CITY OF INDUSTRY, Calif., Nov. 15, 2010 /PRNewswire-FirstCall/ -- US China Mining Group, Inc. (OTC Bulletin Board: SGZH), a Chinese leader in coal production and exploration in the People's Republic of China, today announced its financial results for the third quarter ended September 30, 2010.

Third Quarter 2010 Highlights:


    --  Revenue increased 93% to $17.85 million from $9.27 million in the third
        quarter of 2009
    --  Gross profit increased 73% to $7.79 million from $4.5 million in third
        quarter of 2009
    --  Operating profit increased by 47.2% to $5.3 million compared to $3.6
        million for the same period in 2009
    --  Operating expenses increased to $2.5 million compared to $915 thousand
        in the third quarter of 2009
    --  Cash balance increased 43.8% to $40.14 million from $27.9 million as of
        September 30, 2009
    --  Average selling price for coal increased to $47.84 from $44.17 in the
        third quarter of 2009, an increase of 8.3%

During the three months ended September 30, 2010, revenue was $17.85 million, compared to $9.27 million for the same period in 2009, an increase of approximately 93%. This increase in sales is primarily attributed to increased brokerage sales from both Tonggong and Xing An Mines.

Gross profit for the third quarter was $7.79, compared to $4.50 million for the same period in 2009, an increase of $3.29 million or 73%. Gross margin decreased slightly to 44% from 49% in the three months ended September 30, 2009. The decrease in gross margin was mainly attributable to the increased average cost of coal per ton for the period.

Operating expenses for the third quarter were $2.5 million, compared to $915 for the same period in 2009. This increase in operating expenses was driven mainly by certain new levies required by the provincial and local government, beginning in the second quarter of 2010.

Operating profit increased by 47.2% to $5.3 million for the period compared to $3.6 million for the same period in 2009. This increase in operating profit was driven principally by the increase in revenues for the quarter as well as the higher selling price for coal over year earlier levels.

Net income for the three months ended September 30, 2010 was $3.85 million compared to $2.76 million for the same period of 2009, an increase of $1.09 million or 39%.

Total production during the three months ended September 30, 2010 was 30,810 tons, compared to 67,416 tons produced for the same period of 2009, a decrease of 36,606 tons. The decrease in production was primarily due to our mine maintenance and retrofit projects at the Xing An mines.

As of September 30, 2010, cash and cash equivalents totaled $40.14 million, compared to $27.9 million at September 30, 2009. Cash balances were grown through cash flow from operations.

The average selling price per ton for the three months ended September 30, 2010 was $47.84 as compared to $44.17 for the same period of 2009, an increase of 8%. Total sales volume, including brokerage sales, was 373,794 tons for the three months ended September 30, 2010, compared to 209,793 tons for the same period of 2009, an increase of approximately 78%.

Mr. Hongwen Li, President of US China Mining Group, commented, "We are very pleased with the growth in revenues from our brokerage operations as we continue to leverage our competitive advantage in that segment of the industry. We remain very focused on maximizing the value of all our assets and expect our brokerage business to be a significant revenue contributor to our company going forward. We are now well positioned to take advantage of the favorable economic trends developing in our industry as we look forward to the Xing An mine resuming production in the coming months."

About US China Mining Group

US China Mining Group is a company engaged in coal production and sales by exploring, assembling, assessing, permitting, developing and mining coal properties in the People's Republic of China ("PRC"). After obtaining permits from the Heilongjiang Province National Land and Resources Administration Bureau and the Heilongjiang Economic and Trade Commission, we extract coal from properties to which we have the right to mine capped amounts of coal, and then sell most of the coal on a per metric ton ("ton") basis in cash on delivery, primarily to power plants, cement factories, wholesalers and individuals for home heating. We do not own the coal mines, but have mining rights to extract a capped amount of coal from a mine as determined by government authorized mining engineers and approved by the Heilongjiang Department of Land and Resources. Our business consists of the operations of Tong Gong coal mine in northern PRC, located approximately 175 km southwest of the city of Heihe in the Heilongjiang Province and the Hong Yuan and Sheng Yu coal mines located in the city of Mohe in Heilongjiang Province.

Safe Harbor Statement

This press release contains certain statements that may include 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as "believe, expect, anticipate, optimistic, intend, will" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risks and other factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.



    Contact:
    Hanover Financial Services
    Ronald J. Blekicki
    Ph: 303-494-3617
    Info@hanoverfinancialservices.com

SOURCE US China Mining Group, Inc.