments did not have any impact on the measurement, recognition or presentation of any items in the Group’s financial statements.

F-14

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.4 |  | ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Group has not applied the following revised IFRSs, that have been issued but are not yet effective, in these financial statements. The Group intends to apply these revised IFRSs, if applicable, when they become effective.

Amendments to IFRS 10 and IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture3
Amendments to IAS 7 and IFRS 7 | Supplier Finance Arrangements1
Amendments to IAS 21 | Lack of Exchangeability2

1 |  | Effective for annual periods beginning on or after 1 January 2024
2 |  | Effective for annual periods beginning on or after 1 January 2025
3 |  | No mandatory effective date yet determined but available for adoption

Further information about those IFRSs that are expected to be applicable to the Group is described below.

| (a) | Amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements in IFRS 10 and in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require a full recognition of a gain or loss resulting from a downstream transaction when the sale or contribution of assets constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss resulting from the transaction is recognised in the investor’s profit or loss only to the extent of the unrelated investor’s interest in that associate or joint venture. The amendments are to be applied prospectively. The amendments are not expected to have any significant impact on the Group’s financial statements.

| (b) | Amendments to IAS 7 and IFRS 7 clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. Earlier application of the amendments is permitted. The amendments provide certain transition reliefs regarding comparative information, quantitative information as at the beginning of the annual reporting period and interim disclosures. The amendments are not expected to have any significant impact on the Group’s financial statements.

| (c) | Amendments to IAS 21 specify how an entity shall assess whether a currency is exchangeable into another currency and how it shall estimate a spot exchange rate at a measurement date when exchangeability is lacking. The amendments require disclosures of information that enable users of financial statements to understand the impact of a currency not being exchangeable. Earlier application is permitted. When applying the amendments, an entity cannot restate comparative information. Any cumulative effect of initially applying the amendments shall be recognised as an adjustment to the opening balance of retained profits or to the cumulative amount of translation differences accumulated in a separate component of equity, where appropriate, at the date of initial application. The amendments are not expected to have any significant impact on the Group’s financial statements.

F-15

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES

| (a) | Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owner of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.

The Group determines that it has acquired a business when the acquired set of activities and assets includes an input and a substantive process that together significantly contribute to the ability to create outputs.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date. This includes the separation of embedded derivatives in host contracts of the acquiree.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss.

Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability is measured at fair value with changes in fair value recognized in profit or loss. If the contingent consideration is not within the scope of IFRS 9, it is measured in accordance with the appropriate IFRSs. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognized for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree over the identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognized in profit or loss as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as of December 31. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. An impairment loss recognized for goodwill is not reversed in a subsequent period.

F-16

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (a) | Business combinations and goodwill (continued)

Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on the disposal. Goodwill disposed of in these circumstances is measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.

| (b) | Fair value measurement

The Group measures equity investments and derivative financial liabilities at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:

Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – based on valuation techniques for which the lowest-level input that is significant to the fair value measurement is observable, either directly or indirectly;

Level 3 – based on valuation techniques for which the lowest-level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest-level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

F-17

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (c) | Related parties

A party is considered to be related to the Group if:

| (1) | the party is a person or a close member of that person’s family and that person

| (i) | has control or joint control over the Group;
| (ii) | has significant influence over the Group; or
| (iii) | is a member of the key management personnel of the Group or of a parent of the Group;

or

| (2) | the party is an entity where any of the following conditions applies:

| (i) | the entity and the Group are members of the same group;
| (ii) | one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);
| (iii) | the entity and the Group are joint ventures of the same third party;
| (iv) | one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
| (v) | the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;
| (vi) | the entity is controlled or jointly controlled by a person identified in (1);
| (vii) | a person identified in (1)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and
| (viii) | the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.

| (d) | Property, plant and equipment and depreciation

Property, plant and equipment comprise buildings, machinery and equipment, motor vehicles and office and other equipment. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Buildings, machinery and equipment, motor vehicles and office and other equipment are stated at cost less accumulated depreciation and any impairment losses. Expenditures for routine repairs and maintenance are expensed as incurred.

Depreciation for the following items is calculated on the straight-line basis over each asset’s estimated useful life down to the estimated residual value of each asset.

Estimated useful lives are as follows:

Schedule of estimated useful lives of property, plant and equipment |  |
Buildings |  | 8–35 years
Machinery and equipment |  | 3–15 years
Motor vehicles |  | 4–8 years
Office and other equipment |  | 4–8 years

Residual values, useful lives and the depreciation method are reviewed and adjusted, if appropriate, at each reporting date.

F-18

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (d) | Property, plant and equipment and depreciation (continued)

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalized in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciates them accordingly.

An item of property, plant and equipment including any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognized in the statement of profit or loss in the year the asset is derecognized is the difference between the net sales proceeds and the carrying amount of the relevant asset.

| (e) | Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities for obligations to make lease payments and right-of-use assets representing the right to use the underlying assets.

At inception or on reassessment of a contract that contains a lease component and a non-lease component, the Group adopts the practical expedient not to separate the non-lease component and to account for the lease component and the associated non-lease component (e.g., property management services for leases of properties) as a single lease component.

F-19

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (e) | Leases (continued)

(1) Right-of-use assets

Right-of-use assets are recognized at the commencement date of the lease (that is, the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:

Schedule of estimated useful lives of right-of-use assets |  |
Offices and warehouses |  | 2–5 years
Motor vehicles |  | 2–10 years

If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

(2) Lease liabilities

Lease liabilities are recognized at the commencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognized as an expense in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying asset.

F-20

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (e) | Leases (continued)

Group as a lessee (continued)

(3) Short-term leases

The Group applies the short-term lease recognition exemption to its short-term leases of buildings (that is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option).

Lease payments on short-term leases are recognized as an expense on a straight-line basis over the lease term.

| (f) | Exploration and evaluation costs

Exploration and evaluation assets include topographical and geological surveys, exploratory drilling, sampling and trenching and activities in relation to commercial and technical feasibility studies, and expenditure incurred to secure further mineralization in existing bodies and to expand the capacity of a mine. Expenditure incurred prior to acquiring legal rights to explore an area is expensed as incurred.

Once the exploration right has been acquired, exploration and evaluation expenditures are charged to the statement of profit or loss as incurred, unless a future economic benefit is more likely than not to be realized. Exploration and evaluation assets acquired in a business combination are initially recognized at fair value. They are subsequently stated at cost less accumulated impairment.

When it can be reasonably ascertained that a mining property is capable of commercial production, exploration and evaluation costs are transferred to tangible or intangible assets according to the nature of the exploration and evaluation assets. If any project is abandoned during the evaluation stage, the total expenditure thereon will be written off.

| (g) | Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, financial assets, deferred tax assets and contract assets), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs. In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate asset (e.g., a headquarters building) is allocated to an individual cash-generating unit if it can be allocated on a reasonable and consistent basis or, otherwise, to the smallest group of cash-generating units.

An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset.

An assessment is made at the end of each reporting period as to whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognized impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortization) had no impairment loss been recognized for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which it arises.

F-21

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (h) | Investments and other financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 in accordance with the policies set out in Note 2.5(aa) below.

In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.

Purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at amortized cost (debt instruments)

Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the statement of profit or loss when the asset is derecognized, modified or impaired.

Financial assets at fair value through other comprehensive income (debt instruments)

For debt investments at fair value through other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statement of profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled to the statement of profit or loss.

F-22

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (h) | Investments and other financial assets (continued)

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss.

This category includes derivative instruments and equity investments which the Group had not irrevocably elected to classify at fair value through other comprehensive income. Dividends on the equity investments are also recognized as other income in the statement of profit or loss when the right of payment has been established.

| (i) | Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s statement of financial position) when:

| • | the rights to receive cash flows from the asset have expired; or
| • | the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

| (j) | Impairment of financial assets

The Group recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

F-23

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (j) | Impairment of financial assets (continued)

General approach

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as of the reporting date with the risk of a default occurring on the financial instrument as of the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.

The Group considers a financial asset in default based on historical patterns and the credit risk management practices of the Group. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Financial assets at amortized cost excluding trade receivables and contract assets are subject to impairment under the general approach, and they are classified within the following stages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as detailed below:

Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs;

Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs.

Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs;

Simplified approach

For trade receivables and contract assets including those containing a significant financing component, the Group applies the simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

| (k) | Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

F-24

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (k) | Financial liabilities (continued)

The Group’s financial liabilities include trade payables, financial liabilities included in other payables and accruals, dividends payable, derivative financial liabilities, interest-bearing loans and borrowings, due to related companies and due to the shareholders.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the statement of profit or loss. The net fair value gain or loss recognized in the statement of profit or loss does not include any interest charged on these financial liabilities.

Financial liabilities designated upon initial recognition as at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. Gains or losses on liabilities designated at fair value through profit or loss are recognized in the statement of profit or loss, except for the gains or losses arising from the Group’s own credit risk which are presented in other comprehensive income with no subsequent reclassification to the statement of profit or loss. The net fair value gain or loss recognized in the statement of profit or loss does not include any interest charged on these financial liabilities.

Financial liabilities at amortized cost

After initial recognition, lease liabilities are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the liabilities are derecognized as well as through the effective interest rate amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance costs in the statement of profit or loss.

| (l) | Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or canceled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in the statement of profit or loss.

| (m) | Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

F-25

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (n) | Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-term highly liquid deposits with a maturity of generally within three months that are readily convertible into known amounts of cash, subject to an insignificant risk of changes in value held for the purpose of meeting short-term cash commitments.

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

| (o) | Employee benefits

Pension obligations

The Group contributes on a monthly basis to various defined contribution retirement benefit plans administered by the PRC government. The relevant government agencies undertake to assume the retirement benefit obligation payable to all existing and future retired employees under these plans and the Group has no further obligation for post-retirement benefits beyond the contributions made. Further information is set out in Note 6 to the consolidated financial statements.

Housing funds

All full-time employees of the Group in mainland China are entitled to participate in various government-sponsored housing funds. The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees. The Group's liability with respect to these funds is limited to the contributions payable in each year.

| (p) | Share-based payments

The Company operates a share option scheme for the purpose of providing incentives and rewards to employees (including directors) and consultants who contribute to the success of the Group's business and grants warrants for the Company’s shares for the purpose of paying fees to the placement agent who provided the professional services during the Company’s private placement. The employees and consultants (collectedly with placement agent, the “grantees”) of the Group receive remuneration in the form of share-based payments, whereby the grantees render services in exchange for equity instruments (“equity-settled transactions”).

F-26

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (p) | Share-based payments (continued)

The cost of equity-settled transactions is recognized in administrative expense, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognized as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no expense is recognized. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognized for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is canceled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the canceled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

F-27

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (q) | Income taxes

Income tax comprises current and deferred tax. Income tax relating to items recognized outside profit or loss is recognized outside profit or loss, either as other comprehensive income or loss, or directly in equity.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the end of the reporting date, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

| · | When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and

| · | In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, and the carryforward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilized, except:

| · | Where the deferred tax assets relating to the deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and

| · | In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

F-28

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (r) | Foreign currencies

The functional currency of the Company is the Hong Kong dollars. The functional currency of substantially all the operations of the Group is the CNY, the national currency of the PRC. Transactions denominated in currencies other than the CNY recorded by the entities of the Group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in other currencies have been translated into CNY at the functional currency rates of exchange prevailing at the end of the reporting period. The resulting exchange gains or losses are credited or charged to the consolidated statements of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.

The consolidated financial statements of certain overseas subsidiary operations with a functional currency other than the CNY have been translated into CNY. The assets and liabilities of these entities have been translated using the exchange rates prevailing at the reporting date and their consolidated statements of profit or loss have been translated using the weighted average exchange rate for the year. Resulting translation adjustments are reported as a separate component of other comprehensive income.

