YNGFF Yangzijiang Financial Holding Ltd (PK)

FORWARD-LOOKING STATEMENTS

This annual report on Form 40-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of applicable laws concerning the Corporation’s plans at its properties, plans related to its business and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning mineral reserves and resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves or resources, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects,” “anticipates,” “plans,” “estimates” or “intends,” or the negative or other variations of these words or other comparable words or phrases or stating that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements.” Forward-looking statements also include management’s expectations relating to the following:

• the Corporation’s mineral reserve and mineral resource estimates;
• the targeted dates for completing certain resource and reserve Technical Report updates;
• the targeted and forecasted ore and gold production from the SSX-Steer and Smith mines;
• the targeted ore production from Starvation Canyon and the timeline related thereto;
• with the expected ore feed from the operating underground mines at Jerritt Canyon, the Corporation’s plan to fill the remaining mill capacity with third party ores through toll milling contracts;
• that the Jerritt Canyon property offers a significant number of advanced, early stage and district-scale exploration targets and potential to expand the currently defined mineral reserves and resources proximal to the producing mines;
• the Corporation’s intention to seek and acquire additional near production stage properties worthy of development and within economic trucking distance of the Jerritt Canyon mill;
• the Corporation’s expectation that the Tailings Storage Facility 1 (TSF-1) will enter closure and reclamation and the timeline related thereto;
• the plan for performing restoration projects at the Jerritt Canyon mine site, including initial actions for closure and reclamation of TSF-1 and improvements to the reclamation of waste rock disposal areas to diminish the seepage from them;
• the Corporation’s expectations for completing the air pollution controls for mercury at Jerritt Canyon and the timeline related thereto;
• the Corporation’s expectations relating to re-grading of the Snow Canyon East rock disposal area and the restoration of the Marlboro Canyon rock disposal area and the timelines related thereto;
• the Corporation’s expectations for putting the second tailings facility into operation and the timeline related thereto;
  

• the estimated net present value of the Corporation’s closure and reclamation obligations for the Jerritt Canyon operations at the end of the mine life;
• that the second tailings facility is anticipated to provide six years of storage at planned production rates;
• that additional approvals may be required for expanded exploration plans in the future;
• that the Corporation will ensure additional surety capacity as new mines and plant expansions develop in the future;
• that monitoring of the effectiveness of mercury controls will be performed;
• the Corporation’s planned environmental capital expenditures and restoration expenditures;
• that approval of the Yukon Environmental and Socio-economic Assessment Board (“ YESAB ”) project proposal relating to the Ketza River property will allow the Corporation to commence construction of the tailings facility at the site and allow for mine production;
• that the review of the application after it is deemed to be adequate by the YESAB is expected to take between 12 and 18 months to process;
• that all Jerritt Canyon property claims will always be renewed every year by filing the necessary paperwork and claim fees with the U.S. Bureau of Land Management and the County;
• the Corporation’s estimated costs to maintain its property claims;
• the Corporation’s targeted annual mill throughput over the 4.5 year life of mine plan and the Corporation’s forecasted gold recovery;
• the Corporation’s targeted daily mill production from the SSX-Steer mine;
• the life of mine reserves plan and the Corporation’s expected production, profitability, payback period, cash flow, internal rate of return, cash operating costs, total costs and capital requirements;
• the Corporation’s expectation that the life of mine reserves plan will produce robust financial results;
• that under the life of mine reserves plan, in the first year ore will be sourced from the Smith and SSX mines and low grade ore stockpiles and additional ore sources will be developed at Starvation Canyon and Burns Basin during the year to enhance underground production and replace the stockpile ores as they are depleted;
• the Corporation’s expectation that the primary focus of exploration for the Bay property in Yukon will be silver;
• the Corporation’s expectation that the focus of exploration of the Silver Bar property in Arizona will be gold and copper and management’s plans regarding exploration on such property;
• the Corporation’s expectation that the directors will be nominated for re-election;
• the Corporation’s plans for testing of the runoff from the three rock disposal areas located in the areas of historic open pit mining;
• the Corporation’s expectations regarding development of Starvation Canyon and widening the access road to allow for on-highway haulage trucks to directly access the site and reduce re-handling of ore;
• that an exploration drift extending from the existing workings at West Mahala and Zone 1 to near the northeastern West Mahala inferred resource pod could serve as multiple platforms for additional exploration drilling and at some point could act as a ventilation route and possible secondary escapeway for that remote area of the mine;
• the Corporation’s goal of adding resources and reserves that are not included in the current life of mine plan;
• the Corporation’s plans for future drilling programs;
• the Corporation’s plans to continue the permitting process for the Ketza River property;
• the Corporation’s expectations regarding its ability to fund the completion of the Starvation Canyon mine;
• the Corporation’s expectation that once the development work at the Starvation Canyon mine is completed and the mine is in operations, the operations should generate sufficient funds to support the ongoing capital expenditures and the Corporation will be free cash flow positive;
• the Corporation’s plans for reducing its existing debt commitments and its expectations for increasing cash flow from the Jerritt Canyon operations;
• the Corporation’s expected mineral production from its two existing underground mines as well as the Starvation Canyon mine upon completion thereof;
• the Corporation’s plans to open a third portal at the SSX-Steer mine through which the Corporation can draw additional ores at comparable grades for at least another year;
• the Corporation’s expectation to enter into third party toll milling contracts to take delivery of third party ore or concentrates which will provide significant incremental cash flows as well as provide significant cost credits as these revenues are treated as offsets to the cost of production;

