Unassociated Document


    [This
document has been translated from Chinese to English]

    


    Equity
Transfer Agreement

    January
13, 2011

    


    Party
A-1: Jia Xiangfu (Natural Person Shareholder)

    ID Card
No.: 330725195401155914

    Party
A-2: Yu Wuqiang (Natural Person Shareholder)

    ID Card
No.: 340103196302024017

    Party
A-3: Chen Qiaolin (Natural Person Shareholder)

    ID Card
No.: 330725195806295923

    


    Parties
A-1, A-2, and A-2 are collectively referred to as “Party A” or the “Transferor.”

    


    Party
B-1: Xinjiang Xingzhen Mining Co., Ltd.

    (hereinafter
referred to as “Xingzhen”)

    Legal
Representative: Yu Xiaoming

    Party
B-2: Min Yong

    ID Card
No.: 362321195909110012

    Party
B-3: Wang Changman

    ID Card
No.: 342530195711100015

     

    Parties
B-1, B-2, and B-3 are collectively referred to as “Party B” or the “Transferee.”

     

    Party A
and Party B are collectively referred to as the “Parties”.

    


    Recitals

    


    Whereas:

     

    1.           Parties
A-1, A-2 and A-3 are Chinese Citizens, who respectively own eighty percent
(80%), twenty percent (20%) and ten percent (10%) of the equity of Xinyi
Fluorite Company Ltd. (“Xinyi”), which is a valid
existing corporation registered in Jingde County, Anhui Province, People’s
Republic of China (“China” or the “PRC”).

    


    Xinyi
owns:

     

    
      	
               
      

            	
              ·

            	
              the
      mining permit to the Qingzheng Fluorite Xinyi Mine No.1 of Xinyi, with the
      permit number of C3418252009036120010379, covering an area of 0.151 square
      kilometres (the “Qingzheng Mine”) the
      permit of which is attached hereto as Exhibit
      A;

            


    

     

    
      	
               
      

            	
              ·

            	
              the
      mining permit to the Xinglong County Guangrong Fluorite Mine of Xinyi,
      with the permit number of C3418002009046120011698, covering an area of
      0.0695 square kilometres (the “Guangrong Mine”) the
      permit of which is attached hereto as Exhibit
      B;

            


    

     

    
      	
               
      

            	
              ·

            	
              the
      mining rights and assets to the Sanxi Old Town flotation plant (the “Sanxi
      Plant”).

            


    

     

    2.           Party
B-1 is a valid existing limited liability company registered in Xinjiang Uygur
Autonomous Region, China.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    3.           Party
B-2 is a Chinese citizen, whose resident address is Room 101, Unit 1, Building
14, No.8, Binjiang East Road, Xinzhou District, Shangrao City, Jiangxi Province,
China.

     

    4.           Party
B-3 is a Chinese citizen, whose resident address is ICBC Dormitory 5, Shengli
East Road, Jinyang Town, Jingde County, Anhui Province, China.

    


    In order to:

     

    
      	
              1.

            	
              give
      full credit to the respective strengths of the Parties with respect to the
      resources, technology and funding of the
  Parties;

            


    

     

    2.           expedite
the establishment of the fluorine chemical industry base with fluorite
exploitation as the foundation and high value-added fluorine chemicals as the
core product;

     

    3.           leverage
Party A’s superior resources to create superior products and economic benefits;
and

     

    4.           make
contributions to the local economic development, under the uniform deployment of
the Jingde County Government,

     

    Party B
agrees to consolidate the Qingzheng Mine, the Guangrong Mine and the Sanxi Plant
by acquiring an equity interest of Xinyi owned by Party A.

     

    The
Parties, upon fair and friendly negotiation, enter into this Equity Transfer
Agreement (the “Agreement”) with respect to
the transfer of equity of Xinyi and other related matters as
follows:

    


    Terms

     

    1.           Target
Equity.

     

    Party A
agrees to transfer seventy percent (70%) of the equity of Xinyi it owns
(hereinafter referred to as the “Target Equity”) to Party
B.  In such transfer, Party A-1 will transfer sixty percent (60%) of
the total equity of Xinyi, and Party A-2 will transfer ten percent (10%) of the
total equity of Xinyi.  Party A-3, however, will not transfer any
portion of the ten percent (10%) of the total equity of Xinyi that it
owns.  Party B agrees to acquire the Target Equity in the following
proportion: Party B-1 will acquire fifty-five percent (55%) of the total equity
of Xinyi, Party B-2 will acquire ten percent (10%) of the total equity of Xinyi,
and Party B-3 will acquire five percent (5%) of the total equity of
Xinyi.

