DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Note 13 - DISCONTINUED OPERATIONS

On December 30, 2013, the Company transferred all of the 60% equity of East Mining to its control person, Mr. Zhang Hong Jun and one of the other company shareholders, Mr. Wang Sheng Li, with a consideration of $885,696 (RMB 5,400,000). Each of the acquirers obtained 30% equity in this transaction. The transfer of East Mining is a transaction between entities under common control. No gain or loss is recognized for the transaction.

East Mining completed the sale of its mines exploration rights to Xunyang County Yongjin Mining Co., Ltd for business purpose with a consideration of $2,406,893 (RMB 15,000,000) as of June 30, 2013. The gain of $2,279,328 on disposal of mines consists of the cash consideration less the total of $127,565 for the related business tax and the surcharges.

Pursuant to accounting rules for discontinuing operations, The Company has classified 2013 and prior reporting periods to present the activity related to the East Ming as a discontinued operation. Discontinued operations for the three and six months ended June 30, 2013 are summarized as follows.

	For three months ended June 30, 2013			For six months ended June 30, 2013
	$			$
Sales revenue		-			-
Cost of revenue		-			-
Gross Profit		-			-
Operating expenses(income)
Administrative expenses		3,740			19,189
Gain on disposal of asset		(16,376	)		(2,279,328	)
Depreciation		460			932
Total Operating Income		(12,176	)		(2,259,207	)
Income from operations		12,176			2,259,207
Other Income (Expenses)
Interest income		32,437			32,580
Interest expenses		(48	)		(144	)
Allowance for long term investment					-
Total Other Income		32,389			32,436
Income before tax		44,565			2,291,643
Income tax expense		11,261			587,376
Net Income		33,304			1,704,267