Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

中國黃金國際資源有限公司

(a company incorporated under the laws of British Columbia, Canada with limited liability)

(Hong Kong Stock Code: 2099)

(Toronto Stock Code: CGG)

Overseas Regulatory Announcement

VANCOUVER, August 14, 2020 - China Gold International Resources Corp. Ltd. (TSX: CGG; HKEx: 2099) has filed MD&A and Financial Statements for the Six months Ended June 30, 2020 on SEDAR (www.sedar.com) on August 14, 2020, Vancouver time.

Please see the attached announcement for more details.

By order of the Board

China Gold International Resources Corp. Ltd.

Mr. Liangyou Jiang

Chairman and Chief Executive Officer

Hong Kong, 14 August 2020

As at the date of this announcement, the Board of Directors of the Company comprises of Mr. Liangyou Jiang, Mr. Shiliang Guan, Mr. Weibin Zhang and Ms. Na Tian as Executive Directors, Mr. Junhu Tong as Non‐Executive Director, and Mr. Ian He, Mr. Wei Shao, Dr. Bielin Shi and Ms. Ruixia Han as Independent Non‐Executive Directors.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

China Gold International Resources Corp. Ltd.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Six months ended June 30, 2020

(Stated in U.S. dollars, except as otherwise noted)

Suite 660, One Bentall Centre, 505 Burrard Street, Box 27, Vancouver, BC, V7X 1M4

Tel: 604-609-0598 Fax: 604-688-0598E-mail: info@chinagoldintl.com, www.chinagoldintl.com

MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2020. (Stated in U.S. dollars, except as otherwise noted)

FORWARD-LOOKING STATEMENTS

2

THE COMPANY

3

OVERVIEW

3

PERFORMANCEHIGHLIGHTS

3

OUTLOOK

3

RESULTS OF OPERATIONS

4

SELECTEDQUARTERLYFINANCIALDATA

4

SELECTEDQUARTERLYPRODUCTIONDATA ANDANALYSIS

4

REVIEW OFQUARTERLYDATA

5

NON-IFRS MEASURES

7

MINERAL PROPERTIES

8

THE CSH MINE

8

THEJIAMAMINE

10

LIQUIDITY AND CAPITAL RESOURCES

12

CASH FLOWS

13

OPERATING CASH FLOW

13

INVESTING CASH FLOW

14

FINANCING CASH FLOW

14

SIGNIFICANT INVESTMENTS, ACQUISITIONS AND DISPOSAL OF SUBSIDIARIES. ASSOCIATES AND

JOINT VENTURES, AND FUTURE PLAN FOR MATERIAL INVESTMENTS OF CAPITAL ASSETS

14

CHARGE ON ASSETS

14

EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES

14

COMMITMENTS

14

RELATED PARTY TRANSACTIONS

15

PROPOSED TRANSACTIONS

16

CRITICAL ACCOUNTING ESTIMATES

16

CHANGE IN ACCOUNTING POLICIES

16

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

16

OFF-BALANCE SHEET ARRANGEMENTS

16

DIVIDEND AND DIVIDEND POLICY

16

OUTSTANDING SHARES

16

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL

REPORTING

17

RISK FACTORS

17

QUALIFIED PERSON

17

ADDITIONAL INFORMATION

17

1 | P a g e

China Gold International Resources Corp. Ltd.

The following Management Discussion and Analysis of financial condition and results of operations ("MD&A") is prepared as of August 14, 2020. It should be read in conjunction with the consolidated financial statements and notes thereto of China Gold International Resources Corp. Ltd. (referred to herein as "China Gold International", the "Company", "we" or "our" as the context may require) for the three and six months ended June 30, 2020 and the three and six months ended June 30, 2019, respectively. Unless the context otherwise provides, references in this MD&A to China Gold International or the Company refer to China Gold International and each of its subsidiaries collectively on a consolidated basis.

The following discussion contains certain forward-looking statements relating to the Company's plans, objectives, expectations and intentions, which are based on the Company's current expectations and are subject to risks, uncertainties and changes in circumstances. Readers should carefully consider all of the information set out in this MD&A, including the risks and uncertainties outlined further in the Company's Annual Information Form ("Annual Information Form" or "AIF") dated March 30, 2020 on SEDAR at www.sedar.com,www.chinagoldintl.comand www.hkex.com.hk. For further information on risks and other factors that could affect the accuracy of forward-looking statements and the result of operations of the Company, please refer to the sections titled "Forward-Looking Statements" and "Risk Factors" and to discussions elsewhere within this MD&A. China Gold International's business, financial condition or results of operations could be materially and adversely affected by any of these risks.

FORWARD-LOOKING STATEMENTS

Certain statements made herein, other than statements of historical fact relating to the Company, represent forward-looking information. In some cases, this forward-looking information can be identified by words or phrases such as "may", "will", "expect", "anticipate", "contemplates", "aim", "estimate", "intend", "plan", "believe", "potential", "continue", "is/are likely to", "should" or the negative of these terms, or other similar expressions intended to identify forward-looking information. This forward-looking information includes, among other things; China Gold International's production estimates, business strategies and capital expenditure plans; the development and expansion plans and schedules for the CSH Mine and the Jiama Mine; China Gold International's financial condition; the regulatory environment as well as the general industry outlook; general economic trends in China; and statements respecting anticipated business activities, planned expenditures, corporate strategies, participation in projects and financing, and other statements that are not historical facts.

By their nature, forward-looking information involves numerous assumptions, both general and specific, which may cause the actual results, performance or achievements of China Gold International and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Some of the key assumptions include, among others, the absence of any material change in China Gold International's operations or in foreign exchange rates, the prevailing price of gold, copper and other non-ferrous metal products; the absence of lower-than-anticipated mineral recovery or other production problems; effective income and other tax rates and other assumptions underlying China Gold International's financial performance as stated in the Company's technical reports for its CSH Mine and Jiama Mine; China Gold International's ability to obtain regulatory confirmations and approvals on a timely basis; continuing positive labor relations; the absence of any material adverse effects as a result of political instability, terrorism, natural disasters, pandemics such as COVID-19, litigation or arbitration and adverse changes in government regulation; the availability and accessibility of financing to China Gold International; and the performance by counterparties of the terms and conditions of all contracts to which China Gold International and its subsidiaries are a party. The forward-looking information is also based on the assumption that none of the risk factors identified in this MD&A or in the AIF that could cause actual results to differ materially from the forward-looking information actually occurs.

Forward-looking information contained herein as of the date of this MD&A is based on the opinions, estimates and assumptions of management. There are a number of important risks, uncertainties and other factors that could cause actual actions, events or results to differ materially from those described as forward-looking information. China Gold International disclaims any obligation to update any forward-looking information, whether as a result of new information, estimates, opinions or assumptions, future events or results, or otherwise except to the extent required by law. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking information in this MD&A is expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on forward-looking information.

2 | P a g e

China Gold International Resources Corp. Ltd.

THE COMPANY

Overview

China Gold International is a gold and base metal mining company registered in British Columbia Canada. The Company's main business involves the operation, acquisition, development and exploration of gold and base metal properties.

The Company's principal mining operations are the Chang Shan Hao Gold Mine ("CSH Mine" or "CSH"), located in Inner Mongolia, China and the Jiama Copper-Gold Polymetallic Mine ("Jiama Mine" or "Jiama"), located in Tibet, China. China Gold International holds a 96.5% interest in the CSH Mine, while its Chinese joint venture ("CJV") partner holds the remaining 3.5% interest. The Company owns a 100% interest in the Jiama Mine, which hosts a large scale copper-gold polymetallic deposit containing copper, gold, molybdenum, silver, lead and zinc metals.

China Gold International's common shares are listed on the Toronto Stock Exchange ("TSX") and The Stock Exchange of Hong Kong Limited ("HKSE") under the symbol CGG and the stock code 2099, respectively. Additional information about the Company, including the Company's Annual Information Form, is available on SEDAR at sedar.com as well as Hong Kong Exchange News at hkexnews.hk.

Performance Highlights

Three months ended June 30, 2020

  • Revenue increased to US$209.2 million compared to US$163.2 million for the same period in 2019.
  • Mine operating earnings increased by 386% to US$35.5 million from US$7.3 million for the same period in 2019.
  • Net income of US$18.5 million increased by US$41.5 million from a net loss of US$23.0 million for the same period in 2019.
  • Cash flow from operation decreased by 4% to US$54.5 million from US$56.6 million for the same period in 2019.
  • Total gold production increased by 14% to 63,043 ounces from 55,503 ounces for the same period in 2019.
  • Total copper production increased by 31% to 46.5 million pounds (approximately 21,103 tonnes) from 35.6 million pounds (approximately 16,126 tonnes) for the same period in 2019.

Six months ended June 30, 2020

  • Revenue increased to US$357.8 million compared to US$308.8 million for the same period in 2019.
  • Mine operating earnings increased by 138% to US$53.7 million from US$22.6 million for the same period in 2019.
  • Net income of US$9.9 million increased by US$37.4 million from a net loss of US$27.5 million for the same period in 2019.
  • Cash flow from operation increased by 11% to US$70.5 million from US$63.5 million for the same period in 2019.
  • Total gold production increased by 15% to 114,872 ounces from 99,527 ounces for the same period in 2019.
  • Total copper production increased by 20% to 82.2 million pounds (approximately 37,288 tonnes) from 68.3 million pounds (approximately 30,959 tonnes) for the same period in 2019.

OUTLOOK

  • Projected gold production of 212,000 ounces in 2020.
  • Projected copper production of 145 million pounds in 2020.
  • The Company continues to focus its efforts on optimizing the operation at both mines, improving the Jiama Mine's production and extending the mine life of CSH Mine.

3 | P a g e

China Gold International Resources Corp. Ltd.

  • To fulfill its growth strategy, the Company is continually working with CNG and other interested parties to identify potential international mining acquisition opportunities, namely projects outside of China.
  • The Company has not experienced any significant impact on its operations from the COVID-19 pandemic. Both of the
    Company's mines have been able to operate and sell production without significant interruption during the three and six months ended June 30, 2020. The Company continues to closely monitor the health of its employees and supply chains to be able to respond to any potential disruptions, should any arise. The Company is also managing its cash reserves to be able to withstand any financial ramifications of potential disruptions.

RESULTS OF OPERATIONS

Selected Quarterly Financial Data

Quarter ended

2020

2019

2018

(US$ in thousands except per share)

30-Jun

31-Mar

31-Dec

30-Sep

30-Jun

31-Mar

31-Dec

30-Sep

Revenue

209,188

148,583

162,326

186,375

163,166

145,592

162,957

158,841

Cost of sales

173,701

130,414

146,952

160,094

155,876

130,324

129,693

123,743

Mine operating earnings

35,487

18,169

15,374

26,281

7,290

15,268

33,264

35,098

General and administrative expenses

5,793

9,186

15,280

11,762

9,532

13,495

16,701

12,666

Exploration and evaluation expenses

165

61

(156)

368

175

115

(4)

134

Research and development expenses

2,264

1,966

3,200

4,308

4,541

4,856

7,374

3,068

Income (loss) from operations

27,265

6,956

(2,950)

9,843

(6,958)

(3,198)

9,193

19,230

Gain on recognition of other assets

-

-

14,067

11,245

-

-

-

-

Foreign exchange (loss) gain

(2,331)

(5,438)

4,074

(9,616)

(7,414)

5,288

(1,677)

(11,024)

Finance costs

11,525

10,516

10,398

10,560

11,482

10,088

11,224

10,909

Profit (loss) before income tax

17,597

(7,793)

4,732

2,380

(24,817)

(7,137)

(3,346)

(998)

Income tax (credit) expense

(926)

876

9,037

2,701

(1,866)

(2,563)

(1,351)

3,591

Net profit (loss)

18,523

(8,669)

(4,305)

(321)

(22,951)

(4,574)

(1,995)

(4,589)

Basic earnings (loss) per share (cents)

4.52

(2.25)

(1.19)

(0.17)

(5.79)

(1.13)

(0.49)

(1.23)

Diluted earnings (loss) per share (cents)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Selected Quarterly Production Data and Analysis

CSH Mine

Three months ended June 30,

Six months ended June 30

2020

2019

2020

2019

Gold sales (US$ million)

65.06

52.17

120.56

89.85

Realized average price (US$) of gold per ounce

1,673

1,303

1,625

1,305

Gold produced (ounces)

38,850

39,875

74,147

68,502

Gold sold (ounces)

38,887

40,028

74,182

68,859

Total production cost (US$ per ounce)

1,358

1,329

1,359

1,347

Cash production cost(1) (US$ per ounce)

889

805

841

849

  1. Non-IFRSmeasure. See 'Non-IFRS measures' section of this MD&A

Gold production at the CSH Mine slightly decreased by 3% to 38,850 ounces for the three months ended June 30, 2020 compared to 39,875 ounces for the three months ended June 30, 2019. The total production cost of gold for the three months ended June 30, 2020 increased to US$1,358 per ounce compared to US$1,329 for the three months ended June 30, 2019. The cash production cost of gold for the three months ended June 30, 2020 increased to US$889 per ounce from US$805 for the same period in 2019. Changes in total production cost and cash cost are mainly due to higher stripping ratio and waste removal costs.

