09:22     TIANYUAN<08253> - Announcement & Resumption of Trading (2)          

    non-exempt continuing connected transaction                               
                                                                              
    Since the Company's purchase of pre-baked carbon                          
    anode from Dongxing for the year ended 31 December                        
    2004 for an aggregate sum of approximately RMB15.8                        
    million exceeded the maximum annual cap of RMB15.0                        
    million specified in the Existing Waiver, the Company                     
    should have re-complied with Chapter 20 of the GEM                        
    Listing Rules. As the Company failed to re-comply with                    
    Chapter 20 of the GEM Listing Rules in a timely manner,                   
    it constituted breaching of the GEM Listing Rules.                        
                                                                              
    The Alloy Agreement and the Anode Agreement                               
                                                                              
    The Company entered into the Alloy Agreement with                         
    Jiashi and the Anode Agreement with Dongxing on 25                        
    May 2005. Under the GEM Listing Rules, the                                
    transactions contemplated under the Alloy Agreement                       
    and the Anode Agreement will constitute non-exempt                        
    continuing connected transactions of the Company and                      
    will be subject to the reporting, announcement and                        
    independent shareholders' approval requirements.                          
                                                                              
    The EGM                                                                   
                                                                              
    An EGM will be convened for the purpose of seeking                        
    the independent Shareholders' approval which will be                      
    taken by poll for the Alloy Agreement, the Anode                          
    Agreement and the relevant annual caps in relation                        
    thereto. Tianyuan Group together with its associates                      
    with interests in the Alloy Agreement, holding                            
    approximately 67.02% of the issued share capital of                       
    the Company, and Dongxing together with its                               
    associates with interests in the Anode Agreement,                         
    holding approximately 0.76% of the issued share                           
    capital of the Company, will abstain from voting in                       
    the relevant resolutions. A circular containing,                          
    among other things, further details of the provision                      
    of Financial Assistance, the unreported connected                         
    transactions, the Alloy Agreement, the Anode                              
    Agreement, a letter from the independent financial                        
    adviser containing its advice to the independent                          
    board committee and the independent Shareholders and                      
    the recommendation in respect of the Alloy Agreement,                     
    the Anode Agreement and the relevant annual caps will                     
    be despatched to the Shareholders together with a                         
    notice convening the EGM as soon as possible.                             
                                                                              
    Breaches of the GEM Listing Rules                                         
                                                                              
    The Company's failure to comply with the reporting,                       
    announcement and independent shareholders' approval                       
    requirements (as the case may be) in respect of the                       
    provision of Financial Assistance and certain                             
    unreported connected transactions, disclose the                           
    details of the trade receivables due from Jiashi and                      
    the independent third party in a timely manner and                        
    re-comply with the GEM Listing Rules upon the                             
    exceeding of annual cap of the Existing Waiver have                       
    resulted in breaches of the GEM Listing Rules.                            
                                                                              
    The Stock Exchange has indicated that it reserves its                     
    rights to take appropriate action against the Company                     
    and/or its Directors as a result of such breaches of                      
    the GEM Listing Rules.                                                    
                                                                              
    Suspension and resumption of trading                                      
                                                                              
    At the request of the Company, trading in the Shares                      
    was suspended with effect from 9:30a.m. on 18 March                       
    2005 pending the release of this announcement.