UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

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(Mark One)

Commission file number:0-26046

CHINA NATURAL RESOURCES, INC.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

British Virgin Islands

(Jurisdiction of incorporation or organization)

Room 2205, 22/F, West Tower, Shun Tak Centre,

168-200 Connaught Road Central, Sheung Wan, Hong Kong

(Address of principal executive offices)

Bonaventure Yue, Chief Financial Officer

Room 2205, 22/F, West Tower, Shun Tak Centre,

168-200 Connaught Road Central, Sheung Wan, Hong Kong

bonyue@chnr.net

 (Name, telephone number, e-mail and/or facsimile number and address of Registrant’s contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 24,910,916 common shares as of December 31, 2016.2018.

Indicate by check mark if the issuer is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes¨  Noþ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes¨  Noþ

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ  No¨

Indicate by check mark whether the registrationregistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes¨þ  No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer,” “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17¨  Item 18¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes¨  Noþ

CONVENTIONS

Unless otherwise specified, all references in this Annual Report to "U.S.“U.S. Dollars," "Dollars," "US$” “Dollars,” “US$,"” or "$"“$” are to United States dollars; all references to "Hong“Hong Kong Dollars"Dollars” or "HK$"“HK$” are to Hong Kong dollars; all references to "Bolivian Boliviano" or "BOB " are to Bolivian Boliviano; and all references to "Renminbi"“Renminbi” or "CNY"“CNY” are to RenminbiChinese Yuan, which is the lawful currency of the People's Republic of China. The accounts of the Company and its subsidiaries are maintained in Hong Kong Dollars, or Bolivian Boliviano, or Renminbi. The financial statements of the Company and its subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi to U.S. Dollars, from Bolivian Boliviano to U.S. Dollars, and from Hong Kong Dollars to U.S. Dollars are for the convenience of the reader. Unless otherwise indicated, any translations from Renminbi to U.S. Dollars or from U.S. Dollars to Renminbi have been made at the single rate of exchange (the "CNY“CNY Exchange Rate"Rate”) as quoted by UKForexwww.ofx.com on December 31, 2016,2018, which was US$1.00 = CNY6.9448. Translations from Bolivian Boliviano to U.S. Dollars or from U.S. Dollars to Bolivian Boliviano have been made at the single rate of exchange (the "BOB Exchange Rate") as quoted by www.exchangerates.org.uk on December 31, 2016, which was US$1.00 = BOB6.9322.CNY6.8785. Translations from Hong Kong Dollars to U.S. Dollars have been made at the official pegged exchange rate of US$1.00 = HK$7.80 as of December 31, 2016.2018. The Renminbi is not freely convertible into foreign currencies and no representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the CNY Exchange Rate or at all.

References to “Antay Pacha” are to Planta Metalurgica Antay Pacha S.A., a company organized in Bolivia and, until December 29, 2017, an indirect wholly-owned subsidiary of Double Grow.CHNR.

References to "China Resources"“Bayannaoer Mining” are to Bayannaoer City Feishang Mining Company Limited, a company organized in the PRC and a wholly-owned subsidiary of Yangpu Shuanghu.

References to the “BVI” are to the British Virgin Islands.

References to “China Resources” are to China Resources Development, Inc., a Nevada company and the predecessor to CHNR.

References to the “Company” or “CHNR” are to China Natural Resources, Inc. (formerly known as Billion Luck Company Ltd.), a British Virgin IslandsBVI company, which was the surviving company to a merger between China Resources and CHNR on December 9, 2004 (the “Redomicile Merger”). Unless the context otherwise requires, the Company and/or CHNR includes the operations of its predecessor and subsidiaries.

References to “common shares” are to the common shares, without par value, of CHNR after the Redomicile Merger.

References to "common stock"“common stock” are to the common stock, $0.001US$0.001 par value, of China Resources.

References to "China Coal"“China Coal” are to China Coal Mining Investment Limited, a company organized in Hong Kong and a wholly-owned subsidiary of CHNR.

References to “Distribution” are to a special interim dividend declared by the Company satisfied by way of a distribution in specie of the entire issued share capital of Feishang Anthracite, being an aggregate of 124,554,580 ordinary shares in the capital of Feishang Anthracite with a par value of HK$0.01 each.

References to “Distribution Record Date” are to January 13, 2014, being the record date for ascertaining entitlements to the Distribution.

References to “Double Grow” are to Double Grow International Limited, a company organized in the British Virgin IslandsBVI and, until December 29, 2017, a wholly-owned subsidiary of CHNR.

References to “Easy Gain” are to Easy Gain Investments Limited, a company organized in the British Virgin IslandsBVI and a wholly-owned subsidiary of Double Grow.

References to "Feishang“Feishang Anthracite” are to Feishang Anthracite Resources Limited (formerly known as Wealthy Year Limited), a company organized in the British Virgin IslandsBVI whose ordinary shares arewere listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) on January 22, 2014; and, until January 22, 2014, a wholly-owned subsidiary of CHNR.

References to “Feishang Dayun” are to Feishang Dayun Coal Mining Limited, a company organized in Hong Kong and a wholly-owned subsidiary of Pineboom.

References to “Feishang Enterprise” are to Feishang Enterprise Group Limited,Co., Ltd., a related company organized in the PRC and controlled by Mr. Li Feilie, the principal beneficial owner of the Company and its former Chairman and CEO.

References to “Feishang Hesheng” are to Feishang Hesheng Investment Limited, a related company organized in the BVI that is ultimately controlled by Mr. Li Feilie.

i

References to “Feishang Management” are to Shenzhen Feishang Management and Consulting Co., Limited, a company organized in the PRC and a wholly-owned subsidiary of Yunnan Mining.

i

References to “Feishang Mining” are to Feishang Mining Holdings Limited, a company organized in the British Virgin IslandsBVI and, since February 3, 2006, a wholly-owned subsidiary of CHNR.

References to “Feishang Group” are to Feishang Group Limited, CHNR’s principal shareholder and a company organized in the BVI that is ultimately controlled by Mr. Li Feilie.

References to “Feishang Yongfu” are to Feishang Yongfu Mining Limited, a company organized in Hong Kong and a wholly ownedwholly-owned subsidiary of Newhold.

References to “FMH Services” are to FMH Corporate Services Inc., a company organized in Florida and a wholly-owned subsidiary of CHNR. FMH Services is currently inactive.

References to “Full Profit” are to Full Profit Investments Limited, a company organized in the British Virgin IslandsBVI and a wholly-owned subsidiary of Double Grow.

References to the “Group” are to the Company and its directlydirect and indirect subsidiaries.

References to “HK” or indirectly owned subsidiaries.“Hong Kong” are to Hong Kong Special Administrative Region.

References to “IFRS” are toInternational Financial Reporting Standards as issued by the International Accounting Standards Board.

References to "Newhold"“Newhold” are to Newhold Investments Limited, a company organized in the British Virgin IslandsBVI and a wholly-owned subsidiary of CHNR.

References to "Pineboom"“Pineboom” are to Pineboom Investments Limited, a company organized in the British Virgin IslandsBVI and a wholly-owned subsidiary of CHNR.

References to the "PRC"“PRC” or "China"“China” are to the People’s Republic of China and, solely for the purpose of this annual report, excluding Hong Kong, Macao, and Taiwan.

References to the “Related-Party Debtholders” are to the companies affiliated with Mr. Li Feilie, CHNR’s principal beneficial owner, including without limitation, Feishang Enterprise and Feishang Group.

References to “Series B preferred shares” are to the Series B preferred shares, without par value, of CHNR, after the Redomicile Merger.

References to "Series“Series B preferred stock"stock” are to the Series B preferred stock, $.001US$.001 par value, of China Resources.

References to “shareholders” of CHNR are to the members of China Natural Resources, Inc., a British Virgin IslandsBVI corporation. “Members” under British Virgin Islands law are the equivalent of “shareholders” under the laws of the several states of the United States.

References to “Silver Moon” are to Silver Moon Technologies Limited, a company organized in the British Virgin IslandsBVI and an 80%-owned subsidiary of CHNR. Silver Moon is currently inactive.

References to “Spin-Off” are to the January 22, 2014 Distribution to the Company’s shareholders of the outstanding shares of Feishang Anthracite, which operated the Company’s coal mining and related business prior to January 22, 2014.

References to "Sunwide"“Sunwide” are to Sunwide Capital Limited, a company organized in the British Virgin IslandsBVI and a wholly-owned subsidiary of CHNR. Sunwide is currently inactive.

References to “Wuhu Feishang” are to Wuhu Feishang Mining Development Co., Limited, a company organized in the PRC and, until March 3, 2017, a wholly-owned subsidiary of Feishang Mining.

References to “Yangpu Lianzhong” are to Yangpu Lianzhong Mining Co., Limited, a company organized in the PRC and a wholly-owned subsidiary of China Coal.

References to “Yangpu Shuanghu” are to Yangpu Shuanghu Industrial Development Co., Limited, a company organized in the PRC and a wholly-owned subsidiary of Feishang Yongfu.

References to “Yunnan Mining” are to Yunnan Feishang Mining Co., Limited, a company organized in the PRC and a wholly-owned subsidiary of Yangpu Shuanghu.

ii

Forward-Looking Statements

This Annual Report contains statements that constitute forward-looking statements within the meaning of Federal securities laws. These statements appear in a number of places in this Annual Report and include, without limitation, statements regarding the intent, belief and current expectations of the Company, its directors or its officers with respect to the Company's policies regarding investments, dispositions, financings, conflicts of interest and other matters; and trends affecting the Company's financial condition or results of operations. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statement as a result of various factors. Among the risks and uncertainties that could cause our actual results to differ from our forward-looking statements are our intent, belief and current expectations as to business operations and operating results, uncertainties regarding the governmental, economic and political circumstances in the People’s Republic of China, uncertainties concerningassociated with metal price volatility; uncertainties related to our ability to commence commercial production of the Company’s copper smelting business in Bolivia, uncertainties regarding the political, legal, social and economic circumstances in Bolivia, uncertainties associated with volatility in the market price of copper,fund operations; uncertainties associated with the Company’s ability to secure copper ore and other raw materials supply for its copper smelting production,reliance on third-party contractors, uncertainties relatingrelated to possible future increases in operating expenses, including costs of labor and materials, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including without limitation the information set forth in Item 3.D. of this Annual Report under the heading “Risk Factors”.Factors.” With respect to forward-looking statements that include a statement of its underlying assumptions or bases, the Company cautions that, while it believes such assumptions or bases to be reasonable and has formed them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material depending on the circumstances. When, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to future results, that expectation or belief is expressed in good faith and is believed to have a reasonable basis, but there can be no assurance that the stated expectation or belief will result or be achieved or accomplished.

iii

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

No disclosure is required in response to this Item.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

No disclosure is required in response to this Item.

ITEM 3.

KEY INFORMATION

A.

Selected Financial Data

The selected financial information as of and for the years ended December 31, 2014, 2015, 2016, 2017 and 2018 set forth below should be read in conjunction with, and is qualified in its entirety by reference to, “Item 5. Operating and Financial Review and Prospects” and our audited consolidated financial statements and the notes thereto included elsewhere in this Annual Report.

On February 3, 2006, we consummated the acquisition of all of the issued and outstanding capital stock of Feishang Mining (the “Acquisition”). Our acquisition of Feishang MiningThe Acquisition was accounted for using the purchase method of accounting and was treated as a reverse acquisition because on a post-merger basis, the former Feishang Mining shareholder holds 86.4% of our outstanding common shares. As a result, Feishang Mining is deemed to be the acquirer for accounting purposes. We have retroactively restated our issued share capital to reflect the acquisition by Feishang Mining. The selected financial data are stated in CNY and are derived from the audited consolidated financial statements of the Company for the years ended December 31, 2012, 2013, 2014, 2015, 2016, 2017 and 2016,2018, prepared and presented in accordance with IFRS.IFRSs. Details of the Company’s acquisition of Feishang Mining are described elsewhere in this Annual Report.

Ernst & Young, our former independent registered public accounting firm, issued an unqualified auditor's report on our consolidated statement of financial position as of December 31, 2014, and the related consolidated statements of profit or loss, statements of comprehensive income, statements of changes in equity and statements of cash flows for the years ended December 31, 2013 and 2014. Ernst & Young Hua Ming LLP, which has been engaged as our independent registered public accounting firm for the years ended December 31, 20152016, 2017 and 2016,2018, has issued unqualified auditor's reports on our consolidated statementstatements of financial position as of December 31, 20152016, 2017 and 2016,2018, and the related consolidated statementstatements of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows for the years ended December 31, 20152016, 2017 and 2016.

The selected financial information as of and for the years ended December 31, 2012, 2013, 2014, 2015 and 2016 set forth below should be read in conjunction with, and is qualified in its entirety by reference to, “Item 5. Operating and Financial Review and Prospects”and our audited consolidated financial statements and the notes thereto included elsewhere in this Annual Report.2018.