4 | P a g e

China Gold International Resources Corp. Ltd.

Jiama Mine

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

Copper sales (US$ in millions)

63.99

76.63

118.65

145.99

Realized average price 1(US$) of copper per

pound after smelting fee discount

1.35

1.85

1.49

1.87

Copper produced (tonnes)

21,103

16,126

37,288

30,959

Copper produced (pounds)

46,523,860

35,551,640

82,205,981

68,253,000

Copper sold (tonnes)

21,686

16,300

36,098

31,425

Copper sold (pounds)

47,810,580

35,936,014

79,582,880

69,281,182

Gold produced (ounces)

24,193

15,628

40,725

31,025

Gold sold (ounces)

24,872

16,817

39,718

32,398

Silver produced (ounces)

1,824,767

844,748

3,088,602

1,820,751

Silver sold (ounces)

1,895,570

936,765

2,941,611

1,932,544

Lead produced (tonnes)

20,263

2,752

29,538

2,752

Lead produced (pounds)

44,672,072

6,067,209

65,120,727

6,067,29

Lead sold (tonnes)

22,074

2,752

28,073

2,752

Lead sold (pounds)

48,664,678

6,067,209

61,891,245

6,067,209

Zinc produced (tonnes)

9,885

-

15,083

-

Zinc produced (pounds)

21,791,970

-

33,251,468

-

Zinc sold (tonnes)

10,733

-

14,370

-

Zinc sold (pounds)

23,661,754

-

31,681,205

-

Total production cost 2

(US$) of copper per

pound

2.69

3.18

2.76

3.13

Total production cost 2 (US$) of copper per

pound after by-products credits 4

1.00

2.39

1.27

2.34

Cash production cost 4(US$) per pound of copper

2.08

2.49

2.03

2.43

Cash production cost 3

(US$) of copper per

pound after by-products credits 4

0.41

1.70

0.54

1.64

  1. A discount factor of 18.6% to 29.6% is applied to the copper benchmark price to compensate the refinery costs incurred by the buyers. The discount factor is higher if the grade of copper in copper concentrate is below 18%. The industry standard of copper in copper concentrate is between 18-20%.
  2. Production costs include expenditures incurred at the mine sites for the activities related to production including mining, processing, mine

site G&A and royalties etc.

  1. Non-IFRSmeasure. See 'Non-IFRS measures' section of this MD&A
  2. By-productscredit refers to the sales of gold and silver during the corresponding period.

During the three months ended June 30, 2020, the Jiama Mine produced 21,103 tonnes (approximately 46.5 million pounds) of copper, an increase of 31% compared with the three months ended June 30, 2019 (16,126 tonnes, or 35.6 million pounds).

Both total production cost of copper per pound after by-products and cash production cost of copper per pound after by-product decreased greatly as compared to the same period in 2019 due to higher mined tonnes, higher head grade, higher recovery rates, and more by-products recovered of lead and zinc.

Review of Quarterly Data

Three months ended June 30, 2020 compared to three months ended June 30, 2019

Revenue of US$209.2 million for the second quarter of 2020 increased by US$46.0 million from US$163.2 million for the same period in 2019.

Revenue from the CSH Mine was US$65.1 million, an increase of US$12.9 million, compared to US$52.2 million for the same period in 2019. Realized average gold price increased by 28% from US$1,303/oz in Q2 2019 to US$1,673/oz in Q2 2020. Gold sold by the CSH Mine was 38,887 ounces (gold produced: 38,850 ounces), compared to 40,028 ounces (gold produced: 39,875 ounces) for the same period in 2019.

5 | P a g e

China Gold International Resources Corp. Ltd.

Revenue from the Jiama Mine was US$144.1 million, an increase of US$33.1 million, compared to US$111.0 million for the same period in 2019. Total copper sold was 21,687 tonnes (47.8 million pounds) for the three months ended June 30, 2020, an increase of 33% from 16,300 tonnes (35.9 million pounds) for the same period in 2019.

Cost of sales of US$173.7 million for the quarter ended June 30, 2020, an increase of US$17.8 million from US$155.9 million for the same period in 2019. Cost of sales as a percentage of revenue for the Company decreased from 96% to 83% for the three months ended June 30, 2019 and 2020, respectively. Cost of sales was impacted by many operation factors such as grade of ore, recovery rates and stripping ratio. Refer to the sections below for details of production factors for each individual mine.

Mine operating earnings of US$35.5 million for the three months ended June 30, 2020, an increase of 386%, or US$28.2 million, from US$7.3 million for the same period in 2019. Mine operating earnings as a percentage of revenue increased from 4% to 17% for the three months ended June 30, 2019 and 2020, respectively.

General and administrative expenses decreased by US$3.7 million, from US$9.5 million for the quarter ended June 30, 2019 to US$5.8 million for the quarter ended June 30, 2020. The decrease was due to the Company's implementation of an overall cost reduction program.

Research and development expenses of US$2.3 million for the three months ended June 30, 2020, decreased from US$4.5 million for the comparative 2019 period. The decrease in the second quarter of 2020 was mainly due to the completion of several research projects in 2019.

Income from operations of US$27.3 million for the second quarter of 2020, increased by US$34.3 million, compared to a loss of US$7.0 million for the same period in 2019.

Finance costs of US$11.4 million for the three months ended June 30, 2020, decreased by US$0.1 million compared to US$11.5 million for the same period in 2019.

Foreign exchange loss of US$2.3 million for the three months ended June 30, 2020, decreased from US$7.4 million for the same period in 2019. The loss was attributed to changes in the RMB/USD exchange rates and the revaluation of monetary items held in Chinese RMB.

Interest and other income of US$4.2 million for the three months ended June 30, 2020 increased from US$1.0 million for the same period in 2019. The increase in the second quarter of 2020 was primarily attributed to the sales of lead-zinc concentrate at the Jiama Mine.

Income tax credit of US$0.9 million for the quarter ended June 30, 2020, decreased by US$1.0 million from US$1.9 million for the comparative period in 2019. During the current quarter, the Company had US$1.9 million of deferred tax credit compared to US$1.1 million for the same period in 2019.

Net income of US$18.5 million for the three months ended June 30, 2020, increased by US$41.5 million from a net loss of US$23.0 million for the three months ended June 30, 2019.

Six months ended June 30, 2020 compared to six months ended June 30, 2019

Revenue of US$357.8 million for the first half of 2020 increased by US$49.0 million from US$308.8 million for the same period in 2019.

Revenue from the CSH Mine was US$120.6 million, an increase of US$30.8 million, compared to US$89.8 million for the same period in 2019. Realized average gold price increased by 25% from US$1,305/oz in the first six months of 2019 to US$1,625/oz in

2020. Gold sold by the CSH Mine was 74,182 ounces (gold produced: 74,147 ounces), compared to 68,859 ounces (gold produced: 68,502 ounces) for the same period in 2019.

Revenue from the Jiama Mine was US$237.2 million, an increase of US$18.3 million, compared to US$218.9 million for the same period in 2019. Total copper sold was 36,098 tonnes (79.6 million pounds) for the six months ended June 30, 2020, an increase of 15% from 31,425 tonnes (69.3 million pounds) for the same period in 2019.

Cost of sales of US$304.1 million for the six months ended June 30, 2020, an increase of US$17.9 million from US$286.2 million for the same period in 2019. Cost of sales as a percentage of revenue for the Company decreased from 93% to 85% for the six months ended June 30, 2019 and 2020, respectively. Cost of sales was impacted by many operation factors such as grade of ore, recovery rates and stripping ratio. Refer to the sections below for details of production factors for each individual mine.

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China Gold International Resources Corp. Ltd.

Mine operating earnings of US$53.7 million for the six months ended June 30, 2020, an increase of 138%, or US$31.1 million, from US$22.6 million for the same period in 2019. Mine operating earnings as a percentage of revenue increased from 7% to 15% for the six months ended June 30, 2019 and 2020, respectively.

General and administrative expenses decreased by US$8.0 million, from US$23.0 million for the six months ended June 30, 2019 to US$15.0 million for the six months ended June 30, 2020. The decrease was due to the Company's implementation of an overall cost reduction program.

Research and development expenses of US$4.2 million for the six months ended June 30, 2020, decreased from US$9.4 million for the comparative 2019 period. The decrease in 2020 was mainly due to the completion of several research projects in 2019.

Income from operations of US$34.2 million for the six months ended 2020, increased by US$44.4 million, compared to a loss of US$10.2 million for the same period in 2019.

Finance costs of US$22.0 million for the six months ended June 30, 2020, increased by US$0.4 million compared to US$21.6 million for the same period in 2019.

Foreign exchange loss of US$7.8 million for the six months ended June 30, 2020, increased from US$2.1 million for the same period in 2019. The loss was attributed to changes in the RMB/USD exchange rates and the revaluation of monetary items held in Chinese RMB.

Interest and other income of US$5.4 million for the six months ended June 30, 2020 increased from US$1.9 million for the same period in 2019. The increase in 2020 was primarily attributed to the sales of lead-zinc concentrate at the Jiama Mine.

Income tax credit of US$0.1 million for the six months ended June 30, 2020, decreased by US$4.3 million from US$4.4 million for the comparative period in 2019. During the current six months period, the Company had US$1.9 million of deferred tax credit compared to S$4.3 million for the same period in 2019.

Net income of US$9.9 million for the six months ended June 30, 2020, increased by US$37.4 million from a net loss of US$27.5 million for the six months ended June 30, 2019.

NON-IFRS MEASURES

The cash cost of production is a measure that is not in accordance with IFRS.

The Company has included cash production cost per ounce gold data to supplement its consolidated financial statements, which are presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance, operating results or financial condition prepared in accordance with IFRS. The Company has included cash production cost per ounce data because it understands that certain investors use this information to determine the Company's ability to generate earnings and cash flow. The measure is not necessarily indicative of operating results, cash flow from operations, or financial condition as determined under IFRS. Cash production costs are determined in accordance with the Gold Institute's Production Cost Standard. Although the Gold Institute ceased operations in 2002, the Company believes that the Gold Institute's Production Cost Standard continues to represent the market accepted standard for reporting cash cost of production. However, different issuers may apply slight deviations to the standard so the cash production costs disclosed by the Company may not be directly comparable to other issuers.

7 | P a g e

China Gold International Resources Corp. Ltd.

The following tables provide a reconciliation of cost of sales to the cash costs of production in total dollars and in dollars per gold ounce for the CSH Mine or per copper pound for the Jiama Mine:

CSH Mine (Gold)

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$

US$

US$

US$

US$

US$

Per

Per

Per ounce

US$

Per ounce

US$

ounce

ounce

Total Cost of sales 1

52,798,614

1,358

53,200,398

1,329

100,835,749

1,359

92,782,0491

1,347

Adjustment -

Depreciation & depletion

(17,853,204)

(459)

(20,010,035)

(500)

(37,223,738)

(502)

(33,328,270)

(483)

Adjustment -

Amortization of

intangible assets

(389,364)

(10)

(955,668)

(24)

(1,248,123)

(17)

(1,008,645)

(15)

Total cash production

costs

34,556,046

889

32,234,695

805

62,363,888

841

58,445,134

849

1 In 2019, Inventory write down of US$4.3 million was provided in total cost of sales for the three months ended 2019, of which been excluded from this figure.