     

    Upon the
completion of the transfer, the equity structure of Xinyi will be as follows:
Party A and Party B will hold thirty percent (30%) and seventy percent (70%)
respectively.  Party A-1 will hold twenty percent (20%) and Party A-3
will hold ten percent (10%).  Party A-2 will no longer hold any equity
of Xinyi after the Target Equity is transferred.  Party B-1 will hold
fifty-five percent (55%), Party B-2 will hold ten percent (10%), and the Party
B-3 will hold five percent (5%).


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      	
              2.

            	
                    
                Transfer
      Consideration.

              

            


    

     

    
      	
               
      

            	
              2.1.

            	
              
                Given that Party A
      guarantees that the amount of ore with an average ore grade of at least
      sixty-five percent (65%) mined within the permitted area of the mining
      permit of the Qingzheng Mine will exceed five hundred thousand (500,000)
      metric tons, the Parties have agreed to a transfer price of Renminbi
      (“RMB”) seventy million Yuan (RMB
      70,000,000.00) for the Target
  Equity.

              

            


    

     

    
      	
               
      

            	
              2.2.

            	
              Party
      B agrees to provide RMB twenty-eight million Yuan (RMB 28,000,000.00) to
      Xinyi, out of which, RMB twenty million Yuan (RMB 20,000,000.00) shall be
      used for the renovation of the Sanxi Plant and the
      Guangrong Mine, and RMB eight million Yuan (RMB 8,000,000.00) shall be
      paid to Party A.

            


    

     

    
      	
              3.

            	
                    
                Terms of
      Payment.

              

            


    

     

    The
parties agree, that the transfer consideration shall be paid in cash instalments
and in the form of common shares of China Shen Zhou Mining & Resources, Inc
(the “Parent Company”).

     

    
      	
               
      

            	
              3.1.

            	
              
                On
      the date of the execution of this Agreement, Party B shall pay RMB five
      million Yuan (RMB 5,000,000.00) to Party A, and the Parties shall commence
      the equity registration modification and financial
      handover.

              

            


    

     

    
      	
               
      

            	
              3.2.

            	
              Within
      seven (7) business days as of the execution of this Agreement, Party B
      shall pay RMB fifteen million Yuan (RMB 15,000,000.00) to Party A. Among
      such payment, Party B-1 shall pay RMB ten million Yuan (RMB
      10,000,000.00), and Party B-2 shall pay RMB three million Yuan (RMB
      3,000,000.00), and Party B-3 shall pay RMB 2 million Yuan (RMB
      2,000,000.00).

            


    

     

    
      	
               
      

            	
              3.3.

            	
              Party B shall make
      a payment in the form of the Parent Company’s common shares valued at RMB
      fifty million Yuan (RMB 50,000,000.00) to Party A before June 30, 2011,
      where the exchange rate is US 1 Dollar equals to RMB 6.6
      Yuan.

            


    

     

    
      	
               
      

            	
              3.4.

            	
              Party
      B shall make a cash payment in the amount of RMB eight million Yuan (RMB
      8,000,000.00) to Party A before February 28,
  2011.

            


    

     

    
      	
               
      

            	
              3.5.

            	
              Party
      B shall make payment instalments to Party A in the amount of RMB twenty
      million Yuan (RMB 20,000,000.00) as a renovation fund for the Guangrong
      Mine and the Sanxi Plant after the execution of this
      Agreement.

            


    

     

    
      	
              4.

            	
              Representation and
      Warranties.

            


    

     

    
      	
               
      

            	
              4.1.

            	
              Party
      A warrants that it has the right to proceed with the transaction as set
      forth in this Agreement, and it has obtained all necessary authorizations
      from the Company and under the law to execute and perform this
      Agreement.