The statements of profit or loss data for each of the years ended December 31, 2014, 20152016, 2017 and 20162018 and the statements of financial position data as of December 31, 2014, 20152017 and 20162018 are derived from our audited consolidated financial statements included in Part III, Item 18, "Financial Statements"“Financial Statements” of this Annual Report. The statements of financial position data as of December 31, 20122014, 2015 and 20132016 and the statements of profit or loss data for the years ended December 31, 20122014 and 20132015 are derived from our audited consolidated financial statements that are not included in this Annual Report. Our historical results are not necessarily indicative of our results in any future period.

In accordance with IFRS 5, consolidated statements of profit or loss have been restated retrospectively for all periods presented due to the Spin-Off and listing by way of introduction on the Hong Kong Stock Exchange of the Company’s wholly ownedwholly-owned subsidiary, Feishang Anthracite, which operated the Company’s coal mining and related business. The Spin-Off was completed on January 22, 2014. The coal mining and related operations are therefore presented as discontinued operations.

The statement“discontinued operations” in the consolidated statements of profit or loss data for the year ended December 31, 2016, and the statement of financial position data as of December 31, 2016 include the results of operations of Double Grow, which was acquired on December 23, 2016. The statement2014.

Moreover, consolidated statements of profit or loss datahave been restated retrospectively for the years ended December 31, 2014, 2015 and 2016 due to the disposal of Wuhu Feishang and Double Grow on March 3, 2017 and December 29, 2017, respectively. Wuhu Feishang and Double Grow were the primary contributors to the Group’s exploration and mining of non-ferrous metals segment and copper smelting segment, respectively, which represented a separate major line of business with separately identifiable operations and cash flows. Accordingly, the results of Wuhu Feishang and Double Grow are classified and separately reported as “discontinued operations” in the consolidated statements of profit or loss for the year ended December 31, 2015,2017. The comparative amounts reported in the consolidated statements of profit or loss and related notes have been revised accordingly to reflect the reclassification between continuing operations and the statementsdiscontinued operations. In addition, the gains recognized on the disposal of financial position data as of December 31, 2014Wuhu Feishang and 2015 have been restated retrospectively as a resultDouble Grow are included in the results of the acquisition of Double Grow, by using the pooling of interest method since Double Grow’s incorporation date of December 17, 2014.discontinued operations.

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*

In December 2013, the assets and liabilities of the coal mining segment and related business were reclassified to held for distribution, only as at December 31, 2013, and not as at the other year ends in the table.

The Company has not paid any dividends with respect to its common shares and has no present plan to pay any dividends in the foreseeable future. The Company intends to retain its earnings to support the development of its business. Any dividends paid in the future by the Company will be paid at the discretion of the Company’s Board of Directors and will be dependent upon distributions, if any, made by its subsidiaries, and on the Company’s results of operations, its financial condition and other factors deemed relevant by the Board of Directors. In accordance with the relevant PRC regulations and the Articles of Association of companies incorporated in the PRC, appropriations of net income of wholly ownedwholly-owned foreign enterprises and sino-foreign joint venture companies as reflected in its statutory financial statements are to be allocated to either (i) each of the general reserve, enterprise expansion reserve and staff bonus and welfare reserve, respectively, or (ii) statutory reserve, as determined by the resolution of the Board of Directors annually. Prior to the Acquisition, the Board of Directors of Wuhu Feishang declared and paid dividends of CNY44.01 million (US$6.34 million) and CNY38.46 million (US$5.54 million) on February 28, 2005 and January 27, 2006, respectively. Wuhu Feishang declared dividends of CNY127.10 million (US$18.30 million) to its parent on April 27, 2012 which were paid in 2013. On June 28, 2013, Feishang Mining declared and paid dividends of HK$155.00 million (US$19.87 million) to the Company. On September 24, 2014, Wuhu Feishang declared dividends of CNY39.24 million (US$5.65 million) to its parent which were paid in 2015. On May 19, 2015, Feishang Mining declared and paid dividends of HK$39.50 million (US$5.06 million) to the Company.

Exchange Rates

The Company’s reporting currency is Renminbi. Translations of amounts from Renminbi to U.S. Dollars are for the convenience of the reader. The following table provides information concerning the exchange rate of Renminbi for U.S. Dollars for each of the preceding five years, and for each month during the preceding six months. The rates of exchange for 2012 to 2014 are the rates quoted by Bloomberg L.P. The rates of exchange for 2015 are the rates quoted by www.oanda.com. The rates of exchange for 2016 to 2018 and the preceding six months are the rates quoted by UKForex.www.ofx.com. The Renminbi is not freely convertible into foreign currencies and the quotation of exchange rates does not imply convertibility of Renminbi into U.S. Dollars or other currencies. All foreign exchange transactions take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China, the PRC’s central bank. No representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the CNY Exchange Rate or at all.

The exchange rate on June 15, 2017April 25, 2019 was US$1.00 = CNY6.8036.CNY6.7431.

The following table reflects the high and low exchange rates for each month during the previous six months:

The following table reflects the average exchange rate for each of the preceding five years, calculated by using the average of the exchange rates on the last day of each month during the period:

B.

Capitalization and Indebtedness

No disclosure is required in response to this Item.

C.

Reasons for the Offer and Use of Proceeds

No disclosure is required in response to this Item.

D.

Risk Factors

Risks Relating to Copper Smelting Operationsour Mine Exploration Activities in BoliviaInner Mongolia

The Wulatehouqi Moruogu Tong Mine (“Moruogu Tong Mine”) is in the exploration stage and we may not generate revenues for the foreseeable future.

We are in the exploration stage at Moruogu Tong Mine located in the Inner Mongolia Autonomous Region of the PRC, and, at this stage, we cannot predict whether ore can be mined on a profitable basis. During the exploration stage, the mine incurs operating expenses but does not yet generate revenues for the Company. The Company intends to fund mine exploration, construction and development through bank borrowings, funds received pursuant to its Cooperation Agreement with Bayannaoer Jijincheng Mining Co., Ltd. (“Jijincheng Mining”), and loans from a related party. To date, the exploration program has indicated the presence of a “mid-size” deposit of lead and silver ore and resources sufficient in quantity and quality to warrant further exploration designed to confirm and increase measured resources, with the prospect of identifying other minable metal resources such as copper.

Further exploration is subject to negotiation with Jijincheng Mining (based on a number of factors including, inter alia, the economic, geological and technical viability) as to whether to continue exploration of potential copper resources in 2019, and a final appraisal and application for mining rights will be scheduled thereafter. While the results of preliminary prospecting suggest that Moruogu Tong Mine contains mineable quantities of lead and silver, until further exploration and analysis is completed, we cannot predict the nature and extent of minerals contained at the mine or the commercial viability of pursuing a plan of extraction. In the event that further exploration and analysis does not confirm initial findings, continued activities in furtherance of revenue-producing mining operations at Moruogu Tong Mine will cease.

Moruogu Tong Mine is currently being explored under an agreement which effectively reduces our share in any future profits from mineral extraction at the mine.

On August 20, 2017, Bayannaoer Mining entered into a mutual cooperation agreement (the “Cooperation Agreement”) with Jijincheng Mining, an unrelated third party. The Cooperation Agreement is intended to provide for financial support for the operating expenses of Moruogu Tong Mine during the exploration stage, and the allocation of rights and responsibilities between Bayannaoer Mining and Jijincheng Mining. Pursuant to the Cooperation Agreement: (i) Bayannaoer Mining contributed the existing exploration results for Moruogu Tong Mine; (ii) Jijincheng Mining provides the necessary funds for further exploration at the mine; (iii) Bayannaoer Mining enjoys full rights to any resources already discovered and confirmed by its independent exploration works conducted prior to commencement of the cooperative exploration project; (iv) Bayannaoer Mining and Jijincheng Mining will each receive a 50% interest in any newly discovered resources from the first 10 drilling holes in the cooperative exploration project; and (v) Bayannaoer Mining and Jijincheng Mining will receive 30% and 70% interests, respectively, in any newly discovered resources from drilling works beyond the first 10 drilling holes in the cooperative exploration project. Other details of the Cooperation Agreement, including allocations and distributions upon completion of exploration works, remain to be negotiated between the parties. There is no assurance that the details of the arrangement that remain to be negotiated will be resolved in a manner satisfactory to the Company.

Our estimates of the reserves contained in Moruogu Tong Mine are based upon protocols not generally recognized in the United States and the various assumptions underlying our estimates may be inaccurate.

Moruogu Tong Mine is the subject of a geological survey prepared in conformity with procedures and protocols recognized in the PRC. These procedures and protocols are different from those generally recognized in the United States. In addition, reserve estimation is an interpretive process based upon available data and various assumptions that are believed to be reasonable, and the economic value of ore reserves may be adversely affected by price fluctuations in the metal market, reduced recovery rates or a rise in production costs as a result of inflation or other technical problems arising in the course of extraction. The exploration program at Moruogu Tong Mine has indicated the presence of a “mid-size” deposit of lead and silver ore and resources sufficient in quantity and quality to warrant further exploration designed to confirm and increase measured resources. If the assumptions upon which we conduct the reserve study prove to be inaccurate, we may reach incorrect conclusions as to the nature and extent of resources present at Moruogu Tong Mine.

Volatility in the market price for copperprices of metals may adversely affect the results of our smelting business.mining operations.

The market prices forof lead, silver and other metals including copper ore have experienced significant volatility in recent years. Market prices depend upon many factors outside of our control and include industry specific factors such as supply and demand, as well as factors such as local and world-wide general economic conditions. The results of our copper smelting operations will be significantly affected byuncertainties surrounding the market price for copper. For example, at times when the market price for copper ore is high, it may be difficult for us to secure sufficient raw material to enable us to operate at full capacity. Conversely, at times when the market price for copper cathodes (or electodeposited copper) is low,prices of metals and the costs of operatingextraction may adversely affect our ability to operate on a copper smelting plant may not justify continued production.

Trial operations at our smelting plant have not commenced and we could encounter delays and expense prior to commencement of production.

We currently intend to conduct trial smelting operations commencing in the third quarter of 2017 with a view towards commencement of commercial production in the fourth quarter of 2017. In the event we encounter delays prior to or during the trial phase, scheduled commercial production may be correspondingly delayed and we may incur significant expense to resolve any problems we encounter.

We will incur operating costs prior to the commencement of revenue production.

Antay Pacha will incur operating expenses prior to the commencement of revenue production, including for management salaries, lease payments, licenses and permits and trial production expenses. Antay Pacha intends to fund these pre-revenue expenses through bank borrowings, internal resources and loans from related parties; but there is no assurance that Antay Pacha will secure the necessary operating funds on acceptable terms or at all.

We do not have a history of operations in Bolivia and are subject to all of the risks inherent in the operation of a business in a foreign country.

We have engaged a management team with experience in copper mining and smelting, however, many of these individuals are Chinese nationals and, since we do not have a history of operations in Bolivia, we will be subject to all of the political, legal, social and economic risks associated with operations in a foreign country.  We have engaged local attorneys and other professionals to guide us through legal, governmental and regulatory processes, however, we will likely encounter challenges associated with operations in Bolivia and there is no assurance that we will successfully overcome these challenges or that we will not incur significant time and expense in seeking to do so.profitable basis.

We will be subject to government regulationregulations in various aspects of our Bolivian operationsexploration activities and our failure to comply with applicable government regulations could adversely affect us.

Antay PachaBayannaoer Mining, our subsidiary that acquired exploration rights to Moruogu Tong Mine, is and will continue to be subject to be regulatedregulations in various aspects of its operations by a variety of laws, rules and regulations administered by the national and local governments, including laws, rules and regulations relating to: smelting operations;exploration activities; environmental protection; the use and preservation of dangerous substances; employment practices; as well as zoning and land use laws and a variety of local business laws, customs and implementation rules. Our failure to comply with applicable laws, rules, regulations and customs could adversely affect our operations and subject us to fines and other penalties including suspension or termination of our business permits.

If we are unable to successfully manage the integration of our acquisition, we may not benefit from our acquisition strategy.

As part of our growth strategy, we seek to supplement internal growth with targeted acquisitions. We may not be successful in integrating newly acquired companies into our day-to-day operations for a number of reasons, including if we are unable to (a) retain the skilled managerial, technical, and sales personnel of acquired companies; (b) retain the customers of acquired companies; (c) integrate the services offered by acquired companies with our existing services to achieve a single package of service offerings; (d) establish and maintain uniform standards, controls, policies and procedures throughout our acquired companies; or (e) devote the management time required to successfully integrate acquired businesses.

We do not have binding agreements with customers to purchase our future output of copper cathodes.metals.

While we believe there is a robust market for copper productslead, silver and other metals not only in Bolivia,China but also in other countries, including Germany and China, we do not currently have any commitments from any customers to purchase our future output of copper cathodes.

Financial transfers to or out of Bolivia are subject to certain restrictions.