Jiama Mine (Copper with by-products credits)

Three months ended June 30,

20202019

Six months ended June 30,

2020

2019

US$

US$

Per

US$

Per

US$

US$

Pound

US$

Per Pound

US$

Pound

US$

Per Pound

Total Cost of sales

120,902,333

2.53

102,674,711

2.86

203,279,379

2.55

189,225,117

2.73

General and administrative

expenses

5,219,804

0.11

7,122,665

0.20

12,099,942

0.15

18,418,434

0.27

Research and development

expenses

2,263,506

0.05

4,540,867

0.13

4,229,777

0.06

9,396,910

0.14

Total production cost

128,385,643

2.69

114,338,243

3.18

219,609,098

2.76

217,040,461

3.13

Adjustment - Depreciation

& depletion

(19,853,021)

(0.42)

(17,248,041)

(0.48)

(40,192,446)

(0.50)

(34,979,620)

(0.50)

Adjustment - Amortization

of intangible assets

(8,855,858)

(0.19)

(7,370,901)

(0.21)

(17,978,957)

(0.23)

(13,478,297)

(0.19)

Total cash production costs

99,676,764

2.08

89,719,301

2.49

161,437,695

2.03

168,582,544

2.44

By-products credits

(80,067,168)

(1.67)

(28,419,971)

(0.79)

(118,452,832)

(1.49)

(55,110,600)

(0.80)

Total cash production costs

after by-products credits

19,609,596

0.41

61,299,330

1.70

42,984,863

0.54

113,471,944

1.64

The adjustments above include depreciation and depletion, amortization of intangible assets, and selling expenses included in total production costs.

MINERAL PROPERTIES

The CSH Mine

The CSH Mine is located in Inner Mongolia Autonomous Region of China (Inner Mongolia). The property hosts two low-grade, near surface gold deposits, along with other mineralized prospects. The main deposit is called the Northeast Zone (the "Northeast Zone"), while the second, smaller deposit is called the Southwest Zone (the "Southwest Zone").

The CSH Mine is owned and operated by Inner Mongolia Pacific Mining Co. Limited, a Chinese Joint Venture in which the Company holds a 96.5% interest and Ningxia Nuclear Industry Geological Exploration Institution holds the remaining 3.5%.

The CSH Mine has two open-pit mining operations with a combined mining and processing capacity of 60,000 tpd. The run-of-mine ore is heap leached with cyanide solution to extract gold and electro-winned to produce a gold dore which is sold to refiners.

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China Gold International Resources Corp. Ltd.

The major new contracts entered into during the six months ended June 30, 2020:

Item

Contract Name

Counterpart

Subject amount

Contract period

Date of Contract

No.

(US $ millions)

(effective day and

expiration date)

1

Contract for supply of on

Bayannur Sheng'an Chemical

Estimated: 12.1

2020.1.1 - 2020.12.31

2020.1.1

-site mixed emulsion

Co., Ltd. Urad Middle Banner

explosives

Branch

2

Supply Agreement of Liquid

Inner Mongolia Chengxin

Estimated: 18.5

2020.1.1 - 2020.12.31

2020.1.1

Sodium Cyanide

Yong'an Chemicals Co., Ltd.

3

Purchase and sale contract

Hunan Zhongxing Environmental

Estimated: 10.6

2020.6.23 - 2020.7.22

2020.6.23

of gold bearing materials

Protection Technology Co., Ltd

Production Update

CSH Mine

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

Ore mined and placed on pad (tonnes)

3,773,262

4,014,071

5,499,662

6,891,913

Average ore grade (g/t)

0.59

0.55

0.59

0.51

Recoverable gold (ounces)

42,623

44,211

63,270

69,785

Ending gold in process (ounces)

170,695

170,466

170,695

170,466

Waste rock mined (tonnes)

21,460,794

19,647,091

26,577,866

29,457,476

For the three months ended June 30, 2020, the total amount of ore placed on the leach pad was 3.8 million tonnes, with total contained gold of 42,623 ounces (1,326 kilograms). The overall accumulative project-to-date gold recovery rate has slightly decreased to approximately 54.49% at the end of June 2020 from 54.51% at the end of March 2020. Of which, gold recovery from the phase I heap was 59.77% and; gold recovery from the Phase II heap was 48.76% at June 30, 2020.

Exploration

At the beginning of 2020, an exploration program for the south-west pit depth was projected, with six surface diamond drill holes totaling 3,300+/-m to identify and upgrade additional deep Mineral Resources, which may extend the life of mine. Three surface drill holes are underway, given 1,125 +/-m completed accounting for 31% of the annual projection.

In addition, the geological exploration research project initiated in 2019 is continued to proceed with interpretation of geophysical and geochemical surveys, establishment of 3D-quantitative geological model, and selection of targets for further exploration.

Mineral Resource Update

CSH Mine Resources by category, Northeast and Southwest Zones combined at December 31, 2019 under NI 43-101:

Metal

Type

Quantity Mt

Au g/t

Au t

Au Moz

Measured

9.00

0.60

5.44

0.17

Indicated

115.70

0.62

71.93

2.31

M+I

124.70

0.62

77.37

2.49

Inferred

78.86

0.52

40.90

1.32

Mineral Reserves Update

CSH Mine Reserves by category, Northeast and Southwest Zones combined at December 31, 2019 under NI 43-101:

Metal

Type

Quantity Mt

Au g/t

Au t

Au Moz

Proven

7.40

0.63

4.64

0.15

Probable

58.65

0.66

38.85

1.25

Total

66.05

0.66

43.48

1.40

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China Gold International Resources Corp. Ltd.

The Jiama Mine

The Company acquired the Jiama Mine on December 1, 2010. Jiama is a large copper-gold polymetallic deposit containing copper, gold, silver, molybdenum, lead, zinc and other metals located in the Gandise metallogenic belt in Tibet Autonomous Region of China.

The Jiama Mine has both underground mining and open-pit mining operations. Phase I of the Jiama Mine commenced mining operations in the latter half of 2010 and reached its design capacity of 6,000 tpd in early 2011. Phase II of the Jiama Mine commenced mining operations in 2018 with 44,000 tpd design capacity.

The major new contracts entered into during the six months ended June 30, 2020:

Item

Contract Name

Counterpart

Subject amount

Contract period

Date of Contract

No.

(US $ millions)

(effective day and

expiration date)

1

Steel ball purchase

Tongling Nonferrous Jinshen

Estimated: 2.9

2020.4.28- 2020.10.27

2020.4.28

contract

wear resistant materials Co., Ltd.

2

Steel ball purchase

Chinalco Industrial Services Co.,

Estimated: 3.0

2020.4.28- 2020.10.27

2020.4.28

contract

Ltd

3

Steel ball purchase

Chinalco Industrial Services Co.,

Estimated: 3.0

2020.6.6- 2021.6.5

2020.6.6

contract

Ltd

4

Production Technical

China Gold Group Inner

Estimated: 4.2

2020.4.5- 2021.4.4

2020.4.5

Service Contract

Mongolia Mining Co., Ltd

5

Contract of pressure

Tibet Tianchu LiuYe Construction

Estimated: 2.8

2020.6.30- 2021.6.29

2020.6.30

filtration production and

Industry Co., Ltd

operation project of No.1

processing plant

6

Blasting service contract

Tibet Zhongjin Xinlian Blasting

Estimated: 9.9

2020.1.1- 2020.12.31

2020.1.1

Engineering Co., Ltd.

7

Blasting service contract

Tibet Gaozheng Blasting

Estimated: 9.9

2020.1.1- 2020.12.31

2020.1.1

Engineering Co., Ltd

8

Mixed ore sales contract

Tibet Hongshang Trade Co., Ltd.

Estimated: 42.4

2020.1.1- 2020.12.31

2020.1.1

9

Raw ore sales contract

Tibet Hongshang Trade Co., Ltd.

Estimated: 4.2

2020.6.15- 2023.6.14

2020.6.15

10

Mixed ore sales contract

Tibet Hongshang Trade Co., Ltd.

Estimated: 32.5

2020.5.1-2020.6.1

2020.5.1

11

Mixed ore sales contract

Tibet Mingchuan Trade Co., Ltd

Estimated: 381.4

2020.6.12-2023.6.11

2020.6.12

In 2019, Tibet Huatailong Mining Development Co. Ltd. ("Huatailong"), the company holds the Jiama mine, entered into a cooperation agreement (the "Cooperation Agreement") with an independent third party property developer, Zhongxinfang Tibet Construction Investment Co., Ltd. ("Zhongxinfang") in relation to the development of a composite project in Lhasa, Tibet, China. Pursuant to the Cooperation Agreement, the Huatailong agreed to transfer the land use right for the development and the Zhongxinfang agreed to compensate the Huatailong by transferring a block of the buildings and twenty car parks within two years from the date of the Cooperation Agreement and all related tax exposures including but not limited to land appreciation tax, enterprises income tax and other related tax. The land use right was transferred to the Zhongxinfang in 2019.

During the second quarter of 2020, there was a construction contract dispute between independent third parties, the constructor, Huaxin Construction Group Co., Ltd. (formerly named as "Nantong Huaxin Construction Group Co., Ltd.") ("Huaxin") and the developer, Zhongxinfang Tibet Construction Investment Co., Ltd. ("Zhongxinfang"), and the Group's subsidiary, Huatailong, who are the signatories of the construction contract for the property development project on the land previously owned by Huatailong. Such land was transferred to Zhongxinfang during 2019 pursuant to the cooperation agreement signed between Zhongxinfang and Huatailong in 2019 in relation to the Land Exchange. Huaxin proceeded a lawsuit against the parties to the construction contract, Zhongxinfang and Huatailong, for the recoverability of the construction costs of RMB149 million (equivalents to US$21,196,000) and applied for pre-litigation preservation of assets from Huatailong. The Intermediate People's Court of Lhasa City, Tibet, adjudicated that the bank deposit of RMB140 million (equivalents to US$19,775,000) of Huatailong to be frozen for one year (the "1st Adjudication"). Accordingly, the frozen bank deposit of US$19,775,000 was included in restricted bank balances as at June 30, 2020.

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China Gold International Resources Corp. Ltd.

Based on the first instance adjudication dated on August 5, 2020 (the "First Instance Adjudication"), the litigation ruling adjudicated that Zhongxinfang and Huatailong shall have the jointly obligation for the construction costs of RMB140 million (equivalents to US$19,954,000) to Huaxin. Pursuant to the cooperation agreement signed between Zhongxinfang and Huatailong in 2019, Huatailong does not involve in the construction process which and the related costs are the sole responsibilities of Zhongxinfang. Based on the legal opinion, Huatailong will proceed an appeal against the First Instance Adjudication, and the lawsuit is currently under proceeding and the results is not ascertain as at the date of issuance of these condensed consolidated financial statements. The directors of the Company have been closing monitoring the proceedings in relation to the First Instance Adjudication.

Regarding the 1st Adjudication, Huatailong applied for pre-litigation preservation of assets from Zhongxinfang, the Intermediate People's Court of Lhasa City, Tibet, adjudicated that the value of properties limited to RMB151 million (equivalents to US$21,473,000) from Zhongxinfang was frozen for one year.

Huatailong has paid the tax and other surcharges related to the Land Exchange during the six months ended June 30, 2020, and expects to recover such payments from Zhongxinfang in accordance with the cooperation agreement between Huatailong and Zhongxinfang signed in 2019. On July 8, 2020, Huatailong applied for pre-litigation preservation of assets from Zhongxinfang, the Intermediate People's Court of Lhasa City, Tibet, adjudicated that the value of properties limited to RMB46 million (equivalents to US$6,571,000) from Zhongxinfang was frozen for one year. In the opinion of the directors of the Company, no significant expected credit loss is recognised on other receivables based on the credit risk assessment.

Production Update

Jiama Mine

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

Ore processed (tonnes)

3,775,553

3,224,395

7,184,761

6,236,988

Average copper ore grade (%)

0.68

0.62

0.65

0.65

Copper recovery rate (%)

82

81

80

77

Average gold grade (g/t)

0.29

0.28

0.26

0.29

Gold recovery rate (%)

70

54

67

54

Average silver grade (g/t)

24.77

15.13

22.95

16.93

Silver recovery rate (%)

61

54

58

54

Average lead grade (%)

0.71

-

0.63

-

Lead recovery rate (%)

76

-

66

-

Average zinc grade (%)

0.38

-

0.34

-

Zinc recovery rate (%)

68

-

61

-

During the second quarter of 2020, the metals recovery rates were increased significantly, with increases of 1% for copper, 16% for gold, and 7% for silver, based on the continued optimization of operating parameters regime of agent, and the amelioration of steady flowsheet, as well as recoveries of 76% for lead and 68% for zinc.