On disposal of a foreign operation, the cumulative amount recognized in equity relating to that particular foreign operation is recognized in the consolidated statements of profit or loss.

| (s) | Convenience translation

The consolidated financial statements are stated in CNY. The translation of amounts from CNY into US$ is supplementary information and is included solely for the convenience of the readers and has been made at the rate of exchange quoted by www.ofx.com on December 31, 2024 of US$1.00 = CNY7.2980. No representation is made that the CNY amounts could have been, or could be, converted into US$ at that rate on December 31, 2024 or at any other date.

| (t) | Provisions

A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.

When the effect of discounting is material, the amount recognized for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in the statement of profit or loss.

| (u) | Dividends

Final dividends are recognized as a liability when they are approved by the Directors in a general meeting.

Interim dividends are simultaneously proposed and declared, because the Company’s memorandum and articles of association grant the Directors the authority to declare interim dividends. Consequently, interim dividends are recognized immediately as a liability when they are proposed and declared.

F-29

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (v) | Government grants

Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the period in which the costs, for which it is intended to compensate, are expensed.

| (w) | Service concession arrangement – Discontinued Operations

The Group has entered into Public-Private Partnership (“PPP”) projects under Build-Operate-Transfer (“BOT”) arrangements with the governmental entity of Guangdong Shaoguan Wujiang District. The BOT arrangement is a service concession arrangement under IFRIC 12 Service Concession Arrangements, because the local government controls and regulates the services that the Group must provide with the infrastructure at a pre-determined service charge and, upon expiration of concession right agreements, the infrastructure has to be transferred to the local government at nil consideration.

Under this service concession arrangement:

- the grantor controls or regulates the services the Group must provide with the infrastructure, to whom it must provide them, and at what price; and

- the grantor controls, through ownership, beneficial entitlement or otherwise, any significant residual interest in the infrastructure at the end of the term of the arrangement, or the infrastructure is used for its entire useful life under the arrangements, or both the Group’s practical ability to sell or pledge the infrastructure is restricted and continuing right of use of the infrastructure is given to the grantor throughout the period of the arrangements.

A financial asset (receivable under a service concession arrangement) is recognized to the extent that (a) the Group has an unconditional right to receive cash or another financial asset from or at the direction of the grantor for the construction services rendered and/or the consideration paid and payable by the Group for the right to charge users of the public service; and (b) the grantor has little, if any, discretion to avoid payment, usually because the agreement is enforceable by law. The Group has an unconditional right to receive cash or another financial asset if nothing other than the passage of time is required before payment of the consideration is due and the grantor contractually guarantees to pay the Group (a) specified or determinable amounts or (b) the shortfall, if any, between amounts received from users of the public service and specified or determinable amounts, even if the payment is contingent on the Group ensuring that the infrastructure meets specified quality of efficiency requirements. The financial asset (receivable under service concession arrangement) is accounted for in accordance with the policy set out for loans and receivables under “(i) Investments and other financial assets”.

An intangible asset (concession right) is recognized to the extent that the Group receives a right to charge users of the public service, which is not an unconditional right to receive cash because the amounts are contingent on the extent that the public uses the service. The intangible asset (concession right) is accounted for in accordance with the policy set out for “(e) Intangible assets (other than goodwill)”.

Construction services

If the Group is paid partly with a financial asset and partly with an intangible asset, each component of the consideration is accounted for separately and the consideration received or receivable for both components will be recognized initially at the fair value of the consideration received or receivable.

Revenue relating to construction is accounted for in accordance with the policy set out for “Revenue from contracts with customers - Construction services” below.

F-30

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (w) | Service concession arrangement - Discontinued Operations (continued)

Operating services

Revenue relating to operating services is accounted for in accordance with the policy for “(aa) Revenue recognition-Revenue from contracts with customers-Operation services of service concession arrangements” below. Costs for operating services are expensed in the period in which they are incurred.

| (x) | Revenue recognition – Discontinued Operations

Revenue from contracts with customers

Revenue from contracts with customers is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

When the consideration in a contract includes a variable amount, the amount of consideration is estimated to be that to which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

When the contract contains a financing component which provides the customer with a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Group and the customer at contract inception. When the contract contains a financing component which provides the Group with a significant financial benefit for more than one year, revenue recognized under the contract includes the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in IFRS 15.

The Group satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met:

– The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs.

– The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.

– The Group’s performance does not create an asset with an alternate use to the Group and the Group has an enforceable right to payment for performance completed to date.

If none of the above conditions are met, the Group recognizes revenue at the point in time at which the performance obligation is satisfied.

The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation, by reference to the surveyors’ assessment of work performed and the costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract.

When the Group provides more than one service in a service concession arrangement, the transaction price will be allocated to each performance obligation by reference to their relative stand-alone selling prices. In determining the transaction price, the Group adjusts the promised amount of consideration for the effect of a financing component if it is significant.

F-31

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (x) | Revenue recognition – Discontinued Operations (continued)

Revenue from contracts with customers (continued)

Construction services

The Group’s performance with respect to construction services creates or enhances an asset or work in progress that the customer controls as the asset is created or enhanced. The Group satisfies the performance obligation and recognizes revenue over time, by reference to completion of the specific transaction assessed on the basis of either the surveyors’ assessment of work performed for Engineering Procurement Construction (EPC) contracts or the costs incurred up to the end of the reporting period as a percentage of total estimated costs for certain contracts solely associated with equipment installation.

In some circumstances, the Group as subcontractor of the construction service may not be able to reasonably measure the outcome of a performance obligation in the early states of a contract. The Group recognizes revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

The fair value of the construction services under a service concession arrangement is initially estimated at the date of the agreement based on a cost-plus-margin basis with reference to the prevailing market rate of gross margin applicable to similar construction services rendered

Operation services of service concession arrangements

Operation revenue from service concession arrangements is recognized over the period of time that the services are rendered, and the benefits are received and consumed simultaneously by the customers.

Sales of water treatment equipment

Revenue from the sales of water treatment equipment is recognized at the point in time when control of the asset is transferred to the customer. Control is generally transferred when: (i) the customer obtains the physical possession or the legal title of water treatment equipment; and (ii) the Group has a present right to payment and the collection of the consideration is probable.

Maintenance services

Revenue from maintenance services is recognized over the period of time that the services are rendered, and the benefits are received and consumed simultaneously by the customers.

Trading of copper ores

The Group purchased copper ores from third-party suppliers and then resells to a third-party trading company. The Group controlled the copper ores prior to selling them to customers. Revenue was recognized on a gross basis, and at the point in time when control of the asset was transferred to the customer, upon delivery of the copper ores to the customers.

F-32

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.5 |  | MATERIAL ACCOUNTING POLICIES (CONTINUED)

| (x) | Revenue recognition - Discontinued Operations (continued)

Other income

Imputed finance income under a service concession arrangement is recognized on an accrual basis using the effective interest rate method by applying the rate that discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

Interest income is recognized on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

| (y) | Contract assets and contract liabilities – Discontinued Operations

Contract assets

If the Group performs by transferring services or goods to a customer before being unconditionally entitled to the consideration under the contract terms, a contract asset is recognized for the earned consideration that is conditional. Contract assets are subject to impairment assessment according to the policy set out for “(k) Impairment of financial assets” above. They are reclassified to trade receivables when the right to the consideration becomes unconditional.

Contract liabilities

A contract liability is the obligation to transfer services or goods to a customer from which the Group has received consideration (or from which an amount of consideration is unconditionally due) from the customer. If a customer pays consideration before the Group transfers services or goods to the customer, a contract liability is recognized when the payment is made or the payment is unconditionally due (whichever is earlier). Contract liabilities are recognized as revenue when the Group performs under the contract.

F-33

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

2.6 |  | SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgments

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effects on the amounts recognized in the financial statements.

Income taxes

The Group is subject to income taxes in Hong Kong and the PRC. The Group carefully evaluates tax implications of its transactions in accordance with prevailing tax regulations and makes tax provision accordingly. However, judgment is required in determining the Group’s provision for income taxes as there are many transactions and calculations, of which the ultimate tax determination is uncertain, during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact on the income tax and deferred tax provision in the periods in which such determination is made.

Estimation uncertainty

Contract asset and intangible asset under IFRIC 12 Service Concession Arrangements – Discontinued Operations

The Group recognizes the consideration received or receivable in exchange for the construction services as a contract asset and an intangible asset under a service concession arrangement. However, if the Group is paid for the construction services partly by a cash consideration and partly by an intangible asset, it is necessary to separately account for each component of the operator’s consideration. Both components of consideration received or receivable initially are recognized at their respective fair values.

The segregation of the consideration for a service concession arrangement between the contract asset component and the intangible asset component, if any, requires the Group to make an estimate of a number of factors, which include, the fair value of the construction services, expected future water treatment volume of the relevant water treatment plant over its service concession period, future guaranteed receipts and unguaranteed receipts, and a discount rate in order to calculate the present value of those cash flows. These estimates, including revenue recognition of the contract asset and intangible asset components are determined by the Group’s management based on their experience and assessment of current and future market conditions.

Provision for expected credit losses on financial assets at amortized cost and contract assets – Discontinued Operations

The policy for provision for ECLs on contract assets and financial assets at amortized cost including trade receivables, other receivables and amounts due from related parties is based on an ECL model. A considerable amount of estimation is required in assessing the available information which includes past collection history, age of balances, customer type and forecasts of future economic conditions to estimate the ECLs. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of a customers’ actual default in the future. The information about the ECLs on the Group’s contract assets and financial assets at amortized cost is disclosed in Note 12.

F-34

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

3. |  | DISCONTINUED OPERATIONS

On July 28, 2023, the Company’s board of directors had approved the Sale and Purchase Agreement (“SPA") with Feishang Group. Pursuant to the SPA, the Company agreed to sell 100% equity interest of Precise Space-Time Technology Limited ("PSTT") to Feishang Group, together with PSTT's outstanding payable owed to the Company, for consideration of approximately CNY95,761 comprising: (i) CNY-34,197, the fair value of 100% equity interest of PSTT as determined by the independent valuation report dated July 28, 2023. (ii) CNY129,958, the book value of PSTT's outstanding payable owed to the Company (referred as Disposal of PSTT). PSTT operated the wastewater treatment segment. After the disposal, the Company will not operate any wastewater treatment business and will continue operating its exploration and mining business.

The disposal of PST Technology was accounted for as an equity transaction of entities under common control. The consideration received by the Company for the disposal has been accounted for as a deemed contribution from the controlling shareholder in the consolidated statement of changes in equity. The assets and liabilities of the wastewater treatment transferred to Mr. Li Feilie were accounted for as a deemed distribution to the controlling shareholder on the closing date of the transaction.

The results of PSTT for the years/period are presented below.

