{"url_path":"/sec/chnr/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 **","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/793628/0001553350-26-000083-index.html","accession_number":"0001553350-26-000083","cik":"0000793628","ticker":"CHNR","issuer_name":"CHINA NATURAL RESOURCES INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/793628/0001553350-26-000083-index.html","primary_entity_key":"0000793628","primary_entity_name":"CHINA NATURAL RESOURCES INC"},"word_count":26922,"has_tables":true,"body_markdown":"**ITEM 19.**\n**EXHIBITS**\n\n \n\nThe following exhibits are\nfiled as part of this annual report on Form 20-F. Certain exhibits have been previously filed with the SEC pursuant to the Exchange\nAct, as amended (Commission File Number 000-26046). \n\n \n\n**Exhibit No.**\n \n**Exhibit Description**\n\n \n \n \n\n1.1\n \n[Amended and Restated Memorandum and Articles of Association of the Registrant](http://www.sec.gov/Archives/edgar/data/793628/000155335014000105/chnr_ex99z1.htm) *(included as Exhibit 99.1 to the Current Report on Form 6-K furnished January 30, 2014, and incorporated herein by reference).*\n\n2.1\n \n[Description of China Natural Resources, Inc.’s Securities Registered under Section 12 of the Securities Exchange Act of 1934, as Amended](http://www.sec.gov/Archives/edgar/data/793628/000155335020000529/chnr_ex2z1.htm)*(included as Exhibit 2.1 to the Annual Report on Form 20-F filed June 12, 2020, and incorporated herein by reference)*.\n\n2.2\n \n[Form of Investors Warrant](http://www.sec.gov/Archives/edgar/data/793628/000107997324000286/ex2x1.htm) *(included as Exhibit 2.1 to the Current Report on Form 6-K furnished February 21, 2024, and incorporated herein by reference).*\n\n2.3\n \n[Form\nof Placement Agent Warrant](http://www.sec.gov/Archives/edgar/data/793628/000107997324000286/ex2x2.htm) *(included as Exhibit 2.2 to the Current Report on Form 6-K furnished February 21, 2024, and\nincorporated herein by reference).*\n\n4.1\n \n[2014 Equity Compensation Plan](http://www.sec.gov/Archives/edgar/data/793628/000155335014000917/chnr_ex99z1.htm) *(included as Annex A of Exhibit 99.1 to the Current Report on Form 6-K furnished August 13, 2014, and incorporated herein by reference).*\n\n4.2\n \n[Service Agreement dated as of April 2, 2015, by and between the Company and Tam Cheuk Ho](http://www.sec.gov/Archives/edgar/data/793628/000155335015000332/chnr_ex99z1.htm) *(included as Exhibit 99.1 to the Current Report on Form 6-K furnished April 6, 2015, and incorporated herein by reference)*.\n\n4.3\n \n[Service Agreement dated as of April 2, 2015, by and between the Company and Wong Wah On Edward](http://www.sec.gov/Archives/edgar/data/793628/000155335015000332/chnr_ex99z2.htm) *(included as Exhibit 99.2 to the Current Report on Form 6-K furnished April 6, 2015, and incorporated herein by reference)*.\n\n4.4\n \n[License\nAgreement dated April 1, 2017, by and between Anka Consultants Limited and China Natural Resources, Inc.](http://www.sec.gov/Archives/edgar/data/793628/000155335017000769/chnr_ex4z15.htm) *(included as Exhibit\n4.15 to the Annual Report on Form 20-F filed June 19, 2017, and incorporated herein by reference).*\n\n4.5\n \n[Inner\nMongolia Wulatehouqi Moruogu Tong Mine Cooperation Agreement on Mineral Exploration dated August 20, 2017, by and between Bayannaoer\nCity Feishang Mining Company Limited and Bayannaoer Jijincheng Mining Co., Ltd](http://www.sec.gov/Archives/edgar/data/793628/000155335018000439/chnr_ex4z25.htm). *(included as Exhibit 4.25 to the Annual Report\non Form 20-F filed April 30, 2018, and incorporated herein by reference).*\n\n4.6\n \n[Confirmation of Financial Support to China Natural Resources, Inc., dated May 15, 2023, from Feishang Group Ltd.](http://www.sec.gov/Archives/edgar/data/793628/000107997323000705/ex4x7.htm) *(included as Exhibit 4.7 to the Annual Report on Form 20-F filed May 15, 2023, and incorporated herein by reference).*\n\n4.7\n \n[Confirmation of Financial Support to China Natural Resources, Inc., dated May 15 2023, from Feishang Enterprise Group Co., Ltd.](http://www.sec.gov/Archives/edgar/data/793628/000107997323000705/ex4x8.htm)*(included as Exhibit 4.8 to the Annual Report on Form 20-F filed May 15, 2023, and incorporated herein by reference)*.\n\n4.8\n \n[Domestic\nGarbage and Sewage Treatment Infrastructure at Villages and Towns, Wujiang District, Whole PPP Project Package, PPP Project Contract\n– Purchaser: Housing and Urban-Rural Development Bureau of Wujiang District, Shaoguan City, by and among Shanghai Onway Environmental\nDevelopment Co., Ltd., Guangzhou Ruiyi Environmental Protection Technology Co., Ltd., Guangdong Xifu Environmental Protection Technology\nCo., Ltd., Guangdong Xinzhen Construction Engineering Co., Ltd., and Shaoguan Angrui Environmental Technology Development Co. Ltd., dated\nAugust 2018](http://www.sec.gov/Archives/edgar/data/793628/000155335022000485/chnr_ex4z9.htm) *(included as Exhibit 4.9 to the Annual Report on Form 20-F filed May 17, 2022, and incorporated herein by reference)*.\n\n4.9\n \n[Sale and Purchase Agreement dated February 27, 2023, by and among the Company, Feishang Group Limited, Top Pacific (China) Limited, Li Feilie and Yao Yuguang](http://www.sec.gov/Archives/edgar/data/793628/000155335023000148/chnr_ex99z2.htm) *(included as Exhibit 99.2 to the Current Report on Form 6-K furnished February 28, 2023, and incorporated herein by reference).*\n\n4.10\n \n[Sale and Purchase Agreement dated July 28, 2023 by and between the Company and Feishang Group Limited](http://www.sec.gov/Archives/edgar/data/793628/000107997323001013/chnr_ex99z1.htm) (*incorporated by reference to Exhibit 99.1 to our Form 6-K filed on July 28, 2023*)\n\n \n \n \n\n \n\n \n\n \n\n82 \n\n \n\n \n\n \n \n \n\n**Exhibit No.**\n \n**Exhibit Description**\n\n4.11\n \n[Set-off letter dated August 3, 2023 by and between the Company and Feishang Group Limited](http://www.sec.gov/Archives/edgar/data/793628/000107997324000619/ex4x19.htm) (*included as Exhibit 4.19 to the Annual Report on Form 20-F filed April 30, 2024 and incorporated herein by reference)*\n\n4.12\n \n[Amendment\nAgreement dated as of December 22, 2023 to Sale and Purchase Agreement dated as of February 27, 2023 by and among the Company,\nFeishang Group and Top Pacific (China) Limited, Li Feilie and Yao Yuguang](http://www.sec.gov/Archives/edgar/data/793628/000107997323001809/ex99x1.htm) (*incorporated by reference to Exhibit 99.1 to our\nForm 6-K filed on December 22, 2023*)\n\n4.13\n \n[Form of Securities Purchase Agreement by and between the Company and the Investors](http://www.sec.gov/Archives/edgar/data/793628/000107997324000286/ex4x1.htm)(*incorporated by reference to Exhibit 4.1 to our Form 6-K filed on February 21, 2024*)\n\n4.14\n \n[Placement Agency Agreement dated February 15, 2024 by and between the Company and FT Global Capital, Inc.](http://www.sec.gov/Archives/edgar/data/793628/000107997324000286/ex4x2.htm) (*incorporated by reference to Exhibit 4.2 to our Form 6-K filed on February 21, 2024*)\n\n4.15\n \n[Amendment Agreement II dated December 31, 2024 to Sale and Purchase Agreement dated as of February 27, 2023 by and among the Company, Feishang Group and Top Pacific (China) Limited, Li Feilie and Yao Yuguang](http://www.sec.gov/Archives/edgar/data/793628/000107997324001803/ex99x1.htm) (*incorporated by reference to Exhibit 99.1 to our Form 6-K filed on December 31, 2024*)\n\n4.16\n \n[Amendment Agreement III dated December 31, 2025 to Sale and Purchase Agreement dated as of February 27, 2023 by and among the Company, Feishang Group and Top Pacific (China) Limited, Li Feilie and Yao Yuguang](http://www.sec.gov/Archives/edgar/data/793628/000155335025000219/ex99x1.htm) (*incorporated by reference to Exhibit 99.1 to our Form 6-K filed on December 31, 2025*)\n\n8.1\n \n[Subsidiaries of the Registrant](ex8.htm) *(filed herewith).*\n\n11.1\n \n[Code of Business Conduct and Ethics](http://www.sec.gov/Archives/edgar/data/793628/000111650204000735/codeof14.txt)*(filed as Exhibit 14 to Annual Report on Form 10-KSB filed March 30, 2004, and incorporated herein by reference)*\n\n12.1\n \n[CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12x1.htm)*(filed herewith).*\n\n12.2\n \n[CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12x2.htm) *(filed herewith).*\n\n13.1\n \n[CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13x1.htm) *(furnished herewith).