DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2011

DISCONTINUED OPERATIONS

NOTE 4 - DISCONTINUED OPERATIONS

On April 12, 2011, the Company through its subsidiary Qianzhen Mining entered into an equity transfer agreement (the “Agreement”) to sell its 60% equity interest Qingshan Metal to a Chinese citizen Mr. Mao Huang (the “Investor”), a related party of the Company.

Pursuant to the Agreement, Qianzhen Mining sold all of its Equity in Qingshan Metal to the Investor for total consideration in the amount of RMB 8.5 million (approximately $1.3 million). The payment of the Transfer Price has been offset the debt owed by Qianzhen Mining to the Investor. After the transfer, Qianzhen Mining will no longer hold any equity interests in Qingshan Metal.

The Company has recorded a loss from operations of discontinued component, net of income taxes, of approximately $7,000, and a loss on disposal of discontinued subsidiary, net of income taxes, of approximately $82,000 for the nine months ended September 30, 2011. In accordance with Accounting Standard Codification (“ASC”) 360 (Formerly FAS 144) of Financial Accounting Standards Board (“FASB”), Accounting for Impairment or Disposal of Long-Lived Assets, the Company has reflected Qingshan Metal’s results of operations in the consolidated statements of operations through the date of the sale as discontinued operations for all periods presented. The assets and liabilities of Qingshan Metal in the Company’s consolidated balance sheet as of December 31, 2010 have been reclassified. The cash flows of discontinued operations also have been reclassified.

The following table presents the revenue, net loss from discontinued operations and on disposal of Qingshan Metal for the periods presented:

	Nine Months Ended September 30, 2011,
	2011			2010
	(In thousands)			(In thousands)
Revenue	$	-		$	-
Net loss from discontinued operations,	$	(7	)	$	(35	)
Net loss on disposal of subsidiary	$	(82	)	$	Not Applicable