Exploration

In the second quarter of 2020, the company continued diamond drilling program, focusing on the well mineralized zones based on the drilling program in 2019. Six surface drill holes are underway, totaling 1,060 +/-m of drilling completed. The mineralization interceptions and sample assaying of 2020 drilling will be analyzed together with 2019 exploration results to upgrade Mineral and a positive result is expected.

Mineral Resources Estimate

An NI 43-101 compliant mineral resource estimate was independently completed by Mining One Pty Ltd. in November 2013. The drilling programs subsequent to November 2012, including an extensive drill program conducted in 2013, will be included in future updates of the Mineral Resources and Reserves.

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China Gold International Resources Corp. Ltd.

Mining One Pty Ltd. noted that gold and silver mineralization within the ore body had a significantly higher spatial variability than the other elements. This classification takes into account the proposed large scale mining techniques where Au and Ag will only be credits to the overall products from the operations. Mining One Pty Ltd has assumed that Au and Ag will not be assigned a single cut-off grade for a selected mining block and will be mined in conjunction with the other elements.

Jiama Project - Cu, Mo, Pb, Zn ,Au, and Ag Mineral Resources under NI 43-101

Reported at a 0.3% Cu Equivalent Cut off grade*, as of December 31, 2019

Quantity

Cu Metal

Mo Metal

Pb Metal

Zn Metal

Class

Mt

Cu %

Mo %

Pb %

Zn %

Au g/t

Ag g/t

(kt)

(kt)

(kt)

(kt)

Au Moz

Ag Moz

Measured

95.02

0.39

0.04

0.04

0.02

0.08

5.41

370.6

34.3

41.8

22.4

0.25

16.63

Indicated

1,359.51

0.40

0.03

0.05

0.03

0.11

5.79

5,502.9

460.3

732

460

4.63

254.82

M+I

1,454.53

0.40

0.03

0.05

0.03

0.10

5.76

5,873.5

494.6

773.7

482.4

4.88

271.45

Inferred

406.1

0.30

0.00

0.10

0.00

0.10

5.1

1,247

123

311

175

1.32

66.93

Note: Figures reported are rounded which may result in small tabulation errors.

The Copper Equivalent basis for the reporting of resources has been compiled on the following basis:

CuEq Grade: = (Ag Grade * Ag Price + Au Grade * Au Price + Cu Grade * Cu Price + Pb Grade * Pb Price +

Zn Grade * Zn Price + Mo Grade * Mo Price) / Copper Price

Mineral Reserves Estimate

A Mineral Reserve estimate, dated November 20, 2013, has been independently prepared by Mining One Pty Ltd. in accordance with the CIM Definitions Standards under NI 43-101.

Jiama Project Statement of NI 43-101 Mineral Reserve Estimate as of December 31, 2019

Quantity

Cu Metal

Mo Metal

Pb Metal

Zn Metal

Class

Mt

Cu %

Mo %

Pb %

Zn %

Au g/t

Ag g/t

(kt)

(kt)

(kt)

(kt)

Au Moz

Ag Moz

Proven

20.00

0.60

0.05

0.05

0.03

0.20

8.60

120.9

9.4

9.9

6.7

0.130

5.53

Probable

385.73

0.60

0.03

0.14

0.08

0.17

10.99

2,326.6

127.0

540.5

313.5

2.17

136.30

P+P

405.73

0.60

0.03

0.14

0.08

0.18

10.87

2,447.4

136.4

550.4

320.2

2.30

141.83

Notes:

  1. All Mineral Reserves have been estimated in accordance with the JORC code and have been reconciled to CIM standards as prescribed by the NI 43-101.
  2. Mineral Reserves were estimated using the following mining and economic factors:

Open Pits:

  1. 5% dilution factor and 95% recovery were applied to the mining method;
  2. an overall slope angles of 43 degrees;
  3. a copper price of US$ 2.9/lbs;
  4. an overall processing recovery of 88 - 90% for copper

Underground:

  1. 10% dilution added to all Sub-Level Open Stoping;
  2. Stope recovery is 87% for Sub-Level Open Stoping;
  3. An overall processing recovery of 88 - 90% for copper.

3. The cut-off grade for Mineral Reserves has been estimated at copper equivalent grades of 0.3% Cu (NSR) for the open pits and 0.45% Cu (NSR) for the underground mine.

LIQUIDITY AND CAPITAL RESOURCES

The Company operates in a capital intensive industry. The Company's liquidity requirements arise principally from the need for financing its mining and mineral processing operations, exploration activities and acquisition of exploration and mining rights. The Company's principal sources of funds have been proceeds from borrowing from commercial banks in China, corporate bond financing, equity financings, and cash generated from operations. The Company's liquidity primarily depends on its ability to generate cash flow from its operations and to obtain external financing to meet its debt obligations as they become due, as well as the Company's future operating and capital expenditure requirements.

At June 30, 2020, the Company had an accumulated surplus of US$206.3 million, working capital of US$175.2 million and borrowings of US$1,759 million. The Company's cash balance at June 30, 2020 was US$723.2 million.

Management believes that its forecast operating cash flows are sufficient to cover the next twelve months of the Company's operations including its planned capital expenditures and current debt repayments. The Company's borrowings are comprised of

12 | P a g e

China Gold International Resources Corp. Ltd.

US$507.6 million of 3.25% coupon rate unsecured bonds maturing on July 6, 2020, which are included in the current portion of borrowings, US$295.9 million of 2.8% coupon rate unsecured bonds maturing on June 23, 2023, and US$99.9 million of short term debt facilities with interest rates ranging from 2.65% to 4.51% per annum arranged through various banks in China. In addition, on November 3, 2015, the Company entered into a Loan Facility agreement with a syndicate of banks, led by Bank of China. The lenders agreed to lend an aggregate principle amount of RMB 3.98 billion, approximately US$613 million with the interest rate of 2.83% per annum. The People's Bank of China Lhasa Center Branch's interest rate serves as a local benchmark for the interest on the drawdowns. The bank's interest rate is then discounted by 7 basis points (or 0.07%) to calculate the interest on the drawdowns. The loan interest rate was adjusted from benchmark interest rate minus 7 basis points to 5 year loan prime rate ("LPR") less 2% (LPR-2%) in second quarter of 2020. The interest rate of 2.65% shall be applied for the current year after converting. The proceeds from the Loan Facility are to be used for the development of the Jiama Mine. The loan is secured by the mining rights for the Jiama Mine. As of June 30, 2020 the Company has drawn down RMB3.640 billion, approximately US$505.7 million under the Loan Facility. On April 29, 2020, the Company entered into a Loan Facility agreement with a syndicate of banks. The lenders agreed to lend an aggregate principle amount of RMB 1.4 billion, approximately US$197.8 million with the interest rate of 2.65% per annum currently, maturing on April 28, 2034. The company obtained a loan in the aggregate principal amount of RMB400 million with China Development Bank bearing interest at the People's Bank of China Loan Market Quote Rate (1 year) minus 2.65% on April 30, 2020. The current interest rate of the loan is 1.2% per annum. On July 6, 2020, the Company repaid the unsecured bonds with an aggregate principal amount of US$500 million and interest expense of US$8.125 million. The Company believes that the availability of debt financing in China at favorable rates will continue for the foreseeable future.

The Company continues to review and assess its assets for impairment as part of its financial reporting processes. To date, the assessment carried out by the Company support the carrying values of the Company's assets and no impairment has been required. However, the management of the Company continues to evaluate key assumptions on estimates and management judgements in order to determine the recoverable amount of the CSH Mine and the Jiama Mine.

Cash flows

The following table sets out selected cash flow data from the Company's consolidated cash flow statements for the three and six months ended June 30, 2020 and June 30, 2019.

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Net cash from operating activities

54,467

56,554

70,487

63,538

Net cash (used in) investing activities

(26,254)

(8,919)

(57,785)

(46,608)

Net cash from (used in) financing activities

530,122

27,319

529,744

19,722

Net increase in cash and cash equivalents

558,335

74,954

542,446

36,652

Effect of foreign exchange rate changes on

1,180

(1,327)

(1,528)

597

cash and cash equivalents

Cash and cash equivalents, beginning of

163,693

101,618

182,290

137,996

period

Cash and cash equivalents, end of period

723,208

175,245

723,208

175,245

Operating cash flow

For the three months ended June 30, 2020, net cash inflow from operating activities was US$54.5 million which is primarily attributable to (i) profit before income tax of US$17.6 million (ii) depreciation of property, plant and equipment of US$41.0 million and (iii) finance cost of US$11.5 million , partially offset by (i) placement of restricted cash of US$19.8 million (ii) decrease in accounts payable of US$9.6 million and (iii) interest paid of US$6.4 million.

For the six months ended June 30, 2020, net cash inflow from operating activities was US$70.5 million which is primarily attributable to (i) profit before income tax of US$9.8 million (ii) depreciation of property, plant and equipment of US$74.2 million

  1. finance cost of US$22.0 million and (iv) amortization of mining rights of US$19.1 million, partially offset by (i) decrease in accounts payable of US$35.3 million (ii) placement of restricted cash of US$19.8 million, and (iii) interest paid of US$12.0 million.

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China Gold International Resources Corp. Ltd.

Investing cash flow

For the three months ended June 30, 2020, the net cash outflow from investing activities was US$26.3 million which is primarily attributable to (i) payment of restricted bank balance of US$35.8 million for bank notes and (ii) payment for acquisition of property, plant and equipment of US$26.7 million, partially offset by release of restricted bank balance of US$35.7 million for bank notes.

For the six months ended June 30, 2020, the net cash outflow from investing activities was US$57.8 million which is primarily attributable to (i) payment of restricted bank balance of US$74.3 million for bank notes and (ii) payment for acquisition of property, plant and equipment of US$61.7 million, partially offset by release of restricted bank balance of US$76.8 million for bank notes.

Financing cash flow

For the three months ended June 30, 2020, the net cash inflow mainly from financing activities was US$530.1 million which is primarily attributable to proceeds from borrowings of US$583.6 million which included the US$300 million bond issuance on June 24, 2020 offset by repayment of borrowings of US$53.5 million.

For the six months ended June 30, 2020, the net cash inflow mainly from financing activities was US$529.7 million which is primarily attributable to proceeds from borrowings of US$583.6 million which included the US$300 million bond issuance on June 24, 2020 offset by repayment of borrowings of US$53.5 million and dividend paid to a minority shareholder of Jiama Industry and Trade of US$356,000.

Expenditures Incurred

For the six months ended June 30, 2020, the Company incurred mining costs of US$52.9 million, mineral processing costs of US$72.0 million and transportation costs of US$3.4 million.

Gearing ratio

Gearing ratio is defined as the ratio of consolidated total debt to consolidated total equity. As at June 30, 2020, the Company's total debt was US$1,759 million and the total equity was US$1,453 million. The Company's gearing ratio was therefore 1.21 as at June 30, 2020 and 0.84 as at June 30, 2019.

SIGNIFICANT INVESTMENTS, ACQUISITIONS AND DISPOSAL OF SUBSIDIARIES. ASSOCIATES AND JOINT VENTURES, AND FUTURE PLAN FOR MATERIAL INVESTMENTS OF CAPITAL ASSETS

Other than as disclosed elsewhere in this MD&A or in the condensed consolidated financial statements for six months ended June 30, 2020, there were no significant investments held by the Company, nor were there any material acquisitions or disposals of subsidiaries, associates and joint ventures during the three months ended June 30, 2020. Other than as disclosed in this MD&A, there was no plan authorized by the Board for other material investments or additions of capital assets at the date of this MD&A.

CHARGE ON ASSETS

Other than as disclosed elsewhere in this MD&A and annual consolidated financial statements, none of the Company's assets were pledged as at June 30, 2020.

EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES

The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates for the monetary assets and liabilities denominated in the currencies other than the functional currencies to which they relate. The Company has not hedged its exposure to currency fluctuation. However, the Management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. Refer to Note 34, Financial Instruments, in the annual consolidated financial statements for the year ended December 31, 2019.