*\n\n13.2\n \n[CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13x2.htm) *(furnished herewith).*\n\n15.1\n \n[Consent of HYYH CPA LLC](ex15x1.htm) *(filed herewith).*\n\n15.2\n \n[Consent of ARK Pro CPA\n& Co](ex15x2.htm) *(filed herewith).*\n\n15.3\n \n[Consent of Ernst & Young Hua Ming LLP](ex15x3.htm)*(filed\nherewith).*\n\n15.4\n \n[Press Release dated May 15, 2026](ex15x4.htm) *(filed herewith).*\n\n16.1\n \n[Letter of Ernst & Young Hua Ming LLP dated April 8, 2025 regarding change in independent registered public accounting firm](http://www.sec.gov/Archives/edgar/data/793628/000107997325000604/ex99x1.htm) *(incorporated by reference to Exhibit 99.1 to our Form 6-K furnished on April 8, 2025)*.\n\n16.2\n \n[Letter of ARK dated January 29, 2026 regarding change in independent registered public accounting firm](http://www.sec.gov/Archives/edgar/data/793628/000107997326000143/ex16x1.htm)*(incorporated by reference to Exhibit 16.1 to our Form 6-K furnished on January 29, 2026).*\n\n97\n \n[Clawback Policy](http://www.sec.gov/Archives/edgar/data/793628/000107997324000619/ex97.htm) (*included as Exhibit 97 to the Annual Report on Form 20-F filed April 30, 2024 and incorporated herein by reference)*\n\n101.INS\n \nInline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n\n101.SCH\n \nInline XBRL Taxonomy Extension Schema Document.\n\n101.CAL\n \nInline XBRL Taxonomy Extension Calculation Linkbase Document.\n\n101.DEF\n \nInline XBRL Taxonomy Extension Definition Linkbase Document.\n\n101.LAB\n \nInline XBRL Taxonomy Extension Label Linkbase Document.\n\n101.PRE\n \nInline XBRL Taxonomy Extension Presentation Linkbase Document.\n\n104\n \nCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\n\n \n\n \n\n \n\n83 \n\n \n\n \n\n**SIGNATURES**\n\n \n\nThe registrant hereby certifies that it meets all\nof the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report\non its behalf.\n\n \n\n \n**CHINA NATURAL RESOURCES, INC.**\n\n \n \n \n \n\nDate: May 15, 2026\nBy:  \n/s/ WONG WAH ON EDWARD\n \n\n \n \nWong Wah On Edward, CEO\n \n\n \n\n \n\n \n\n**  **\n\n84\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**APPENDIX A**\n\n** **\n\n**CONSOLIDATED\nFINANCIAL STATEMENTS**\n\n \n\nReport of Independent Registered\nPublic Accounting Firm, together with the consolidated financial statements for the Company and its subsidiaries, including:\n\n \n\n \na.\nConsolidated statements of profit or loss for the years ended December 31, 2023, 2024 and 2025\n\n \n\n \nb.\nConsolidated statements of comprehensive income for the years ended December 31, 2023, 2024 and 2025\n\n \n\n \nc.\nConsolidated statements of financial position as of December 31, 2024 and 2025\n\n \n\n \nd.\nConsolidated statements of changes in equity for the years ended December 31, 2023, 2024 and 2025\n\n \n\n \ne.\nConsolidated statements of cash flows for the years ended December 31, 2023, 2024 and 2025\n\n \n\n \nf.\nNotes to the consolidated financial statements\n\n \n\n \n\nF-1 \n\n \n\n \n\n****\n\n**CHINA NATURAL RESOURCES, INC.**\n\n**INDEX TO CONSOLIDATED FINANCIAL\nSTATEMENTS**\n\n \n\n \n**Pages**\n\n[Report of Independent Registered Public Accounting Firm](#a_034) (PCAOB ID:7302 )\nF-3\n\n \n \n\n[Report of Independent Registered Public Accounting Firm](#a_035) (PCAOB ID: 3299 )\nF-4\n\n \n \n\n[Report of Independent Registered Public Accounting Firm](#a_037) (PCAOB ID: 1408 )\nF-5\n\n \n \n\n[Consolidated statements of profit or loss for the years ended December 31, 2023, 2024 and 2025](#a_038)\nF-6\n\n \n \n\n[Consolidated statements of comprehensive income for the years ended December 31, 2023, 2024 and 2025](#a_039)\nF-7\n\n \n \n\n[Consolidated statements of financial position as of December 31, 2024 and 2025](#a_040)\nF-8 – F-9\n\n \n \n\n[Consolidated statements of changes in equity for the years ended December 31, 2023, 2024 and 2025](#a_041)\nF-10\n\n \n \n\n[Consolidated statements of cash flows for the years ended December 31, 2023, 2024 and 2025](#a_042)\nF-11 – F-12\n\n \n \n\n[Notes to the consolidated financial statements](#a_043)\nF-13 – F-71\n\n \n\n \n\nF-2 \n\n \n\n \n\n**REPORT OF INDEPENDENT REGISTERED\nPUBLIC ACCOUNTING FIRM**\n\n \n\nTo the Shareholders and the Board of Directors of China Natural Resources,\nInc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe have audited the accompanying consolidated\nstatement of financial position of China Natural Resources, Inc. (the “Company”) as of December 31, 2025, the related consolidated\nstatements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and the related notes (collectively\nreferred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,\nin all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash\nflows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting\nStandards Board.\n\n**   **\n\n**The Company’s Ability to Continue as\na Going Concern**\n\n** **\n\nThe accompanying financial statements have been\nprepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has\nincurred recurring losses from operations, has negative cash flow from operations, and was in an accumulated deficit position. Given the\nCompany’s financial position, there is substantial doubt about the Company’s ability to continue as a going concern. Management’s\nevaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The financial\nstatements do not include any adjustments that might result from the outcome of this uncertainty.\n\n \n\n**Basis for Opinion**\n\n** **\n\nThese financial statements are the responsibility\nof the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our\naudits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are\nrequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and\nregulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial\nstatements are free of material misstatement, whether due to error or fraud.\n\n \n\nOur audits included performing procedures to assess\nthe risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond\nto those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.\nOur audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating\nthe overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n \n\n \n\n/s/ HYYH CPA. LLC\n\nHYYH CPA. LLC\n\n \n\nWe have served as the Company’s auditor since 2026.\n\nBaltimore, Maryland\n\nMay 15, 2026\n\n \n\nF-3 \n\n \n\n \n\n \n\n \n\n**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING\nFIRM**\n\n \n\nTo The Board of Directors and Shareholders of\n\nChina Natural Resources, Inc.\n\n** **\n\n**Opinion on the Financial Statements**\n\n \n\nWe have audited the accompanying consolidated\nstatement of financial position of China Natural Resources, Inc. and subsidiaries (the “Company”) as of December 31, 2024,\nand the related consolidated statements of comprehensive income, changes in stockholders’ equity and cash flows for the year then\nended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated\nfinancial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024,\nand the consolidated results of its operations and its cash flows for the year then ended, in conformity with International Financial\nReporting Standards as issued by the International Accounting Standards Board.\n\n** **\n\n**Going Concern**\n\n \n\nThe accompanying consolidated financial statements\nhave been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements,\nthe Company has accumulated deficit from recurring net losses and significant net operating cash outflow for the year ended December 31,\n2024. All these factors raise doubt about its ability to continue as a going concern. Management’s plans in regard to these matters\nare also discussed in Note 3 to the consolidated financial statements. These consolidated financial statements do not include any adjustments\nthat might result from the outcome of this uncertainty.\n\n** **\n\n**Basis for Opinion**\n\n \n\nThese consolidated financial statements are the\nresponsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements\nbased on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\")\nand are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable\nrules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated\nfinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we\nengaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding\nof internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s\ninternal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to assess\nthe risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures\nthat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the\nconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by\nmanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide\na reasonable basis for our opinion.