Schedule of disposal pstt |  |  |  |  |  |  |  |  |
|  | 2022 |  |  | For the period from January 1, 2023 to July 28, 2023 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |
Revenue |  |  | 20,306 |  |  |  | 12,748 |  |  |  | — |
Cost of sales |  |  | (14,485 | ) |  |  | (5,872 | ) |  |  | — |
Gross profit |  |  | 5,821 |  |  |  | 6,876 |  |  |  | — |
Selling and distribution expenses |  |  | (700 | ) |  |  | (442 | ) |  |  | — |
Administrative expenses |  |  | (11,501 | ) |  |  | (5,699 | ) |  |  | — |
Other income |  |  | 205 |  |  |  | 142 |  |  |  | — |
Impairment reversal/(losses) on financial assets |  |  | 1,073 |  |  |  | (9,931 | ) |  |  | — |
Finance costs |  |  | (3,586 | ) |  |  | (1,906 | ) |  |  | — |
Finance income |  |  | 15,594 |  |  |  | 8,785 |  |  |  | — |
(LOSS)/PROFIT BEFORE INCOME TAX |  |  | 6,906 |  |  |  | (2,175 | ) |  |  | — |
Income tax expense |  |  | (5,864 | ) |  |  | (1,931 | ) |  |  | — |
(LOSS)/PROFIT FOR THE YEAR/PERIOD FROM THE DISCONTINUED OPERATIONS |  |  | 1,042 |  |  |  | (4,106 | ) |  |  | — |
Attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Owners of the company |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |
Non-controlling interests |  |  | 2,327 |  |  |  | 1,398 |  |  |  | — |

F-35

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

3. |  | DISCONTINUED OPERATIONS (CONTINUED)

The net cash flows incurred by PSTT are as follows:

Schedule of discontinued operations cash flow |  |  |  |  |  |  |  |  |
|  | 2022 |  |  | For the period from January 1, 2023 to July 28, 2023 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
Operating activities |  |  | (2,255 | ) |  |  | 15,162 |  |  |  | — |
Investing activities |  |  | (13 | ) |  |  | (12 | ) |  |  | — |
Financing activities |  |  | (11,930 | ) |  |  | (3,378 | ) |  |  | — |
Net foreign exchange difference |  |  | — |  |  |  | 33 |  |  |  | — |
Net (decrease) /increase in cash and cash equivalents |  |  | (14,198 | ) |  |  | 11,805 |  |  |  | — |
Loss per share |  |  |  |  |  |  |  |  |  |  |  |
– Basic, from the discontinued operations |  |  | (0.15 | ) |  |  | (0.67 | ) |  |  | — |
– Diluted, from the discontinued operations |  |  | (0.15 | ) |  |  | (0.67 | ) |  |  | — |

The calculations of basic and diluted earnings per share from discontinued operations are based on:

|  | 2022 |  |  | For the period from January 1, 2023 to July 28, 2023 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
Loss for the year attributable to owners of the Company from discontinued operations |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |
Weighted average number of ordinary shares in issue during the year / period used in the basic and diluted earnings per share calculation (note 8) |  |  | 8,189,617 |  |  |  | 8,222,658 |  |  |  | — |

F-36

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

4. |  | SEGMENT INFORMATION

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Group’s management and the Company’s Board of Directors for the purpose of resource allocation and performance assessment.

Management assesses the performance of operating segments based on profit or loss before income tax in related periods. The manner of assessment is consistent with that applied in these financial statements.

After the disposal of PSTT in July 2023, the Group only operates in one operating segment: exploration and mining. Segment performance is evaluated based on reportable segment profit / (loss), which is a measure of adjusted profit / (loss) before tax from continuing operations. The segment analysis below is provided for the Group's continuing operations and does not include any amount from a discontinued operation, namely the wastewater treatment (see Note 3 for information on discontinued operations).

As of and for the year ended December 31, 2024, the segment results were as follows:

Schedule of segment results |  |  |  |  |  |  |  |  |
|  | CNY |
|  | Exploration and mining |  |  | Corporate activities |  |  | Total |
Depreciation and amortization |  |  | (4 | ) |  |  | — |  |  |  | (4 | )
Interest income |  |  | 3 |  |  |  | 66 |  |  |  | 69 |
Finance costs |  |  | (1 | ) |  |  | (27 | ) |  |  | (28 | )
Fair value gain on financial instruments, net |  |  | — |  |  |  | 3,996 |  |  |  | 3,996 |
Loss before income tax |  |  | (2,190 | ) |  |  | (970 | ) |  |  | (3,160 | )
Loss for the year from continuing operations |  |  | (2,190 | ) |  |  | (970 | ) |  |  | (3,160 | )
Total assets |  |  | 259,091 |  |  |  | 1,798 |  |  |  | 260,889 |
Total liabilities |  |  | 162,039 |  |  |  | 10,788 |  |  |  | 172,827 |

F-37

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

4. |  | SEGMENT INFORMATION (CONTINUED)

|  | US$ |
|  | Exploration and mining |  |  | Corporate activities |  |  | Total |
Depreciation and amortization |  |  | (1 | ) |  |  | — |  |  |  | (1 | )
Interest income |  |  | — |  |  |  | 9 |  |  |  | 9 |
Finance costs |  |  | — |  |  |  | (4 | ) |  |  | (4 | )
Fair value gain on financial instruments, net |  |  | — |  |  |  | 432 |  |  |  | 432 |
Loss before income tax |  |  | (300 | ) |  |  | (132 | ) |  |  | (432 | )
Profit/(loss) for the year from continuing operations |  |  | (300 | ) |  |  | (132 | ) |  |  | (432 | )
Total assets |  |  | 35,502 |  |  |  | 245 |  |  |  | 35,747 |
Total liabilities |  |  | 22,203 |  |  |  | 1,479 |  |  |  | 23,682 |

As of and for the year ended December 31, 2023, the segment results were as follows (continued):

|  | CNY |
|  | Exploration and mining |  |  | Corporate activities |  |  | Total |
Depreciation and amortization |  |  | (4 | ) |  |  | (692 | ) |  |  | (696 | )
Interest income |  |  | 1 |  |  |  | 4 |  |  |  | 5 |
Finance costs |  |  | (1 | ) |  |  | (47 | ) |  |  | (48 | )
Fair value gain on financial instruments, net |  |  | — |  |  |  | 847 |  |  |  | 847 |
Profit/(loss) before income tax |  |  | 1,263 |  |  |  | (9,600 | ) |  |  | (8,337 | )
Other income* |  |  | 3,742 | * |  |  | — |  |  |  | 3,742 |
Profit/(loss) for the year from continuing operations |  |  | 1,263 |  |  |  | (9,600 | ) |  |  | (8,337 | )
Total assets |  |  | 252,133 |  |  |  | 1,674 |  |  |  | 253,807 |
Total liabilities |  |  | 159,285 |  |  |  | 18,527 |  |  |  | 177,812 |

*In 2023, the Company received RMB3,742 from government of Dengkou County, Inner Mongolia Autonomous Region as reimbursement payments for discontinuing the exploration and development activities in certain nature reserve areas. The amount is recognized in other income as the expenditure on the exploration and development have been fully expensed before 2023.

As of and for the year ended December 31, 2022, the segment results were as follows (continued):

|  | CNY |
|  | Exploration and mining |  |  | Corporate activities |  |  | Total |
Depreciation and amortization |  |  | (28 | ) |  |  | (701 | ) |  |  | (729 | )
Interest income |  |  | — |  |  |  | 13 |  |  |  | 13 |
Finance costs |  |  | (1 | ) |  |  | 192 |  |  |  | 191 |
Fair value gain on financial instruments, net |  |  | — |  |  |  | 1,007 |  |  |  | 1,007 |
Loss before income tax |  |  | (39 | ) |  |  | (23,299 | ) |  |  | (23,338 | )
Other income |  |  | 698 |  |  |  | 1 |  |  |  | 699 |
Loss for the year from continuing operations |  |  | (39 | ) |  |  | (23,299 | ) |  |  | (23,338 | )
Total assets |  |  | 36,015 |  |  |  | 213,891 |  |  |  | 249,906 |
Total liabilities |  |  | 38,306 |  |  |  | 59,296 |  |  |  | 97,602 |

F-38

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

4. |  | SEGMENT INFORMATION (CONTINUED)

The reconciliation from loss for the year from continuing operations to net loss is as follows:

Schedule of reconciliation from loss |  |  |  |  |  |  |  |  |  |  |  |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | US$ |
Loss for the year from continuing operations |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
Loss for the year from discontinued operations |  |  | 1,042 |  |  |  | (4,106 | ) |  |  | — |  |  |  | — |
Net loss (including non-controlling interests) |  |  | (22,296 | ) |  |  | (12,443 | ) |  |  | (3,160 | ) |  |  | (432 | )

Geographical information

(a) |  | Non-current assets

Schedule of non-current assets |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Mainland China |  |  | 162 |  |  |  | 49 |  |  |  | 7 |
Hong Kong |  |  | 247,767 |  |  |  | 256,484 |  |  |  | 35,144 |
Total |  |  | 247,929 |  |  |  | 256,533 |  |  |  | 35,151 |

The non-current assets information above is based on the locations of the assets and excludes financial instruments and deferred tax assets.

F-39

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

5. |  | LOSS BEFORE INCOME TAX

The Group’s loss before tax from continuing operations is arrived at after (crediting)/charging:

Schedule of loss before tax from continuing operations is arrived at after (crediting)/charging |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Crediting: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Finance income |  |  | (13 | ) |  |  | (5 | ) |  |  | (69 | ) |  |  | (9 | )
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Property, plant and equipment (Note 9) |  |  | 29 |  |  |  | 5 |  |  |  | 4 |  |  |  | 1 |
- Right-of-use assets (Note 10) |  |  | 700 |  |  |  | 691 |  |  |  | 346 |  |  |  | 47 |
Expense relating to short-term leases (Note 10) |  |  | 353 |  |  |  | 194 |  |  |  | 371 |  |  |  | 51 |
Fair value gain on financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Financial assets at fair value through profit or loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
- Derivative financial liabilities |  |  | (1,007 | ) |  |  | (847 | ) |  |  | (3,996 | ) |  |  | (548 | )
Expenses related to issuance of shares |  |  | — |  |  |  | — |  |  |  | 1,354 |  |  |  | 186 |
Expenses related to share-based payment |  |  | — |  |  |  | 3,074 |  |  |  | 125 |  |  |  | 17 |
Consultants share option expense |  |  | 16,152 |  |  |  | — |  |  |  | — |  |  |  | — |
Other income |  |  | (699 | ) |  |  | (3,742 | ) |  |  | (2 | ) |  |  | (1 | )
Finance costs |  |  | (191 | ) |  |  | 48 |  |  |  | (28 | ) |  |  | (4 | )
Employee benefit expenses** (Note 6) |  |  | 1,171 |  |  |  | 1,192 |  |  |  | 1,251 |  |  |  | 172 |

F-40

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

5. |  | LOSS BEFORE INCOME TAX (CONTINUED)

The Group’s loss before tax from discontinuing operations is arrived at after (crediting)/charging:

|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Crediting: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Finance income |  |  | (15,594 | ) |  |  | (8,785 | ) |  |  | — |  |  |  | — |
Charging: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Sales of water treatment equipment |  |  | 94 |  |  |  | — |  |  |  | — |  |  |  | — |
- Construction service |  |  | 8,580 |  |  |  | 2,435 |  |  |  | — |  |  |  | — |
- Operation and maintenance services |  |  | — |  |  |  | 307 |  |  |  | — |  |  |  | — |
- Operation services related to service concession arrangement |  |  | 5,811 |  |  |  | 3,130 |  |  |  | — |  |  |  | — |
- Construction services related to service concession arrangement |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Cost of sales |  |  | 14,485 |  |  |  | 5,872 |  |  |  | — |  |  |  | — |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Property, plant and equipment (Note 9) |  |  | 275 |  |  |  | 95 |  |  |  | — |  |  |  | — |
- Right-of-use assets (Note 10) |  |  | 713 |  |  |  | 359 |  |  |  | — |  |  |  | — |
Amortization of intangible assets* |  |  | 813 |  |  |  | 460 |  |  |  | — |  |  |  | — |
Expense relating to short-term leases (Note 10) |  |  | 137 |  |  |  | 129 |  |  |  | — |  |  |  | — |
Impairment losses/(reversal) on financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Trade receivables |  |  | (3,989 | ) |  |  | 383 |  |  |  | — |  |  |  | — |
- Contract assets |  |  | 171 |  |  |  | 3,545 |  |  |  | — |  |  |  | — |
- Other receivables |  |  | 2,745 |  |  |  | 6,003 |  |  |  | — |  |  |  | — |
- Amounts due from related companies |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other losses / (income) |  |  | (205 | ) |  |  | 142 |  |  |  | — |  |  |  | — |
Finance costs |  |  | 3,586 |  |  |  | 1,906 |  |  |  | — |  |  |  | — |
Employee benefit expenses** |  |  | 9,416 |  |  |  | 4,960 |  |  |  | — |  |  |  | — |

| * | The amortization of intangible assets allocated to cost of sales amounted to CNY730, CNY425 and CNYnil (US$nil) and administrative expenses amounted to CNY83, CNY35 and CNYnil (US$nil) on the consolidated statements of profit or loss for the years ended December 31, 2022, 2023 and 2024.

| ** | The employee benefit expenses allocated to cost of sales amounted to CNY1,418, CNY870 and CNYnil (US$nil), selling and distribution expenses amounted to CNY111, CNY70, CNYnil (US$nil) and administrative expenses amounted to CNY9,058, CNY5,212 and CNYnil (US$nil) on the consolidated statements of profit or loss for the years ended December 31, 2022, 2023 and 2024.