COMMITMENTS

Commitments include principal payments on the Company's bank loans and syndicated loan facility, corporate bond, and capital commitments in respect of the future acquisition of property, plant and equipment and construction for both the CSH Mine and the Jiama Mine.

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China Gold International Resources Corp. Ltd.

The Company's capital commitments relate primarily to the payments for purchase of equipment and machinery for both mines and payments to third-party contractors for the provision of mining and exploration engineering work and mine construction work for both mines. The Company has entered into contracts that prescribe such capital commitments; however, liabilities relating to them have not yet been incurred. Refer to Note 35, Commitments, in the annual consolidated financial statements for the year ended December 31, 2019.

On July 7, 2017, the Company, through its wholly owned subsidiary Skyland Mining (BVI) Limited, issued bonds denominated in U.S. dollar, with an aggregate principal amount of US$500 million. The Bonds were issued at a price of 99.663%, bearing a coupon of 3.25% per annum with a maturity date of July 6, 2020. Interest is payable in semi-annual installments on January 6 and July 6 of each year. The bonds were listed on HKSE and were repaid in their entirety on maturity.

On June 24, 2020, the Company, through its wholly owned subsidiary Skyland Mining (BVI) Limited, issued bonds denominated in U.S. dollar, with an aggregate principal amount of US$300 million. The Bonds were issued at a price of 99.886%, bearing a coupon of 2.8% per annum with a maturity date of June 23, 2023. Interest is payable in semi-annual installments on December 23 and June 23 of each year. The bonds are listed on HKSE and Chongwa (Macao) Financial Asset Exchange ("MOX").

The following table outlines payments for commitments for the periods indicated:

Within

Within

Total

One year

Two to five years

Over five years

US$'000

US$'000

US$'000

US$'000

Principal repayment of bank loans

891,871

99,866

366,127

425,878

Repayment of bonds including interest

803,501

515,810

287,691

-

Repayment of entrusted loan payable

28,251

-

28,251

-

Repayment of loans payable to a CNG

35,313

-

35,313

-

subsidiary

Total

1,758,936

615,676

717,382

425,878

In addition to the table set forth above, the Company has entered into service agreements with third-party contractors such as China Railway for the provision of mining and exploration engineering work and mine construction work for the CSH Mine. The fees for such work performed and to be performed each year varies depending on the amount of work performed. The Company has similar agreements with third party contractors for the Jiama Mine.

RELATED PARTY TRANSACTIONS

China National Gold Group Co., Ltd. (formerly known as China National Gold Group Corporation) ("CNG") owned 39.3 percent of the outstanding common shares of the Company as at June 30, 2020 and June 30, 2019.

The Company had major related party transactions with the following companies related by way of shareholders or shareholder in common:

The Company's subsidiary, Inner Mongolia Pacific is a party to a non-exclusive contract for the purchase and sale of doré with

CNG (the "Dore Sales Contract") pursuant to which Inner Mongolia Pacific sells gold doré bars to CNG. The pricing is based on

the monthly average price of gold ingot as quoted on the Shanghai Gold Exchange and the daily average price of silver as quoted on the Shanghai Huatong Platinum & Silver Exchange prevailing at the time of each relevant purchase order during the contract period. The Dore Sales Contract has been in effect since October 24, 2008 and has been renewed for a current term that

commenced on January 1, 2018 and expires on December 31, 2020, which renewal was approved by the Company's shareholders

on June 28, 2017. On June 16, 2020, the third Supplemental Contract for Purchase and Sale of Dore was approved by the

Company's Shareholders, commencing on January 1, 2021 and expiring on December 31, 2023.

Revenue from sales of gold doré bars to CNG was US$120.6 million for the six months ended June 30, 2020 which increased from US$89.8 million for the six months ended June 30, 2019.

The Company is also a party to a Product and Service Framework Agreement with CNG, pursuant to which CNG provides construction, procurement and equipment financing services to the Company and also purchases the copper concentrates produced at the Jiama Mine. The quantity of copper concentrates, pricing terms and payment terms may be established from time to time by the parties with reference to the pricing principles for connected transactions set out under the Product and Service Framework Agreement. On June 28, 2017, the Supplemental Product and Service Framework Agreement was approved and extended to expire on December 31, 2020. For the six months ended June 30, 2020, revenue from sales of copper concentrate and other products to CNG was US$13.9 million, compared to US$54.2 million for the same period in 2019. On June 16, 2020, the third Supplemental

Product and Service Framework Agreement was approved by the Company's Shareholders, commencing on January 1, 2021 and

expiring on December 31, 2023.

15 | P a g e

China Gold International Resources Corp. Ltd.

For the six months ended June 30, 2020, construction services of US$4.1 million were provided to the Company by subsidiaries of CNG (US$5.5 million for the six months ended June 30, 2019).

In addition to the aforementioned major related party transactions, the Company also obtains additional services from related parties in its normal course of business, including a Loan Agreement and a Deposit Services Agreement entered into on March 25, 2019 and December 31, 2019 among the Company and China Gold Finance.

Refer to Note 14 of the condensed consolidated financial statements for the six months ended June 30, 2020.

PROPOSED TRANSACTIONS

The Board of Directors has given the Company approval to conduct reviews of a number of projects that may qualify as acquisition targets through joint venture, merger and/or outright acquisitions. The Company did not have any material acquisition and disposal of subsidiaries and associated companies for the six months ended June 30, 2020. The Company continues to review possible acquisition targets.

CRITICAL ACCOUNTING ESTIMATES

In the process of applying the Company's accounting policies, the Directors of the Company have identified accounting judgments and key sources of estimation uncertainty that have a significant effect on the amounts recognized in the audited annual consolidated financial statements.

Key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next twelve months are described in Note 4 of the audited annual consolidated financial statements for the year ended December 31, 2019.

CHANGE IN ACCOUNTING POLICIES

A summary of new and revised IFRS standards and interpretations are outlined in Note 2 of the audited annual consolidated financial statements as at December 31, 2019.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Company holds a number of financial instruments, the most significant of which are equity securities, accounts receivables, accounts payables, cash and loans. The financial instruments are recorded at either fair values or amortized amount on the balance sheet.

The Company did not have any financial derivatives or outstanding hedging contracts as at June 30, 2020.

OFF-BALANCE SHEET ARRANGEMENTS

As at June 30, 2020, the Company had not entered into any off-balance sheet arrangements.

DIVIDEND AND DIVIDEND POLICY

The Company has not paid any dividends since incorporation and does not currently have a fixed dividend policy. The Board of Directors will determine any future dividend policy on the basis of, among other things, the results of operations, cash flows and financial conditions, operating and capital requirements, the rules promulgated by the regulators affecting dividends in both Canada and Hong Kong, China and at both the TSX and HKSE, and the amount of distributable profits and other relevant factors.

Subject to the British Columbia Business Corporations Act, the Directors may from time to time declare and authorize payment of such dividends as they may deem advisable, including the amount thereof and the time and method of payment provided that the record date for the purpose of determining shareholders entitled to receive payment of the dividend must not precede the date on which the dividend is to be paid by more than two months.

A dividend may be paid wholly or partly by the distribution of cash, specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways. No dividend may be declared or paid in money or assets if there are reasonable grounds for believing that the Company is insolvent or the payment of the dividend would render the Company insolvent.

OUTSTANDING SHARES

As of June 30, 2020 the Company had 396,413,753 common shares issued and outstanding.

16 | P a g e

China Gold International Resources Corp. Ltd.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for the design of disclosure controls and procedures ("DC&P") and the design of internal control over financial reporting ("ICFR") to provide reasonable assurance that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's certifying officers. The Company's Chief Executive Officer and Chief Financial Officer have each evaluated the Company's DC&P and ICFR as of June 30, 2020 and, in accordance with the requirements established under Canadian National Instrument 52-109 - Certification of Disclosure in Issuer's Annual and Interim Filings, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures were effective as of June 30, 2020, and provide reasonable assurance that material information relating to the Company is made known to them by others within the Company and that the information required to be disclosed in reports that are filed or submitted under Canadian securities legislation are recorded, processed, summarized and reported within the time period specified in those rules.

The Company's Chief Executive Officer and Chief Financial Officer have used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 framework to evaluate the Company's ICFR as of June 30, 2020 and have concluded that these controls and procedures were effective as of June 30, 2020 and provide reasonable assurance that financial information is recorded, processed, summarized and reported in a timely manner. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The result of the inherent limitations in all control systems means design of controls cannot provide absolute assurance that all control issues and instances of fraud will be detected. During the six months ended June 30, 2020, there were no changes in the Company's DC&P or ICFR that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

RISK FACTORS

There are certain risks involved in the Company's operations, some of which are beyond the Company's control. Aside from risks relating to business and industry, the Company's principal operations are located within the People's Republic of China and are governed by a legal and regulatory environment that in some respects differs from that which prevails in other countries. Readers of this MD&A should give careful consideration to the information included in this document and the Company's audited annual consolidated financial statements and related notes. Significant risk factors for the Company are metal prices, government regulations, foreign operations, environmental compliance, the ability to obtain additional financing, risk relating to recent acquisitions, dependence on management, title to the Company's mineral properties, natural disasters, pandemics such as COVID-19 and litigation. China Gold International's business, financial condition or results of operations could be materially and adversely affected by any of these risks. For details of risk factors, please refer to the Company's annual audited consolidated financial statements, and Annual Information Form filed from time to time on SEDAR at www.sedar.comand www.hkex.com.hk.

QUALIFIED PERSON

Disclosure of scientific or technical information in this MD&A was reviewed and approved by Mr. Zhongxin Guo, P.Eng. the Company's Chief Engineer and a Qualified Person ("QP") for the purposes of NI 43-101.

ADDITIONAL INFORMATION

Additional information as required by the Hong Kong Stock Exchange in the half-year interim report and not shown elsewhere in this report is as follows:

A1. PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities during the six months ended June 30, 2020.

A2. SUBSTANTIAL SHAREHOLDERS

Save as disclosed below, as of June 30, 2020, the Company's directors were not aware of any other person (other than a director or chief executive of the Company who had an interest or short position in the shares or underlying shares of the Company as recorded in the register kept pursuant to Section 336 of the Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong) ("SFO"):

17 | P a g e

China Gold International Resources Corp. Ltd.

Approximate

percentage of

Number of

outstanding

Name

Nature of interest

Shares held

shares

China National Gold Group Co., Ltd. (1)

Indirect

155,794,830(1) (2)

39.3%

China National Gold Group Hong Kong Limited

Registered Owner

155,794,830(1) (2)

39.3%

Note:

  1. China National Gold Group Co., Ltd. directly and wholly owns the entire issued share capital of China National Gold Group Hong Kong Limited. Therefore, the interest attributable to China National Gold Group Co., Ltd. represents its indirect interest in the Company's shares through its equity interest in China National Gold Group Hong Kong Limited
  2. Information relating to registered and indirect ownership of the Company's shares is provided by China National Gold Group Co., Ltd.

A3. DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS IN SHARES AND STOCK OPTIONS

As of June 30, 2020, the interests of the directors and chief executive of the Company in the share capital, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuer, were as follows:

SHARES

Position

Approximate percentage

Number of

Nature of

of interest in the

Name

Company

shares held

interest

Company

Ian He

Director

China Gold International

150,000

Personal

0.0378%

Resources Corp. Ltd.

Other than as disclosed above, none of the directors, chief executive or their associates had any interests or short positions in any shares, underlying shares or debentures of the Company or its associated corporations as of June 30, 2020.

A4. STOCK OPTION PLAN

The Company adopted an incentive stock option plan with approval from its shareholders and pursuant to the policies of the Toronto Stock Exchange dated May 9, 2007. All options expired on June 1, 2015 and the 2007 Stock Option Plan has ceased to be in effect.

A5. EMOLUMENT POLICY

The Company's executive emolument policy and compensation program is administered by the Compensation and Benefits Committee which consists solely of independent directors. The Compensation and Benefits Committee reviews levels of cash compensation as needed and at least annually, and makes recommendations to the Board to adjust cash compensation in light of merit, qualifications and competence. The Compensation and Benefits Committee also reviews the corporate goals and objectives relevant to the compensation of the senior executive officers as needed and at least annually and based on recommendations from the Chief Executive Officer and other members of the management team. The Compensation and Benefits Committee makes its determinations as to overall compensation levels on the basis of both available third party data regarding comparable compensation at similar size companies as well as their own industry experience and the Company's hiring and retention needs. Decisions relating to executive compensation are reported by the Compensation and Benefits Committee to the Board for approval.