\n\n  \n\n**Critical Audit Matters**\n\n \n\nCritical audit matters are matters arising from\nthe current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee\nand that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,\nsubjective or complex judgments. We determined that there are no critical audit matters.\n\n \n\n \n\n/s/ ARK Pro CPA & Co\n\nARK Pro CPA & Co\n\nCertified Public Accountants\n\n \n\nWe have served as the Company’s auditor since 2025, in 2026,\nwe become the predecessor auditor.\n\nHong Kong, China\n\nMay 15, 2025\n\nPCAOB ID: 3299\n\n \n\n \n\n \n\nF-4 \n\n \n\n \n\n****\n\n**REPORT OF INDEPENDENT REGISTERED\nPUBLIC ACCOUNTING FIRM**\n\n \n\nTo the Shareholders and the Board of Directors of China Natural Resources,\nInc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe have audited the accompanying consolidated\nstatements of profit or loss, comprehensive income, changes in equity and cash flows of China Natural Resources, Inc. (the “Company”)\nfor the year ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).\nIn our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its\ncash flows for the year ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International\nAccounting Standards Board.** **\n\n** **\n\n**Basis for Opinion**\n\n** **\n\nThese financial statements are the responsibility\nof the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our\naudits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are\nrequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and\nregulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial\nstatements are free of material misstatement, whether due to error or fraud.\n\n \n\nOur audits included performing procedures to assess\nthe risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond\nto those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.\nOur audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating\nthe overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n \n\n \n\n/s/ Ernst & Young Hua Ming LLP\n\nWe served as the Company’s auditor from 2015 to 2025.\n\nBeijing, the People’s Republic of China\n\nApril 30, 2024\n\n \n\n \n\nF-5 \n\n \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS\nOF PROFIT OR LOSS**\n\n**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024\nAND 2025**\n\n**(Amounts in thousands, except share and per\nshare data)**\n\n** **\n\n  \n   \n   \n   \n   \n  \n\n  \n   \nYear Ended December 31, \n\n  \n   \n2023  \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \nNotes  \n   \n   \n   \n  \n\n  \n   \n   \n   \n   \n  \n\nCONTINUING OPERATIONS \n    \n    \n    \n    \n   \n\nAdministrative expenses \n    \n (12,883) \n (7,199) \n (3,299) \n (472)\n\nOther income \n    \n 3,742  \n 2  \n 34  \n 5 \n\nFair value gain on financial instruments, net \n    \n 847  \n 3,996  \n 2,077  \n 297 \n\nFinance costs \n    \n (48) \n (28) \n (44) \n (6)\n\nFinance income \n    \n 5  \n 69  \n 1  \n — \n\n  \n    \n    \n    \n    \n   \n\nLOSS BEFORE INCOME TAX \n 5  \n (8,337) \n (3,160) \n (1,231) \n (176)\n\n  \n    \n    \n    \n    \n   \n\nIncome tax expense \n 7  \n —  \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nLOSS FOR THE YEAR FROM CONTINUING OPERATIONS \n    \n (8,337) \n (3,160) \n (1,231) \n (176)\n\n  \n    \n    \n    \n    \n   \n\nDISCONTINUED OPERATIONS \n    \n    \n    \n    \n   \n\nLoss for the year from discontinued operations, net of tax \n 3  \n (4,106) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nLOSS FOR THE YEAR \n    \n (12,443) \n (3,160) \n (1,231) \n (176)\n\n  \n    \n    \n    \n    \n   \n\nATTRIBUTABLE TO: \n    \n    \n    \n    \n   \n\nOwners of the Company \n    \n    \n    \n    \n   \n\nFrom continuing operations \n    \n (8,337) \n (3,160) \n (1,231) \n (176)\n\nFrom discontinued operations \n    \n (5,504) \n —  \n —  \n — \n\nNon-controlling interests \n    \n    \n    \n    \n   \n\nFrom continuing operations \n    \n —  \n —  \n —  \n — \n\nFrom discontinued operations \n    \n 1,398  \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nLOSS FOR THE YEAR \n    \n (12,443) \n (3,160) \n (1,231) \n (176)\n\n  \n    \n    \n    \n    \n   \n\nLOSS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY: \n    \n    \n    \n    \n   \n\nBasic and diluted \n    \n    \n    \n    \n   \n\n- For loss from continuing operations \n 8  \n (8.11)* \n (2.62)* \n (0.98) \n (0.14)\n\n- For loss from discontinued operations \n 8  \n (5.35)* \n —  \n —  \n — \n\n- Loss per share \n 8  \n (13.46)* \n (2.62)* \n (0.98) \n (0.14)\n\n****\n\n** **\n\n*****Retrospectively restated for effect of the 8-to-1 share combination effective on June 13,\n2025, see Note 19(a).\n\n** **\n\n \n\nF-6 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS\nOF COMPREHENSIVE INCOME**\n\n**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024\nAND 2025**\n\n**(Amounts in thousands)**\n\n** **\n\n  \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nLOSS FOR THE YEAR \n (12,443) \n (3,160) \n (1,231) \n (176)\n\n  \n    \n    \n    \n   \n\nOther comprehensive loss that will be reclassified to profit or loss in subsequent periods: \n    \n    \n    \n   \n\nForeign currency translation adjustments of the subsidiaries \n (2,810) \n (4,053) \n (5,366) \n (767)\n\nOther comprehensive income that will not be reclassified to profit or loss in subsequent periods: \n    \n    \n    \n   \n\nForeign currency translation adjustments of the Company \n 1,421  \n 5,590  \n 4,863  \n 695 \n\n  \n    \n    \n    \n   \n\nTotal other comprehensive (loss)/income for the year, net of tax \n (1,389) \n 1,537  \n (503) \n (72)\n\n  \n    \n    \n    \n   \n\nTOTAL COMPREHENSIVE LOSS FOR THE YEAR \n (13,832) \n (1,623) \n (1,734) \n (248)\n\n  \n    \n    \n    \n   \n\nAttributable to: \n    \n    \n    \n   \n\nOwners of the Company \n    \n    \n    \n   \n\nFrom continuing operations \n (9,726) \n (1,623) \n (1,734) \n (248)\n\nFrom discontinued operations \n (5,504) \n —  \n —  \n — \n\nNon-controlling interests \n    \n    \n    \n   \n\nFrom continuing operations \n —  \n —  \n —  \n — \n\nFrom discontinued operations \n 1,398  \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\nTOTAL COMPREHENSIVE LOSS FOR THE YEAR \n (13,832) \n (1,623) \n (1,734) \n (248)\n\n****\n\n** **\n\n**** \n\n \n\nF-7 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS\nOF FINANCIAL POSITION**\n\n**AS OF DECEMBER 31, 2024 AND 2025**\n\n**(Amounts in thousands)**\n\n** **\n\n****\n\n  \n   \n   \n   \n  \n\n  \n   \nDecember 31, \n\n  \n   \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nUS$ \n\n  \nNotes  \n   \n   \n  \n\n  \n   \n   \n   \n  \n\nASSETS \n    \n    \n    \n   \n\nNON-CURRENT ASSETS \n    \n    \n    \n   \n\nProperty, plant and equipment \n 9  \n 49  \n 30  \n 4 \n\nRight-of-use assets \n 10  \n —  \n —  \n — \n\nOther non-current assets \n 11  \n 256,484  \n 245,400  \n 35,075 \n\n  \n    \n    \n    \n   \n\nTOTAL NON-CURRENT ASSETS \n    \n 256,533  \n 245,430  \n 35,079 \n\n  \n    \n    \n    \n   \n\nCURRENT ASSETS \n    \n    \n    \n   \n\nPrepayments \n    \n 1,242  \n 1,234  \n 176 \n\nOther receivables \n 12  \n 32  \n 43  \n 6 \n\nCash and cash equivalents \n 13  \n 3,082  \n 475  \n 68 \n\n  \n    \n    \n    \n   \n\nTOTAL CURRENT ASSETS \n    \n 4,356  \n 1,752  \n 250 \n\n  \n    \n    \n    \n   \n\nTOTAL ASSETS \n    \n 260,889  \n 247,182  \n 35,329 \n\n** **\n\n** ** \n\n \n\nF-8 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION\n(CONTINUED)**\n\n**AS OF DECEMBER 31, 2024 AND 2025**\n\n**(Amounts in thousands)**\n\n****\n\n  \n   \n   \n   \n  \n\n  \n   \nDecember 31, \n\n  \n   \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nUS$ \n\n  \nNotes  \n   \n   \n  \n\n  \n   \n   \n   \n  \n\nLIABILITIES AND EQUITY \n    \n    \n    \n   \n\n  \n    \n    \n    \n   \n\nCURRENT LIABILITIES \n    \n    \n    \n   \n\nTrade payables \n 14  \n 280  \n 280  \n 40 \n\nOther payables and accruals \n 15  \n 3,536  \n 1,151  \n 164 \n\nDerivative financial liabilities \n 16  \n 2,138  \n 19  \n 3 \n\nLease liabilities \n 10  \n —  \n —  \n — \n\nDue to related companies \n 20  \n 11,361  \n 12,709  \n 1,817 \n\n  \n    \n    \n    \n   \n\nTOTAL CURRENT LIABILITIES \n    \n 