            


    

     

    
      	
               
      

            	
              4.2.

            	
              Party
      A warrants that at the date of the execution of this Agreement, it
      legitimately possesses the Target Equity shares, the mining rights of
      Xinyi, and all related assets as well as the disposal rights for such
      assets.

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              4.3.

            	
              Party A warrants
      that prior to the execution date of this Agreement, it has obtained a
      written approval of the cooperation between the parties of this Agreement
      from Jingde County’s People’s Government, or Jingde
      County’s People’s Government as an attesting party
      of this Agreement stating approval of the Agreement and that Xinyi
      continues to enjoy the preferential tax treatment of the “Attract Foreign Investment
      Policy.”

            


    

     

    
      	
               
      

            	
              4.4.

            	
              Party
      A warrants that a total amount of five hundred thousand (500,000) metric
      tons of ore can be extracted from within the mining permit area of the
      Qingzheng Mine. If five hundred thousand (500,000) metric tons are not
      extracted, Party A shall undertake such loss and compensate Party B for
      each ton of shortage with RMB two hundred Yuan (RMB
      200.00).

            


    

     

    
      	
               
      

            	
              4.5.

            	
              Part
      A warrants that after the execution of this Agreement, Party A shall
      assume all of Xinyi’s outstanding claims and
  debt.

            


    

     

    
      	
               
      

            	
              4.6.

            	
              Party
      A warrants safe production and normal operation in the mining mills during
      the transaction period, and all assets will be kept safe without any loss
      and damage during this period.

            


    

     

    
      	
               
      

            	
              4.7.

            	
              Party
      B warrants that it has the right to proceed with the transaction as set
      forth in this Agreement , and it has obtained all necessary authorizations
      from the Company and under the law to execute and perform this
      Agreement.

            


    

     

    
      	
               
      

            	
              4.8.

            	
              Party
      B warrants the legitimacy of the source of funding for the equity transfer
      consideration under this Agreement.

            


    

     

    
      	
               
      

            	
              4.9.

            	
              Party
      B warrants that the equity share value of the Parent Company in the amount
      of RMB fifty million Yuan (50,000,000.00) will not devalue, otherwise
      Party B shall make up the
difference.

            


    

     

    
      	 	
              4.10.

            	
              Party
      B warrants that if income tax incurred from the first payment of RMB five
      million Yuan (5,000,000.00) and the second payment of RMB fifteen million
      Yuan (15,000,000.00), Xinyi shall bear such
  cost.

            


    

     

    
      	 	
              4.11.

            	
              Party
      B warrants that Xinyi will pay Party A a total amount of RMB three point
      eight million Yuan (RMB 3,800,000) for the ore in
  stock.

            


    

     

    
      	 	
              4.12.

            	
              Both
      parties warrant that when Xinyi needs to make an investment, both Parties
      will contribute to such investments according to their equity ownership
      percentage (after the renovation fund of RMB twenty million Yuan
      (20,000,000.00) for Guangrong Mine and Sanxi Plant is
      exhausted).

            


    

     

    
      	
              5.

            	
              Profit
      Sharing.

            


    

     

    
      The
condition precedent for profit sharing is keeping a sufficient amount of
relevant commissions for the company according to relevant PRC laws, regulations
and accounting rules.

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.1.

            	
              On
      the condition that Party A guarantees five hundred thousand (500,000)
      metric tons of production from Qingzheng Mine, the profit sharing plan
      between Party A and Party B shall be based upon the equity ownership
      percentage (tax shall be dealt with by each party respectively), that is,
      Party A gets thirty percent (30%), and Party B gets seventy percent
      (70%).  If the Qingzheng Mine exceeds five hundred thousand
      (500,000) metric tons of production, a conditional profit sharing plan
      takes effect that Party A and Party B shall each get fifty percent (50%)
      of the net income on the excess part respectively.
  

            


    

     

    
      	
               
      

            	
              5.2.