The Company's director emolument policy is administered by the Compensation and Benefits Committee with regard to comparable market statistics. Decisions relating to the compensation of directors are reported by the Compensation and Benefits Committee to the Board for approval.

As of June 30, 2020, the Company had 2,050 employees working at various locations. The emolument policy for the Company's employees is determined on a department by department basis with the Chief Executive Officer determining the emoluments for employees and managers based on merit, qualifications and the Company's hiring and retention needs.

18 | P a g e

China Gold International Resources Corp. Ltd.

A6. COMPLIANCE WITH CORPORATE GOVERNANCE CODE

The Company has, throughout the six months ended June 30, 2020, applied the principles and complied with the requirements of its corporate governance practices as defined by the Board and all applicable statutory, regulatory and stock exchange listings standards, in particular, the code provisions set out in the Corporate Governance Code contained in Appendix 14 of the Rules Governing the Listing Securities of The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules").

A7. COMPLIANCE WITH MODEL CODE ON DIRECTORS' SECURITIES TRANSACTIONS

The Company has adopted policies regarding directors' securities transactions in its Corporate Disclosure, Confidentiality and Securities Trading Policy that has terms which are no less exacting than those set out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the Hong Kong Listing Rules.

After specific enquiry with all members of the Board, the Board confirms that all of the directors of the Company have complied with the required policies in the Company's Corporate Disclosure, Confidentiality and Securities Trading Policy throughout the six months ended June 30, 2020.

A8. INTERIM DIVIDEND

The Board did not recommend the payment of interim dividends in respect of the six months ended June 30, 2020.

A9. AUDIT COMMITTEE

Pursuant to the requirements under the Hong Kong Listing Rules, the Company has established an audit committee (the "Audit Committee") comprising all the existing Independent Non-executive Directors, namely Ian He (chairman of the Audit Committee), Wei Shao, Bielin Shi and Ruixia Han. The Audit Committee has reviewed and discussed with the Company's auditors the unaudited interim results of the Group for the three and six months ended June 30, 2020.

August 14, 2020

19 | P a g e

China Gold International Resources Corp. Ltd.

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

(incorporated in British Columbia, Canada with limited liability)

Condensed Consolidated Financial Statements For the three and six months ended June 30, 2020

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (unaudited)

CONTENTS

PAGE(S)

CONDENSED CONSOLIDATED STATEMENT OF PROFIT

OR LOSS AND OTHER COMPREHENSIVE INCOME

1 & 2

CONDENSED CONSOLIDATED STATEMENT

OF FINANCIAL POSITION

3 & 4

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY

5

CONDENSED CONSOLIDATED STATEMENT

OF CASH FLOWS

6

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

7 - 20

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (unaudited)

NOTES

Revenue3 Cost of sales

Mine operating earnings

Expenses

General and administrative expenses

4

Exploration and evaluation expenditure

Research and development costs

Income (loss) from operations

Other income (expenses)

Foreign exchange loss, net

Interest and other income

Finance costs

5

Profit (loss) before income tax

Income tax credit

6

Profit (loss) for the period

Other comprehensive income (expenses) for the period

Item that will not be reclassified to profit or loss:

Fair value gain (loss) on investment in an equity security

Item that may be reclassified subsequently to profit or loss:

Exchange difference arising on translation

Total comprehensive income (expenses) for the period

Profit (loss) for the period attributable to Non-controlling interests

Owners of the Company

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

209,188

163,166

357,771

308,758

(173,701)

(155,876)

(304,115)

(286,200)

_______

_______

_______

_______

35,487

7,290

53,656

22,558

_______

_______

_______

_______

(5,793)

(9,532)

(14,979)

(23,027)

(165)

(175)

(226)

(290)

(2,264)

(4,541)

(4,230)

(9,397)

_______

_______

_______

_______

(8,222)

(14,248)

(19,435)

(32,714)

_______

_______

_______

_______

27,265

(6,958)

34,221

(10,156)

_______

_______

_______

_______

(2,331)

(7,414)

(7,769)

(2,126)

4,188

1,037

5,393

1,898

(11,525)

(11,482)

(22,041)

(21,570)

_______

_______

_______

_______

(9,668)

(17,859)

(24,417)

(21,798)

_______

_______

_______

_______

17,597

(24,817)

9,804

(31,954)

926

1,866

50

4,429

_______

_______

_______

_______

18,523

(22,951)

9,854

(27,525)

_______

_______

_______

_______

275

(5,682)

(2,196)

(4,105)

137

(6,340)

(4,732)

(417)

_______

_______

_______

_______

18,935

(34,973)

2,926

(32,047)

_______

_______

_______

_______

614

(17)

869

(106)

17,909

(22,934)

8,985

(27,419)

_______

_______

_______

_______

18,523

(22,951)

9,854

(27,525)

_______

_______

_______

_______

- 1 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

Three months ended June 30,

Six months ended June 30,

NOTE

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Total comprehensive income (expenses)

for the period attributable to

Non-controlling interests

617

(13)

872

(102)

Owners of the Company

18,318

(34,960)

2,054

(31,945)

___________

___________

___________

___________

18,935

(34,973)

2,926

(32,047)

___________

___________

___________

___________

Earnings (loss) per share - Basic

(US cents)

7

4.52

(5.79)

2.27

(6.92)

___________

___________

___________

___________

Weighted average number of

common shares - Basic

7

396,413,753

396,413,753

396,413,753

396,413,753

___________

___________

___________

___________

- 2 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT JUNE 30, 2020 (unaudited)

June 30,

December 31,

NOTES

2020

2019

US$'000

US$'000

(audited)

Current assets

Cash and cash equivalents

723,208

182,290

Restricted bank balance

34,595

17,687

Trade and other receivables

8

19,937

26,011

Prepaid expenses and deposits

5,467

12,271

Inventories

9

276,393

281,123

_________

_________

1,059,600

519,382

_________

_________

Non-current assets

Prepaid expense and deposits

16,892

19,044

Right-of-use assets

13,447

13,869

Equity instruments at fair value through

other comprehensive income

15

14,855

17,059

Property, plant and equipment

10

1,661,678

1,709,449

Mining rights

10

880,248

900,373

Other non-current assets

17,692

17,954

_________

_________

2,604,812

2,677,748

_________

_________

Total assets

3,664,412

3,197,130

_________

_________

Current liabilities

Accounts and other payables and accrued expenses

11

248,333

296,403

Contract liabilities

10,590

6,783

Borrowings

12

615,676

582,952

Entrusted loan payable

-

28,669

Lease liabilities

85

89

Tax liabilities

9,701

13,850

_________

_________

884,385

928,746

_________

_________

Net current assets (liabilities)

175,215

(409,364)

_________

_________

Total assets less current liabilities

2,780,027

2,268,384

_________

_________

Non-current liabilities

Borrowings

12

1,115,009

632,149

Lease liabilities

405

444

Deferred tax liabilities

117,455

119,293

Deferred income

2,273

2,686

Entrusted loan payable

28,251

-

Environmental rehabilitation

63,397

63,145

_________

_________

1,326,790

817,717

_________

_________

Total liabilities

2,211,175

1,746,463

_________

_________

- 3 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

June 30,

December 31,

NOTE

2020

2019

US$'000

US$'000

(audited)

Owners' equity

Share capital

13

1,229,061

1,229,061

Reserves

2,052

6,791

Retained profits

206,278

199,485

_________

_________

1,437,391

1,435,337

Non-controlling interests

15,846

15,330

_________

_________

Total owners' equity

1,453,237

1,450,667

_________

_________

Total liabilities and owners' equity

3,664,412

3,197,130

_________

_________

The condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on August 14, 2020 and are signed on its behalf by:

(Signed By) Liangyou Jiang

(Signed By) Ian He

______________________________

______________________________

Liangyou Jiang

Ian He

Director

Director

- 4 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (unaudited)

Attributable to owners of the Company

Investment

Non-

Total

Number

Share

Equity

revaluation

Exchange

Statutory

Retained

controlling

owners'

of shares

capital

reserve

reserve

reserve

reserve

profits

Subtotal

interests

equity

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

At January 1, 2019

396,413,753

1,229,061

11,179

(1,791)

(15,244)

21,426

229,802

1,474,433

14,805

1,489,238

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

Loss for the period

-

-

-

-

-

-

(27,419)

(27,419)

(106)

(27,525)

Fair value loss on investment

in an equity security

-

-

-

(4,105)

-

-

-

(4,105)

-

(4,105)

Exchange difference arising

on translation

-

-

-

-

(421)

-

-

(421)

4

(417)

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

Total comprehensive expenses

for the period

-

-

-

(4,105)

(421)

-

(27,419)

(31,945)

(102)

(32,047)

Transfer to statutory reserve

- safety production fund

-

-

-

-

-

2,370

(2,370)

-

-

-

Dividends paid to a non-controlling

shareholder

-

-

-

-

-

-

-

-

(165)

(165)

Transfer upon disposal of

investment in equity security

-

-

-

(564)

-

-

564

-

-

-

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

At June 30, 2019

396,413,753

1,229,061

11,179

(6,460)

(15,665)

23,796

200,577

1,442,488

14,538

1,457,026

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

At January 1, 2020

396,413,753

1,229,061

11,179

(3,525)

(20,333)

19,470

199,485

1,435,337

15,330

1,450,667

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

Profit for the period

-

-

-

-

-

-

8,985

8,985

869

9,854

Fair value loss on investment

in an equity security

-

-

-

(2,196)

-

-

-

(2,196)

-

(2,196)

Exchange difference arising

on translation

-

-

-

-

(4,735)

-

-

(4,735)

3

(4,732)

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

Total comprehensive (expenses) income

for the period

-

-

-

(2,196)

(4,735)

-

8,985

2,054

872

2,926

Transfer to statutory reserve

- safety production fund

-

-

-

-

-

2,192

(2,192)

-

-

-

Dividends paid to a non-controlling

shareholder

-

-

-

-

-

-

-

-

(356)

(356)

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

At June 30, 2020

396,413,753

1,229,061

11,179

(5,721)

(25,068)

21,662

206,278

1,437,391

15,846

1,453,237

___________

_________

_______

_______

_______

_______

_______

_________

_______

_________

- 5 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (unaudited)

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Net cash from operating activities

Investing activities Interest income received

Payment for acquisition of property, plant and equipment

Proceeds from disposal of equity investment at fair value through other comprehensive income

Payment for acquisition of a mining right Placement of restricted bank deposits Release of restricted bank deposits

Net cash used in investing activities

Financing activities Proceeds from borrowings Repayment of borrowings

Dividends paid to a non-controlling shareholder Payment for lease

Net cash from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period Effect of foreign exchange rate changes on

cash and cash equivalents

Cash and cash equivalents, end of period

Cash and cash equivalents are comprised of Cash and bank deposits

54,467

56,554

70,487

_______

_______

_______

529

663

1,455

(26,744)

(16,705)

(61,733)

-

2,023

-

-

-

-

(35,780)

(5,122)

(74,328)

35,741

10,222

76,821

_______

_______

_______

(26,254)

(8,919)

(57,785)

_______

_______

_______

583,617

81,197

583,617

(53,469)

(53,856)

(53,469)

-

-

(356)

(26)

(22)

(48)

_______

_______

_______

530,122

27,319

529,744

_______

_______

_______

558,335

74,954

542,446

163,693

101,618

182,290

1,180

(1,327)

(1,528)

_______

_______

_______

723,208

175,245

723,208

_______

_______

_______

723,208

175,245

723,208

_______

_______

_______

63,538

_______

979

(56,078)

2,023

(2,230)

(7,453)

16,151

_______

(46,608)

_______

81,197

(61,267)

(165)

(43)

_______

19,722

_______

36,652

137,996

597

_______

175,245

_______

175,245

_______

- 6 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (unaudited)