F-41

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

6. |  | EMPLOYEE BENEFITS

The Group’s employee benefits from continuing operation comprise the following:

Schedule of employee benefits |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Wages, salaries and allowances |  |  | 1,042 |  |  |  | 1,073 |  |  |  | 1,126 |  |  |  | 154 |
Housing funds (a) |  |  | 16 |  |  |  | 12 |  |  |  | 49 |  |  |  | 7 |
Contribution to pension plans (a) |  |  | 67 |  |  |  | 70 |  |  |  | 42 |  |  |  | 6 |
Welfare and other expenses |  |  | 46 |  |  |  | 37 |  |  |  | 34 |  |  |  | 5 |
Total employee benefits |  |  | 1,171 |  |  |  | 1,192 |  |  |  | 1,251 |  |  |  | 172 |

| (a) | According to the Mainland China state regulations, the employees of the Group's subsidiaries which operate in Mainland China are required to participate in a central pension scheme operated by the local municipal government and government-sponsored housing funds. These subsidiaries are required to contribute a certain percentage of their payroll costs for those qualified urban employees to the central pension scheme as well as to housing funds.

Employee benefit expenses include remuneration payables to Directors and senior management as set out in Note 20(d).

F-42

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

7. |  | INCOME TAX EXPENSE

The Company is incorporated in the BVI and conducts its primary business operations through its subsidiaries in the PRC. It also has intermediate holding companies in the BVI and Hong Kong. Under the current laws of the BVI, the Company and its subsidiaries incorporated in the BVI are not subject to tax on income or capital gains. Effective from April 1, 2018, a two-tier corporate income tax system was officially implemented in Hong Kong. The applicable income tax rate is 8.25% for the first HK$2.0 million profits, and the subsequent profits are taxed at 16.5%. The Company’s Hong Kong subsidiaries have both Hong Kong–sourced and non-Hong Kong–sourced income. The latter is not subject to Hong Kong Profits Tax and the related expenses are non-tax-deductible. For the Hong Kong–sourced income, no provision for Hong Kong Profits Tax was made as such operations sustained tax losses during the years ended December 31, 2022, 2023 AND 2024. Furthermore, there are no withholding taxes in Hong Kong on the remittance of dividends.

China

Under the law of the PRC on corporate income tax and the Implementation Regulation of the Corporate Income Tax Law (collectively, the “CIT Law”), the Company’s PRC subsidiaries are generally subject to PRC corporate income tax at the statutory rate of 25% on their respective estimated assessable profits for the years ended December 31, 2022, 2023 and 2024.

Under the prevailing CIT Law and its relevant regulations, any dividends paid by the Company’s PRC subsidiaries from their earnings derived after January 1, 2008 to the Company’s Hong Kong subsidiaries are subject to PRC dividend withholding tax of 5% or 10%, depending on the applicability of the Sino-Hong Kong tax treaty.

The current and deferred components of income tax benefit are as follows:

Schedule of current and deferred components of income tax expense |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Current income tax expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Deferred income tax benefit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total tax credit for the year from continuing operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total tax charge for the year from a discontinued operation |  |  | 5,864 |  |  |  | 1,931 |  |  |  | — |  |  |  | — |
Total |  |  | 5,864 |  |  |  | 1,931 |  |  |  | — |  |  |  | — |

(Loss)/profit before income tax from continuing and discontinued operations consists of the following:

Schedule of Profit/(loss) before income tax |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
PRC |  |  | 6,406 |  |  |  | (1,718 | ) |  |  | (2,631 | ) |  |  | (360 | )
BVI |  |  | (22,776 | ) |  |  | (8,738 | ) |  |  | (473 | ) |  |  | (64 | )
Hong Kong |  |  | (62 | ) |  |  | (56 | ) |  |  | (56 | ) |  |  | (8 | )
Total loss before income tax for the year |  |  | (16,432 | ) |  |  | (10,512 | ) |  |  | (3,160 | ) |  |  | (432 | )

F-43

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

7. |  | INCOME TAX EXPENSE (CONTINUED)

A reconciliation of the income taxes from continuing and discontinued operations computed at the PRC statutory tax rate of 25% to the actual income tax expense is as follows:

Schedule of reconciliation of the income tax expenses |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Loss before income tax for the year from continuing operations |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
Profit/(loss) before income tax for the year from a discontinued operation |  |  | 6,906 |  |  |  | (2,175 | ) |  |  | — |  |  |  | — |
Total |  |  | (16,432 | ) |  |  | (10,512 | ) |  |  | (3,160 | ) |  |  | (432 | )
Tax at the statutory tax rate |  |  | 25 | % |  |  | 25 | % |  |  | 25 | % |  |  | 25 | %
Computed income tax benefit |  |  | (4,108 | ) |  |  | (2,628 | ) |  |  | (790 | ) |  |  | (108 | )
Effect of different tax rates of the Company and certain subsidiaries |  |  | 5,699 |  |  |  | 2,190 |  |  |  | 123 |  |  |  | 17 |
Tax losses with no deferred tax assets recognized |  |  | 420 |  |  |  | 290 |  |  |  | 667 |  |  |  | 91 |
Non-deductible expenses |  |  | 983 |  |  |  | 617 |  |  |  | — |  |  |  | — |
Statutory income |  |  | (201 | ) |  |  | — |  |  |  | — |  |  |  | — |
Deductible temporary differences with no deferred tax assets recognized |  |  | 971 |  |  |  | 2,430 |  |  |  | — |  |  |  | — |
Utilization of previously unrecognized deductible temporary differences and tax losses |  |  | (1,774 | ) |  |  | (2,021 | ) |  |  | — |  |  |  | — |
Write-off of unrecoverable deferred tax assets previously recognized |  |  | 2,272 |  |  |  | — |  |  |  | — |  |  |  | — |
Preferential tax rate |  |  | 14 |  |  |  | 95 |  |  |  | — |  |  |  | — |
Others |  |  | 1,588 |  |  |  | 958 |  |  |  | — |  |  |  | — |
Total tax credit for the year from continuing operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total tax charge for the year from a discontinued operation |  |  | 5,864 |  |  |  | 1,931 |  |  |  | — |  |  |  | — |
Income tax benefit |  |  | 5,864 |  |  |  | 1,931 |  |  |  | — |  |  |  | — |

F-44

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

8. |  | LOSS PER SHARE

Basic loss per share is calculated by dividing the loss for the period attributable to ordinary equity holders of the Company by the weighted average number of common shares outstanding during the period.

Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the Company by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all outstanding dilutive securities into common shares.

Basic and diluted net loss per share for the years ended December 31, 2022, 2023 and 2024 are as follows:

Schedule of basic and diluted net loss per share |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Loss for the year attributable to owners of the Company |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations |  |  | (23,338 | ) |  |  | (8,337 | ) |  |  | (3,160 | ) |  |  | (432 | )
From discontinued operations |  |  | (1,285 | ) |  |  | (5,504 | ) |  |  | — |  |  |  | — |
Weighted average number of ordinary shares for basic and diluted earnings per share* |  |  | 8,189,617 |  |  |  | 8,222,658 |  |  |  | 9,658,441 |  |  |  | 9,658,441 |
Loss per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic and diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
For loss from continuing operations |  |  | (2.85 | ) |  |  | (1.01 | ) |  |  | (0.33 | ) |  |  | (0.04 | )
For loss from discontinued operations |  |  | (0.15 | ) |  |  | (0.67 | ) |  |  | — |  |  |  | — |
Loss per share |  |  | (3.00 | ) |  |  | (1.68 | ) |  |  | (0.33 | ) |  |  | (0.04 | )

* |  | The basic and diluted loss per ordinary share has been adjusted retrospectively for the Share Combination which became effective on April 3, 2023. Refer to Note 19 for further details.

For the years ended December 31, 2022，2023 and 2024, the effects of the outstanding warrants and share options were anti-dilutive and excluded from the computation of diluted loss per share. Accordingly, the diluted loss per share amounts are the same as the basic loss per share amounts for the periods presented.

F-45

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

9. |  | PROPERTY, PLANT AND EQUIPMENT

Schedule of property plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Buildings |  |  | Machinery and equipment |  |  | Motor vehicle |  |  | Office and other equipment |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1, 2023 |  |  | 46 |  |  |  | 1,185 |  |  |  | 2,470 |  |  |  | 644 |  |  |  | 4,345 |
Additions |  |  | — |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | 11 |
Disposal of PSTT |  |  | — |  |  |  | (100 | ) |  |  | (1,869 | ) |  |  | (738 | ) |  |  | (2,707 | )
As of December 31, 2023 |  |  | 46 |  |  |  | 1,096 |  |  |  | 601 |  |  |  | (94 | ) |  |  | 1,649 |
Accumulated depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1, 2023 |  |  | (15 | ) |  |  | (1,144 | ) |  |  | (2,258 | ) |  |  | (504 | ) |  |  | (3,921 | )
Depreciation charge |  |  | (3 | ) |  |  | (30 | ) |  |  | (60 | ) |  |  | (7 | ) |  |  | (100 | )
Disposal of PSTT |  |  | — |  |  |  | 91 |  |  |  | 1,735 |  |  |  | 599 |  |  |  | 2,425 |
|  |  | (18 | ) |  |  | (1,083 | ) |  |  | (583 | ) |  |  | 88 |  |  |  | (1,596 | )
Net book value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1, 2023 |  |  | 31 |  |  |  | 41 |  |  |  | 212 |  |  |  | 140 |  |  |  | 424 |
As of December 31, 2023 |  |  | 28 |  |  |  | 13 |  |  |  | 18 |  |  |  | (6 | ) |  |  | 53 |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1, 2024 |  |  | 46 |  |  |  | 1,096 |  |  |  | 601 |  |  |  | (94 | ) |  |  | 1,649 |
Additions |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 3 |
Disposal |  |  | — |  |  |  | — |  |  |  | (99 | ) |  |  | — |  |  |  | (98 | )
As of December 31, 2024 |  |  | 46 |  |  |  | 1,100 |  |  |  | 502 |  |  |  | (94 | ) |  |  | 1,554 |
Accumulated depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of January 1, 2024 |  |  | (18 | ) |  |  | (1,083 | ) |  |  | (583 | ) |  |  | 88 |  |  |  | (1,596 | )
Depreciation charge |  |  | (3 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | (4 | )
Written back on disposal |  |  |  |  |  |  |  |  |  |  | 95 |  |  |  |  |  |  |  | 95 |
|  |  | (21 | ) |  |  | (1,084 | ) |  |  | (488 | ) |  |  | 88 |  |  |  | (1,505 | )
Net book value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of December 31, 2024 |  |  | 25 |  |  |  | 16 |  |  |  | 14 |  |  |  | (6 | ) |  |  | 49 |
As of December 31, 2024 (US$) |  |  | 4 |  |  |  | 2 |  |  |  | 2 |  |  |  | (1 | ) |  |  | 7 |

There was no impairment loss on property, plant and equipment for the years ended December 31, 2022, 2023 and 2024.