            	
              If
      ore is found deep within the Qingzheng Mine, application for expanding the
      mining scope of the mining permit will be required, Xinyi will undertake
      such application cost. After obtaining such mining permit, when all
      investment costs on the deep mining are deducted from the operating
      profit, Party A and Party B shall each obtain fifty percent (50%) on the
      residual profit
respectively.

            


    

     

    
      	
              6.

            	
              Management
      Handover.

            


    

     

    
      	
               
      

            	
              6.1.

            	
              After
      Party A receives the first RMB five million Yuan (RMB 5,000,000.00)
      payment, both Parties shall commence the equity registration modification
      and the financial handover.

            


    

     

    
      	
               
      

            	
              6.2.

            	
              On
      the day of receiving the second payment of equity transfer consideration,
      both Parties shall complete the equity registration modification and the
      legal procedures required for
re-registration.

            


    

     

    
      	
               
      

            	
              6.3.

            	
              A
      take-over team shall be organized and the majority of the team shall
      comprise of personnel from Party B. The take-over team shall fully take
      over Xinyi and designate the principal management personnel in Xinyi.
      Party A shall coordinate with the take-over team accordingly. The
      placement of Xinyi’s original employees shall be properly arranged by
      negotiations of both Parties.

            


    

     

    
      	
               
      

            	
              6.4.

            	
              Party
      A shall handover all assets, rights and its related certificates or
      documents (including company assets, documents, accounting books and
      records, seals, etc.) of Xinyi within the scope of this transaction as set
      forth in this Agreement, and jointly prepare a handover checklist, signed
      and sealed by each party.

            


    

     

    
      	
              7.

            	
              The Administrative
      Structure of the Company.

            


    

     

    The
Company shall form a Board of Directors (the “Board”), comprising of five
(5) people including two (2) people from Party A and three (3) people from Party
B.  The Chairman of the Board shall be appointed by Party
B.  The Board shall be formed after the execution of this Agreement to
determine the detailed administrative structure and the management model of the
company.

     

    
      	
              8.

            	
              Liabilities for
      Breach.

            


    

     

    
      Both
Party A and Party B shall follow the terms of this Agreement strictly. In the
event that one Party breaches this Agreement, the breaching Party shall be
responsible for indemnifying the other Party for all economic
losses.

       

    

    
      	
              9.

            	
              Miscellaneous.

            


    

     

    
      	
               
      

            	
              9.1.

            	
              This
      Agreement shall be executed in six (6) copies, Party A and Party B shall
      each keep three (3) copies , and all copies shall bear equal legal
      effect.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              9.2.

            	
              This
      Agreement shall take effect on the date of execution and seal by both
      Party A and Party B.

            


    

     

    
      	
               
      

            	
              9.3.

            	
              Any
      matters not provided herein shall be supplemented to this Agreement
      subject to both parties’ Agreement, supplemental Agreement bears equal
      legal effect.

            


    

     

    
      *Remainder
of page intentionally left blank*

    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

    


    No Text
Within This Page

    


    Signing
Parties:

    


    Party
A1: Jia Xiangfu

    


    
      
        
          	
                  Signature:

                	
                  /s/ Jia Xiangfu

                	 
      


        

      

    

    


    Party
A2: Yu Wuqiang

    


    
      
        	
                Signature:

              	
                /s/ Yu Wuqiang

              	 
      


      

    

    


    Party
A3: Chen Qiaoling

    


    
      
        	
                Signature:

              	
                /s/Chen Qiaoling

              	 
      


      

    

    


    Party
B1: Xingzhen Mining Co Ltd

    


    
      
        
          
            	
                    Authorized
      signatory:

                  	
                    /s/ Cui
      Helin

                  	 
      


          

        

      

    

    


    Party
B2: Min Yong

     

    
      
        
          	
                  Signature:

                	
                  /s/ Min Yong

                	 
      


        

      

    

    


    Party
B3: Wang Changman

     

    
      
        
          	
                  Signature:

                	
                  /s/ Wang Changman

                	 
      


        

      

    

    


    January
13, 2011 at Jingde County, Anhui Province, China

    


    SIGNATURE
PAGE TO EQUITY TRANSFER AGREEMENT


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      Exhibit
A

       

    

    
      Copy of
Mining Permit for Qingzheng Mine

       

       

      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

    

     

    People’s
Republic of China

     

    Mining
Permit

     

    (Duplicate)

     

    Certificate
No.: C3418252009036120010379

     

    Mining Right Owner: Jingde
County Xinyi Fluorite Co., Ltd.