  1. GENERAL
    China Gold International Resources Corp. Ltd., (the "Company") is a publicly listed company incorporated in British Columbia, Canada on May 31, 2000 with limited liability under the legislation of the Province of British Columbia and its shares are listed on the Toronto Stock Exchange ("TSX") and The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The Company together with its subsidiaries (collectively referred to as the "Group") is principally engaged in the acquisition, exploration, development and mining of mineral reserves in the People's Republic of China ("PRC"). The Group considers that China National Gold Group Corporation Ltd. ("CNG"), a state owned company registered in Beijing, PRC, which is controlled by State-owned Assets Supervision and Administration Commission of the State Council of the PRC, is able to exercise significant influence over the Company.
    The principal address and registered and records office of the Company are located at Suite 660, One Bentall Centre, 505 Burrard Street, Vancouver, British Columbia, Canada, V7X 1M4.
    The condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange as well as International Accounting Standard 34 Interim Financial Reporting issued by the International Accounting Standards Board which should read in conjunction with the consolidated financial statements for the year ended December 31, 2019.
    The condensed consolidated financial statements are presented in United States Dollars ("US$"), which is the functional currency of the Company.
  2. PRINCIPAL ACCOUNTING POLICIES
    The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values.
    Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended June 30, 2020 are the same as those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2019.
    In the current interim period, the Group has applied the following amendments to International Financial Reporting Standards ("IFRSs") which are mandatorily effective for the current interim period:

Amendments to IFRS 3

Definition of a Business

Amendments to IAS 1

Definition of Material

and IAS 8

Amendments to IFRS 9,

Interest Rate Benchmark Reform

IAS 39 and IFRS 7

- 7 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

  1. PRINCIPAL ACCOUNTING POLICIES - continued
    In addition to the above amendments to IFRSs, the Group has applied the consequential amendments of a revised Conceptual Framework for Financial Reporting issued in 2018, the Amendments to References to the Conceptual Framework in IFRS Standards.
    The application of the amendments to IFRSs in the current interim period has had no material effect on the amounts reported and/or disclosures in these condensed consolidated financial statements.
  2. REVENUE AND SEGMENT INFORMATION
    Revenue
  1. Disaggregation of revenue from contracts with customers
    The following is an analysis of the Group's revenue from its major products and services:

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

At a point in time

Gold bullion

65,057

52,170

120,555

89,845

Copper

63,989

76,633

118,646

145,986

Other by-products

80,142

34,363

118,570

72,927

_______

_______

_______

_______

Total revenue

209,188

163,166

357,771

308,758

_______

_______

_______

_______

  1. Performance obligations for contracts with customers
    The Group sells gold bullion, copper and other by-products directly to customers in the PRC.
    For sales of gold bullion, copper and other by-products directly to customers, revenue is recognised at a point in time when control of the gold doré bars, copper and other by-products is passed to customers, i.e. when the products are delivered and titles have passed to customers.

Segment information

IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the chief operating decision-maker ("CODM") to allocate resources to the segments and to assess their performance.

- 8 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

3. REVENUE AND SEGMENT INFORMATION - continued Segment information - continued

The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been defined as the executive directors of the Company. The CODM has identified two operating and reportable segments as follows:

  1. The mine-produced gold segment - the production of gold bullion through the Group's integrated processes, i.e., mining, metallurgical processing, production and selling of gold doré bars to external clients.
  2. The mine-produced copper concentrate segment - the production of copper concentrate including other by-products through the Group's integrated processes, i.e., mining, metallurgical processing, production and selling copper concentrate including other by- products to external clients.

Information regarding the above segments is reported below:

  1. Segment revenues and results
    The following is an analysis of the Group's revenue and results by operating and reportable segment.
    For the six months ended June 30, 2020

Revenues - external and segment revenue

Cost of sales

Mining operating earnings

Income (loss) from operations Foreign exchange gain (loss), net Interest and other income Finance costs

Profit before income tax

Mine -

Mine -

produced

produced

copper

Segment

gold

concentrate

total

Unallocated

Consolidated

US$'000

US$'000

US$'000

US$'000

US$'000

120,555

237,216

357,771

-

357,771

(100,836)

(203,279)

(304,115)

-

(304,115)

_______

_______

_______

_______

_______

19,719

33,937

53,656

-

53,656

_______

_______

_______

_______

_______

19,494

17,607

37,101

(2,880)

34,221

645

(8,510)

(7,865)

96

(7,769)

354

4,950

5,304

89

5,393

(2,264)

(10,860)

(13,124)

(8,917)

(22,041)

_______

_______

_______

_______

_______

18,229

3,187

21,416

(11,612)

9,804

_______

_______

_______

_______

_______

- 9 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

3. REVENUE AND SEGMENT INFORMATION - continued Segment information - continued

  1. Segment revenues and results - continued For the six months ended June 30, 2019

Revenues - external and segment revenue

Cost of sales

Mining operating (loss) earnings

(Loss) income from operations Foreign exchange (loss) gain, net Interest and other income Finance costs

Loss before income tax

Mine -

Mine -

produced

produced

copper

Segment

gold

concentrate

total

Unallocated

Consolidated

US$'000

US$'000

US$'000

US$'000

US$'000

89,845

218,913

308,758

-

308,758

(96,974)

(189,226)

(286,200)

-

(286,200)

_______

_______

_______

_______

_______

(7,129)

29,687

22,558

-

22,558

_______

_______

_______

_______

_______

(7,419)

1,872

(5,547)

(4,609)

(10,156)

(1,026)

(1,101)

(2,127)

1

(2,126)

256

1,640

1,896

2

1,898

(2,610)

(10,254)

(12,864)

(8,706)

(21,570)

_______

_______

_______

_______

_______

(10,799)

(7,843)

(18,642)

(13,312)

(31,954)

_______

_______

_______

_______

_______

The accounting policies of the operating segments are the same as the Group's accounting policies. Segment result represents the profit (loss) before income tax, without allocation of certain general and administrative expenses, foreign exchange gain (loss), interest and other income and finance costs, attributable to the respective segments. This is the measure reported to the CODM for the purposes of resource allocation and performance assessment.

There were no inter-segment sales for the six months ended June 30, 2020 and 2019.

  1. Segment assets and liabilities
    The following is an analysis of the Group's assets and liabilities by segment representing assets/liabilities directly attributable to respective segment:

As of June 30, 2020 Total assets

Total liabilities

As of December 31, 2019 Total assets

Total liabilities

Mine -

Mine -

produced

produced

copper

Segment

gold

concentrate

total

Unallocated

Consolidated

US$'000

US$'000

US$'000

US$'000

US$'000

707,065

2,427,800

3,134,865

529,547

3,664,412

164,669

1,235,721

1,400,390

810,785

2,211,175

_______

_________

_________

_______

_________

755,231

2,407,554

3,162,785

34,345

3,197,130

229,873

1,006,604

1,236,477

509,986

1,746,463

_______

_________

_________

_______

_________

- 10 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

  1. REVENUE AND SEGMENT INFORMATION - continued Segment information - continued
    1. Segment assets and liabilities - continued

      • For the purposes of monitoring segment performance and allocating resources between segments:
      • all assets are allocated to operating segments other than certain of cash and cash equivalents, other receivables, prepaid expenses and deposits, right-of-use assets and equity instruments at fair value through other comprehensive income; and
      • all liabilities are allocated to operating segments other than other payables and accrued expenses, lease liabilities and certain borrowings.
  3. GENERAL AND ADMINISTRATIVE EXPENSES

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Administration and office

606

2,147

3,267

7,323

Depreciation of property, plant and

equipment

823

1,405

1,757

3,294

Depreciation of right-of-use assets

24

20

44

40

Professional fees

929

824

1,353

1,398

Salaries and benefits

2,143

4,207

7,289

8,324

Others

1,268

929

1,269

2,648

_______

_______

_______

_______

Total general and administrative

expenses

5,793

9,532

14,979

23,027

_______

_______

_______

_______

5. FINANCE COSTS

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Interests on borrowings Interests on lease liabilities Accretion on environmental

rehabilitation

Less: Amount capitalised to property, plant and equipment

Total finance costs

11,074

10,943

21,151

20,876

4

-

5

1

587

562

1,182

1,128

_______

_______

_______

_______

11,665

11,505

22,338

22,005

(140)

(23)

(297)

(435)

_______

_______

_______

_______

11,525

11,482

22,041

21,570

_______

_______

_______

_______

- 11 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

6. INCOME TAX CREDIT

PRC Enterprise Income Tax Overprovision of PRC Enterprise

Income Tax in prior year Deferred tax credit

Total income tax credit

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

2,254

267

3,093

890

(1,233)

(989)

(1,233)

(989)

(1,947)

(1,144)

(1,910)

(4,330)

_______

_______

_______

_______

(926)

(1,866)

(50)

(4,429)

_______

_______

_______

_______

During the year ended December 31, 2019, the Group has an uncertain tax position in respective of tax exposure of the transferring of land use right in return of a block of the buildings and twenty car parks (the "Land Exchange") based on the most likely amount of tax expenses. The most likely amount of tax expenses including land appreciation tax and enterprise income tax is calculated by the respective tax rates on land value stated in the cooperation agreement and gain on recognition of other assets, respectively, based on the current facts and circumstances. However, the tax expenses may be subject to change as the tax assessable amount is based on final decision with the relevant tax authority. As at June 30, 2020, the most likely amount of the relevant tax liabilities amounting to US$1,226,000 (December 31, 2019: US$8,059,000) has been recognised. During the three and six months ended June 30, 2020, the Group's wholly-owned subsidiary, Tibet Huatailong Mining Development Co. Ltd. ("Huatailong") has paid land appreciation tax amounting to US$5,425,000 and US$5,425,000 and other surcharges of US$1,142,000 and US$1,142,000 to the tax authority respectively.

7. EARNINGS (LOSS) PER SHARE

Profit (loss) used in determining earnings (loss) per share are presented below:

Profit (loss) for the period attributable to owners of the Company for the purposes of basic earnings (loss) per share (US$'000)

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

17,909 (22,934) 8,985 (27,419)

___________ ___________ ___________ ___________

Weighted average number of

shares, basic

396,413,753

396,413,753

396,413,753

396,413,753

___________ ___________ ___________ ___________

Basic earnings (loss) per share

(US cents)

4.52

(5.79)

2.27

(6.92)

___________ ___________ ___________ ___________

The Group has no outstanding potential dilutive instruments issued as at June 30, 2020 and 2019 and during the three and six months ended June 30, 2020 and 2019. Therefore, no diluted earnings (loss) per share is presented.

- 12 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

8. TRADE AND OTHER RECEIVABLES

Trade receivables

Less: Allowance for credit loss

Amounts due from related companies (note 14(a))(1) Other receivables(2)

Total trade and other receivables

June 30,

December 31,

2020

2019

US$'000

US$'000

1,745

958

(77)

(78)

_______

_______

1,668

880

1,363

2,020

16,906

23,111

_______

_______

19,937

26,011

_______

_______

  1. The amounts are unsecured, interest free and repayable on demand.
  2. Included in the balance as at June 30, 2020 are value-added tax recoverable of approximately US$6.4 million (December 31, 2019: US$11.7 million) and other receivables of US$10.5 million (December 31, 2019: US$11.4 million), which are expected to be recovered within twelve months after the end of the reporting period.

The Group allows an average credit period of 30 days and 180 days to its external trade customers including CNG for gold doŕe bars sales and copper concentrate trade business, respectively.

Below is an aged analysis of trade receivables (net of allowance for credit losses) presented based on

invoice dates, which approximated the respective revenue recognition dates, at the end of the

reporting period:

June 30,

December 31,

2020

2019

US$'000

US$'000

Less than 30 days

890

62

31 to 90 days

234

523

91 to 180 days

180

-

Over 180 days

364

295

_______

_______

1,668

880

_______

_______

9.