F-46

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

10. |  | LEASES

(a) |  | Right-of-use assets

The carrying amounts of the Group’s right-of-use assets and the movements during the years indicated are as follows:

Schedule of right-of-use assets |  |  |  |  |  |  |  |  |
|  | Motor vehicles |  |  | Offices and warehouses |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2023 |  |  | 425 |  |  |  | 2,568 |  |  |  | 2,993 |
Depreciation charge |  |  | (100 | ) |  |  | (950 | ) |  |  | (1,050 | )
Foreign currency translation difference |  |  | — |  |  |  | 24 |  |  |  | 24 |
Disposal of PSTT |  |  | (325 | ) |  |  | (1,296 | ) |  |  | (1,621 | )
As of December 31, 2023 |  |  | — |  |  |  | 346 |  |  |  | 346 |
As of January 1, 2024 |  |  | — |  |  |  | 346 |  |  |  | 346 |
Depreciation charge |  |  | — |  |  |  | (346 | ) |  |  | (346 | )
Foreign currency translation difference |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 (US$) |  |  | — |  |  |  | — |  |  |  | — |

There was no impairment loss on right-of-use assets for the years ended December 31, 2022, 2023 and 2024.

F-47

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

10. |  | LEASES (CONTINUED)

(b) |  | Lease liabilities

The carrying amount of lease liabilities and the movements during the years are as follows:

Schedule of lease liabilities |  |  |  |  |  |  |  |  |
|  | Motor vehicles |  |  | Offices and warehouses |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2023 |  |  | 322 |  |  |  | 2,593 |  |  |  | 2,915 |
Addition |  |  | — |  |  |  | — |  |  |  | — |
Accretion of interest recognized during the year |  |  | 13 |  |  |  | 86 |  |  |  | 99 |
Payments |  |  | (60 | ) |  |  | (964 | ) |  |  | (1,024 | )
Foreign currency translation difference |  |  | — |  |  |  | 27 |  |  |  | 27 |
Disposal of PSTT |  |  | (275 | ) |  |  | (1,382 | ) |  |  | (1,657 | )
As of December 31, 2023 |  |  | — |  |  |  | 360 |  |  |  | 360 |
Analyzed into: |  |  |  |  |  |  |  |  |  |  |  |
Current portion |  |  | — |  |  |  | 360 |  |  |  | 360 |
Non-current portion |  |  | — |  |  |  | — |  |  |  | — |

|  | Motor vehicles |  |  | Offices and warehouses |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2024 |  |  | — |  |  |  | 360 |  |  |  | 360 |
Addition |  |  | — |  |  |  | — |  |  |  | — |
Accretion of interest recognized during the year |  |  | — |  |  |  | 6 |  |  |  | 6 |
Payments |  |  | — |  |  |  | (366 | ) |  |  | (366 | )
As of December 31, 2024 |  |  | — |  |  |  | — |  |  |  | — |
Analyzed into: |  |  |  |  |  |  |  |  |  |  |  |
Current portion |  |  | — |  |  |  | — |  |  |  | — |
Non-current portion |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 (US$) |  |  | — |  |  |  | — |  |  |  | — |
Current portion (US$) |  |  | — |  |  |  | — |  |  |  | — |
Non-current portion (US$) |  |  | — |  |  |  | — |  |  |  | — |

F-48

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

10. |  | LEASES (CONTINUED)

(c) |  | Lease-related expenses

The amounts recognized in profit or loss in relation to leases are, as follows:

Schedule of lease-related expenses |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Depreciation expense of right-of-use assets |  |  | 1,413 |  |  |  | 1,050 |  |  |  | 346 |  |  |  | 47 |
Interest on lease liabilities |  |  | 133 |  |  |  | 99 |  |  |  | 6 |  |  |  | 1 |
Expense relating to short-term leases |  |  | 490 |  |  |  | 323 |  |  |  | 371 |  |  |  | 52 |
Total amounts recognized in profit or loss |  |  | 2,036 |  |  |  | 1,472 |  |  |  | 723 |  |  |  | 100 |

(d) |  | The total cash outflow for leases is disclosed in Note 22(c) to the financial statements.

F-49

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

11. |  | OTHER NON-CURRENT ASSETS

Schedule of other non-current assets |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Zimbabwe lithium deposits (i) |  |  | 247,420 |  |  |  | 256,484 |  |  |  | 35,144 |
Others |  |  | 110 |  |  |  | — |  |  |  | — |
Total |  |  | 247,530 |  |  |  | 256,484 |  |  |  | 35,144 |

(i) Please refer to Note 20 (b) for more details.

F-50

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

12. |  | OTHER RECEIVABLES

Schedule of other receivables |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 3 |  |  |  | — |  |  |  | — |
Others |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 3 |  |  |  | — |  |  |  | — |
Staff advance |  |  | 12 |  |  |  | — |  |  |  | — |
Others |  |  | 3 |  |  |  | 32 |  |  |  | 4 |
|  |  | 15 |  |  |  | 32 |  |  |  | 4 |
Impairment allowance |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 18 |  |  |  | 32 |  |  |  | 4 |

The movements in the loss allowance for other receivables during the years indicated are as follows:

Schedule of movements in the loss allowance for other receivables |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Beginning of the year |  |  | 2,984 |  |  |  | — |  |  |  | — |
Provision for expected credit losses, net |  |  | 6,003 |  |  |  | — |  |  |  | — |
Disposal of PSTT |  |  | (8,987 | ) |  |  | — |  |  |  | — |
End of the year |  |  | — |  |  |  | — |  |  |  | — |

For the financial assets included above, an impairment analysis is performed at each reporting date using the probability-of-default approach to measure ECL. The probability of default rates are estimated based on comparable companies with published credit ratings. The calculation reflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions, and forward-looking credit risk information. As of December 31, 2024, the probability of default applied was nil, and the loss given default was nil.

F-51

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

13. |  | CASH AND CASH EQUIVALENTS

Cash and cash equivalents are set out below as of December 31, 2023 and 2024:

Schedule of cash and cash equivalents |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |  |
- Cash on hand |  |  | 2 |  |  |  | 1 |  |  |  | 1 |
- Cash at bank |  |  | 4,751 |  |  |  | 3,081 |  |  |  | 421 |
- Short-term deposits |  |  | — |  |  |  | — |  |  |  | — |
Total Cash and cash equivalent |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |

The carrying amounts of the Group’s cash and cash equivalents are denominated in the following currencies:

Schedule of cash and cash equivalents denominated in different currencies |  |  |  |  |  |  |  |  |  |
|  |  | December 31, |
|  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  | CNY |  |  | US$ |
CNY |  |  |  | 3,673 |  |  |  | 1,469 |  |  |  | 201 |
US$ |  |  |  | 762 |  |  |  | 1,366 |  |  |  | 187 |
HK$ |  |  |  | 318 |  |  |  | 247 |  |  |  | 34 |
|  |  |  | 4,753 |  |  |  | 3,082 |  |  |  | 422 |

Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances and time deposits are deposited with creditworthy banks with no recent history of default.

F-52

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

14. |  | TRADE PAYABLES

Schedule of trade payables |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | US$ |
Trade payables |  |  | 100 |  |  |  | 280 |  |  |  | 38 |

The aging analysis of trade payables as of December 31, 2023 and 2024 is as follows:

Schedule of aging analysis of trade payables |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Within 1 year |  |  | — |  |  |  | 180 |  |  |  | 24 |
Between 1 and 2 years |  |  | — |  |  |  | — |  |  |  | — |
Over 2 years |  |  | 100 |  |  |  | 100 |  |  |  | 14 |
Total |  |  | 100 |  |  |  | 280 |  |  |  | 38 |

Trade payables are mainly due to subcontractors of construction services and the vendors of labor service.

F-53

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

15. |  | OTHER PAYABLES AND ACCRUALS

Schedule of other payables and accruals |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Accrued expenses |  |  | 7,748 |  |  |  | 1,910 |  |  |  | 262 |
Deposits from customers |  |  | 116 |  |  |  | — |  |  |  | — |
|  |  | 7,864 |  |  |  | 1,910 |  |  |  | 262 |
Accrued payroll |  |  | 156 |  |  |  | 189 |  |  |  | 26 |
Taxes other than income tax payable (a) |  |  | 2 |  |  |  | — |  |  |  | — |
Transaction deposit of mining right acquisition (Note 20 (b)) |  |  | 74,322 |  |  |  | 76,945 |  |  |  | 10,543 |
Others |  |  | 266 |  |  |  | 1,437 |  |  |  | 197 |
|  |  | 74,746 |  |  |  | 78,571 |  |  |  | 10,766 |
Total |  |  | 82,610 |  |  |  | 80,481 |  |  |  | 11,028 |
Analyzed into: |  |  |  |  |  |  |  |  |  |  |  |
Current portion |  |  | 82,610 |  |  |  | 3,536 |  |  |  | 485 |
Non-current portion (Note 20 (b)) |  |  | — |  |  |  | 76,945 |  |  |  | 10,543 |
|  |  | 82,610 |  |  |  | 80,481 |  |  |  | 11,028 |

| (a) | Taxes other than income taxes payable mainly comprise accruals for output value-added tax, city construction tax and education surcharge.

F-54

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

16. |  | FINANCIAL INSTRUMENTS

(a) |  | Financial assets

Set out below is an overview of financial assets, other than cash and short-term deposits, held by the Group as of December 31, 2023 and 2024:

Schedule of financial assets |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Debt instruments at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |
Trade receivables: current |  |  | — |  |  |  | — |  |  |  | — |
Trade receivables: non-current |  |  | — |  |  |  | — |  |  |  | — |
Financial assets included in other receivables |  |  | 3 |  |  |  | 15 |  |  |  | 2 |
Financial assets at fair value through other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |
Bills receivable |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 3 |  |  |  | 15 |  |  |  | 2 |
Total current |  |  | 3 |  |  |  | 15 |  |  |  | 2 |
Total non-current |  |  | — |  |  |  | — |  |  |  | — |

F-55

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

16. |  | FINANCIAL INSTRUMENTS (CONTINUED)

(b) |  | Financial liabilities

Set out below is an overview of financial liabilities of the Group as of December 31, 2023 and 2024:

Schedule of financial liabilities |  |  |  |  |  |  |  |  |
|  | December 31, |  |  | December 31, |  |  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | US$ |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial liabilities (i) |  |  | — |  |  |  | 3,996 |  |  |  | 548 |
Financial liabilities at amortized cost: |  |  |  |  |  |  |  |  |  |  |  |
Trade payables |  |  | 100 |  |  |  | 280 |  |  |  | 38 |
Financial liabilities in other payables and accruals |  |  | 7,864 |  |  |  | 3,536 |  |  |  | 485 |
Lease liabilities |  |  | 360 |  |  |  | — |  |  |  | — |
Due to related companies |  |  | 9,069 |  |  |  | 11,361 |  |  |  | 1,557 |
Due to the Shareholder |  |  | 85,673 |  |  |  | 78,567 |  |  |  | 10,766 |
Total |  |  | 103,066 |  |  |  | 97,740 |  |  |  | 13,394 |
Total current |  |  | 103,066 |  |  |  | 19,173 |  |  |  | 2,628 |
Total non-current |  |  | — |  |  |  | 78,567 |  |  |  | 10,766 |

(i) |  | This represents certain warrants issued to institutional investors on February 21, 2024, which was recognized as derivative financial liabilities (not designated as hedging instruments) with a fair value of CNY6,134 (US$843)* on the issue date as the investors have the right to exercise their warrants on a cashless basis. In accordance with IAS 32, a contract settled by a single net payment (generally referred to as net cash-settled or net equity-settled as the case may be) is a financial liability and not an equity instrument. The fair value gain of derivative financial liabilities for the year ended December 31, 2024 was CNY2,138 (US$293).