17,315  \n 14,159  \n 2,024 \n\n  \n    \n    \n    \n   \n\nNON-CURRENT LIABILITIES \n    \n    \n    \n   \n\nOther payables \n 15  \n 76,945  \n 73,620  \n 10,523 \n\nDue to the Shareholder \n 20  \n 78,567  \n 73,075  \n 10,445 \n\n  \n    \n    \n    \n   \n\nTOTAL NON-CURRENT LIABILITIES \n    \n 155,512  \n 146,695  \n 20,968 \n\n  \n    \n    \n    \n   \n\nTOTAL LIABILITIES \n    \n 172,827  \n 160,854  \n 22,992 \n\n  \n    \n    \n    \n   \n\nEQUITY \n    \n    \n    \n   \n\nIssued capital \n 19  \n 450,782  \n 450,782  \n 64,431 \n\nOther capital reserves \n 19  \n 772,465  \n 772,465  \n 110,409 \n\nAccumulated losses \n    \n (1,126,011) \n (1,127,242) \n (161,120)\n\nOther comprehensive losses \n    \n (9,174) \n (9,677) \n (1,383)\n\n  \n    \n    \n    \n   \n\nEQUITY ATTRIBUTABLE TO OWNERS\n   OF THE COMPANY \n    \n 88,062  \n 86,328  \n 12,337 \n\nNON-CONTROLLING INTERESTS \n    \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\nTOTAL EQUITY \n    \n 88,062  \n 86,328  \n 12,337 \n\n  \n    \n    \n    \n   \n\nTOTAL LIABILITIES AND EQUITY \n    \n 260,889  \n 247,182  \n 35,329 \n\n****\n\n** **\n\n** **\n\n \n\nF-9 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS\nOF CHANGES IN EQUITY**\n\n**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024\nAND 2025**\n\n**(Amounts in thousands)**\n\n \n\n  \n   \n   \n   \n   \n   \n   \n  \n\n  \nAttributable to Owners of the Company  \n   \n  \n\n  \nIssued\ncapital  \nOther capital\nreserves  \n\n**Accumulated**\n\n**losses**\n  \n\n**Other**\n\n**comprehensive (loss)/income**\n  \nTotal  \nNon-controlling interests  \nTotal equity \n\n  \nCNY  \nCNY  \nCNY  \nCNY  \nCNY  \nCNY  \nCNY \n\n  \n   \n   \n   \n   \n   \n   \n  \n\nBalance as of January 1, 2023 \n 450,782  \n 735,319  \n (1,109,010) \n (9,322) \n 67,769  \n 109,680  \n 177,449 \n\n(Loss)/income for the year \n —  \n —  \n (13,841) \n —  \n (13,841) \n 1,398  \n (12,443)\n\nForeign currency translation adjustments \n —  \n —  \n —  \n (1,389) \n (1,389) \n —  \n (1,389)\n\nTotal comprehensive (loss)/income for the year \n —  \n —  \n (13,841) \n (1,389) \n (15,230) \n 1,398  \n (13,832)\n\nDisposal of PSTT (Note 3) \n —  \n 20,382  \n —  \n —  \n 20,382  \n (111,078) \n (90,696 \n\nEquity-settled share-based payments\n(Note 21) \n —  \n 3,074  \n —  \n —  \n 3,074  \n —  \n 3,074 \n\nBalance as of December 31, 2023 \n 450,782  \n 758,775  \n (1,122,851) \n (10,711) \n 75,995  \n —  \n 75,995 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance as of January 1, 2024 \n 450,782  \n 758,775  \n (1,122,851) \n (10,711) \n 75,995  \n —  \n 75,995 \n\nLoss for the year \n —  \n —  \n (3,160) \n —  \n (3,160) \n —  \n (3,160)\n\nForeign currency translation adjustments \n —  \n —  \n —  \n 1,537  \n 1,537  \n —  \n 1,537 \n\nTotal comprehensive (loss)/income for the year \n —  \n —  \n (3,160) \n 1,537  \n (1,623) \n —  \n (1,623)\n\nIssue of shares \n —  \n 13,207  \n —  \n —  \n 13,207  \n —  \n 13,207 \n\nShare-based payments (Note 21) \n —  \n 483  \n —  \n —  \n 483  \n —  \n 483 \n\nBalance as of December 31, 2024 \n 450,782  \n 772,465  \n (1,126,011) \n (9,174) \n 88,062  \n —  \n 88,062 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance as of January 1, 2025 \n 450,782  \n 772,465  \n (1,126,011) \n (9,174) \n 88,062  \n —  \n 88,062 \n\nLoss for the year \n —  \n —  \n (1,231) \n —  \n (1,231) \n —  \n (1,231)\n\nForeign currency translation adjustments \n —  \n —  \n —  \n (503) \n (503) \n —  \n (503)\n\nTotal comprehensive loss for the year \n —  \n —  \n (1,231) \n (503) \n (1,734) \n —  \n (1,734)\n\nBalance as of December 31, 2025 \n 450,782  \n 772,465  \n (1,127,242) \n (9,677) \n 86,328  \n —  \n 86,328 \n\nBalance as of December 31, 2025\n(US$) \n 64,431  \n 110,409  \n (161,120) \n (1,383) \n 12,337  \n —  \n 12,337 \n\n \n\n \n\n \n\n \n\nF-10 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS\nOF CASH FLOWS**\n\n**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024\nAND 2025**\n\n**(Amounts in thousands)**\n\n  \n   \n   \n   \n   \n  \n\n  \n   \n2023  \n2024  \n2025  \n2025 \n\n  \n    \n **CNY**  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n **Notes**  \n    \n    \n    \n   \n\n  \n    \n    \n    \n    \n   \n\nOPERATING ACTIVITIES \n    \n    \n    \n    \n   \n\nLoss before income tax for the year \n    \n (10,512) \n (3,160) \n (1,231) \n (176)\n\nFrom continuing operations \n    \n (8,337) \n (3,160) \n (1,231) \n (176)\n\nFrom discontinued operations \n    \n (2,175) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nAdjustments for: \n    \n    \n    \n    \n   \n\nInterest expenses \n    \n 1,977  \n 6  \n —  \n — \n\nInterest income \n    \n (4,013) \n —  \n —  \n — \n\nGain on disposal of property, plant and equipment \n    \n —  \n (2) \n (34) \n (5)\n\nConsultants share-based payment expenses \n 5  \n 3,074  \n 125  \n —  \n — \n\nExpenses related to issuance of shares \n 5  \n —  \n 1,354  \n —  \n — \n\nFair value gain on financial instruments, net \n 5  \n (847) \n (3,996) \n (2,077) \n (297)\n\nDepreciation of property, plant and equipment \n 5  \n 100  \n 4  \n 5  \n 1 \n\nDepreciation of right-of-use assets \n 5  \n 1,050  \n 346  \n —  \n — \n\nAmortization of intangible assets \n 5  \n 460  \n —  \n —  \n — \n\nImpairment loss on trade receivables \n 5  \n 383  \n —  \n —  \n — \n\nImpairment losses on contract assets \n 5  \n 3,545  \n —  \n —  \n — \n\nImpairment losses on other receivables \n 5  \n 6,003  \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nChanges in working capital \n    \n    \n    \n    \n   \n\nInventories \n    \n (182) \n —  \n —  \n — \n\nTrade and bills receivables \n    \n (4,406) \n —  \n —  \n — \n\nContract assets \n    \n (1,550) \n —  \n —  \n — \n\nPrepayments \n    \n 765  \n (136) \n 8  \n 1 \n\nOther receivables \n    \n 18  \n (14) \n (11) \n (1)\n\nOther current assets \n    \n —  \n —  \n —  \n — \n\nTrade payables \n    \n 1,297  \n 180  \n —  \n — \n\nOther payables and accruals \n    \n 5,749  \n (2,124) \n (2,385) \n (340)\n\nProvisions \n    \n (494) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nCash from/(used in) operations \n    \n 14,329  \n (7,417) \n (5,725) \n (817)\n\n  \n    \n    \n    \n    \n   \n\nIncome tax paid \n    \n (1,001) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nNet cash flows from/(used in) operating activities \n    \n 13,328  \n (7,417) \n (5,725) \n (817)\n\n  \n    \n    \n    \n    \n   \n\nINVESTING ACTIVITIES \n    \n    \n    \n    \n   \n\nProceed from disposal of property, plant and equipment \n    \n —  \n 5  \n 50  \n 7 \n\nPurchase of property, plant and equipment \n    \n (12) \n (4) \n —  \n — \n\nExpenditures on mine development \n    \n (1,042) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nNet cash flows from /(used in) investing activities \n    \n (1,054) \n 1  \n 50  \n 7 \n\n  \n    \n    \n    \n    \n   \n\n** ** \n\n** **\n\n \n\nF-11 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**\n\n**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024\nAND 2025**\n\n**(Amounts in thousands)**\n\n \n\n  \n   \n   \n   \n   \n  \n\n  \n   \nYear Ended December 31, \n\n  \n   \n2023  \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \nNotes  \n   \n   \n   \n  \n\n  \n   \n   \n   \n   \n  \n\nFINANCING\nACTIVITIES \n    \n    \n    \n    \n   \n\nRepayments\nof bank loans \n    \n (1,500) \n —  \n —  \n — \n\nAdvances\nfrom related companies \n    \n 3,932  \n 1,292  \n 2,276  \n 325 \n\nRepayment\nto related companies \n    \n —  \n (3,150) \n —  \n — \n\nAdvances\nfrom the Shareholder \n    \n —  \n 6,898  \n —  \n — \n\nRepayments\nto the Shareholder \n    \n —  \n (7,892) \n (2,595) \n (371)\n\nPayment\nof principal portion of lease liabilities \n    \n (925) \n (373) \n —  \n — \n\nPayment\nof interest expenses on lease liabilities \n    \n (99) \n (6) \n —  \n — \n\nNet\nproceed from issuance of shares \n    \n —  \n 18,342  \n —  \n — \n\nNet\ncash outflow for the distribution of CHNR's 100% equity interest of PSTT \n    \n (37,460) \n —  \n —  \n — \n\nInterest\npaid \n    \n (1,878) \n —  \n —  \n — \n\n  \n    \n    \n    \n    \n   \n\nNet cash flows (used in)/from financing activities \n    \n (37,930) \n 15,111  \n (319) \n (46)\n\n  \n    \n    \n    \n    \n   \n\nNET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS \n    \n (25,656) \n 7,695  \n (5,994) \n (856)\n\n  \n    \n    \n    \n    \n   \n\nNET FOREIGN EXCHANGE DIFFERENCE \n    \n (1,286) \n (9,366) \n 3,387  \n 483 \n\n  \n    \n    \n    \n    \n   \n\nCASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR \n    \n 31,695  \n 4,753  \n 3,082  \n 441 \n\n  \n    \n    \n    \n    \n   \n\nCASH AND CASH EQUIVALENTS AT END OF YEAR \n 13  \n 4,753  \n 3,082  \n 475  \n 68 \n\n \n\n \n\n \n\n  \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS \n    \n    \n    \n   \n\nCash and bank balances attributable to continued operations \n 4,753  \n 3,082  \n 475  \n 68 \n\nCash, bank balances and short-term deposits attributable to discontinued operations \n —  \n —  \n —  \n — \n\nCash and cash equivalents as stated in the statement of cash flows \n 4,753  \n 3,082  \n 475  \n 68 \n\n \n\n  \n\n \n\nF-12 \n\n \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED\nFINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per\nshare data)**\n\n \n\n \n\n**1.