The principal regulation governing foreign currency exchange in Bolivia is Law No. 516, the investment promotion law (Ley de Promoción de Inversiones, “LPI”) that was promulgated in April 2014. The LPI guarantees that if foreign investors fulfill tax and other obligations under Bolivian law, they may freely transfer abroad their net profits, the capital resulting from the liquidation of companies or from the sale of shares, dispute settlement awards, among other amounts, in freely convertible currency. However, financial transfers to or out of Bolivia must be channeled through the Bolivian financial system, as well as registered with Bolivia’s Central Bank and these procedures may make it more difficult for us to effect financial transactions with our Bolivian subsidiary.

The fluctuation of the Boliviano may materially and adversely affect your investment.

The Boliviano is the official currency of Bolivia and the financial books and records of Antay Pacha will be maintained in Boliviano and, thereafter, converted into Renminbi or United States Dollar for various financial, accounting and reporting purposes. The exchange rate of the Boliviano against the Renminbi, the United States Dollar and other currencies may fluctuate and is affected by, among other things, changes in Bolivia’s political and economic conditions. Any significant revaluation of the Boliviano may materially and adversely affect our cash flows, revenues and financial condition. Conversely, if we convert our Boliviano into Renminbi or United States Dollar, appreciation of the Renminbi or United States Dollar against the Boliviano could affect the amount of Boliviano we convert.

metals.

Risks Relating to Our Financial Condition

We have incurred losses from operations for each of the preceding three fiscal years and there is no assurance that we will generate profits in the future.

For the three years ended December 31, 2014, 20152016, 2017 and 2016,2018, we incurred operating losses from continuing operations of CNY27.38CNY4.52 million, (US$3.94 million), CNY40.11CNY6.20 million (US$5.78 million) and CNY20.55CNY6.21 million (US$2.96million)0.90 million), respectively. Our operating losses are attributable,mainly represented exploration expenses in part, to depressed prices for ore that we mined, the temporary suspension of operations at YangchongMoruogu Tong Mine, as well as administrative expenses such as legal and the fact that the trial run of our copper smelting operation has not yet started.professional fees, rental and office expenses. Our profitability is dependent upon many factors, including our ability to fund our exploration and operating expenses, produce copper cathodes,metal outputs, and sell our production outputoutputs to third parties. Other factors, such as uncertainty over the demand and market price for copper,lead, silver and other metals, are outside of our control. There is no assurance that we will be successful in our efforts to achieve profitability.

We do not currently generate revenues from operations and commercial production is not expected to commence until the fourth quarter of 2017;operations; we will have to fund operating expenses until we are able to generate sufficient revenue to pay them.

We do not currently generate revenues from operations and commercial production at our copper smelting plant is not expected to commence until the fourth quarter of 2017.operations. We will continue to incur operating expenses prior to the commencement of revenue-producing activities, and we intend to fund those expenses from the proceeds of loans from our principal ShareholderRelated-Party Debtholders, payments pursuant to the Cooperation Agreement and, to the extent deemed necessary, bank borrowings. If we encounter delays prior to the commencement of commercialrevenue production in our mining operations, we will be required to fund operating expenses longer than expected. There is no assurance that we will be able to secure amounts sufficient to fund our operating expenses until such time as we are able to generate revenues sufficient to pay those expenses.

Any failure to achieve and maintain effective internal control could have material adverse effect on our business, results of operations and the market price of our shares.

The SEC,United States Securities and Exchange Commission (“SEC”), as required by Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act (“SOX”), adopted rules requiring most public companies to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. In addition, under certain circumstances, an independent registered public accounting firm must report on the effectiveness of the company’s internal control over financial reporting.

Our management has concluded that our internal control over financial reporting as of December 31, 20162018 was effective. However, we cannot assure you our management will not identify material weaknesses in the future during the Section 404(a) process or our independent public registered accounting firm will not identify material weaknesses during the Section 404(b) process if it was performed in the current year or in the future or for other reasons. In addition, because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. As a result, if we fail to maintain effective internal control over financial reporting or should we be unable to prevent or detect material misstatements due to error or fraud on a timely basis, investors could lose confidence in the reliability of our financial statements, which in turn could harm our business, results of operations and negatively impact the market price of our shares, and harm our reputation. Furthermore, we have incurred and expect to continue to incur considerable costs and to use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

The exclusion of our Copper Segment from the scope of management’s assessment of the effectiveness of the Company’s internal control over financial reporting could deprive investors of information that is material to an investment decision.

The Company acquiredDouble Grow and its subsidiaries including Antay Pacha (the “Copper Segment”) in December 2016 and accounted for the acquisition as a combination of entities under common control since the Company and Double Grow were under the common control of Mr. Li Feilie. As such, the assets and liabilities of Double Grow have been accounted for at historical cost and the consolidated financial statements of the Group prior to acquisition have been restated to include the results of operations of Double Grow and its subsidiaries on a combined basis when the entities first came under the common control of Mr. Li Feilie. The total assets as of December 31, 2015 and the loss for the year ended December 31, 2015 of Double Grow and its subsidiaries accounts for 53.5% and 14.3% of the total assets and loss of CHNR, respectively. The total assets as of December 31, 2016 and the loss for the year ended December 31, 2016 of Double Grow and its subsidiaries accounts for 61.8% and 33.1% of the total assets and loss of CHNR, respectively. In accordance with SEC guidance, management’s assessment of the effectiveness of a company’s internal control over financial reporting may exclude from its scope subsidiaries that were acquired in a material business combination during the preceding fiscal year. Accordingly, management’s assessment of the effectiveness of the Company’s internal control over financial reporting excludes the Copper Segment from its scope. The Copper Segment is currently the Company’s sole operating segment. In light of the significance of the Copper Segment to the Company, taken as a whole, the exclusion of the Copper Segment from the scope of management’s assessment could deprive investors of material information that might have been revealed had management included the Copper Segment within the scope of its assessment.

Risks Relating to PRC Operations

We have in the past and may in the future engage in business operations in the PRC; however, ourOur current business operations are conducted outside ofin the PRC. Notwithstanding the foregoing,PRC; our executive officers, directors and principal shareholders,shareholder, our auditors and our bank accounts are located in the PRC; and many of our (inactive) subsidiaries are organized and funded in the PRC. To the extentAs we remainare subject to the laws, rules, regulations and customs of the PRC, investors should consider the following risk factors.

Investors should consider economic, legal and political factors applicable to investments in the PRC prior to investing in our company.

Since 1979, the PRC government has been making efforts to promote reforms of its economic system. These reforms have brought about marked economic growth and social progress, and the economy of China has shifted from a planned economy to a market-oriented economy. Our PRC subsidiaries have also benefited from the economic reforms implemented by the PRC government and the economic policies and measures. However, economic, legal and social policies in the PRC are not similar to those of Western governments and revisions or amendments may be made to these policies and measures from time to time, and we are not in a position to predict whether any change in the political, economic or social conditions may adversely affect our operating results, and how those changes may impact on us.

The PRC legal system is a statutory law system. Unlike the common law system, decided legal cases have little significance for guidance, and rulings by the court can only be used as reference with little value as precedents. Since 1979, the PRC government has established a commercial law system, and significant progress has been made in promulgating laws and regulations relating to economic affairs. The PRC government is still in the process of developing a comprehensive set of laws and regulations. Examples are the organization of companies and their regulation, foreign investment, commerce, taxation and trade. However, these regulations are relatively new and the availability of public cases as well as the judicial interpretation of them is limited in number. Moreover, as they are not binding, both the implementation and interpretation of these regulations are uncertain in many areas. Also, more stringent environmental regulations may also affect our ability to comply with, or our costs to comply with, such regulations. Such changes, if implemented, may adversely affect our business operations and may reduce our profitability.

The interpretation of PRC laws may also be subject to policy changes reflecting domestic political changes, and new laws, changes to existing laws and the pre-emption of local regulations by national laws may adversely affect foreign investors. The activities of our subsidiaries in China are subject to PRC regulations governing PRC companies.

We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business.

The PRC’s economy is in a transition from a planned economy to a market-oriented economy subject to five-year and annual plans adopted by the government that set national economic development goals. Policies of the PRC government can have significant effects on the economic conditions of the PRC. During this transition, we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and business development in the PRC will follow market forces. While we believe that this trend will continue, we cannot assure you that this will be the case. A change in policies by the PRC government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises. Although the PRC government has been pursuing economic reform policies for more than three decades, we cannot assure you that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting the PRC's political, economic and social life.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain. Any changes in such laws and regulations may have a material and adverse effect on our business.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. We and any future subsidiaries are considered foreign persons or foreign-funded enterprises under PRC laws, and as a result, we are required to comply with PRC laws and regulations. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses.

Inflation in the PRC could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our products rise at a rate that is insufficient to compensate for the rise in the costs of supplies, it may have an adverse effect on our profitability. In order to control inflation in the past, the PRC government has imposed controls on bank credit, limits on loans for fixed assets and restrictions on bank lending. Such an austere policy can lead to a slowing of economic growth, and recent statistics have, indeed, suggested that China’s high annual economic growth will slow down. According to China National Bureau of Statistics released data, China's consumer price index (CPI)remained stable for 2016,2018, rising 2.02.1 percentyear on year — well below the government's 3.0 percent target. AsCPI is the main gauge of inflation, the lower than targeted CPI increase reflects that inflation in China remains largely in check.

Our PRC subsidiaries are subject to restrictions on paying dividends and making other payments to us.

We are a holding company incorporated in the British Virgin Islands.BVI. As a result of our holding company structure, we relydivdends and other distributions to our shareholders, if any, will depend primarily onupon dividend payments from our subsidiaries. However, PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined in accordance with PRC accounting standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after-tax profits as certain reserve funds according to PRC accounting standards and regulations. The PRC government also imposes controls on the conversion of Renminbi into foreign currencies and the remittance of currencies out of China. We may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency. Furthermore, if our subsidiaries in China incur debt in the future, the debt covenants may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive dividend from the operating companies due to contractual or other limitations on the payment of dividends, we may be unable to pay dividends or make other distribuions on our common shares.

Governmental control of currency conversion may affect payment of our obligations and the value of your investment.

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or otherwise satisfy foreign currency dominateddenominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures can be made in foreign currencies without prior approval from the PRC State Administration of Foreign Exchange (“SAFE”) by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of bank loans denominated in foreign currencies.

The PRC government may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay certain of our expenses as they come due.

See Item 10.D. “ADDITIONAL INFORMATION – Exchange Controls” for further details of exchange controls in the PRC.

The fluctuation of the Renminbi may materially and adversely affect your investment.

The exchange rate of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. As somemost of our operating expenses are denominated in Renminbi, any significant revaluation of the Renminbi may materially and adversely affect our cash flows and financial condition. Conversely, if we convert our Renminbi into U.S. dollars, should we determine to pay dividends on our common shares or for other business purposes, appreciation of the Renminbi against the U.S. dollar could affect the amount of U.S. dollars we convert. For example, to the extent that we need to convert U.S. dollars we receive from an offering of our securities into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar could have a material adverse effect on our business, financial condition and results of operations resulting in a lower income, a charge to our income statement and a reduction in the value of these U.S. assets. 

In 2016,2018, the annual cumulative depreciation of the exchange rate of the Renminbi against the U.S. dollar was 6.95%5.71%. Since the beginning of 20172019 to June 15, 2017,March 31, 2019, the exchange rate of the Renminbi against the U.S. dollar appreciated by 2.03%2.42%.

Recent PRC SAFE Regulations regarding offshore financing activities by PRC residents, have undergone continuous changes which may increase the administrative burden we face and create regulatory uncertainties that could adversely affect the implementation of our acquisition strategy, and a failure by our shareholders who are PRC residents to make any required applications and filings pursuant to such regulations may prevent us from being able to distribute profits and could expose us and our PRC resident shareholders to liability under PRC law.

In 2005, the SAFE promulgated regulations in the form of public notices, which require registrations with, and approval from, the SAFE on direct or indirect offshore investment activities by PRC resident individuals. The SAFE regulations require that if an offshore company directly or indirectly formed by or controlled by PRC resident individuals, known as “SPC,” intends to acquire a PRC company, such acquisition will be subject to strict examination by the SAFE. The regulation also requires PRC resident individuals to repatriate all dividends of the SPC. Without registration with the SAFE by PRC resident individuals, the PRC entity may not be able to remit any of its profits out of the PRC as dividends or otherwise. Violation of the regulation may be deemed an evasion of foreign exchange rules and implicated PRC resident individuals may be liable for a penalty. However, there are uncertainties regarding the interpretation and application of current or future PRC laws and regulations, including the regulations established by the SAFE. To date, no registration has been filed with the SAFE. Even if it is determined that registration with the SAFE is required, management believes that applicable filings with the SAFE can be made at any time, and management does not foresee significant difficulties in obtaining the SAFE’s approval should it be required.

