Traditional Energy and Mineral Exploitation

The Group currently operates an upstream oil and gas exploration and production project in East Texas, the USA. The Group completed drilling of the first well and the second well which have started production since July 2014 and March 2015 respectively. The oil and gas produced from the operating wells are sold to oil and gas storage and transportation companies in East Texas, the USA. The Group had entered into over 400 lease agreements with mineral owners. Pursuant to the lease agreements, the Group is entitled to explore and produce oil and gas in a total area of about 1,845 acres at East Texas, the USA.

The Group conducts its silver mining business through two silver mines in Ningde City, Fujian Province, the PRC, namely the “Western Section” located in Fu’an County of Ningde City (the “West Mine”) and the “Eastern Section” located in Zherong County of Ningde City (the “East Mine”). Based on an updated technical report issued by SRK Consulting China Limited, the probable ore reserve of the West Mine was estimated to be approximately 0.69 million tonnes, while the probable ore reserve of the East Mine was estimated to be approximately 6.07 million tonnes, adopting the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves released by the Joint Ore Reserves Committee.