****ORGANIZATION AND PRINCIPAL ACTIVITIES**\n\n \n\nChina Natural Resources, Inc. (“CHNR”\nor the “Company”) is a British Virgin Islands (“BVI”) holding company incorporated in 1993. The address of the\nprincipal executive office is Room M07, 7/F, Valiant Industrial Building, 2-12 Au Pui Wan Street, Fo Tan, Hong Kong. The Company’s\nprincipal activity is investment holding. The Company’s subsidiaries (collectively with CHNR, the “Group”) are primarily\ninvolved in the exploration and mining in the People’s Republic of China (“PRC”).\n\n \n\nCHNR’s principal shareholder is\nFeishang Group Limited (“Feishang Group” or the “Shareholder”), a BVI corporation. Mr. Li Feilie is the controlling\nshareholder of Feishang Group. In the opinion of the directors of the Company (the “Directors”), the ultimate parent of CHNR\nis Laitan Investment Limited, a BVI corporation.\n\n \n\nAs of 31 December 2025, the Company had\ndirect and indirect interests in the following subsidiaries, the particulars of which are set out below:\n\nSchedule of direct and indirect interests in subsidiaries \n  \n  \n   \n   \n \n\n  \n\n**Place of incorporation/**\n\n**registration and operations**\n \nNominal value\nof issued\ncommon/\nregistered\nshare capital \n\n**Percentage**\n\n**of equity attributable to the Company**\n  \n\n**Principal**\n\n**activities**\n\nName \n  \n  \nDirect  \nIndirect  \n \n\nChina Coal Mining Investment Limited (“China\nCoal”) \nHong Kong \n* \n 100  \n —  \nInvestment holding\n\nFMH Corporate Services Inc. \nUnited States \n* \n 100  \n —  \nDormant\n\nFeishang Dayun Coal Mining Limited \nHong Kong \n* \n —  \n 100  \nInvestment holding\n\nFeishang Mining Holdings Limited \nBVI \n* \n 100  \n —  \nInvestment holding\n\nFeishang Yongfu Mining Limited \nHong Kong \n* \n —  \n 100  \nInvestment holding\n\nNewhold Investments Limited \nBVI \n* \n 100  \n —  \nInvestment holding\n\nPineboom Investments Limited \nBVI \n* \n 100  \n —  \nInvestment holding\n\nShenzhen Feishang Management and Consulting Co., Limited\n(“Feishang Management”) \nPRC/Mainland China \nCNY 10,000 \n —  \n 100  \nProvision of management and consulting services to other\ncompanies in the Group\n\nYangpu Shuanghu Industrial Development Co., Limited \nPRC/Mainland China \nCNY 1,000 \n —  \n 100  \nInvestment holding\n\nYunnan Feishang Mining Co., Limited \nPRC/Mainland China \nCNY 50,000 \n —  \n 100  \nInvestment holding\n\nBayannaoer City Feishang Mining Company Limited \nPRC/Mainland China \nCNY 59,480 \n —  \n 100  \nExploration and development of lead mines\n\n*  Insignificant\n\n \n\nThe consolidated financial statements\nof the Group for the year ended December 31, 2025 were authorized for issuance in accordance with a resolution of the Directors executed\non May 15, 2026.\n\n \n\n \n\nF-13 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.1**\n \n**BASIS OF PREPARATION**\n\n** **\n\nThe consolidated financial statements\nhave been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International\nAccounting Standards Board (“IASB”). The consolidated financial statements have been prepared on a historical cost basis,\nexcept for structured deposit, derivative financial liabilities and equity financial assets that have been measured at fair value. The\nconsolidated financial statements are presented in Chinese Yuan (“CNY”) and all values are rounded to the nearest thousand,\nexcept when otherwise indicated. US$ indicates U.S. dollars. The Group has prepared the financial statements on the basis that it will\ncontinue to operate as a going concern.\n\n \n\n**2.1.1.**\n \n**GOING CONCERN BASIS**\n\n \n\nThe Group incurred net losses of\nCNY3.16 million 3,160\nand CNY1.23 million 1,231\n(US$0.18 million) 176\nfor the years ended December 31, 2024 and 2025, respectively and net cash used in operating activities was CNY7.42 million 7,417\nand CNY5.73 million 5,725\n(US$0.82 million) 817 for the year ended December 31, 2024 and 2025, respectively. The Group assesses its liquidity by its ability\nto generate cash from operating activities and attract additional capital and/or finance funding.\n\n \n\nDuring the year ended December 31,\n2023, the Group has, through its subsidiary, sold all its water treatment segment assets and liabilities. This means there will be\nno revenues, but administrative and other operating expenses incurred in the near future as the mining and exploration segment is\nstill at a developing stage. As of December 31, 2025, the Group had net current liabilities of CNY 12.41\nmillion (US$1.77\nmillion) and cash and cash equivalents of CNY0.48 million475\n(US$0.07 million68).\n\n \n\nThe Group expects that its existing cash\nand cash equivalents will be sufficient to fund its operations and meet all of its obligations as they fall due for at least twelve months\nfrom the date of the consolidated financial statements. In addition, the Group has received a financial support letter from its major\nshareholder. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute\nits business plan, which includes increasing revenues while controlling operating costs and expenses, generating operational cash flows\nas well as continuing to gain support from outside sources of financing. Based on the above considerations, the Group’s consolidated\nfinancial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities\nin the normal course of business.\n\n \n\n \n\nF-14 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n** **\n\n**2.2**\n \n**BASIS OF CONSOLIDATION**\n\n \n\nThe consolidated financial statements\ncomprise the financial statements of the Company and its subsidiaries for the years ended December 31. A subsidiary is an entity (including\na structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights,\nto variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee\n(i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).\n\n \n\nGenerally, there is a presumption that\na majority of voting rights results in control. When the Company has less than a majority of the voting or similar right of an investee,\nthe Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:\n\n \n\n \n\n \n(a)\nthe contractual arrangement with the other vote holders of the investee;\n\n \n(b)\nrights arising from other contractual arrangements; and\n\n \n(c)\nthe Group’s voting rights and potential voting rights.\n\n \n\nThe financial statements of the subsidiaries\nare prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated\nfrom the date on which the Group obtains control and continue to be consolidated until the date that such control ceases.\n\n \n\nProfit or loss and each component of\nother comprehensive income are attributed to owners of the Company and to the non-controlling interests, even if this results in the non-controlling\ninterests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions\nbetween members of the Group are eliminated in full on consolidation.\n\n \n\nThe Group reassesses whether or not it\ncontrols an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control above.\nA change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.\n\n \n\nIf the Group loses control over a subsidiary,\nit derecognises the related assets (including goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve;\nand recognises the fair value of any investment retained and any resulting surplus or deficit in profit or loss. The Group’s share\nof components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate,\non the same basis as would be required if the Group had directly disposed of the related assets or liabilities.