Our auditor is located in China, a jurisdiction where PCAOB is currently unable to conduct inspections without the approval of the PRC authorities, and as such, investors may be deprived of the benefits of such inspection.

Our independent registered public accounting firm that issues the audit reports included in our annual reports filed with the SEC, as an auditor of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States), or PCAOB, is required by the laws of the United States to undergo regular inspections by PCAOB to assess its compliance with the laws of the United States and professional standards. Our auditor is located in China, a jurisdiction where PCAOB is currently unable to conduct inspections without the approval of the PRC authorities. In May 2013, PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the China Securities Regulation Commission, or the CSRC, and the Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations undertaken by PCAOB, the CSRC or the Ministry of Finance in the United States and the PRC, respectively. PCAOB continues to be in discussions with the CSRC and the Ministry of Finance to permit joint inspections in the PRC of audit firms that are registered with PCAOB and audit Chinese companies that trade on U.S. exchanges. On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. The joint statement reflects a heightened interest in an issue that has vexed U.S. regulators in recent years. However, it remains unclear what further actions the SEC and PCAOB will take to address the problem.

Inspections of other firms that PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of PCAOB to conduct inspections of independent registered public accounting firms operating in China makes it more difficult to evaluate the effectiveness of our auditor’s audit procedures or quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

Proceedings instituted recently by the SEC against fivecertain PRC-based accounting firms, including our independent registered public accounting firm, could result in our financial statements being determined to not be in compliance with the requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

In December 2012, the SEC brought administrative proceedings against five accounting firms in China, including our independent registered public accounting firm, alleging that they had refused to produce audit work papers and other documents related to certain other China-based companies under investigation by the SEC for potential accounting fraud.SEC. On January 22, 2014, an initial administrative law decision was issued, censuring these accounting firms and suspending four of the fivethese firms from practicing before the SEC for a period of six months. The decision is neither final nor legally effective unless and until reviewed and approved by the SEC. On February 12, 2014, four of these PRC-based accounting firms appealed to the SEC against this decision and, ondecision. In February 6, 2015, each of the four PRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC. The firms' ability to continue to serve all their respective clients is not affected by the settlement. The settlement requires the firms to follow detailed procedures to seek to provide the SEC with access to Chinese firms'firms’ audit documents via the CSRC. If the firms do not follow these procedures,fail to meet specified criteria, during a period of four years starting from the settlement date, the SEC couldretains authority to impose penalties such as suspensions, or it could restart the administrative proceedings. The settlement did not requirea variety of additional remedial measures on the firms to admit to any violation of law and preservesdepending on the firms' legal defenses in the event the administrative proceeding is restarted.

To our knowledge, we were not and are not subject to any SEC investigations, nor are we involved in the proceedings brought by the SEC against the accounting firms. However, the independent registered public accounting firms that issue the audit reports included in our annual reports filed with the SEC is affiliated to onenature of the failure. Additional remedies for any future noncompliance could include, as appropriate, an automatic six-month bar on a single firm’s performance of certain audit work, commencement of additional proceedings against a firm, or in extreme cases the resumption of the current proceeding against all four accounting firms above.

firms.

In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, listed companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. Moreover, any negative news about the proceedings against these audit firms may cause investor uncertainty regarding China-based, United States-listed companies and the market price of our ADSsshares may be adversely affected.

If our independent registered public accounting firmsfirm were denied, even temporarily, the ability to practice before the SEC and we were unable to timely find another registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be determined not to not be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to theour delisting from the NYSENASDAQ Stock Market or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of our ADSsshares in the United States.

Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.

The Ministry of Commerce published a discussion draft of the proposed Foreign Investment Law in January 2015 aiming to, upon its enactment, replace the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. The Ministry of Commerce is currently soliciting comments on this draft and substantial uncertainties exist with respect to its enactment timetable, interpretation and implementation. The draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our current corporate structure, corporate governance and business operations in many aspects.

Among other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether a company should be treated as a foreign-invested enterprise, or an FIE. According to the definition set forth in the draft Foreign Investment Law, FIEs refer to enterprises established in China pursuant to PRC law that are solely or partially invested by foreign investors. The draft Foreign Investment Law specifically provides that entities established in China (without direct foreign equity ownership) but “controlled” by foreign investors, through contract or trust for example, will be treated as FIEs. Once an entity falls within the definition of FIE, it may be subject to foreign investment “restrictions” or “prohibitions” set forth in a “negative list” to be separately issued by the State Council later. If an FIE proposes to conduct business in an industry subject to foreign investment “restrictions” in the “negative list,” the FIE must go through a market entry clearance by the Ministry of Commerce before being established. If an FIE proposes to conduct business in an industry subject to foreign investment “prohibitions” in the “negative list,” it must not engage in the business. However, an FIE, during the market entry clearance process, may apply in writing to be treated as a PRC domestic enterprise if its foreign investor(s) is/are ultimately “controlled” by PRC government authorities and its affiliates and/or PRC citizens. In this connection, “control” is broadly defined in the draft law to cover the following summarized categories: (i) holding 50% of more of the voting rights of the subject entity; (ii) holding less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats on the board or other equivalent decision making bodies, or having the voting power to exert material influence on the board, the shareholders’ meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations.

The draft Foreign Investment Law, if enacted as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable FIEs. Aside from investment implementation report and investment amendment report that are required at each investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria are required to report on a quarterly basis. Any company found to be non-compliant with these information reporting obligations may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be subject to criminal liabilities.

Risks Relating to Foreign Private Issuer Status

Because our assets are located outside of the United States and all of our directors and all our officers reside outside of the United States, it may be difficult for you to enforce your rights based on U.S. Federal Securities Laws against us and our officers and directors or to enforce a judgment of a United States court against us or our officers and directors in the PRC.

We are a British Virgin IslandsBVI company, our officers and directors are non-residents of the United States, our assets are located in the PRC, and Bolivia, and our operations are conducted in the PRC and Bolivia.PRC. We do not maintain a business presence in the United States,States. Therefore, it may not be possible to effect service of process on such persons in the United States, and it may be difficult to enforce any judgments rendered against us or them. Moreover, there is doubt whether courts in the British Virgin Islands,BVI or the PRC or Bolivia would enforce (a) judgments of United States courts against us, or our directors or officers based on the civil liability provisions of the securities laws of the Unites States or any state, or (b) in original actions brought in the British Virgin Islands,BVI or the PRC, or Bolivia, liabilities against us or any non-residents based upon the securities laws of the United States or any state.

Our status as a “foreign private issuer” results in less information being available about us than about domestic reporting companies.

We are a foreign private issuer and are not required to file as much information about us as domestic issuers are required to file. In this regard:

·

we are not required to file quarterly reports on Form 10-Q and our annual reports on Form 20-F are subject to disclosure requirement that differ from annual reports on Form 10-K;

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we are exempt from the provisions of Regulation FD aimed at preventing issuers from making selective disclosures;

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the SEC proxy statement and information statement rules do not apply to us; and

·

our officers, directors and principal shareholdersshareholder are not required to file reports under Section 16 of the Exchange Act detailing their beneficial ownership of our shares.shares; and they are not subject to the shortswing profit provisions under Section 16.

Since there is generally greater information available about domestic issuers than about foreign private issuers such as us, the information we are not required to provideit may make itbe more difficult to make investment decisions about us.

Our status as a “foreign private issuer” allows us to adopt IFRS accounting principles, which are different than accounting principles under U.S. GAAP.

We have adopted and presented our financial statements in accordance with IFRS accounting principles. IFRS is an internationally recognized body of accounting principles that are used by many companies outside of the United States to prepare their financial statements; and the SEC recently permitted foreign private issuers such as the Company to prepare and file their financial statements in accordance with IFRS rather than U.S GAAP. IFRS accounting principles are different from those of U.S. GAAP, and SEC rules do not require us to provide a reconciliation of IFRS accounting principles to those of U.S GAAP. Accordingly, we suggest that readers of our financial statements familiarize themselves with the provisions of IFRS accounting principles in order to better understand the differences between these two sets of principles.

We are not currently subject to the SEC’s XBRL requirements which may provide less information to investors than is provided by filers utilizing XBRL.

The SEC requires most reporting companies to provide financial statements in their periodic reports that include “XBRL tagging” – cross references that provide the reader with a greater understanding of the components of line items contained in financial statements. The SEC has recently announced taxonomy to enable filers of IFRS financial statements, such as the Company, to include XBRL tagging in their financial statements. However, under the SEC’s phase-in rules covering the new taxonomy, the Company is required to include XBRL tagging with its financial statements for the fiscal period ending December 31, 2017. Until we do so, readers will not have the benefit of XBRL tagging when reviewing our financial statements.

As a “foreign private issuer” we are not subject to certain requirements that other NASDAQ listed issuers are required to comply with, some of which are designed to provide information to and protect investors.

Our common shares are currently listed on the NASDAQ Capital Market and, for so long as our securities continue to be listed, we will remain subject to the rules and regulations established by NASDAQ applicable to listed companies. However, we have elected to claim certain exemptions afforded to foreign private issuers by relevant NASDAQ rules, and as a result:

·

a majority of the members on our Board of Directors are not independent as defined by NASDAQ rules;

·

our independent directors do not hold regularly scheduled meetings in executive session;

·

while executive compensation is recommended by our Compensation Committee which is comprised of independent directors, the compensation of our executive officers is notultimately determined by the Board of Directors rather than an independent committee of the board or by the independent members of the Board of Directors;

·

related party transactions are not required to be reviewed or approved by our audit committee or other independent body of the Board of Directors;

·

we are not required to solicit shareholder approval of stock plans, including those in which our officers or directors may participate; stock issuances that will result in a change in control; the issuance of our stock in related party acquisitions or other acquisitions in which we may issue 20% or more of our outstanding shares; or, below market issuances of 20% or more of our outstanding shares to any person; and

·

we are not required to hold an in-person annual meeting to elect directors and transact other business customarily conducted at an annual meeting.

Due to an exemption from NASDAQ rules applicable to “foreign private issuers,” our related party transactions may not receive the type of independent review process that other NASDAQ-listed companies receive, andreceive; the terms of these transactions are not negotiated at arms-length and may not be as favorable as could be obtained from unrelated parties.

We have historically engaged in a substantial number of transactions with related parties in the ordinary course of business,predominantly with our principal beneficial owner and former Chairman and Chief Executive Officer and/or companies that he owns or controls. These transactions are described in greater detail elsewhere in this Annual Report. In general, NASDAQ rules require that related party transactions be reviewed by an audit committee or other committee comprised of independent directors. However, under NASDAQ rules applicable to foreign private issuers such as our company, we are exempt from certain NASDAQ requirements, including the requirementrequirements applicable to independent director review of related party transactions. This exemption is available to us because the laws of the British Virgin Islands, our home jurisdiction, do not mandate independent review of related party transactions.

Notwithstanding the foregoing, non-recurring related party transactions (i.e., related party transactions that are not in the ordinary course of business) are submitted for approval by our Board of Directors, following disclosure of the related party’s interest in the transaction, and, in all cases, board approval has historically included the unanimous approval of our independent directors. In addition, our annual audited financial statements, including the related party transactions reported therein, are approved by our audit committee, which is comprised solely of independent directors. However, except to the limited extent described above, these transactions are not individually reviewed or approved solely by independent directors. While management believes that related party transactions are on terms at least as favorable to the Company as could be obtained from unrelated parties, there is no assurance that such is the case, or that shareholders would not be better protected if we were not exempt from, or we chose to voluntarily comply with, the NASDAQ rule.

Risks Related to our Common Shares

There are a limited number of our common shares in the public float and trading in our shares is not active; therefore, our common shares tend to experience price volatility.

There are currently approximately 9,448,397 of our common shares in the public float and, in general, there has not been an active trading market for our shares. Our shares tend to trade along with other shares of public companies whose operations are based in the People’s Republic of China, and, at times, in tandem with other natural resource companies. These shares tend to exhibit periods of extreme volatility and price fluctuations, even when there are no events peculiar to the Company that appear to warrant price changes. We cannot assure you that price volatility will not continue in the future or, as a result thereof, that market prices will reflect actual values of our company.

As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The share price could, for example, decline precipitously in the event that a large number of shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative new or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be in the case with the stock of a seasoned issuer.

Our principal beneficial owner and his affiliates control us through their stock ownership; and their interests may differ from other shareholders.

Mr. Li Feilie, beneficial owner of a majority of our outstanding common shares, beneficially owns approximately 59% of our outstanding common shares, and as a result, Mr. Li is and will continue to be able to influence the outcome of shareholder votes on various matters, including the election of directors and extraordinary corporate transactions such as business combinations. Through his related companies, Mr. Li also provides funding to support the Company’s operating expenses and holds a substantial amount of the Company’s debt (see Item 7.B. “MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions,” below). Mr. Li’s interests may differ from those of other shareholders. Additional information relating to the beneficial ownership of our securities is contained elsewhere in this Annual Report under Item 6.E. “Share Ownership”.“DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES – Share Ownership.”