• that the completion of the second tailings facility and water storage reservoirs will extend the life of the mill, allow for the eventual reclamation of the original tailings facility, and bring the fluid management system in line with current standards;
• the Corporation’s development and drilling plans for the SSX-Steer mine;
• the Corporation’s expectations regarding the impact that certain accounting pronouncements will have on its consolidated financial statements;
• that the Corporation’s infrastructure to access specific ore blocks will provide probable future economic benefits to the Corporation; and
• that to maintain or adjust its capital structure, the Corporation may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents.

Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

• precious metal price fluctuations;
• operating hazards and risks;
• risks and uncertainties relating to the exploration and development of mineral properties;
• uncertainty attributable to the calculation of reserves, resources and metal recoveries;
• uncertainty of title to mining properties;
• risks related to the issuance of debt;
• risks associated with dilution;
• risks related to environmental regulation and liability;
• risks related to the possibility that the Corporation is a passive foreign investment company; and
• uncertainty associated with enforcing civil liabilities of the Corporation and its directors and officers in Canada.

Some of the important risks and uncertainties that could affect the Corporation’s forward-looking statements are described further in the Corporation’s Annual Information Form for the year ended December 31, 2012, a copy of which is filed as Exhibit 99.1 hereto, under the heading “Risk Factors.” Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against placing undue reliance on forward-looking statements.

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Corporation is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this annual report on Form 40-F in accordance with Canadian disclosure requirements, which are different from those of the United States. The Corporation prepares its financial statements, which are filed with this annual report on Form 40-F, in accordance with IFRS, and they are subject to Canadian auditing and auditor independence standards. The Corporation’s financial statements may not be comparable to financial statements of United States companies.

RESOURCE AND RESERVE ESTIMATES

The terms “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” used in the Corporation’s disclosure are Canadian mining terms that are defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“ NI 43-101 ”) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “ CIM ”) Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves (the “CIM Standards”), adopted by the CIM Council on November 23, 2003. These definitions differ from the definitions in the United States Securities and Exchange Commission (the “ Commission ”) Industry Guide 7 under the Securities Act. Under Industry Guide 7 standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Under Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

The terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” used in the Corporation’s disclosure are Canadian mining terms that are defined in accordance with NI 43-101 under the guidelines set out in the CIM Standards; however, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the Commission. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the Commission normally only permits issuers to report mineralization that does not constitute “reserves” by Commission Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this annual report on Form 40-F and the documents incorporated by reference herein containing descriptions of the Corporation’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

ANNUAL INFORMATION FORM

The Corporation’s Annual Information Form for the year ended December 31, 2012 is filed as Exhibit 99.1 and incorporated by reference in this annual report on Form 40-F.

AUDITED ANNUAL FINANCIAL STATEMENTS AND
MANAGEMENT’S DISCUSSION AND ANALYSIS

Audited Annual Financial Statements

The audited consolidated financial statements of the Corporation for the years ended December 31, 2012 and 2011, including the report of the Independent Registered Chartered Accountant with respect thereto, are filed as Exhibit 99.2 and incorporated by reference in this annual report on Form 40-F.