(c) |  | Fair value

As of December 31, 2023 and 2024, the carrying amounts of the Group’s financial instruments are reasonable approximations of fair values.

F-56

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

16. |  | FINANCIAL INSTRUMENTS (CONTINUED)

Level 2:

Bills receivable

The fair value valuation of bills receivable is based on directly or indirectly observable inputs (such as recent bill discount rate) through valuation techniques.

Derivative financial liabilities

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

There is no established public trading market for the warrants issued to investors on February 21, 2024. As of December 31, 2024, the Group measured the fair value of those warrants on a recurring basis using a binomial lattice pricing model with significant inputs including, among other relevant observable inputs, the underlying spot price of the Company’s common shares, exercise price, time to expiration, risk-free rate and equity volatility.

F-57

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

17. |  | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The financial instruments of the Group primarily include cash and cash equivalents, trade receivables, bills receivable at fair value through other comprehensive income, other receivables, contract assets, trade payables, other payables, amounts due to related companies, amounts due to the Shareholder, derivative financial liabilities, and interest-bearing loans and borrowings.

The Group is exposed to credit risk, foreign currency risk, business and economic risk and liquidity risk. The Group has not used any derivatives and other instruments for hedging purposes. The Group does not hold or issue derivative financial liabilities for trading purposes. The Group reviews and agrees policies for managing each of these risks and they are summarized below.

(a) |  | Credit risk

Management has a credit policy in place and the exposures to credit risk are monitored on an ongoing basis. Debts are usually due within 30 to 90 days from the date of billing.

As of December 31, 2024 and 2023, no trade receivables was held by the Company.

Management groups financial instruments based on shared credit risk characteristics, such as instrument type and credit risk ratings for the purpose of determining significant increase in credit risk and calculation of impairment. The carrying amount of each financial asset in the consolidated statements of financial position represents the Group’s maximum exposure to credit risk in relation to its financial assets.

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:

- significant financial difficulty of the debtor;

- a breach of contract such as a default or past due event;

- it is probable that the debtor will enter bankruptcy or other financial reorganization

To manage credit risk arising from trade receivables and contract assets, the Group assesses the credit quality of the debtors, taking into account their financial position, historical settlement records, past experience and other factors. The Group applies the simplified approach to provide for ECLs prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The ECLs also incorporated forward-looking information.

For financial assets assessed for impairment under the general approach, the Group established a policy to perform an assessment at the end of each reporting period of whether a financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Group groups its other receivables into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1 – When other receivables are first recognized, the Group recognized an allowance based on 12 months’ ECLs.

Stage 2 – When other receivables have shown a significant increase in credit risk since origination, the Group records an allowance for the lifetime ECLs.

Stage 3 – Other receivables are considered credit-impaired. The Group records an allowance for the lifetime ECLs.

Management also makes periodic collective assessments for other receivables and amounts due from related companies as well as individual assessments of the recoverability of other receivables based on historical settlement records, past experience and other factors. The Group classified other receivables and amounts due from related companies in Stage 1 and continuously monitored their credit risk. Management believes that there is no material credit risk inherent in the Group’s outstanding balance of other receivables as of December 31, 2024 and 2023.

The Group does not provide any guarantees that would expose the Group to credit risk. Further quantitative disclosures with respect to the Group’s exposure to credit risk arising from financial assets are set out in Note 12 to the financial statements.

Cash and cash equivalents

The Group maintains its cash and cash equivalents primarily with various PRC state-owned banks and Hong Kong based financial institutions, which management believes are of high credit quality. The Group performs periodic evaluations of the relative credit standing of those financial institutions.

F-58

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

17. |  | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(b) |  | Foreign currency risk

Foreign currency risk primarily arises from certain significant foreign currency deposits denominated in US$ and HK$ and related exposures are disclosed in Note 16. The Group treasury closely monitors the change of exchange rates on the international foreign currency market and takes these into consideration when investing in foreign currency deposits and borrowing loans.

The CNY is not freely convertible into foreign currencies. The State Administration for Foreign Exchange, under the authority of the People's Bank of China, controls the conversion of the CNY into foreign currencies. The value of the CNY is subject to changes in PRC government policies and to international economic and political developments affecting the supply and demand in the China Foreign Exchange Trading System market. All foreign exchange transactions continue to take place either through the People's Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China.

There is no significant exposure to foreign currency risk as of December 31, 2024 and 2023 for the Company.

(c) |  | Interest rate risk

The fair value interest rate risk of the Group mainly arises from long-term loans at fixed rates. As fluctuation of the comparable interest rate (Loan Prime Rate of PRC market) with similar terms was relatively low, the Directors are of the opinion that the Group is not exposed to any significant fair value interest rate risk for its fixed interest rate borrowings held as of December 31, 2024 and 2023.

(d) |  | Business and economic risk

The Group's operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 40 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the political, economic and social conditions in the PRC. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.

F-59

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

17. |  | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) |  | Liquidity risk

The Group manages its liquidity risk by regularly monitoring its liquidity requirements and its compliance with debt covenants to ensure that it maintains sufficient cash and cash equivalents, as well as adequate time deposits, to meet its liquidity requirements in the short and long term.

The Group expects that its existing cash and cash equivalents, shareholder financial support and subsequent equity financing (see Note 19) will be sufficient to fund its operations and meet all of its obligations as they fall due for at least twelve months from the date of financial statements. See Note 2.1.1 for details related to going concern basis.

The table below summarizes the maturity profile of the Group’s financial liabilities and lease liabilities based on contractual undiscounted payments:

Summary the maturity profile of financial liabilities and lease liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2023 |  | On demand |  |  | Less than 1 year |  |  | 1 to 5 years |  |  | More than 5 years |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |
Trade payables |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 100 |
Financial liabilities in other payables and accruals |  |  | — |  |  |  | 7,864 |  |  |  | — |  |  |  | — |  |  |  | 7,864 |
Due to related companies |  |  | — |  |  |  | 9,069 |  |  |  | — |  |  |  | — |  |  |  | 9,069 |
Due to the shareholder |  |  | — |  |  |  | 85,673 |  |  |  | — |  |  |  | — |  |  |  | 85,673 |
Lease liabilities |  |  | — |  |  |  | 366 |  |  |  | — |  |  |  | — |  |  |  | 366 |
|  |  | 100 |  |  |  | 102,972 |  |  |  | — |  |  |  | — |  |  |  | 103,072 |

F-60

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

17. |  | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) |  | Liquidity risk (continued)

December 31, 2024 |  | On demand |  |  | Less than 1 year |  |  | 1 to 5 years |  |  | More than 5 years |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |
Trade payables |  |  | 280 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 280 |
Financial liabilities in other payables and accruals |  |  | — |  |  |  | 1,910 |  |  |  | — |  |  |  | — |  |  |  | 1,910 |
Due to related companies |  |  | — |  |  |  | 11,361 |  |  |  | — |  |  |  | — |  |  |  | 11,361 |
Due to the shareholder |  |  | — |  |  |  | — |  |  |  | 78,567 |  |  |  | — |  |  |  | 78,567 |
Lease liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 280 |  |  |  | 13,271 |  |  |  | 78,567 |  |  |  | — |  |  |  | 92,118 |

December 31, 2024 |  | On demand |  |  | Less than 1 year |  |  | 1 to 5 years |  |  | More than 5 years |  |  | Total |
|  |  | US$ |  |  |  | US$ |  |  |  | US$ |  |  |  | US$ |  |  |  | US$ |
Trade payables |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 38 |
Financial liabilities in other payables and accruals |  |  | — |  |  |  | 262 |  |  |  | — |  |  |  | — |  |  |  | 262 |
Due to related companies |  |  | — |  |  |  | 1,557 |  |  |  | — |  |  |  | — |  |  |  | 1,557 |
Due to the shareholder |  |  | — |  |  |  | — |  |  |  | 10,766 |  |  |  | — |  |  |  | 10,766 |
Lease liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 38 |  |  |  | 1,819 |  |  |  | 10,766 |  |  |  | — |  |  |  | 12,623 |

(f) |  | Capital management

The Group monitors capital on the basis of the debt to capital ratio (gearing ratio), which is calculated as interest-bearing debt divided by total capital. Interest-bearing debt mainly includes lease liabilities as of December 31, 2023 and there was no interest-bearing debt as of December 31, 2024. Capital includes total equity and interest-bearing debt. The gearing ratio was 0.47% as of December 31, 2023 and nil 0 as of December 31, 2024, respectively.

F-61

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

18. |  | DEFERRED TAX ASSETS AND LIABILITIES

(a) |  | Deferred tax balance

No deferred tax assets and liabilities was recognized in the consolidated statements of financial position as at December 31, 2024 and 2023 as no taxable temporary differences are recognized.

(b) |  | Gross movement on the deferred tax account

The gross movement on the deferred income tax accounts is as follows:

Schedule of gross movement of the deferred tax account |  |  |  |  |  |  |  |  |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | US$ |
As of January 1 |  |  | 5,276 |  |  |  | — |  |  |  | — |
Credited to the consolidated statements of profit or loss during the year |  |  | (10 | ) |  |  | — |  |  |  | — |
Disposal of PSTT |  |  | (5,266 | ) |  |  | — |  |  |  | — |
As of December 31 |  |  | — |  |  |  | — |  |  |  | — |

F-62

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

18. |  | DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)

(c) |  | Deferred tax assets

The components of deferred tax assets and their movements during the years indicated, without taking into consideration the offsetting of balances within the same tax jurisdictions, are as follows:

Schedule of deferred tax assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Provision for loss allowance |  |  | Significant financing component of the contract with customers |  |  | Lease liabilities |  |  | Losses available for offsetting against future taxable profits |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  |  |  |  |  | CNY |
As of January 1, 2023 |  |  | 7 |  |  |  | 62 |  |  |  | 419 |  |  |  | — |  |  |  | 488 |
Charged to the consolidated statements of profit or loss during the year |  |  | — |  |  |  | (22 | ) |  |  | (57 | ) |  |  | — |  |  |  | (79 | )
|  |  | (7 | ) |  |  | (40 | ) |  |  | (362 | ) |  |  | — |  |  |  | (409 | )
As of December 31, 2023 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
As of January 1, 2024 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 US$ |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

(d) |  | Deferred tax liabilities

The components of deferred tax liabilities and their movements during the years indicated, without taking into consideration the offsetting of balances within the same tax jurisdictions, are as follows:

Schedule of deferred tax liabilities |  |  |  |  |  |  |  |  |
|  | Temporary difference on assets recognized under IFRIC 12 |  |  | Right-of-use assets |  |  | Total |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2023 |  |  | 5,270 |  |  |  | 494 |  |  |  | 5,764 |
Credited to the consolidated statements of profit or loss during the year |  |  | — |  |  |  | (89 | ) |  |  | (89 | )
Disposal of PSTT |  |  | (5,270 | ) |  |  | (405 | ) |  |  | (5,675 | )
As of December 31, 2023 |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2023 US$ |  |  | — |  |  |  | — |  |  |  | — |

There were no movements in year 2024.