\n\n \n\nF-15 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**2.3**\n \n**CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES**\n\n  \n\nThe Group has adopted amendments to IAS\n21 Lack of Exchangeability for the first time for the current year's financial statements. The Group has not early adopted any other standard\nor amendment that has been issued but is not yet effective.\n\n \n\nAmendments to IAS 21 specify how an entity\nshall assess whether a currency is exchangeable into another currency and how it shall estimate a spot exchange rate at a measurement\ndate when exchangeability is lacking. The amendments require disclosures of information that enable users of financial statements to understand\nthe impact of a currency not being exchangeable. As the currencies that the Group had transacted in and the functional currencies of overseas\nsubsidiaries, branches, joint ventures and associates for translation into the Group's presentation currency were exchangeable, the\namendments did not have any impact on the Group's financial statements.\n\n  \n\n \n\n**2.4**\n \n**ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS**\n\n \n\nThe Group has not applied the following\nnew and amended IFRS Accounting Standards, that have been issued but are not yet effective, in these financial statements. The Group intends\nto apply these new and amended IFRS Accounting Standards, if applicable, when they become effective.\n\n \n\nIFRS 18\n \n*Presentation and Disclosure in Financial Statements2*\n\nIFRS 19 and its amendments\n \n*Subsidiaries without Public Accountability: Disclosures2*\n\nAmendments to IFRS 9 and IFRS 7\n \n*Amendments to the Classification and Measurement of Financial Instruments1*\n\nAmendments to IFRS 9 and IFRS 7\n \n*Contracts Referencing Nature-dependent Electricity1*\n\nAmendments to IFRS 10 Associate or and IAS 28\n \n*Sale or Contribution of Assets between an Investor and its Joint Venture3*\n\nAmendments to IAS 21\n \n*Translation to a Hyperinflationary Presentation Currency2*\n\nAnnual Improvements to IFRS Accounting Standards – Volume 11\n \n*Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 71*\n\n \n\n1\n \nEffective for annual periods beginning on or after 1 January 2026\n\n2\n \nEffective for annual/reporting periods beginning on or after 1 January 2027\n\n3\n \nNo mandatory effective date yet determined but available for adoption\n\n \n\nFurther information about those IFRS\nAccounting Standards that are expected to be applicable to the Group is described below.\n\n \n\nIFRS\n18 replaces IAS 1 *Presentation of Financial Statements*. While a number of sections have been brought forward from IAS 1 with limited\nchanges, IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and\nsubtotals. Entities are required to classify all income and expenses within the statement of profit or loss into one of the five categories:\noperating, investing, financing, income taxes and discontinued operations and to present two new defined subtotals. It also requires\ndisclosures about management-defined performance measures in a single note and introduces enhanced requirements on the grouping (aggregation\nand disaggregation) and the location of information in both the primary financial statements and the notes. Some requirements previously\nincluded in IAS 1 are moved to IAS 8 *Accounting Policies, Changes in Accounting Estimates and Errors*, which is renamed as IAS\n8 *Basis of Preparation of Financial Statements*. As a consequence of the issuance of IFRS 18, limited, but widely applicable, amendments\nare made to IAS 7 *Statement of Cash Flows*, IAS 33 *Earnings per Share* and IAS 34 *Interim Financial Reporting*. In\naddition, there are minor consequential amendments to other IFRS Accounting Standards. IFRS 18 and the consequential amendments to other\nIFRS Accounting Standards are effective for annual periods beginning on or after 1 January 2027 with earlier application permitted. Retrospective\napplication is required. The Group is currently analysing the new requirements and assessing the impact of IFRS 18 on the presentation\nand disclosure of the Group’s financial statements.\n\n \n\nF-16 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n**2.4**\n \n**ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONTINUED)**\n\n \n\nIFRS\n19 allows eligible entities to elect to apply reduced disclosure requirements while still applying the recognition, measurement and presentation\nrequirements in other IFRS Accounting Standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as\ndefined in IFRS 10 *Consolidated Financial Statements*, cannot have public accountability and must have a parent (ultimate or intermediate)\nthat prepares consolidated financial statements available for public use which comply with IFRS Accounting Standards or IFRS Accounting\nStandards. IFRS 19 was amended in April 2025 to include IFRS Accounting Standards in the eligibility criteria for applying the standard.\nThe standard was further amended in October 2025 to (i) remove disclosure objectives from IFRS 19; (ii) reduce the disclosure requirements\nrelating to supplier finance arrangements and a specific class of financial liabilities; and (iii) replace disclosure requirements relating\nto management-defined performance measures with a cross-reference to IFRS 18 for entities that use these measures. Earlier application\nis permitted. As the Company is a listed company, it is not eligible to elect to apply IFRS 19 and its amendments. Some of the Company’s\nsubsidiaries are considering the application of IFRS 19 and its amendments in their specified financial statements.\n\nAmendments\nto IFRS 9 and IFRS 7 *Amendments to the Classification and Measurement of Financial Instruments* clarify the date on which a financial\nasset or financial liability is derecognised and introduce an accounting policy option to derecognise a financial liability that is settled\nthrough an electronic payment system before the settlement date if specified criteria are met. The amendments clarify how to assess the\ncontractual cash flow characteristics of financial assets with environmental, social and governance and other similar contingent features.\nMoreover, the amendments clarify the requirements for classifying financial assets with non-recourse features and contractually linked\ninstruments. The amendments also include additional disclosures for investments in equity instruments designated at fair value through\nother comprehensive income and financial instruments with contingent features. The amendments shall be applied retrospectively with an\nadjustment to opening retained profits (or other component of equity) at the initial application date. Prior periods are not required\nto be restated and can only be restated without the use of hindsight. Earlier application of either all the amendments at the same time\nor only the amendments related to the classification of financial assets is permitted. The amendments are not expected to have any significant\nimpact on the Group’s financial statements.\n\nAmendments\nto IFRS 9 and IFRS 7 *Contracts Referencing Nature-dependent Electricity* clarify the application of the “own-use” requirements\nfor in-scope contracts and amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope contracts.\nThe amendments also include additional disclosures that enable users of financial statements to understand the effects these contracts\nhave on an entity’s financial performance and future cash flows. The amendments relating to the own-use exception shall be applied\nretrospectively. Prior periods are not required to be restated and can only be restated without the use of hindsight. The amendments\nrelating to the hedge accounting shall be applied prospectively to new hedging relationships designated on or after the date of the initial\napplication. Earlier application is permitted. The amendments to IFRS 9 and IFRS 7 shall be applied at the same time. The amendments\nare not expected to have any significant impact on the Group’s financial statements.\n\nAmendments\nto IFRS 10 and IAS 28 address an inconsistency between the requirements in IFRS 10 and in IAS 28 in dealing with the sale or contribution\nof assets between an investor and its associate or joint venture. The amendments require a full recognition of a gain or loss resulting\nfrom a downstream transaction when the sale or contribution of assets constitutes a business. For a transaction involving assets that\ndo not constitute a business, a gain or loss resulting from the transaction is recognised in the investor’s profit or loss only\nto the extent of the unrelated investor’s interest in that associate or joint venture. The amendments are to be applied prospectively.