INVENTORIES

June 30,

December 31,

2020

2019

US$'000

US$'000

Gold in process

209,940

222,180

Gold doré bars

20,787

20,708

Consumables

15,873

16,923

Copper

8,496

855

Spare parts

21,297

20,457

_______

_______

Total inventories

276,393

281,123

_______

_______

- 13 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

  1. INVENTORIES - continued
    No inventory write down was provided in cost of sales for the three and six months ended June 30, 2020 (three and six months ended June 30, 2019: nil and write down of US$4.3 million, respectively).
    Cost of inventory sold totaling US$166 million and US$288 million for the three and six months ended June 30, 2020, respectively (three and six months ended June 30, 2019: US$149 million and US$274 million, respectively) was recognised in cost of sales.
  2. PROPERTY, PLANT AND EQUIPMENT / MINING RIGHTS
    During the six months ended June 30, 2020, the Group incurred approximately US$7.8 million on construction in progress (for the six months ended June 30, 2019: approximately US$7.7 million) and approximately US$33.6 million on mineral assets (for the six months ended June 30, 2019: approximately US$38.5 million).
    Depreciation of property, plant and equipment was US$41.0 million and US$74.2 million for the three and six months ended June 30, 2020, respectively (for the three and six months ended June 30, 2019: US$37.8 million and US$69.9 million, respectively). The depreciation amount was partly recognised in cost of sales, general and administrative expenses and partly capitalised in inventory.
    No addition of mining rights was incurred during the six months ended June 30, 2020 (for the six months ended June 30, 2019: addition of US$11.1 million). Amortisation of mining rights was US$9.4 million and US$19.1 million for the three and six months ended June 30, 2020, respectively (for the three and months ended June 30, 2019: US$8.2 million and US$15.0 million, respectively). The amortisation amounts were recognised in cost of sales.
  3. ACCOUNTS AND OTHER PAYABLES AND ACCRUED EXPENSES Accounts and other payables and accrued expenses comprise the following:

June 30,

December 31,

2020

2019

US$'000

US$'000

Accounts payable

38,725

38,610

Bills payable

53,832

95,911

Construction cost payables

102,681

121,576

Mining cost accrual

21,207

11,547

Payroll and benefit payables

3,494

2,578

Other accruals

6,394

2,958

Other tax payable

6,581

7,836

Other payables

7,073

6,917

Payable for acquisition of a mining right

8,346

8,470

_______

_______

Total accounts and other payables and accrued expenses

248,333

296,403

_______

_______

- 14 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

11. ACCOUNTS AND OTHER PAYABLES AND ACCRUED EXPENSES - continued

The following is an aged analysis of the accounts payable presented based on invoice date at the end of the reporting period:

Less than 30 days 31 to 90 days

91 to 180 days Over 180 days

Total accounts payable

The credit period for bills payable is 180 days from the issue date.

June 30,

December 31,

2020

2019

US$'000

US$'000

14,079

15,816

10,655

8,282

2,951

4,872

11,040

9,640

_______

_______

38,725

38,610

_______

_______

The following is an ageing analysis of bills payable, presented based on bills issue date at the end of

the reporting period:

June 30,

December 31,

2020

2019

US$'000

US$'000

Less than 30 days

13,032

21,003

31 to 60 days

6,337

9,532

61 to 90 days

6,632

15,233

91 to 180 days

27,831

50,143

_______

_______

Total bills payable

53,832

95,911

_______

_______

12.

BORROWINGS

June 30,

December 31,

2020

2019

US$'000

US$'000

Bank loans

891,871

657,951

Loans payable to a CNG subsidiary

35,313

50,171

Bonds

803,501

506,979

_________

_________

1,730,685

1,215,101

_________

_________

- 15 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

12. BORROWINGS - continued

The borrowings are repayable as follows:

Carrying amount repayable within one year Carrying amount repayable within one to two years Carrying amount repayable within two to five years Carrying amount repayable over five years

Less: Amounts due within one year (shown under current liabilities)

Amounts shown under non-current liabilities

Analysed as: Secured Unsecured

June 30,

December 31,

2020

2019

US$'000

US$'000

615,676

582,952

174,196

157,679

514,935

204,983

425,878

269,487

_________

_________

1,730,685

1,215,101

(615,676)

(582,952)

_________

_________

1,115,009

632,149

_________

_________

703,439

521,774

1,027,246

693,327

_________

_________

1,730,685

1,215,101

_________

_________

The carrying values of the pledged assets to secure borrowings by the Group are as follows:

June 30,

December 31,

2020

2019

US$'000

US$'000

Mining rights

872,584

891,488

_______

_______

Borrowings carry interest at effective interest rates ranging from 1.20% to 4.51% (December 31, 2019: 2.75% to 4.51%) per annum.

On June 23, 2020, the Company, through its wholly-owned subsidiary, Skyland Mining (BVI) Limited, completed the issuance of bonds to independent third parties in an aggregate principal amount of US$300 million, listed on the Stock Exchange and ChongWa (Macao) Financial Asset Exchange CO., Limited. The bonds were issued at a price of 99.886%, bearing coupon rate of 2.80% with a maturity date of June 23, 2023. Interest is payable in equal semi-annual instalments on December 23 and June 23 in each year.

- 16 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

13. SHARE CAPITAL Common shares

  1. Authorised - Unlimited common shares without par value
  2. Issued and outstanding

Number

of shares

Amount

US$'000

Issued and fully paid:

At January 1, 2019, December 31, 2019 and

June 30, 2020

396,413,753

1,229,061

___________

_________

14. RELATED PARTY TRANSACTIONS

Related parties are those parties that have the ability to control the other party or exercise significant influence in making financial and operation decisions. Parties are also considered to be related if they are subject to common control. CNG, a state owned company registered in Beijing, PRC, which is controlled by State-owned Assets Supervision and Administration Commission of the State Council of the PRC, is able to exercise significant influence over the Company.

In accordance with IAS 24 "Related party disclosures", the management believes that information relating to related party transactions have been adequately disclosed in conformity of the IFRSs.

In addition to the related party transactions and balances shown elsewhere in these condensed consolidated financial statements, the following is a summary of significant related party transactions entered into in the ordinary course of business between the Group and its related parties for the three and six months ended June 30, 2020 and 2019.

- 17 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

14. RELATED PARTY TRANSACTIONS - continued

Name and relationship with related parties during the period/year is as follows:

CNG owned the following percentages of outstanding common shares of the Company:

June 30,

December 31,

2020

2019

%

%

CNG

39.3

39.3

_______

_______

  1. Transactions/balances with CNG and its subsidiaries
    The Group had the following transactions with CNG and CNG's subsidiaries:

Gold doré sales by the Group

Copper and other by-products sales by the Group

Provision of transportation services by the Group

Construction, stripping and mining service provided to the Group

(Reversal of) accrued rental expenses for PRC office

Interest income

Interest expenses

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

65,057

52,170

120,555

89,845

_______

_______

_______

_______

10,883

31,155

13,899

54,164

_______

_______

_______

_______

74

241

117

473

_______

_______

_______

_______

3,135

3,898

4,121

5,474

_______

_______

_______

_______

(714)

970

231

1,974

_______

_______

_______

_______

28

2

37

7

_______

_______

_______

_______

716

807

1,487

1,547

_______

_______

_______

_______

The Group has the following significant balances with CNG and its subsidiaries at the end of each reporting period:

June 30,

December 31,

2020

2019

Assets

US$'000

US$'000

Amounts due from related companies

1,363

2,020

Cash and cash equivalents held by a CNG

subsidiary

825

14,202

Deposits

-

90

_______

_______

2,188

16,312

_______

_______

- 18 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

14. RELATED PARTY TRANSACTIONS - continued

  1. Transactions/balances with CNG and its subsidiaries - continued

June 30,

December 31,

2020

2019

US$'000

US$'000

Liabilities

Loans payable to a CNG subsidiary

35,313

50,171

Entrusted loan payable to CNG

28,251

28,669

Construction cost payables to CNG's subsidiaries

21,302

22,860

Trade payable to CNG subsidiaries

1,434

930

Amount due to CNG

32

33

Contract liabilities with CNG's subsidiaries

7,219

2,253

_______

_______

Total amounts due to CNG's subsidiaries

93,551

104,916

_______

_______

With the exception of the entrusted loan payable to CNG and loans payable to a CNG subsidiary which are unsecured, carry fixed interests and have fixed repayment terms, the amounts due to CNG and its subsidiaries which are included in other payables and construction costs payable, are non-interest bearing, unsecured and have no fixed terms of repayments.

  1. Compensation of key management personnel
    The Group has the following compensation to key management personnel during the period:

Three months ended June 30,

Six months ended June 30,

2020

2019

2020

2019

US$'000

US$'000

US$'000

US$'000

Salaries and other benefits

154

251

342

341

Post-employment benefits

3

3

13

12

_______

_______

_______

_______

157

254

355

353

_______

_______

_______

_______

15. FINANCIAL INSTRUMENTS

As at June 30, 2020 and December 31, 2019, the Group's investments in equity securities include equity securities listed on the Stock Exchange and unlisted companies incorporated in the PRC.

Investment in equity securities listed on the Stock Exchange of US$14,289,000 (December 31, 2019: US$16,485,000) is measured based on the unadjusted quoted price available on the Stock Exchange (Level 1 fair value measurement). The Group's investment in listed equity securities represent investment in a company engaged in mining, processing and trading of nonferrous metals registered in Hong Kong, PRC.

In addition, investment in an unlisted company incorporated in the PRC of US$566,000 (December 31, 2019: US$574,000) are measured at fair value based on Level 3 inputs.

  • 19 -

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD.

  1. CONTINGENCIES
    During the second quarter of 2020, there was a construction contract dispute between independent third parties, the constructor, Huaxin Construction Group Co., Ltd. (formerly named as "Nantong Huaxin Construction Group Co., Ltd.") ("Huaxin") and the developer, Zhongxinfang Tibet Construction Investment Co., Ltd. ("Zhongxinfang"), and the Group's subsidiary, Huatailong, who are the signatories of the construction contract for the property development project on the land previously owned by Huatailong. Such land was transferred to Zhongxinfang during 2019 pursuant to the cooperation agreement signed between Zhongxinfang and Huatailong in 2019 in relation to the Land Exchange. Huaxin proceeded a lawsuit against the parties to the construction contract, Zhongxinfang and Huatailong, for the recoverability of the construction costs of RMB149 million (equivalents to US$21,196,000) and applied for pre-litigation preservation of assets from Huatailong.
    The Intermediate People's Court of Lhasa City, Tibet, adjudicated that the bank deposit of RMB140 million (equivalents to US$19,775,000) of Huatailong to be frozen for one year (the "1st Adjudication"). Accordingly, the frozen bank deposit of US$19,775,000 was included in restricted bank balance as at June 30, 2020.
    Based on the first instance adjudication dated August 5, 2020 (the "First Instance Adjudication"), the litigation ruling adjudicated that Zhongxinfang and Huatailong shall have the jointly obligation for the construction costs of RMB140 million (equivalents to US$19,954,000) to Huaxin. Pursuant to the cooperation agreement signed between Zhongxinfang and Huatailong in 2019, Huatailong does not involve in the construction process which and the related costs are the sole responsibilities of Zhongxinfang. Based on the legal opinion, Huatailong will proceed an appeal against the First Instance Adjudication, and the lawsuit is currently under proceeding and the results is not ascertain as at the date of issuance of these condensed consolidated financial statements. The directors of the Company have been closing monitoring the proceedings in relation to the First Instance Adjudication...
    Regarding the 1st Adjudication, Huatailong applied for pre-litigation preservation of assets from Zhongxinfang, the Intermediate People's Court of Lhasa City, Tibet, adjudicated that the value of properties limited to RMB151 million (equivalents to US$21,473,000) from Zhongxinfang was frozen for one year.
    As disclosed in note 6, Huatailong has paid the tax and other surcharges related to the Land Exchange during the six months ended June 30, 2020 and expects to recover such payments from Zhongxinfang in accordance with the cooperation agreement between Huatailong and Zhongxinfang signed in 2019. On July 8, 2020, Huatailong applied for pre-litigation preservation of assets from Zhongxinfang, the Intermediate People's Court of Lhasa City, Tibet, adjudicated that the value of properties limited to RMB46 million (equivalents to US$6,571,000) from Zhongxinfang was frozen for one year. In the opinion of the directors of the Company, no significant expected credit loss is recognised on other receivables based on the credit risk assessment.
  2. EVENT AFTER THE REPORTING PERIOD
    On July 6, 2020, the Group has repaid the unsecured bonds with an aggregate principal amount of US$500 million and interest expenses of US$8.125 million.
    Other than disclosed above, the Group had no other material event after the end of the reporting period.

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China Gold International Resources Corp. Ltd. published this content on 14 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 August 2020 13:22:09 UTC