F-63

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

18. |  | DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)

(e) |  | Deferred tax not recognized

As of December 31, 2023 and 2024, the total amounts of deductible temporary differences and unused tax losses for which no deferred tax assets were recognized with respect to certain deductible temporary differences and accumulated tax losses of the Company’s subsidiaries established in Mainland China and Hong Kong that can be carried forward against future taxable income are as follows:

Schedule of deferred tax not recognized |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Deductible temporary differences with no deferred tax assets recognized |  |  | 1,200 |  |  |  | — |  |  |  | — |
Tax losses with no deferred tax assets recognized |  |  | 6,077 |  |  |  | 667 |  |  |  | 91 |
Total |  |  | 7,277 |  |  |  | 667 |  |  |  | 91 |

(f) |  | Expiration dates of the tax losses

The tax losses in Mainland China can be carried forward for five years to offset future taxable profit. The expiration dates of the unused tax losses of the subsidiaries established in Mainland China for which no deferred tax assets were recognized are summarized as follows:

Schedule of expiration dates of the tax losses |  |  |  |  |  |  |  |  |  |
|  |  | December 31, |
|  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  | CNY |  |  | US$ |
| Year of expiration |  |  |  |  |  |  |  |  |  |  |  |  |
| 2023 |  |  |  | — |  |  |  | — |  |  |  | — |
| 2024 |  |  |  | 1,745 |  |  |  | — |  |  |  | — |
| 2025 |  |  |  | 1,462 |  |  |  | 1,462 |  |  |  | 200 |
| 2026 |  |  |  | 1,411 |  |  |  | 1,411 |  |  |  | 193 |
| 2027 |  |  |  | 499 |  |  |  | 499 |  |  |  | 68 |
| 2028 |  |  |  | 828 |  |  |  | 828 |  |  |  | 113 |
| 2029 |  |  |  | — |  |  |  | 440 |  |  |  | 60 |
| Total |  |  |  | 5,945 |  |  |  | 4,640 |  |  |  | 634 |

F-64

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

19. |  | EQUITY

(a) |  | Issued capital

Schedule of issued capital |  |  |  |  |  |  |  |  |
|  | December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Authorized: |  |  |  |  |  |  |  |  |  |  |  |
10,000,000 preferred shares, no par value |  |  | — |  |  |  | — |  |  |  | — |
200,000,000 common shares, no par value |  |  | — |  |  |  | — |  |  |  | — |
Common shares issued and fully paid: |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024: 9,865,767 (December 31, 2023: 8,377,897*) common shares, no par value |  |  | 450,782 |  |  |  | 450,782 |  |  |  | 61,768 |

Schedule of issued capital shares combination |  |  |  |  |  |  |  |  |
|  | Number of shares |  |  | Share capital |
|  |  |  |  | CNY |  |  | US$ |
As of January 1, 2022, December 31, 2022 and January 1, 2023 |  |  | 40,948,082 |  |  |  | 450,782 |  |  |  | 61,768 |
Effect of Five-to-One Share Combination* |  |  | (32,750,185 | ) |  |  | — |  |  |  | — |
Equity-settled share-based payments |  |  | 180,000 |  |  |  | — |  |  |  | — |
As of December 31, 2023 |  |  | 8,377,897 |  |  |  | 450,782 |  |  |  | 61,768 |
Issue of shares |  |  | 1,487,870 |  |  |  | — |  |  |  | — |
As of December 31, 2024 |  |  | 9,865,767 |  |  |  | 450,782 |  |  |  | 61,768 |

* | The numbers of common shares above are before giving effect to the Share Combination which became effective on April 3, 2023. On April 3, 2023, the Company effected a share combination in which all of the Company's issued and outstanding ordinary shares were combined on a 5-to-1 basis. The basic and diluted earnings/(loss) per ordinary share has been retrospectively adjusted to reflect the impact of the share combination. All outstanding options, warrants and other rights to purchase the Company's common shares were adjusted proportionately as a result of the share combination.

F-65

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

19. |  | EQUITY(CONTINUED)

(b) |  | Other capital reserves

Schedule of other capital reserves |  |  |  |  |  |
|  |  | Other capital reserves |
|  |  | CNY |  |  |  | US$ |
As of January 1, 2023 |  |  | 735,319 |  |  |  | 100,756 |
Deemed distribution from the controlling shareholder (Note 3) |  |  | 20,382 |  |  |  | 2,793 |
Equity-settled share-based payments |  |  | 3,074 |  |  |  | 421 |
As of December 31, 2023 |  |  | 758,775 |  |  |  | 103,970 |
As of January 1, 2024 |  |  | 758,775 |  |  |  | 103,970 |
Issuance of shares |  |  | 13,207 |  |  |  | 1,809 |
Equity-settled share-based payments |  |  | 483 |  |  |  | 66 |
As of December 31, 2024 |  |  | 772,465 |  |  |  | 105,845 |

Other capital reserves of the Company are mainly for equity-settled share-based compensation, the exercise of stock options, the exercise of warrants, the business combination and the deemed contribution from the Shareholder and related companies.

(c) |  | Dividend restrictions and reserves

Due to the Group's structure, the payment of dividends is subject to numerous controls imposed under PRC law, including foreign exchange control on the conversion of the local currency into U.S. dollars and other currencies.

In accordance with the relevant PRC regulations, appropriations of net income as reflected in its PRC statutory financial statements are to be allocated to each of the general reserve and enterprise expansion reserve, respectively, as determined by the resolution of the Board of Directors annually.

F-66

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

20. |  | RELATED PARTY BALANCES AND TRANSACTIONS

In addition to the transactions detailed elsewhere in the consolidated financial statements, the Group had the following transactions and balances with related companies:

(a) |  | Commercial transactions with related companies

Schedule of commercial transactions with related companies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Year Ended December 31, |
|  |  |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
CHNR’s share of office rental, rates and others to Anka Consultants Limited (“Anka”)(a) |  |  | (i) |  |  |  | 1,175 |  |  |  | 445 |  |  |  | 797 |  |  |  | 109 |
Feishang Management's share of office rental to Feishang Enterprise(b) |  |  | (ii) |  |  |  | 166 |  |  |  | 166 |  |  |  | 166 |  |  |  | 23 |
Shenzhen New PST’s share of office rental to Feishang Enterprise(b) |  |  | (iii) |  |  |  | 90 |  |  |  | 53 |  |  |  | — |  |  |  | — |

(i) |  | The Company signed a contract with Anka to lease 184 square meters of office premises for two years from July 2018 to June 30, 2020, and extended it to June 30, 2025. The agreement also provides that the Company shares certain costs and expenses in connection with its use of the office, in addition to some of the accounting and secretarial services and day-to-day office administration services provided by Anka.

(ii) |  | On January 1, 2018, Feishang Management signed an office-sharing agreement with Feishang Enterprise. Pursuant to the agreement, Feishang Management shares 40 square meters of office premises for 33 months. Feishang Management signed a new contract with Feishang Enterprise in October 2024, which will expire on September 30, 2025.

(iii) |  | Shenzhen New PST signed a contract with Feishang Enterprise to lease 96 meters of office premises for 12-month period from March 14, 2022 to March 13, 2023 and renewed the contract with same terms for another 12-month period from March 14, 2023 to March 13, 2024. Due to the disposal of PSTT, the transaction amount in 2023 contains 7 months rentals.

(a) |  | Anka is jointly owned by Mr. Wong Wah On Edward and Mr. Tam Cheuk Ho, who are officers of the Company.

(b) |  | Feishang Enterprise is controlled by Mr. Li Feilie, who is the controlling shareholder of the Company.

F-67

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

20. |  | RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)

(b) |  | Other transactions with related parties

On February 27, 2023, the Company entered into a sale and purchase agreement (the “SPA”) with Feishang Group and Top Pacific (China) Limited (together, the “Sellers”), and the respective beneficial owner of the sellers, Mr. Li Feilie and Mr. Yao Yuguang, to acquire 100% equity interests of Greatfame Investments Limited, which owns 100% equity interest in Williams Minerals (Pvt) Ltd (“Williams Minerals”) (the “Acquisition”). Williams Minerals owns the mining permit for the Zimbabwean lithium mine. The consideration to be paid by the Company for the Acquisition will be calculated by multiplying the qualified measured, indicated and inferred resources quantity of lithium oxide proven to be in the mine by independent technical reports by a unit price of US$500 per ton, less certain due diligence costs and expenses incurred by the Company for the issuance of the independent technical reports.

According to the SPA, the Company issued a US$24,500 promissory note (Promissory Note No. 1) and a US$10,500 promissory note to Feishang Group and Top Pacific (China) Limited respectively on April 14, 2023 to proceed with the acquisition. The Company recognized a liability due to shareholders amounted to US$24,500 and other payable amounted to US$10,500 respectively for the present obligations of these two promissory notes with corresponding non-current assets amounted to US$35,000. The Company obtained guarantee from Feishang Group and Top Pacific (China) Limited which would not demand to repay the balances due with them on or before April 30, 2026. The balances due to these two parties were reclassified as non-current liabilities thereon.

On August 3, 2023, the Company entered into a set-off letter with Feishang Group, pursuant to the letter, the consideration of CNY95,761 liable to be paid by Feishang Group pursuant to the SPA for the disposal of the water treatment segment (Note 3) shall be set off against Promissory Note No. 1 using the exchange rate CNY1.00 = US$0.1400 such that a sum of US$13,407 shall be deducted from the Principal Amount as defined in Promissory Note No. 1. According to the letter, the Company derecognized the receivables from Feishang Group amounted to CNY95,761 and a liability due to shareholders amounted to CNY95,761.

(c) |  | Balances with related companies

The Group’s balances with related companies are unsecured and non-interest bearing. Feishang Enterprise and the Shareholder have provided letters stating their continuous financial support to the Group and that they will not recall any amounts due to them until the Group has sufficient liquidity to finance its operations. The balances are summarized as follows:

Schedule of balances with related companies |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | December 31, |
|  |  |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  |  |  | CNY |  |  | CNY |  |  | US$ |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payable to related companies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Feishang Enterprise(a) |  |  | (i) |  |  |  | 6,078 |  |  |  | 10,422 |  |  |  | 1,428 |
Anka Capital Ltd. (“Anka Capital”)(b) |  |  | (iii) |  |  |  | 2,991 |  |  |  | 939 |  |  |  | 129 |
|  |  |  |  |  |  | 9,069 |  |  |  | 11,361 |  |  |  | 1,557 |
Payable to the Shareholder: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Feishang Group Ltd.(a) |  |  | (ii) |  |  |  | 7,153 |  |  |  | — |  |  |  | — |
Feishang Group Ltd.(a) |  |  |  |  |  |  | 78,520 |  |  |  | 78,567 |  |  |  | 10,766 |
|  |  |  |  |  |  | 85,673 |  |  |  | 78,567 |  |  |  | 10,766 |
Lease liabilities to related parties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Anka(b) |  |  |  |  |  |  | 360 |  |  |  | — |  |  |  | — |
|  |  |  |  |  |  | 360 |  |  |  | — |  |  |  | — |

F-68

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

20. |  | RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)

(c) |  | Balances with related companies (continued)

(i) |  | The payable to Feishang Enterprise by Feishang Management represents the net amount of advances from Feishang Enterprise and its subsidiaries. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

(ii) |  | The payable to Feishang Group represents the net amount of advances from Feishang Group. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group. The Company repaid HK$8.4 million to Feishang Group in 2024.

(iii) |  | The payable to Anka Capital represents the net amount of advances from Anka Capital. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.

(a) |  | Feishang Enterprise and Feishang Group are controlled by Mr. Li Feilie, who is the controlling shareholder of the Company.