The rights of our shareholders are governed by British Virgin IslandsBVI law, the provisions of which may not be as favorable to shareholders as under U.S. law.

Our directors have the power to take certain actions without shareholder approval, including an amendment of our Memorandum of Association or Articles of Association (unless such amendment varies the rights attached to shares) or an increase or reduction in our authorized capital, which would require shareholder approval under the laws of most jurisdictions in the United States. In addition, the directors of a British Virgin IslandsBVI company, subject in certain cases to court approval but without shareholder approval, may, among other things, implement a reorganization, certain mergers or consolidations with a subsidiary, the sale, transfer, exchange or disposition of any assets, property, part of the business, or securities of the company, or any combination (provided the assets do not represent more than 50% of the total assets of the company and the sale is not outside of the usual or ordinary course of the company’s business), if they determine it is in the best interests of the company. Our ability to amend our Memorandum of Association and Articles of Association without shareholder approval could have the effect of delaying, deterring or preventing a change in our control without any further action by the shareholders, including a tender offer to purchase our common shares at a premium over then current market prices.

The elimination of monetary liability against our directors, officers and employees under our articles of association and the existence of indemnification of our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

Our articles of association containscontain provisions which eliminate the liability of our directors for monetary damages to us and to our stockholders to the maximum extent permitted under the corporate laws of the British Virgin Islands.BVI. We may provide contractual indemnification obligations under agreements with our directors, officers and employees. These indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against directors, officers and employees for breach of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit us Company and our shareholders.

Risks Related to the Spin-Off

We face uncertainties with respect to the applicability of PRC withholding tax on the Distribution.

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises (‘‘SAT Circular 698’’) issued by the State Administration of Taxation (‘‘SAT’’) on December 10, 2009 with retroactive effect from January 1, 2008, if a non-PRC resident enterprise transfers its indirect equity interests in a PRC resident enterprise by disposing of its equity interests in an overseas holding company (‘‘Indirect Transfer’’), and such overseas holding company is located in a tax jurisdiction that has an effective tax rate of less than 12.5% or does not tax foreign income of its residents, the non-PRC resident enterprise, as the transferor, is required to report the Indirect Transfer to the relevant PRC tax authorities.

SAT issued an announcement in February 2015, i.e., the Notice of SAT on Several Issues Concerning the CITCorporate Income Tax on the Indirect Transfers of Properties by PRC Non-Residents or “Announcement 7,“Circular7,” which abolishes certain provisions in SAT Circular 698 as well as certain other rules providing clarification on Circular 698 and stipulates in greater detail how to evaluate the “reasonable commercial substance”.

Using a “substance over form” principle,substance.” Circular 7 provides comprehensive guidelines relating to, and also heightens the PRC tax authoritiesauthorities’ scrutiny over, indirect transfers by a non-resident enterprise of assets (including equity interest) of a PRC resident enterprise (“PRC Taxable Assets”). Pursuant to Circular 7, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non- PRC resident enterprise may disregard the existencebe re-characterized and treated as a direct transfer of the overseas holding companyPRC taxable assets, if it lackssuch arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC tax, in which case theenterprise income tax. As a result, gains derived from such “Indirect Transfer”indirect transfer may be subject to PRC enterprise income tax.

On October 17, 2017, SAT issued the Announcement on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at Source (the “Circular 37”), which was implemented on December 1, 2017.  Circular 37 replaced and supplemented certain previous provisions in Circular 7 and further reduced the burden of a withholding tax atobligator who is a ratenon-resident enterprise and transfers PRC taxable assets indirectly by disposing of up to 10%. SAT Circular 698 also provides that, if a non-PRC resident enterprise transfers its equity interests in an overseas holding company directly or indirectly holding such PRC taxable assets, such as revocation of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax authorities in different places, and clarifies the calculation of tax payable and mechanism of foreign exchange. Pursuant to Circular 37, where the income on which enterprise income tax shall be withheld at source as obtained by a PRC residentnon-resident enterprise to its related parties at a price lower thanare dividends, bonuses or other income from equity investments, the fair market value,date when the obligation of withholding the relevant PRC tax authorities havepayable taxes occurs shall be the authority to make reasonable adjustments to the taxable incomedate of the transaction.actual payment of the dividends, bonuses or income from other equity investments.

ThereIt remains uncertain whether any of our transactions involving PRC taxable assets outside of the PRC will be reclassified by applying Circular 7 and Circular 37. If any of our transactions involving PRC taxable assets outside of the PRC constitutes an indirect transfer of the PRC taxable assets and is uncertainty assubject to the applicationenterprise income tax obligation under Circular 7 and Circular 37, the amount of SAT Circular 698 and Announcement 7. For example, while the term “Indirect Transfer” is not clearly defined, it is understood thatenterprise income tax shall be calculated based on the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having no direct contact with the PRC. As a result, there is a risk that the PRC tax authorities would regard the Distribution as an “Indirect Transfer” by CHNR of our PRC subsidiaries to CHNR’s shareholders subject to SAT Circular 698. If SAT Circular 698 were determined to be applicable to the Distribution by the PRC tax authorities, CHNR could be required to withhold taxes at a rate of up to 10% on any gains derived“ income from the Distribution, which may be deemed as thetransfer” (the difference between the fair valueconsideration for transfer and costs of our ordinary shares atequity interests) and applicable tax rate (a withholding tax rate of 10% shall be applicable, unless otherwise provided in the timerelevant tax treaty). However, as Circular 7 and Circular 37 became effective in February 2015 and December 2017, respectively, after completion of the DistributionSpin-Off, and CHNR’s tax basis in our ordinary shares.are not retrospective, we believe the risk is remote.

It is not possible to foresee all risks that may affect us. Moreover, we cannot predict whether we will successfully effectuate our current business plan. Each prospective purchaser is encouraged to carefully analyze the risks and merits of an investment in the shares and should take into consideration when making such analysis, among others, the Risk Factors discussed above.

ITEM 4.

INFORMATION ON THE COMPANY

A.

History and Development of the Company

From Inception Until 2006

China Resources was incorporated as Magenta Corp. on January 15, 1986, in the State of Nevada. China Resources had no operating business until control of it was acquired in December 1994, by the former shareholders of CHNR, who exchanged all of the issued and outstanding shares of capital stock of CHNR for 108,000 shares of China Resources' common stock. As a result of the acquisition, the former shareholders of CHNR acquired 90% of the then issued and outstanding shares of common stock of China Resources, and CHNR became a wholly ownedwholly-owned subsidiary of China Resources. CHNR was incorporated in the British Virgin IslandsBVI on December 14, 1993.

On December 9, 2004, China Resources merged with and into CHNR (the “Redomicile Merger”). The Redomicile Merger was consummated through an exchange of shares of China Resources for shares of CHNR on a one-for-one basis. As a result of the Redomicile Merger, the Company became domiciled in the British Virgin IslandsBVI and CHNR succeeded to the rights and obligations of China Resources under its existing agreements and relationships. Prior to the Redomicile Merger, the Company’s common shares were traded on the NASDAQ Capital Market under the symbol “CHRB”.“CHRB.” Following the Redomicile Merger, the trading symbol was changed to “CHNR”.

Until 2006, the Company has sought, acquired and operated various business opportunities that management believed could be operated profitably. From 2003 until 2006, the Company operated an advertising, promotion and public relations business, which was disposed of in July 2006.“CHNR.”

Reverse Acquisition of Feishang Mining

On February 3, 2006, the Company consummated the Acquisition of all of the issued and outstanding capital stock of Feishang Mining. Feishang Mining beneficially owns 100% of the capital stock of Wuhu Feishang, a company established under the laws of the PRC, which is principally engaged in the mining of zinc, iron and other minerals for distribution in the PRC. We acquired the capital stock of Feishang Mining from Feishang Group, Limited (“a BVI company. Feishang Group”), a British Virgin Islands company.Group is ultimately controlled by its sole beneficial owner, Mr. Li Feilie, our principal beneficial owner and our former Chief Executive Officer and Chairman, is the sole beneficial owner of Feishang Group.Chairman. In consideration for our receipt of the shares of Feishang Mining, the Company issued 9,980,593 of its common shares to Feishang Group, representing approximately 86.4% of the Company’s then issued and outstanding common shares (after giving effect to the exchange of 320,000 outstanding preferred shares for 320,000 common shares), and issued to Feishang Group warrants (the “Warrants”) to purchase an additional 4,500,000 common shares. Ching Lung Po, director, Chief Executive Officer and Chairman of the Company resigned at the closing of the Acquisition, and Mr. Li Feilie, Chairman of Feishang Mining, was appointed as director, Chief Executive Officer and Chairman of the Company. The Company’s other directors and executive officers were not changed as a result of the Acquisition.

The Warrants entitled the holder to purchase: 2,000,000 common shares at an exercise price of $4.00 per share for a period of two years from the closing date; 1,500,000 common shares at an exercise price of $4.50 per share for a period of three years from the closing date; and 1,000,000 shares at an exercise price of $5.00 per share for a period of four years from the closing date. The Warrants were fully exercised by Feishang Group, our principal shareholder, and the Company received gross proceeds of US$8,000,000, US$6,750,000 and US$5,000,000 in connection therewith during the years ended December 31, 2008, 2009 and 2010, respectively.

Non-ferrous Metal Exploration and Mining; Coal Mining and Production; Copper Smelting; and Other Activities

At various times during the period from February 2006 until Marchthrough December 2017, we:

·

Owned and operated a copper smelting plant located in Western Bolivia. We conducted our copper smelting operations through Double Grow and its direct and indirect subsidiaries, including Antay Pacha. On December 29, 2017, we sold our interest in Double Grow and its subsidiaries to an unrelated third party (see “DISCONTINUED SEGMENT – Copper Smelting Operations,” below).

·

Engaged in the exploration, mineral extraction, processing and sales of iron, zinc and other non-ferrous metals extracted or produced at mines primarily located in Anhui Province in the PRC, as well as our operation of related businesses. On December 27, 2015, we temporarily suspended ourmetals mining operations due to the low market price for non-ferrous metals and because we had substantially depleted minable ore at Yangchong Mine, our sole operating mine.In March 2016, we engaged a geological firm to conduct geological surveys to determine the viability of further mining at or near Yangchong Mine. However, we We sold our non-ferrous mining operations to an unrelated third party in March 2017 after concluding that current market prices for non-ferrous metals, and the related costs of extraction and processing, did not permit us to engage in profitable mining operations.warrant continued operations at Yangchong Mine (see “DISCONTINUED SEGMENT – Exploration and Mining of Non-ferrous Metals,” below).

·

Engaged in the mining and production of anthracite coal at mines located in Guizhou Province in the PRC. We conducted these activities through our indirect wholly-owned subsidiary, Feishang Anthracite. We disposed of our coal mining and related businesses in connection with the January 2014 Spin-Off and listing on the Main Board of the Hong Kong Stock Exchange of the shares of Feishang Anthracite.Anthracite(see “DISCONTINUED SEGMENT - Coal-Mining and Related Businesses,” below).

·

Engaged in copper smelting operations through our subsidiary Mark Faith Technologies, Inc.Technology Development Limited in Inner Mongolia. We sold our copper smelting operations to an unrelated third party in September 2009.

Metals

Exploration Activities in Inner Mongolia

The Board of Directors has determined to focus the Company’s resources on metals explorations and mining operations included the exploration for, and extraction, production and sale of, non-ferrous metals. Our metal mining operations were conducted by Wuhu Feishang, a PRC company that was wholly-owned by Feishang Mining. Wuhu Feishang is principally engaged in the mining of zinc, iron,activities and other minerals and non-ferrous metals, and their salebusiness opportunities in the PRC. On February 24, 2017, Feishang Mining together with Wuhu City Feishang Industrial Development Co., Ltd., as nomineeWe are currently exploring for Feishang Mining (collectively “Sellers”), entered into an agreement (the “Purchase Agreement”) with Mr. Shen Yandi, an unrelated individual (“Purchaser”), pursuant to which Sellers soldlead, silver and Purchaser purchased, all of Sellers’ right, title and interestother metals in and to the outstanding capital stock (the “Equity Interests”) of Wuhu Feishang.

The CNY1.00 million (US$0.14 million) purchase price for the Equity Interests was delivered to Sellers, and Sellers delivered the Equity Interests to Purchaser, at a closing held on March 3, 2017, following receipt of regulatory approval for transferInner Mongolia Autonomous Region of the Equity Interests to Purchaser. Pursuant to the Purchase Agreement:PRC.

·

Wuhu Feishang remains responsible for all of its liabilities and financial obligations other than those expressly undertaken by Sellers.