\nThe previous mandatory effective date of amendments to IFRS 10 and IAS 28 was removed by the HKICPA. However, the amendments are available\nfor adoption now.\n\n**\n\nF-17 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n**\n\n**2.4**\n \n**ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONTINUED)**\n\n*Annual\nImprovements to IFRS Accounting Standards – Volume 11* set out amendments to IFRS 1, IFRS 7 (and the accompanying *Guidance\non implementing IFRS 7*), IFRS 9, IFRS 10 and IAS 7. Details of the amendments that are expected to be applicable to the Group are\nas follows:\n\n·IFRS 7 *Financial\nInstruments: Disclosures*: The amendments have updated certain wording in paragraph B38 of IFRS 7 and paragraphs IG1, IG14 and IG20B\nof the *Guidance on implementing IFRS 7* for the purpose of simplification or achieving consistency with other paragraphs in the\nstandard and/or with the concepts and terminology used in other standards. In addition, the amendments clarify that the *Guidance on\nimplementing IFRS 7* does not necessarily illustrate all the requirements in the referenced paragraphs of IFRS 7 nor does it create\nadditional requirements. Earlier application is permitted. The amendments are not expected to have any significant impact on the Group’s\nfinancial statements.\n\n \n\n·IFRS 9 *Financial\nInstruments*: The amendments clarify that when a lessee has determined that a lease liability has been extinguished in accordance\nwith IFRS 9, the lessee is required to apply paragraph 3.3.3 of IFRS 9 and recognise any resulting gain or loss in profit or loss. However,\nthe amendments do not address how a lessee distinguishes between a lease modification as defined in IFRS 16 and an extinguishment of\na lease liability in accordance with IFRS 9. In addition, the amendments have updated certain wording in paragraph 5.1.3 of IFRS 9 and\nAppendix A of IFRS 9 to remove potential confusion. Earlier application is permitted. The amendments are not expected to have any significant\nimpact on the Group’s financial statements.\n\n \n\n·IFRS 10 *Consolidated\nFinancial Statements*: The amendments clarify that the relationship described in paragraph B74 of IFRS 10 is just one example of various\nrelationships that might exist between the investor and other parties acting as de facto agents of the investor, which removes the inconsistency\nwith the requirement in paragraph B73 of IFRS 10. Earlier application is permitted. The amendments are not expected to have any significant\nimpact on the Group’s financial statements.\n\n \n\nIAS\n7 *Statement of Cash Flows*: The amendments replace the term “cost method” with “at cost” in paragraph 37\nof IAS 7 following the prior deletion of the definition of “cost method”. Earlier application is permitted. The amendments\nare not expected to have any impact on the Group’s financial statements.\n\n \n\nF-18 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES**\n\n \n\n \n*(a)*\n*Business combinations and goodwill*\n\n \n\nBusiness combinations are accounted for\nusing the acquisition method. The consideration transferred is measured at the acquisition date fair value which is the sum of the acquisition\ndate fair values of assets transferred by the Group, liabilities assumed by the Group to the former owner of the acquiree and the equity\ninterests issued by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to measure\nthe non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets.\nAll other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.\n\n \n\nThe Group determines that it has acquired\na business when the acquired set of activities and assets includes an input and a substantive process that together significantly contribute\nto the ability to create outputs.\n\n \n\nWhen the Group acquires a business, it\nassesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual\nterms, economic circumstances and pertinent conditions as of the acquisition date. This includes the separation of embedded derivatives\nin host contracts of the acquiree.\n\n \n\nIf the business combination is achieved\nin stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized\nin profit or loss.\n\n \n\nAny contingent consideration to be transferred\nby the acquirer is recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability is measured\nat fair value with changes in fair value recognized in profit or loss. If the contingent consideration is not within the scope of IFRS\n9, it is measured in accordance with the appropriate IFRSs. Contingent consideration that is classified as equity is not remeasured and\nsubsequent settlement is accounted for within equity.\n\n \n\nGoodwill is initially measured at cost,\nbeing the excess of the aggregate of the consideration transferred, the amount recognized for non-controlling interests and any fair value\nof the Group’s previously held equity interests in the acquiree over the identifiable assets acquired and liabilities assumed. If\nthe sum of this consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference\nis, after reassessment, recognized in profit or loss as a gain on bargain purchase.\n\n \n\nAfter initial recognition, goodwill is\nmeasured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes\nin circumstances indicate that the carrying value may be impaired. The Group performs its annual impairment test of goodwill as of December\n31. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each\nof the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the\ncombination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.\n\n \n\nImpairment is determined by assessing\nthe recoverable amount of the cash-generating unit (group of cash-generating units) to which the goodwill relates. Where the recoverable\namount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized.\nAn impairment loss recognized for goodwill is not reversed in a subsequent period.\n\n \n\n \n\nF-19 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(a)*\n*Business combinations and goodwill (continued)*\n\n \n\nWhere goodwill has been allocated to\na cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated\nwith the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on the disposal.\nGoodwill disposed of in these circumstances is measured based on the relative value of the operation disposed of and the portion of the\ncash-generating unit retained.\n\n \n\n \n*(b)*\n*Fair value measurement*\n\n \n\nThe Group measures equity investments\nand derivative financial liabilities at fair value at the end of each reporting period. Fair value is the price that would be received\nto sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair\nvalue measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the\nprincipal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or\nliability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is\nmeasured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants\nact in their economic best interest.\n\n \n\nA fair value measurement of a non-financial\nasset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best\nuse or by selling it to another market participant that would use the asset in its highest and best use.\n\n \n\nThe Group uses valuation techniques that\nare appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant\nobservable inputs and minimizing the use of unobservable inputs.\n\n \n\nAll assets and liabilities for which\nfair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows,\nbased on the lowest-level input that is significant to the fair value measurement as a whole:\n\n \n\nLevel 1 – based on quoted prices\n(unadjusted) in active markets for identical assets or liabilities;\n\nLevel 2 – based on valuation techniques\nfor which the lowest-level input that is significant to the fair value measurement is observable, either directly or indirectly;\n\nLevel 3 – based on valuation techniques\nfor which the lowest-level input that is significant to the fair value measurement is unobservable.\n\n \n\nFor assets and liabilities that are recognized\nin the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy\nby reassessing categorization (based on the lowest-level input that is significant to the fair value measurement as a whole) at the end\nof each reporting period.