China Natural Resources (CHNR) 6-K Current report (foreign)

Exhibit 99.1

CONTACT

Edward Wong, Chief Financial Officer

011-852-2810-7205 or cfo@chnr.net

FOR IMMEDIATE RELEASE

CHINA NATURAL RESOURCES RELEASES

INTERIM RESULTS OF OPERATIONS

HONG KONG, December 29, 2008 – CHINA NATURAL RESOURCES, INC. (NASDAQ: CHNR), a company based in the People’s Republic of China, today released unaudited interim financial statements for the three and six months ended June 30, 2008 as follows.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007

(Amounts in thousands, except share and per share data)

	Three Months Ended June 30,									Six Months Ended June 30,
	2008			2007			2008			2008			2007			2008
	RMB			RMB			US$			RMB			RMB			US$
NET SALES
Related party		163,625			––			23,872			166,687			––			24,319
Others		79,850			33,070			11,650			115,457			58,962			16,844
		243,475			33,070			35,522			282,144			58,962			41,163
COST OF SALES		(197,445	)		(10,205	)		(28,806	)		(229,095	)		(17,991	)		(33,423	)
GROSS PROFIT		46,030			22,865			6,716			53,049			40,971			7,740
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES,		(11,696	)		(2,673	)		(1,706	)		(25,435	)		(5,738	)		(3,711	)
including share-based compensation expense of RMB13,008 for the six months ended 30 June 2008 (2007: nil) and RMB6,504 for the three months ended 30 June 2008 (2007: nil)
INCOME FROM OPERATIONS		34,334			20,192			5,010			27,614			35,233			4,029
INTEREST EXPENSE		(833	)		––			(122	)		(1,068	)		––			(156	)
INTEREST INCOME		372			424			54			1,120			843			163
OTHER INCOME (EXPENSE), NET		(698	)		(34	)		(102	)		2,705			(41	)		395
LOSS ATTRIBUTABLE TO INVESTMENT IN UNCONSOLIDATED INVESTEE		(2,306	)		––			(336	)		(4,437	)		––			(647	)
INCOME BEFORE INCOME TAXES		30,869			20,582			4,504			25,934			36,035			3,784
INCOME TAXES		(8,114	)		(3,267	)		(1,184	)		(8,748	)		(5,798	)		(1,277	)
NET INCOME		22,755			17,315			3,320			17,186			30,237			2,507
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		(3,504	)		(360	)		(511	)		(15,753	)		(564	)		(2,298	)
COMPREHENSIVE INCOME		19,251			16,955			2,809			1,433			29,673			209
INCOME PER SHARE:
Basic		1.18			1.50			0.17			0.91			2.62			0.13
Diluted		0.99			1.29			0.14			0.77			2.23			0.11
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING
Basic		19,323,416			11,548,416			19,323,416			18,982,757			11,548,416			18,982,757
Diluted		22,926,151			13,377,836			22,926,151			22,235,670			13,547,420			22,235,670

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2008 AND DECEMBER 31, 2007

(Amounts in thousands, except share and per share data)

	June 30,			December 31,			June 30,
	2008			2007			2008
	RMB			RMB			US$
	(Unaudited)						(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		323,362			483,689			47,177
Trade receivables		2,008			1,525			293
Bills receivable		24,720			13,000			3,606
Other receivables		73,515			967			10,725
Inventories		222,247			4,633			32,424
Prepaid assets		42,307			––			6,173
Due from related companies		33,118			––			4,832
TOTAL CURRENT ASSETS		721,277			503,814			105,230
INVESTMENT IN UNCONSOLIDATED INVESTEES		26,958			30,495			3,933
PROPERTY AND EQUIPMENT, NET		247,732			37,772			36,143
OTHER ASSETS		8,823			10,000			1,287
TOTAL ASSETS		1,004,790			582,081			146,593
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		89,845			991			13,108
Advance from customers		5,206			2,169			760
Accrued liabilities		4,194			3,367			612
Taxes payable		4,269			5,593			623
Other payables		38,144			32,497			5,565
Dividends payable		170			170			25
Capital lease obligation – current portion		9,607			––			1,402
Due to related companies		243,552			2,221			35,532
TOTAL CURRENT LIABILITIES		394,987			47,008			57,626
NON CURRENT LIABILITIES
Capital lease obligation – non current portion		15,868			––			2,315
TOTAL LIABILITIES		410,855			47,008			59,941
SHAREHOLDERS' EQUITY
Preferred shares, no par:
Authorized - 10,000,000 shares;		––			––			––
Common shares, no par:
Authorized - 200,000,000 shares;
Issued and outstanding - 17,323,416 and 19,323,416 shares at December 31, 2007 and June 30, 2008, respectively		312,081			312,081			45,531
Reserves		7,331			7,331			1,069
Additional paid-in capital		198,272			127,707			28,927
Excess of purchase price to controlling shareholder		(13,136	)		––			(1,916	)
Retained earnings		118,101			100,916			17,230
Other comprehensive loss		(28,714	)		(12,961	)		(4,189	)
TOTAL SHAREHOLDERS' EQUITY		593,935			535,073			86,652
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		1,004,790			582,081			146,593

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For the convenience of the reader, amounts in Renminbi (“RMB”) have been translated into United States dollars (“US$”) at the applicable rate of US$1.00 = RMB6.8543 as quoted by the People’s Bank of China as of June 30, 2008.  No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate, or at all.

The condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2008 (unaudited) and the condensed consolidated balance sheet as of June 30, 2008 (unaudited) have been prepared in accordance with generally accepted accounting principles in the United States but omit certain financial statements and note disclosure that would be included in full financial statements prepared in accordance with US GAAP.  The condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2008 (unaudited) and the condensed consolidated balance sheet as of June 30, 2008 (unaudited) are derived from, and should be read in conjunction with, the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2008 and 2007, as furnished to the Securities and Exchange Commission on December 30, 2008 unde r cover of Form 6-K.  The results of operations for the six months ended June 30, 2008 are not necessarily indicative of the results of operations that may be expected for the year ending December 29, 2008.

Mr. Feilie Li, the Company's Chairman and CEO, commented on the 2008 interim results "the first half of 2008 posted a challenge to China Natural Resources.  Despite the rise in the iron price and the contribution from our recently acquired copper smelter in Inner Mongolia, the net income of the Group reduced.  This was primarily due to (i) a continued softening of the zinc price during the period; (ii) a decrease in the production of zinc concentrates as a result of its mining operation entering the low ore grade zone; and (iii) the recognition of approximately RMB 13.1 million (US$1.9 million) relating to a non-cash employee share-based compensation expense. Given the impact of the global financial crisis on the economy, commodity prices are expected to be volatile in the short term. However, we expect a rebound in coal and metals prices as the global economy becomes stabilized. We remain committed to our strategy of expand ing our coal and metal resources in the PRC.”

This press release includes forward-looking statements within the meaning of federal securities laws.  These forward-looking statements are based upon assumptions believed to be reliable, but involve risks and uncertainties that may cause actual results of operations to differ materially from the forward-looking statements.  Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results of the Company, uncertainties regarding the governmental, economic and political circumstances in the People’s Republic of China, risks and hazards associated with the Company’s mining activities, uncertainties associated with ore reserve estimates, uncertainties associated with metal price volatility, uncertainties associated with the Company’s reliance on third-party contractors and o ther risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Although the Company’s management believes that the expectations reflected in forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be accurate.

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