(b) |  | Anka Capital and Anka are each jointly owned by Mr. Wong Wah On Edward and Mr. Tam Cheuk Ho, who are officers of the Company.

F-69

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

20. |  | RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)

(d) |  | Compensation of key management personnel of the Group

Schedule of compensation of key management personnel of the group |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | US$ |
Wages, salaries and allowances |  |  | 1,014 |  |  |  | 843 |  |  |  | 116 |
Housing funds |  |  | 16 |  |  |  | — |  |  |  | — |
Contribution to pension plans |  |  | 64 |  |  |  | 76 |  |  |  | 10 |
|  |  | 1,094 |  |  |  | 919 |  |  |  | 126 |

The amounts disclosed in the table are the amounts recognized as expenses during the respective period related to key management personnel.

F-70

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

21. |  | SHARE-BASED PAYMENT

Share options

On July 14, 2022, the Board of Directors of the Company approved to grant option awards for an aggregate of 8,100,000 common shares, without par value, of the Company (the “share options”) to certain individuals under the China Natural Resources, Inc. 2014 Equity Compensation Plan for certain strategic consultant services. The share options vested immediately upon grant and are exercisable up to three years from July 19, 2022. The exercise price for the options is $0.623 per share.

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions on which the share options were granted. The Group accounts for share options 2022 as an equity-settled share-based payment and recognize administrative expenses associated with the consultant service reward with a corresponding increase in equity.

Share-based payment

On June 26, 2023, the Board of Directors of the Company approved to grant share-based payment of 180,000 common shares for consultant’s service between June 26 to December 25, 2023. As the Group cannot measure reliably the fair value of the service received, it is based on the fair value of the common shares granted measured over the period the services is received. The Group recognized administrative expenses associated with the consultant service reward with a corresponding increase in equity using the average fair value of the common shares over the service period. The 180.000 common shares were vested and issued in 2023.

The issuance of warrants to the placement agent

As mentioned in Note 19, in addition to fees and offering expenses paid in cash to the placement agent, the Group issued to the placement agent warrants to purchase an aggregate of up to five percent (5%) of the aggregate number of Shares sold in the Registered Offering (the “Placement Agent Warrants”). The Placement Agent Warrants shall generally be on the same terms and conditions as the Investors Warrants except that they will be exercisable at a price of $2.20 per share. The issuance of the agent warrants is an equity-settled share-based payment for professional services received from the placement agent. The Company recognized other capital reserves in an amount of CNY483 (US$67*), which represented the fair value of agent warrants as of issuance date. The fair value of services recorded is not used since it cannot be reliably estimated. The amount was allocated to the issuance of the common shares and investor warrants according to their relative fair values at the date of issuance and CNY359 (US$50*) and CNY124 (US$17*) were charged to share capital and administrative expenses, respectively.

The fair value of the agent warrants is estimated at the issue date using a binomial lattice pricing model using significant observable inputs including underlying spot price of the Company's ordinary shares, exercise price, time to expiration, risk-free rate and equity volatility, etc.

*As the changes in equity from this private placement transaction are dominated in US$, all the amount in US$ of this disclosure paragraph are actual transaction amount and corresponding amount in CNY were translated from US$ at the applicable exchange rate of the transaction date, February 21, 2024.

(a) |  | Expense arising from share-based payment transactions

The expense recognized during the year for above share-based payments is shown in the following table:

Schedule of expense arising from share-based payments |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2024 |
|  | CNY |  |  | CNY |  |  | CNY |  |  | US$ |
Issuance expense related to agent warrants |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consultants share option expense (Note 5) |  |  | 16,152 |  |  |  | — |  |  |  | — |  |  |  | — |
Consultants share-based payment expense (Note 5) |  |  | — |  |  |  | 3,074 |  |  |  | 483 |  |  |  | 66 |
Total |  |  | 16,152 |  |  |  | 3,074 |  |  |  | 483 |  |  |  | 66 |

F-71

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

21. |  | SHARE-BASED PAYMENT (CONTINUED)

(b) |  | Movements during the year

The following table illustrates the number of, and movements in, agent warrants during the year:

Schedule of agent warrants |  |  |  |  |  |
|  | Number of shares |  |  | Exercise price per share |
|  |  |  |  |  |  | US$ |
Outstanding at January, 2022 |  |  | 396,000 |  |  |  | 2.35 |
Outstanding as of December 31, 2022 |  |  | 396,000 |  |  |  | 0.623 | *
Effect of Five-to-One Share Combination (Note 19) |  |  | (316,800 | ) |  |  | — |
Outstanding as of December 31, 2023 |  |  | 79,200 |  |  |  | 3.115 | **
Expired |  |  | (79,200 | ) |  |  | — |
Issued during the year |  |  | 74,394 |  |  |  | 2.20 |
Outstanding as of December 31, 2024 |  |  | 74,394 |  |  |  | — |

The remaining contractual life for the agent warrants as of December 31, 2024 and 2023, were 2.63 years and 0.06 years, respectively.

* |  | The exercise price was revised to $0.623 per share in July, 2022.

** |  | The exercise price was revised to $3.115 per share in March, 2023.

The following table illustrates the number of, and movements in share options during the year:

Schedule of share options |  |  |  |  |  |
|  | Number of shares |  |  | Exercise price per share |
|  |  |  |  |  |  | US$ |
Outstanding as of December 31, 2022* |  |  | 8,100,000 |  |  |  | 0.623 |
Granted during the year |  |  | — |  |  |  | — |
Effect of Five-to-One Share Combination (Note 19) |  |  | (6,480,000 | ) |  |  | — |
Outstanding as of December 31, 2023 |  |  | 1,620,000 |  |  |  | 3.115 |
Granted during the year |  |  | — |  |  |  | — |
Outstanding as of December 31, 2024 |  |  | 1,620,000 |  |  |  | 3.115 |

* |  | The share option numbers above are before giving effect to the Share Combination which became effective on April 3, 2023. Refer to Note 19 for further details.

The remaining contractual life for the share option as of December 31, 2024 and 2023, were 0.53 years and 1.53 years, respectively.

F-72

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

21. |  | SHARE-BASED PAYMENT (CONTINUED)

(c) |  | Inputs to the models

The following tables list the inputs to the models used for agent warrants and share options for the years ended December 31, 2022 and 2024, respectively:

Schedule of inputs to the models for fair value |  |  |  |  |  |
|  | Share options |  |  | Agent warrants |
|  |  | 2022 |  |  | 2024 |
Fair value at the measurement date (US$) |  |  | 2,400 |  |  | 24,451 |
Fair value at the measurement date (CNY) |  |  | 16,209 |  |  | 178,443 |
Expected volatility (%) |  |  | 93.50 |  |  | 121.79 |
Risk-free interest rate (%) |  |  | 3.16 |  |  | 4.17 |
Expected life (years) |  |  | 3 |  |  | 2.63 |
Share price (US$) |  |  | 0.623 |  |  | 0.680 |

The expected life of share options and agent warrants is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

F-73

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

22. |  | NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS

(a) |  | Major non-cash transactions

During the year, the Group had non-cash additions to right-of-use assets and lease liabilities of nil (2022: CNY1,781) and nil (2022: CNY1,781), respectively, with respect to lease arrangements for motor vehicles, offices and warehouses. On February 27, 2023, the Company entered into a sale and purchase agreement of Zimbabwean lithium mine, which is a non-cash transaction (Note 20 (b)) for more details. On July 28, 2023, the Group had non-cash disposal of PSTT (Note 3). On August 3, 2023, the Company entered into a set-off letter with Feishang to net off the consideration of the disposal of PSTT and promissory note issued under the SPA of the sale and purchase agreement of Zimbabwean lithium mine (Note 20 (b)).

(b) |  | Changes in liabilities arising from financing activities

Schedule of changes in liabilities arising from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Year Ended December 31, 2023 |  | Interest-bearing loans and borrowings |  |  | Dividends payable |  |  | Due to related companies |  |  | Due to the Shareholder |  |  | Lease liabilities |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2023 |  |  | 74,000 |  |  |  | — |  |  |  | 3,408 |  |  |  | 7,153 |  |  |  | 2,915 |
Changes from financing cash flows |  |  | (3,378 | ) |  |  | — |  |  |  | 3,932 |  |  |  | 78,520 |  |  |  | (1,024 | )
Foreign exchange difference |  |  | — |  |  |  | — |  |  |  | 78 |  |  |  | — |  |  |  | 27 |
Interest expenses |  |  | 1,878 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 99 |
Disposal of PSTT |  |  | (72,500 | ) |  |  | — |  |  |  | 1,651 |  |  |  | — |  |  |  | (1,657 | )
As of December 31, 2023 |  |  | — |  |  |  | — |  |  |  | 9,069 |  |  |  | 85,673 |  |  |  | 360 |

Year Ended December 31, 2024 |  | Interest-bearing loans and borrowings |  |  | Dividends payable |  |  | Due to related companies |  |  | Due to the Shareholder |  |  | Lease liabilities |
|  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |  |  |  | CNY |
As of January 1, 2024 |  |  | — |  |  |  | — |  |  |  | 9,069 |  |  |  | 85,673 |  |  |  | 360 |
Changes from financing cash flows |  |  | — |  |  |  | — |  |  |  | 1,858 |  |  |  | (5,035 | ) |  |  | (373 | )
Foreign exchange difference |  |  | — |  |  |  | — |  |  |  | 434 |  |  |  | (2,071 | ) |  |  | 7 |
Interest expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |
As of December 31, 2024 |  |  | — |  |  |  | — |  |  |  | 11,361 |  |  |  | 78,567 |  |  |  | — |

Year Ended December 31, 2024 |  | Interest-bearing loans and borrowings |  |  | Dividends payable |  |  | Due to related companies |  |  | Due to the Shareholder |  |  | Lease liabilities |
|  |  | US$ |  |  |  | US$ |  |  |  | US$ |  |  |  | US$ |  |  |  | US$ |
As of January 1, 2024 |  |  | — |  |  |  | — |  |  |  | 1,243 |  |  |  | 11,739 |  |  |  | 49 |
Changes from financing cash flows |  |  | — |  |  |  | — |  |  |  | 255 |  |  |  | (690 | ) |  |  | (51 | )
Foreign exchange difference |  |  | — |  |  |  | — |  |  |  | 59 |  |  |  | (283 | ) |  |  | 1 |
Interest expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
Disposal of PSTT |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024 |  |  | — |  |  |  | — |  |  |  | 1,557 |  |  |  | 10,766 |  |  |  | — |

F-74

CHINA NATURAL RESOURCES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024 (Amounts in thousands, except share and per share data)

22. |  | NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(c) |  | Total cash outflow for leases

Schedule of Cash Outflow for Leases |  |  |  |  |  |  |  |  |
|  | 2023 |  |  | 2024 |  |  | 2024 |
|  |  | CNY |  |  |  | CNY |  |  |  | US$ |
Within operating activities |  |  | (323 | ) |  |  | — |  |  |  | — |
Within financing activities |  |  | (1,024 | ) |  |  | (366 | ) |  |  | (51 | )
Total cash outflow for leases |  |  | (1,347 | ) |  |  | (366 | ) |  |  | (51 | )

23. |  | COMMITMENTS

At December 31 2024, the Company had capital commitments of CNY2,432 (December 31 2023: CNY 2,432) associated with mineral exploration for the Zimbabwean lithium mine. The corresponding capital expenditures will be paid along with the progress of the exploration works once the mine formally enters into the exploration phase.

24. |  | SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date on which the consolidated financial statements were available to be issued. there are no subsequent events that require disclosure in accordance with IAS 10, “Events After the Reporting Period”.

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