·

Sellers established a joint bank account and Purchaser contributed CNY3.00 million (US$0.43 million) into the account as an earnest money deposit. The account will also include funds to be deposited by Wuhu Feishang to fund certain of Wuhu Feishang’s on-going financial obligations under the Purchase Agreement. The funds in the account will be disbursed with the approval of Sellers, upon the attainment of milestones and in the manner described in the Purchase Agreement.

·

The parties allocated responsibility for certain on-going negotiations and settlements with employees and various townspeople affected by Wuhu Feishang’s mining operations; as well as for certain on-going litigation.

·

Purchaser and Wuhu Feishang are prohibited from using the name “Feishang” in their operations.

·

A schedule of penalties is established to compensate a party for the other party’s breach of the terms of the Purchase Agreement. In some cases, penalties are in addition to indemnification and/or performance obligations of a breaching party.

The foregoing description of the Purchase Agreement is only a summary and is qualified in its entirety by reference to the Purchase Agreement, a copy of which has been translated into English and incorporated by reference as Exhibit 4.14 to this Annual Report.

Bolivian Copper Smelting Operations

On December 23, 2016, the Company entered into an agreement with Feishang Hesheng, a related party, and completed the acquisition ofNovember 2017, we acquired all of the issued and outstanding capital stock (the “Acquired Shares”) of Double Grow, its directBayannaoer Mining for a purchase price of CNY716,900. Bayannaoer Mining holds an exploration permit issued by the Land and indirect subsidiaries Easy GainResources Department of Inner Mongolia Autonomous Region covering Moruogu Tong Mine, located in Wulatehouqi, Bayannaoer City, Inner Mongolia. The exploration permit evidences Bayannaoer Mining’s right to explore for minerals at Moruogu Tong Mine (see “BUSINESS SEGMENT – Metal Exploration Activities in Inner Mongolia,” below). Initial results of the exploration program indicate the presence of a “mid-size” deposit of lead and Full Profit, each ofsilver ore and resources sufficient in quantity and quality to warrant further exploration, which is organized under the laws of the British Virgin Islands,designed to confirm and their operating subsidiary, Antay Pacha.

The US$1,541,129 purchase priceincrease measured resources, and identify other minable metal resources such as copper. We anticipate that our working capital and capital expenditures for the Acquired Shares includes the assumption of US$1,441,129 of indebtedness owed by Double Grow to Feishang Hesheng (the “Loan”). The Company paid the purchase price by delivery of its checkour exploration activities will be funded through internally generated cash in favor of Feishang Hesheng in the amount of US$100,000,prior years, non-interest bearing loans from related parties, and is required under the agreement to assume Double Grow’s obligation to repay the Loan. In consideration of the Company’s assumption of the Loan, Feishang Hesheng delivered its Deed of Assignment of the Loan in favor of the Company.

The foregoing description of the agreement with Feishang Hesheng is only a summary and is qualified in its entirety by referencefunds provided pursuant to the entire agreement, a copy of which has been translated into English and incorporated by reference as Exhibit 4.12 to this Annual Report.Cooperation Agreement.

Antay Pacha has constructed a copper smelting facility in Uyuni City, Potosi Province, in Western Bolivia. Plant construction is nearing completion and it is anticipated that trial production will commence during the third quarter of 2017 and that commercial production will commence during the fourth quarter of 2017. It is expected that, at full capacity, the plant will produce approximately 3,000 tonnes of copper cathodes annually. Antay Pacha intends to sell its production of copper cathodes to customers located primarily in Bolivia, Germany and the PRC.

Feishang Hesheng is beneficially owned by Mr. Li Feilie, the principal beneficial owner of the Company, and members of his family. Mr. Li is also the former Chief Executive Officer and Chairman of the Company. Mr. Wong Wah On Edward, currently the Chief Executive Officer and Chairman of the Company, is also the Company Secretary of Feishang Hesheng.

Other Matters

On December 31, 2013, the Board of Directors approved a conditional special interim dividend to the shareholders of CHNR satisfied by way of a distributionDuring 2018, we invested CNY5.00 thousand (US$0.73 thousand) in specie of the entire issued share capital of Feishang Anthracite to all shareholders of CHNR in proportion to their respective shareholdings in CHNR on the Distribution Record Date. The Distribution became unconditional upon successful listing by way of introduction on the Main Board of the Hong Kong Stock Exchange of Feishang Anthracite on January 22, 2014.expenditures.

The Company has not been a party to any bankruptcy, receivership or similar proceedings, trade suspensions or cease trade orders by any regulatory authority.

The Company’s executive offices are located at Room 2205, 22/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong, telephone +852 28107205. The Company does not currently maintain an agent in the United States.

The SEC maintains an Internet website that contains reports, information statements and other documents that we furnish to or file with the SEC. Those documents may be viewed, downloaded and/or printed. The address of the SEC website ishttp://sec.gov.

We maintain a company website athttp://www.chnr.net. The information on our website is not a part of this report.

B.

Business Overview

From February 2006 until March 2017, we engagedBUSINESS SEGMENT – Metal Exploration Activities in the exploration, mineral extraction, processing and salesInner Mongolia

Acquisition of iron, zinc and other non-ferrous metals extracted or produced at mines primarily located in Anhui Province in the PRC, as well as our operation of related businesses. We conducted these activities through our indirect wholly-owned subsidiary, Wuhu Feishang. Wuhu Feishang holds mining rights to mine, process and sell non-ferrous metals extracted or produced at Yangchong Mine located in Anhui Province in the PRC. Historically, we extracted or produced iron, zinc, micaceous oxide and sulphur concentrates at Yangchong Mine.Bayannaoer Mining

On December 27, 2015, we temporarily suspended our metals mining operations dueNovember 30, 2017, CHNR’s subsidiary Yangpu Shuanghu entered into separate agreements with Feishang Enterprise and Shenzhen Chaopeng Investment Co., Ltd. (“Shenzhen Chaopeng”), each of which is a related party. Pursuant to the low marketagreement with Feishang Enterprise (the “Feishang Enterprise Agreement”), the Company consummated its acquisition of approximately 98.32% of the issued and outstanding capital shares of Bayannaoer Mining. Pursuant to the agreement with Shenzhen Chaopeng (together with the Feishang Enterprise Agreement, the “Acquisition Agreements”), the Company consummated its acquisition of approximately 1.68% of the issued and outstanding capital shares of Bayannaoer Mining. The Acquisition Agreements are identical to each other except as to the name of seller, the amount of consideration and similar information.

The purchase price for non-ferrous metals and because we had substantially depleted minable ore at Yangchong Mine.In March 2016, we engaged a geological firm to conduct geological surveys to determine the viability of further mining at or near our current mine.However, we sold our non-ferrous mining operations to an unrelated third party in March 2017 after concluding that current market prices for non-ferrous metals did not permit us to engage in profitable mining operations.On March 3, 2017, Sellers and Purchaser consummated the transactions contemplated by the February 24, 2017 Purchase Agreement, and Sellers sold, and Purchaser purchased, all of Sellers’ right, title and interest in and to the Equity Interests of Wuhu Feishang. Wuhu Feishang was a wholly-owned subsidiary of Feishang Mining.

On December 23, 2016, we acquired all of the issued and outstanding capital stockshares of Double Grow,Bayannaoer Mining (the “BM Acquired Shares”) is CNY716,900, which is approximately equal to the net asset value of Bayannaoer Mining as of September 30, 2017. The purchase price was paid by delivery to Feishang Enterprise and Shenzhen Chaopeng of Yangpu Shuanghu’s several promissory notes (the “Notes”) in the aggregate principal amount of CNY716,900, payable without interest. The Notes were paid in December 2017.

The Acquisition Agreements contain customary representations, warranties and covenants covering such matters as ownership of the BM Acquired Shares by the sellers free and clear of all liens, charges and encumbrances and due authorization, execution and enforceability of the Acquisition Agreements, as well as covering the historical operations of Bayannaoer Mining, including without limitation, its directorganization, capitalization, financial condition, tax payments and indirect subsidiaries Easy Gaincompliance with applicable laws, rules and Full Profit,regulations. The Acquisition Agreements also contain indemnification provisions in favor of the Company in the event of breaches of the sellers’ representations, warranties and their Bolivian operating subsidiary, Antay Pacha. Antay Pacha has constructed a copper smelting facilitycovenants.

Bayannaoer Mining holds an exploration permit issued by the Land and Resources Department of Inner Mongolia Autonomous Region covering Moruogu Tong Mine, located in UyuniWulatehouqi, Bayannaoer City, Potosi Province, in Western Bolivia. Plant construction is nearing completion andInner Mongolia. Based upon preliminary geologic surveys, it is anticipatedbelieved that trial production will commence duringMoruogu Tong Mine contains minable amounts of lead and silver resources, with the third quarterprospect that further surveying and exploration may indicate the presence of 2017other minable ore such as copper.

Feishang Enterprise and that commercial production will commence duringShenzhen Chaopeng are each beneficially owned by Mr. Li Feilie, the fourth quarterprincipal beneficial owner of 2017.It is expected that, at full capacity, the plant will produce approximately 3,000 tonnesCompany, and members of copper cathodes annually. Antay Pacha intends to sell its production of copper cathodes to customers located primarily in Bolivia, Germany and the PRC.

Managementhis family. Mr. Li is also exploring new businesses opportunitiesthe former Chief Executive Officer and Chairman of the Company and currently serves as an executive officer and director of certain subsidiaries of the Company (see Item 7.B. “MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS – Related Party Transactions,” below). Wong Wah On Edward, the Chief Executive Officer and Chairman of the Company, and Bonaventure Yue, the Company’s Chief Financial Officer and a Director, are each also executive officers of Feishang Enterprise and/or certain of its affiliates.

The foregoing description of the Acquisition Agreements is only a summary and is qualified in its entirety by reference to contributethe Acquisition Agreements, copies of which have been translated into English and incorporated by reference as Exhibits 4.16 and 4.17, respectively, to revenuesthis Annual Report.

Lead and enhance shareholder values.

BUSINESS SEGMENT – Copper Smelting Operations

Our copper smelting operations are conducted by Antay Pacha, a Bolivian corporation which is owned 60% by Full Profit, 20% by Easy Gain and 20% by Double Grow.

CopperSilver Industry and Market

CopperLead (chemical element symbol Cu)Pb) is a supple and ductile heavy metal with excellent electricity conductivity andthat is rather supple indenser than most common materials. In its pure state, and haslead is bluish-white; it tarnishes to a pinkish luster.dull gray color when exposed to air. It is primarilyextensively used as a heat conductor, an electrical conductor, a building material,in construction, plumbing, batteries, bullets and a constituent of various metal alloys. Copper’sshot, weights, solders, pewters, fusible alloys, white paints, leaded gasoline, and radiation shielding. Lead's properties of high electricaldensity, low melting point, ductility and thermal conductivity, together with good workability,relative inertness to oxidation allow it to be used in a wide range of applications, of which wire and cable and other electrical uses in lead-acid batteries are by far the most prevalent. The primary uses of copper arereactions in the buildingbattery between lead, lead dioxide, and construction industry, electricalsulfuric acid provide a reliable source of voltage. Despite having lower energy density and electronic productscharge-discharge efficiency than lithium-ion batteries, lead-acid batteries have stable electromotive force when discharging and steady working voltage, while being significantly cheaper. These properties and their ability to supply high surge currents and operate under a lesser extent, industrial machinery and equipment, consumer and general products and transportation.wide range of temperatures make them by far irreplaceable in the automobile industry.

Copper

Lead is an internationally traded commodity, the price of which is effectively established on commodity markets throughout the world. Copper price has been under pressureDuring 2018, world lead production output increased steadily, especially in recent years due to the slow recoverysecond half of global economy. In 2016, copper price remained volatile at low levelsthe year, but lead was still in short supply globally for most of the 2016 year,year. In China, lead imports have surged since 2017 and remained high during 2018. Due to the global economy upturn, lead prices have increased rapidly since mid-2016. During 2018, lead prices remained volatile at relatively high levels, but hadgenerally followed a slight rebound in the last two months of 2016, anddecreasing trend. It reached an annual high of CNY48,405CNY20,810 (US$6,970)3,025) per tonne on November 28, 2016.in June 2018 before it started to decline. The closing price at the end of 20162018 was CNY44,940CNY18,050 (US$6,471)2,624) per tonne, representing an increasea decrease of 24%approximately 6% compared with the opening price at the beginning of the year.

The following table shows the world refined production and world refined usage of copperlead over the past five years:

———————

Source: ICSG andILZSG, LME, SHFE, Wind Economic Database.

Copper Smelting

Silver (chemical element symbol Ag) is a soft, ductile, and malleable metal with the highest electrical conductivity, thermal conductivity and reflectivity of any metal. It has a brilliant white metallic luster that can take a high polish and has similar physical and chemical properties with copper and gold. Most silver is produced as a byproduct during refining of copper, gold, lead, or zinc. Despite being more abundant than gold, silver has long been valued as a precious metal and used in currency and as an investment medium (bullion coins) alongside gold. It is also used in jewelry, silverware, medicine, electronics, brazing alloys, chemical equipment, catalysis, and photography, etc.