     

    Address: Sanxi Town, Jingde
County

     

    Ore Mine Name: Jingde County
Xinyi Fluorite Company Ltd. Qingzheng Fluorite Xinyi No.1 Mine

     

    Corporation Type: Limited
Liability Company

     

    Ore Type: Fluorite
(normal)

     

    Mining Method: Underground
Mining

     

    Production Scale: 15,000 tons
per year

     

    Mine Area: 0.151 square
kilometres

     

    Validity Term: One year and
seven month, from October, 2009 to April, 2011.

     

    Issuance
Organ: Land and Resources Bureau of Jingde County

     

    October
20, 2009

     

    Made and
Printed by Ministry of Land and Resources of People’s Republic of
China

     

    Mine Area
Scope Coordinate:

    


    
      	
              Point No.

            	 
      	
              X Coordinate

            	 
      	
              Y Coordinate

            
	
              1

            	 
      	
              3353358.00

            	 
      	
              40356650.00

            
	
              2

            	 
      	
              3353358.00

            	 
      	
              40356727.00

            
	
              3

            	 
      	
              3353325.00

            	 
      	
              40356798.70

            
	
              4

            	 
      	
              3353582.90

            	 
      	
              40357106.00

            
	
              5

            	 
      	
              3353475.00

            	 
      	
              40357255.00

            
	
              6

            	 
      	
              3352900.00

            	 
      	
              40356580.00

            
	
              7

            	 
      	
              3352955.00

            	 
      	
              40356453.00

            
	
              8

            	 
      	
              3353318.50

            	 
      	
              40356791.00

            
	
              9

            	 
      	
              3353348.00

            	 
      	
              40356727.00

            
	
              10

            	
                

            	
              3353348.00

            	
                

            	
              40356650.00

            


    

     

    Mining
Depth: 502 meters to 100 meters. Aggregately 10 points


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Exhibit
B

     

    
      Copy of
Mining Permit for Guangrong Mine

       

       

      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

    

     

    People’s
Republic of China

     

    Mining
Permit

     

    (Duplicate)

     

    Certificate
No.: C3418002009046120011698

     

    Mining Right Owner: Jingde
County Xinyi Fluorite Co., Ltd.

     

    Address: Guangrong Village,
Xinglong Town, Jingde County

     

    Ore Mine Name: Jingde County
Xinyi Fluorite Company Ltd. Xinglong County Guangrong Fluorite Mine

     

    Corporation Type: Limited
Liability Company

     

    Ore Type: Fluorite
(normal)

     

    Mining Method: Underground
Mining

     

    Production Scale: 20,000 tons
per year

     

    Mine Area: 0.0695 square
kilometres

     

    Validity Term: Two years, from
April, 2009 to April, 2011.

     

    Issuance
Organ: State Territorial Resources Bureau of Jingde County

     

    April 14,
2009

     

    Made and
Printed by Ministry of Land and Resources of People’s Republic of
China

     

    Mine Area
Scope Coordinate:

    


    
      	
              Point No.

            	 
      	
              X Coordinate

            	 
      	
              Y Coordinate

            
	
              1

            	 
      	
              3356765.00

            	 
      	
              39629625.00

            
	
              2

            	 
      	
              3356875.00

            	 
      	
              39629770.00

            
	
              3

            	 
      	
              3357250.00

            	 
      	
              39630110.70

            
	
              4

            	 
      	
              3357290.00

            	 
      	
              39630160.00

            
	
              5

            	 
      	
              3357225.00

            	 
      	
              39630210.00

            
	
              6

            	 
      	
              3357185.00

            	 
      	
              39630163.00

            
	
              7

            	 
      	
              3356790.00

            	 
      	
              39629825.00

            
	
              8

            	
                

            	
              3356683.00

            	
                

            	
              39629680.00

            


    

     

    Mining
Depth: 305 meters to 0 meter standard. Aggregately 10 points