China Zirconium Limited
TSX : CZL

China Zirconium Limited

March 31, 2009 12:22 ET

China Zirconium Limited Announces 2008 Annual Financial Results

HONG KONG, CHINA and TORONTO, ONTARIO--(Marketwire - March 31, 2009) - China Zirconium Limited (TSX:CZL)(HKEX:0395) (the "Company") announced today its results for the financial year ended December 31, 2008, posted in more detail on www.sedar.com and on the Company's website at www.chinazirconium.com.hk.

For the year ended December 31, 2008, the Company's total turnover decreased 12% to RMB478.8 million as compared to RMB541.5 million in 2007. The Company's gross profit decreased by 10%, from RMB124.6 million in 2007 to RMB112.0 million in 2008. However, the Company maintained a stable 23% gross margin in 2008. Profit before and after taxation was RMB54.5 million and RMB30.9 million, respectively, as compared to RMB87.6 million and RMB61.5 million in 2007.

Despite the decline in operating results, the Company continues to maintain a strong balance sheet. The Company's total assets and net assets as at December 31, 2008 increased to RMB879.8 million and RMB788.5 million, respectively. As at December 31, 2008, the Company's current ratio dropped slightly to 4.2:1 from 4.6:1 as at December 31, 2007. The Company did not have any long-term debt during the year ended and as at December 31, 2008.

The Company plans to declare an annual dividend of HK$0.06 per share for the financial year ended December 31, 2008 on May 22, 2009.

Highlights of the year ended December 31, 2008 are as follows:

- On August 15, 2008, the Company successfully completed the listing of its ordinary shares on the TSX (the "TSX Listing") and started trading under the trading symbol "CZL". In connection with the TSX Listing, the Company completed a public offering in certain provinces of Canada of 649,900 ordinary shares at a price of C$1.20 per ordinary share for gross proceeds of C$779,880.00 (the "Offering"). The Offering was conducted with the intention to facilitate the completion of the TSX Listing and establish the Company's presence in the North American capital markets. The Company intends to conduct a subsequent financing in Canada when market conditions stabilize.

- In October 2008, PT Asia Prima Resources (a subsidiary 51% owned by the Company), completed the construction of its zircon separation and refining facilities in Indonesia (the "Indonesian Facilities"). The Indonesian Facilities successfully completed test runs in December 2008 and started production in February 2009.

- In 2008, the Company began construction of a new zirconium chemicals production plant in Binhai, China (the "Binhai Plant"). The construction of the Binhai Plant was substantially completed in early March 2009 and machinery installation is currently in progress. The Binhai Plant plans to commence production in the middle of 2009.

Mr. Yang Xin Min, the Company's Chairman and CEO, noted, "2008 was a year full of challenges for the Company and the world economy, and the economic outlook in 2009 remains uncertain. However, the Company has a strong management team and a very healthy balance sheet that will allow it to take full advantage of any potential opportunities that may emerge. The Company will actively adjust its product mix in response to the development trends of the growing domestic demand in the PRC market. At the same time, the Company will continue to consolidate its overseas markets and strengthen its long-term relationships with overseas customers."

About China Zirconium:

China Zirconium Limited was incorporated under the Companies Law of the Cayman Islands on July 18, 2000. The Company was listed on the Hong Kong Stock Exchange on October 28, 2002 and became dual listed on the Toronto Stock Exchange on August 15, 2008. The Company started its operation in 1977 with its base in Yixing, Jiangsu Province, the PRC. The principal business of the Company is the research, development, manufacture and sale of a wide range of zirconium chemical products. The Company has also entered into the business of rechargeable batteries through a wholly-owned subsidiary located at its Yixing production site. In addition, the Company began to engage in the business of separation, processing and refining of zircon in 2009 through a joint venture company, PT. Asia Prima Resources, incorporated in Indonesia.

CAUTION AND DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, including within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995 of Hong Kong. The forward-looking statements reflect the Company's current beliefs with respect to future events and are based on information currently available to the Company as of the date of this press release. When used in this press release, such statements use such words as "may", "will", "expect", "believe", "anticipate", "project", "plan" and other similar terminology. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results or events to differ materially from those anticipated in such forward-looking statements. These include risks relating to market fluctuations, investee performance and other risks. The risks and uncertainties are detailed from time to time in reports filed by the Company with securities regulatory authorities. When reviewing the Company's forward-looking statements, investors and others should not place undue reliance on these forward-looking statements and should carefully consider uncertainties and potential events. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update the forward-looking statements. The Company has an ongoing obligation to disclose material information as it becomes available.

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