Silver is an internationally traded commodity, the price of which is effectively established on commodity markets throughout the world. Before 2018, silver was in short supply globally, but excess supply occurred in 2018 due to sluggish industrial demand and a slowing global economy. Silver prices have been declining since 2011. Although a slight rebound occurred in 2016, the downward trend continued in the second half of 2016. During 2018, silver prices remained volatile at relatively low levels and generally followed a decreasing trend. It reached an annual high of CNY3,939 (US$573) per kg in January 2018 before it started to decline. The closing price at the end of 2018 was CNY3,700 (US$538) per kg, representing a decrease of approximately 5% compared with the opening price at the beginning of the year.

The following table shows the world refined production and world refined usage of silver over the past five years:

———————

Source:COMEX, SHFE, Wind Economic Database.

Metal Exploration Activities

Overview of Antay PachaBayannaoer Mining

Antay Pacha’s principal activity will beBayannaoer Mining was established in 2005 to produce copper cathodes from copper ores by smelting, for distributionengage in Bolivia and foreign markets. The office and the copper smelting plant of Antay Pacha aremineral exploration activities in Bayannaoer City, located in Uyuni City, Potosi Province, in Western Bolivia. Antay Pacha’s offices, processing facilities and warehouses cover a total gross areathe Inner Mongolia Autonomous Region of the PRC. The registered capital of Bayannaoer Mining is CNY59.48 million, approximately 40,000 square meters. The land98.32% of which was leased from the local Bolivian government for a term of 12 years commencing May 2015, with monthly lease payments of BOB16,400 (US$2,366).

Antay Pacha plans to export its products via ports in Chile along the Pacific Ocean; or transports overland by truck from Antay Pacha to ports in neighboring countries and then by sea to designated destinations. In this way, Antay Pacha hopes to effectively control its transportation costs.

The plant proposes to process copper through a hydrometallurgy process whereby water is used in grinding, stirring and washing of oxide cooper ore and extraction of copper from copper sulfate solution, with daily consumption of 30 to 40 tonnes of water. Areas surrounding Antay Pacha contain substantial amounts of precious and commercially prized metals including copper and lithium; and it is anticipated that Antay Pacha will purchase copper ore from copper mines in surrounding areas, potentially including a copper mine owned and operatedcontributed by Feishang Hesheng.

The final product of the smelting process is copper cathode, which is a form of copper that has a purity of 99.95%.  The major uses of copper cathodes are in the manufacture of copper rods for the wireEnterprise and cable industry and copper tubes for consumer durable goods.  Copper cathodes are also used for the production of alloys such as brass, bronze and alloy steel, with applications in transportation, electrical appliances and machinery and construction. The potential market for copper cathodes is large, and includes demand from the electrical appliances industry, the power transmission industry, light industries, machinery manufacturers, the electronics industry and other downstream industries.

approximately 1.68% by Shenzhen Chaopeng.

In 2005, Bayannaoer Mining obtained 11 exploration rights from the Land and Resources Department of Inner Mongolia Autonomous Region. Following completion of preliminary exploration activities and evaluation, management determined to retain exploration rights solely to Moruogu Tong Mine; and, to date, has received a series of license renewals. Total exploration expenses (other than non-current assets and administrative expense) incurred to date amount to approximately CNY35.50 million. The current exploration permit for Moruogu Tong Mine runs from September 14, 2017 to September 13, 2019 and covers a site area of 10.43 square kilometers.

Moruogu Tong Mine islocated in Wulatehouqi, Bayannaoer City, in the Inner Mongolia Autonomous Region of the PRC. In 2006, Bayannaoer Mining engaged the Land and Resources Exploration and Development Institute of Inner Mongolia to carry out prospecting, including geophysical and drilling works; and, to date, has incurred exploration expenses of approximately CNY16.70 million, which were paid from internal funds. To date, the exploration program at Moruogu Tong Mine primarily involved the completion of mine geological surveying and mapping at 1:2000 covering an area of 2.73 square kilometers, which included trenching exploration works totaling 982.94 cubic meters in nine trenches and 76 drill holes for a total of 22,272.86 meters. 1,467 different samples, including basic analysis samples, chemical analysis samples, spectra samples and aqueous analysis samples, etc., were collected during the exploration program.

Initial results of the exploration program indicate the presence of a “mid-size” deposit of lead and silver ore and resources sufficient in quantity and quality to warrant further exploration designed to confirm and increase measured resources, with the prospect of identifying other minable metal resources such as copper. Further exploration is subject to negotiation with Jijincheng Mining (based on a number of factors including, inter alia, the economic, geological and technical viability of mining) as to whether to continue exploration of potential copper resources in 2019. Thereafter, a final appraisal and application for mining rights will be scheduled.

The future budgeted amount for the exploration project, including drilling expenses, site construction costs, grassland compensation fees and simple infrastructure construction costs, is anticipated to be approximately CNY11.40 million. This project is expected to be financed by bank borrowings, funds received pursuant to the Cooperation Agreement, and loans from a related party. While the results of preliminary prospecting suggest that Moruogu Tong Mine contains mineable quantities of lead and silver, until further exploration and analysis is completed, the Company cannot predict the nature and extent of minerals contained at the mine or the commercial viability of pursuing a plan of extraction. It is possible that further exploration and analysis will not confirm initial findings and that continued activities in furtherance of mining operations will cease.

Metallurgical ProcessMutual Cooperation Agreement

On August 20, 2017, Bayannaoer Mining entered into the Cooperation Agreement with Jijincheng Mining, an unrelated third party. The Cooperation Agreement is intended to provide for financial support by Jijincheng Mining for the operating expenses of Moruogu Tong Mine during the exploration stage, and the allocation of rights and responsibilities between Bayannaoer Mining and Jijincheng Mining. Pursuant to the Cooperation Agreement: (i) Bayannaoer Mining contributed the existing exploration results for Moruogu Tong Mine; (ii) Jijincheng Mining provides the necessary funds for further exploration at the mine; (iii) Bayannaoer Mining enjoys full rights to any resources already discovered and confirmed by its independent exploration works conducted prior to commencement of the cooperative exploration project; (iv) Bayannaoer Mining and Jijincheng Mining will each receive a 50% interest in any newly discovered resources from the first 10 drilling holes in the cooperative exploration project; and (v) Bayannaoer Mining and Jijincheng Mining will receive 30% and 70% interests, respectively, in any newly discovered resources from drilling works beyond the first 10 drilling holes in the cooperative exploration project. Other details of the Cooperation Agreement, including allocations and distributions upon completion of exploration works, remain the subject of continuing discussion between the parties. To date, total exploration expenses paid by Jijincheng Mining amount to approximately CNY6.70 million.

The metallurgical processforegoing description of copper smeltingthe Cooperation Agreement is shown below:

only a summary and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which has been translated into English and incorporated by reference as Exhibit 4.21 to this Annual Report.

Geography

The following diagrams showdiagram shows the geography of Antay Pacha’s copper smelting plantBayannaoer Mining’s exploration site and its surrounding areas:

Raw materials

Copper oresMoruogu Tong Mine of Bayannaoer Mining is located in Wulatehouqi, Bayannaoer City, in the Inner Mongolia Autonomous Region of the PRC. The mine is approximately 45 kilometers to Chaogewenduer Town and sulfuric acid are two essential raw materials for Antay Pacha’s smelting operation. Copper ores are generally purchased from local copper mines in surrounding areas, which include Empressa Minera Jacha Uru S.A. (“Jacha Uru”), a copper40 kilometers to Qingshan Town. The Qingxian Road passes through the southern part of the mine owned and operated by Feishang Hesheng, a related party. To ensure stable supply of copper ores, Antay Pacha has entered into a long-term supply agreement withCooperative Minera Estrella del Sur Ltda., a copper mine with a monthly supply capacity of 1500 ~ 2000 tonnes’ of copper ores.

Antay Pacha has also entered into a strategic co-operation agreement with a local copper mine, Minera DCH S.R.L. (“DCH”),transportation is very convenient. Connectivity to provide technicalwater, electric and operational support for extracting DCH’s copper ores, whichother necessary services will be sold exclusivelyaddressed at the time of mine construction and development. The current exploration permit for Moruogu Tong Mine runs from September 14, 2017 to Antay Pacha as required by the agreement.

Sulfuric acid is currently purchased from Chile through Bolivia’s import traders becauseSeptember 13, 2019 and covers a site area of significant price difference between Chile and Bolivia. In the event Bolivia tightens its import control over sulfuric acid, Antay Pacha will reevaluate purchasing sulfuric acid from local producers.

Suppliers

For the years ended December 31, 2015 and 2016, the largest five suppliers accounted for 99% and 100% of Antay Pacha’s purchases, respectively. For the years ended December 31, 2015 and 2016, the largest supplier accounted for 48% and 60% of Antay Pacha’s purchases, respectively. For the year ended December 31, 2015 and 2016,Jacha Uru was the largest supplier of copper ore to Antay Pacha.

Customers

Antay Pacha is not currently a party to any agreements relating to disposition of its output of copper cathodes, but plans to sell its copper products primarily to copper downstream processing manufacturers in China and Germany, and to copper traders in Bolivia.10.43 square kilometers.

Competition

Antay Pacha has three major competitors in Bolivia which are also engaged in the production and sale of copper cathodes. Inasmuch as the majority of Antay Pacha’s copper products are expected to be sold to foreign markets such as China and Germany, and the total output quantity of Bolivia’s copper only constitutes a small portion of world copper production, the Company believes that its competitors will not pose a significant threat to Antay Pacha’s copper sales.

Government Regulation of Copper SmeltingMineral Exploration Activities

Antay Pacha isUnder the “Mineral Resources Law,” all mineral resources in the PRC are owned by the State. Exploration and mining rights granted by the State permit recipients to conduct exploration or mining activities in a specific mining area during the specified license period. AlthoughBayannaoer Mining believes its exploration licenses will continue to be subjectrenewed, as necessary, there can be no assurance that such will be the case or that Bayannaoer Mining will be able to obtain a mining license in the future and exploit the entire mineral resources of Moruogu Tong Mine during its license period. If Bayannaoer Mining fails to renew its exploration rights upon expiry or if it cannot obtain a mining license and effectively extract the resources within the license period, the operation and performance of Bayannaoer Mining will be regulatedadversely affected.

Bayannaoer Mining’s exploration permit entitles it to undertake exploration activities in various aspects of its operations by a variety ofcompliance with applicable laws rules and regulations, administeredwithin the specific area covered by the nationallicense during the license period. Bayannaoer Mining is required to complete a prospecting report and local governments.

Mininga final appraisal and Metallurgy Regulationsfile with the relevant government authority before it can apply for mining rights and proceed to mine construction. A mining rights permit entitles the holder to undertake mining activities and infrastructure and ancillary work, in compliance with applicable laws and regulations, within the specific area covered by the license during the license period. Holders are required to submit a mining proposal and feasibility studies to the Land and Resources Department of Inner Mongolia Autonomous Region. Entities seeking mining rights are also obligated to pay natural resources fees and resources compensation fees in relation to sales of metal concentrates.

The Ministry of Mining and Metallurgy of BoliviaState Administration for Environmental Protection is responsible for the administrativesupervision of environmental protection in, the implementation of national standards for environmental quality and discharge of pollutants for, and the supervision of the environmental management system of Bolivia’s mining industry, including the formulation, execution, evaluation and monitoring of policies regarding minerals and metals’ exploration, extraction, sieving, smelting and refining, trading, and industrialization. PRC. Environmental protection bureaus at the county level or above are responsible for environmental protection within their jurisdictions.

The smelting activities of Antay Pacha will be subject to ruleslaws and regulations promulgated by the Ministry of Mining and Metallurgy.

The Mining Administrative Jurisdictional Authority is an affiliate of the Ministry of Mining and Metallurgy. Pursuant to Bolivia’s No. 535 Mining Law promulgated on May 28, 2014, activities in connection with concentration, smelting and refining are required to obtain a business permit granted by the Mining Administrative Jurisdictional Authority. Business permits are subject to suspension or withdrawal if the business is found to have violated other laws, rules and regulations to which the business is subject.

Environmental Laws

The principal laws governing Bolivia’s environmental protection are Law No. 1333 - therequire each applicant to lodge environmental law promulgated on April 27, 1992, and Law No. 1700 - the forest law promulgated on 1996. Bolivia’s environmental laws are administered by the Ministry of Environment and Water and its subsidiaries.

An environmental license from the Ministry of Environment and Water and the Autonomous Municipal Government of Uyuni isimpact statements for a prerequisite for obtaining a business permit. Penalties for breachingconstruction project with the environmental protection laws include rectification withinbureaus at the county level. These statements must be filed prior to the commencement of construction, expansion or modification of a limited timeframe,project. The environmental protection bureaus inspect new production facilities and determine compliance with applicable environmental standards, prior to the commencement of operations.

The “Environmental Protection Law” requires all operations that may cause pollution or suspension of productionproduce other hazards to take environmental protection measures and other business activities if surrounding environments were seriously damaged.

Supreme Decree No. 24176 requiresto establish an environmental protection responsibility system. Such system includes the adoption of effective measures to prevent and control exhaust gas, sewage, waste residues, dust or other waste materials. Entities discharging pollutants must report detailingto and register with the activity, contructionEcology and project (Actividad, Obra y Projecto, “AOP”)Environment Department of Inner Mongolia Autonomous Region.

If an enterprise fails to report or register the environmental pollution caused by it, it is subject to receiving a warning or penalty. Enterprises which fail to restore the environment or remedy the effects of the company be submittedpollution within the prescribed time are also subject to penalty or termination of their business licenses. Enterprises which have polluted and endangered the environment are responsible for approvalremedying the danger and effects of the pollution, as well as for the payment of compensation for any losses or damages suffered as a result of such environmental license.

Regulation of Controlled Substances

The purchase, usage and preservation of dangerous substances, including sulfuric acid, hydrochloric acid and nitric acid, are governed by Bolivia’s Controlled Substances Institution, which is a subsidiarypollution. A material violation of the Ministry of Government. Applicable regulations require the filing of forms respecting the ownershipEnvironmental Protection Law that causes a material loss to public and use of controlled substances, and the failure to timely submit required reports,private belongings or safety accident occurred during the time of preservation and use, could result in the imposition of a fine, with the prospect of economic sanctionspersonal injuries or criminal responsibilities in case of serious violations.

Labor Laws

Pursuant to the Labor Law promulgated on May 24, 1939 and later amended in 1992, employers are subject to employee’s rights in contract signing, working condition, remuneration, work safety, occupational risk and compulsory medical and social insurance. Violation of the Labor Law may lead to avoidance of employment contract, compensation to employees, and fines imposed by labor authorities. When there is conflict between the employer company and the trade union or employee, and the mediation committee or the arbitral tribunal fails to reach a mediation agreement or arbitration, the trade union may declare a strike that could lead to the shutdown of the employer company and in the case of conflict with a worker, fines may be incurred. The Labor Law is administered by the Ministry of Labor Employment and Social Security and Jurisdictional Activity.

Autonomous Municipal Government of Uyuni

Industrial and residential land of Antay Pacha’s smelting plant requires approval from the Autonomous Municipal Government of Uyuni, and operations are limited to the approved purposes. Pursuant to the Autonomous Municipal Government Law No. 482 promulgated on January 9, 2014, violation of land use rulesdeath may result in fines, and the person responsible and the legal entity may bear criminal responsibilities in case of serious violations.

Other Regulations

The business activities of Antay Pacha must also comply with Bolivia’s business laws, customs laws and associated implementation rules. Any violation of those laws and rules may lead to fines or criminal sanctions.

liabilities.

Management believes that Antay PachaBayannaoer Mining is in material compliance with all applicable government regulationsenvironmental protection requirements of Bolivia.

the State.

NON-BUSINESS SEGMENT – Corporate Activities

Active Subsidiaries

Feishang Management

Feishang Management was incorporated in the PRC in October 2008. It is a wholly ownedwholly-owned subsidiary of Yunnan Mining and iswas engaged in the provisionproviding of management and consulting services to the other companies in the group.Group. Feishang Management currently serves as a cost center for the Group.

Inactive Subsidiaries

The following subsidiaries are not currently engaged in active operations but remain in good standing in their home jurisdictions and are poised to participate in future opportunities, should they arise:

China Coal

China Coal was incorporated in Hong Kong in January 2008. It is a wholly-owned subsidiary of CHNR.

Feishang Dayun

Feishang Dayun was incorporated in Hong Kong in June 2008. It is a wholly-owned subsidiary of Pineboom.

Feishang Mining

Feishang Mining was incorporated in the BVI in September 2004. It is a wholly-owned subsidiary of CHNR.

Feishang Yongfu

Feishang Yongfu was incorporated in Hong Kong in June 2008. It is a wholly-owned subsidiary of Newhold.

Newhold

Newhold was incorporated in the BVI in July 2008. It is a wholly-owned subsidiary of CHNR.

Pineboom

Pineboom was incorporated in the BVI in May 2008. It is a wholly-owned subsidiary of CHNR.

Yangpu Lianzhong

Yangpu Lianzhong was incorporated in the PRC in January 2008. It is a wholly-owned subsidiary of China Coal.

Yangpu Shuanghu

Yangpu Shuanghu was incorporated in the PRC in May 2004. It is a wholly-owned subsidiary of Feishang Yongfu.

Yunnan Mining

Yunnan Mining was incorporated in the PRC in June 2007. It is a wholly-owned subsidiary of Yangpu Shuanghu.

FMH Services

FMH Services is a Florida company incorporated in November 2007 in connection with a proposed transaction that was not consummated. FMH Services, which is wholly ownedwholly-owned by CHNR, is currently dormant.

Silver Moon

Silver Moon is a BVI company incorporated in March 2000. Silver Moon, which is 80%-owned by CHNR, is currently dormant.

Sunwide

Sunwide was incorporated in the British Virgin IslandsBVI in January 2001. Sunwide is a wholly ownedwholly-owned subsidiary of CHNR and is currently dormant.

Silver Moon

Silver MoonDISCONTINUED SEGMENT – Exploration and Mining of Non-ferrous Metals

Metals mining operations included the exploration for, and extraction, production and sale of, non-ferrous metals. Our metal mining operations were conducted by Wuhu Feishang, a PRC company that was wholly-owned by Feishang Mining. Wuhu Feishang is principally engaged in the mining of zinc, iron, and other minerals and non-ferrous metals, and their sale in the PRC.

On February 24, 2017, Feishang Mining together with Wuhu City Feishang Industrial Development Co., Ltd. (“Wuhu Industrial”), as nominee for Feishang Mining (collectively “WH Sellers”), entered into an agreement (the “WH Purchase Agreement”) with Mr. Shen Yandi, an unrelated individual (“WH Purchaser”), pursuant to which WH Sellers sold and WH Purchaser purchased, all of WH Sellers’ right, title and interest in and to the outstanding capital stock (the “WH Equity Interests”) of Wuhu Feishang.

The CNY1.00 million purchase price for the WH Equity Interests was delivered to WH Sellers, and WH Sellers delivered the WH Equity Interests to WH Purchaser, at a British Virgin Islands companyclosing held on March 3, 2017, following receipt of regulatory approval for transfer of the WH Equity Interests to WH Purchaser. Pursuant to the WH Purchase Agreement:

·

Wuhu Feishang remains responsible for all of its liabilities and financial obligations other than those expressly undertaken by WH Sellers.

·

WH Sellers established a joint bank account and WH Purchaser contributed CNY3.00 million into the account as an earnest money deposit. The account will also include funds to be deposited by Wuhu Feishang to fund certain of Wuhu Feishang’s on-going financial obligations under the WH Purchase Agreement. The funds in the account will be disbursed with the approval of WH Sellers, upon the attainment of milestones and in the manner described in the WH Purchase Agreement.

·

The parties allocated responsibility for certain on-going negotiations and settlements with employees and various townspeople affected by Wuhu Feishang’s mining operations; as well as for certain on-going litigation.

·

WH Purchaser and Wuhu Feishang are prohibited from using the name “Feishang” in their operations.

·

A schedule of penalties is established to compensate a party for the other party’s breach of the terms of the WH Purchase Agreement. In some cases, penalties are in addition to indemnification and/or performance obligations of a breaching party.

The foregoing description of the WH Purchase Agreement is only a summary and is qualified in its entirety by reference to the WH Purchase Agreement, a copy of which has been translated into English and incorporated in March 2000. Silver Moon,by reference as Exhibit 4.14 to this Annual Report.

DISCONTINUED SEGMENT – Copper Smelting Operations

On December 23, 2016, the Company entered into an agreement with Feishang Hesheng, a related party, and completed the acquisition of all of the issued and outstanding capital stock of Double Grow (the “DG Acquired Shares”), its direct and indirect subsidiaries Easy Gain and Full Profit, each of which is 80%-ownedorganized under the laws of the BVI, and their operating subsidiary, Antay Pacha. Antay Pacha principally engages in copper smelting and the production of copper cathodes for sales to customers located primarily in Bolivia, Germany and the PRC.

The US$1,541,129 purchase price for the DG Acquired Shares includes the assumption of US$1,441,129 of indebtedness owed by CHNR,Double Grow to Feishang Hesheng (the “Loan”). The Company paid the purchase price by delivery of its check in favor of Feishang Hesheng in the amount of US$100,000 and is notrequired under the agreement to assume Double Grow’s obligation to repay the Loan. In consideration of the Company’s assumption of the Loan, Feishang Hesheng delivered its Deed of Assignment of the Loan in favor of the Company.

Feishang Hesheng is beneficially owned by Mr. Li Feilie, the principal beneficial owner of the Company, and members of his family. Mr. Li is also the former Chief Executive Officer and Chairman of the Company. Mr. Wong Wah On Edward, currently engagedthe Chief Executive Officer and Chairman of the Company, is also the Company Secretary of Feishang Hesheng.

On December 23, 2016, Feishang Hesheng waived payment of a US$8,000,000 indebtedness owed to it by Double Grow.

On December 29, 2017, the Company and Double Grow entered into an agreement (the “DG Purchase Agreement”) with Shanghai Kangzheng Investment Management Co., Ltd. (“DG Purchaser”), an unrelated third party, pursuant to which the Company sold all of the Company’s right, title and interest in activeand to the outstanding capital stock (the “DG Equity Interests”) of Double Grow and its subsidiaries to the DG Purchaser.

The DG Purchase Agreement provides that the purchase price for the DG Equity Interests is US$2,641,129 (the “Purchase Price”), including the payment of US$1,441,129 in indebtedness of Double Grow to the Company. The Purchase Price was paid (a) US$1,200,000 in cash, delivered in December 2017, and (b) US$1,441,129 by the DG Purchaser’s delivery of its promissory note payable, without interest, on January 28, 2018 (the “Note”). At the time the DG Purchase Agreement was signed, the parties also executed a Deed of Assignment of Loan (the “Deed of Assignment”) pursuant to which the Company assigned to the DG Purchaser its right to receive repayment of the US$1,441,129 loan from Double Grow. Following the disposition, the Company ceased its copper smelting business operations.in Bolivia.

The Board of Directors authorized the DG Purchase Agreement following its determination to focus its resources on metals mining and other business operations in the PRC. Following disposition of the DG Equity Interests in Double Grow, CHNR’s operations consist of the exploration for lead, silver and other metals in the Inner Mongolia Autonomous Region of the PRC.

The foregoing description of the DG Purchase Agreement is only a summary and is qualified in its entirety by reference to the DG Purchase Agreement, a copy of which has been translated into English and incorporated by reference as Exhibit 4.18 to this Annual Report.

DISCONTINUED SEGMENT - Coal-Mining and Related Businesses

On December 31, 2013, the Board of Directors approved a conditional special interim dividend to the shareholders of CHNR satisfied by way of a distribution in specie of the entire issued share capital of Feishang Anthracite to all shareholders of CHNR in proportion to their respective shareholdings in CHNR on the Distribution Record Date. Pursuant to the Distribution, each shareholder of CHNR became entitled to five shares of Feishang Anthracite for every share of CHNR held on the Distribution Record Date. After theFollowing completion of the Distribution, CHNR no longer holds any shares in Feishang Anthracite.Anthracite and discontinued its acquisition and exploitation of mining rights, including the exploration, construction, development and operation of coal mines located in Guizhou Province, the PRC.

The Spin-Off did not involve any offering of new shares of Feishang Anthracite or a public offering of any other securities and no funds were raised pursuant to the Spin-Off. The Distribution became unconditional upon successful listing by way of introduction on the Main Board of the Hong Kong Stock Exchange of Feishang Anthracite on January 22, 2014.

In preparation for the Distribution, the Board of Directors passed resolutions in writing on December 6, 2013 to approve the following matters:

-

change of the authorized share capital of Feishang Anthracite from US$50,000 divided into 50,000 ordinary shares of US$1.00 each to HK$10,000,000 divided into 1,000,000,000 Sharesshares of HK$0.01 each;

-

repurchase and cancellation of all issued shares of US$1.00 each from CHNR for US$1.00; and

-

issue of a total of 124,554,580 Sharesshares of HK$0.01 each to CHNR for HK$98,380,000.

These transactions were completed on December 12, 2013.

Prior to the Spin-Off, Feishang Anthracite and its direct and indirect subsidiaries operated the Company’s coal segment, including the exploration, construction, development and operation of coal mines located in Guizhou Province, the PRC.

C.

Organizational Structure

CHNR is a holding company directly or indirectly owning the following subsidiaries, to the extent indicated (as of June 15, 2017)April 25, 2019):