\n\n \n\n \n\nF-20 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(c)*\n*Related parties*\n\n \n\nA party is considered to be related to\nthe Group if:\n\n \n\n \n(1)\nthe party is a person or a close member of that person’s family and that person\n\n \n\n \n(i)\nhas control or joint control over the Group;\n\n \n(ii)\nhas significant influence over the Group; or\n\n \n(iii)\nis a member of the key management personnel of the Group or of a parent of the Group;\n\n \n\nor\n\n \n\n \n(2)\nthe party is an entity where any of the following conditions applies:\n\n \n\n \n(i)\nthe entity and the Group are members of the same group;\n\n \n(ii)\none entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);\n\n \n(iii)\nthe entity and the Group are joint ventures of the same third party;\n\n \n(iv)\none entity is a joint venture of a third entity and the other entity is an associate of the third entity;\n\n \n(v)\nthe entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;\n\n \n(vi)\nthe entity is controlled or jointly controlled by a person identified in (1);\n\n \n(vii)\na person identified in (1)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and\n\n \n(viii)\nthe entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group.\n\n \n\n \n*(d)*\n*Property, plant and equipment and depreciation*\n\n \n\nProperty, plant and equipment comprise\nbuildings, machinery and equipment, motor vehicles and office and other equipment. The cost of an item of property, plant and equipment\ncomprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended\nuse.\n\n \n\nBuildings, machinery and equipment, motor\nvehicles and office and other equipment are stated at cost less accumulated depreciation and any impairment losses. Expenditures for routine\nrepairs and maintenance are expensed as incurred.\n\n \n\nDepreciation for the following items\nis calculated on the straight-line basis over each asset’s estimated useful life down to the estimated residual value of each asset.\n\n \n\nEstimated useful lives are as follows:\n\n Schedule of estimated useful lives of property, plant and equipment\n \n \n\nBuildings\n \n8–35 years\n\nMachinery and equipment\n \n3–15 years\n\nMotor vehicles\n \n4–8 years\n\nOffice and other equipment\n \n4–8 years\n\n \n\nResidual values, useful lives and the\ndepreciation method are reviewed and adjusted, if appropriate, at each reporting date.\n\n \n\nF-21 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(d)*\n*Property, plant and equipment and depreciation (continued)*\n\n \n\nExpenditure incurred after items of property,\nplant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the statement of profit or loss\nin the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection\nis capitalized in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required\nto be replaced at intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciates them accordingly.\n\n \n\nAn item of property, plant and equipment\nincluding any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from\nits use or disposal. Any gain or loss on disposal or retirement recognized in the statement of profit or loss in the year the asset is\nderecognized is the difference between the net sales proceeds and the carrying amount of the relevant asset.\n\n \n\n \n*(e)*\n*Leases*\n\n* *\n\nThe Group assesses at contract inception\nwhether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use\nof an identified asset for a period of time in exchange for consideration.\n\n \n\nGroup as a lessee\n\nThe Group applies a single recognition\nand measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities\nfor obligations to make lease payments and right-of-use assets representing the right to use the underlying assets.\n\n \n\nAt inception or on reassessment of a\ncontract that contains a lease component and a non-lease component, the Group adopts the practical expedient not to separate the non-lease\ncomponent and to account for the lease component and the associated non-lease component (e.g., property management services for leases\nof properties) as a single lease component.\n\n \n\n \n\nF-22 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(e)*\n*Leases (continued)*\n\n \n\n(1) Right-of-use assets\n\n \n\nRight-of-use assets are recognized at\nthe commencement date of the lease (that is, the date the underlying asset is available for use). Right-of-use assets are measured at\ncost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of\nright-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or\nbefore the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the\nshorter of the lease terms and the estimated useful lives of the assets as follows:\n\n Schedule of estimated useful lives of right-of-use assets\n \n \n\nOffices and warehouses\n \n2 – 5 years\n\nMotor vehicles\n \n2 – 10 years\n\n \n\nIf ownership of the leased asset transfers\nto the Group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the\nestimated useful life of the asset.\n\n \n\n(2) Lease liabilities\n\n \n\nLease liabilities are recognized at the\ncommencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed\npayments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index\nor a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase\noption reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects\nthe Group exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognized\nas an expense in the period in which the event or condition that triggers the payment occurs.\n\n \n\nIn calculating the present value of lease\npayments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease\nis not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest\nand reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification,\na change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or\nrate) or a change in assessment of an option to purchase the underlying asset.\n\n \n\n \n\nF-23 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(e)*\n*Leases (continued)*\n\n \n\nGroup as a lessee (continued)\n\n \n\n(3) Short-term leases\n\n* *\n\nThe Group applies the short-term lease\nrecognition exemption to its short-term leases of buildings (that is those leases that have a lease term of 12 months or less from the\ncommencement date and do not contain a purchase option).\n\n \n\nLease payments on short-term leases are\nrecognized as an expense on a straight-line basis over the lease term.\n\n* *\n\n \n*(f)*\n*Exploration and evaluation costs*\n\n \n\nExploration and evaluation assets include\ntopographical and geological surveys, exploratory drilling, sampling and trenching and activities in relation to commercial and technical\nfeasibility studies, and expenditure incurred to secure further mineralization in existing bodies and to expand the capacity of a mine.\nExpenditure incurred prior to acquiring legal rights to explore an area is expensed as incurred.\n\n \n\nOnce the exploration right has been acquired,\nexploration and evaluation expenditures are charged to the statement of profit or loss as incurred, unless a future economic benefit is\nmore likely than not to be realized. Exploration and evaluation assets acquired in a business combination are initially recognized at\nfair value. They are subsequently stated at cost less accumulated impairment.\n\n \n\nWhen it can be reasonably ascertained\nthat a mining property is capable of commercial production, exploration and evaluation costs are transferred to tangible or intangible\nassets according to the nature of the exploration and evaluation assets. If any project is abandoned during the evaluation stage, the\ntotal expenditure thereon will be written off.\n\n \n\n \n*(g)*\n*Impairment of non-financial assets*\n\n \n\nWhere an indication of impairment exists,\nor when annual impairment testing for an asset is required (other than inventories, financial assets, deferred tax assets and contract\nassets), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or\ncash-generating unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless\nthe asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the\nrecoverable amount is determined for the cash-generating unit to which the asset belongs. In testing a cash-generating unit for impairment,\na portion of the carrying amount of a corporate asset (e.g., a headquarters building) is allocated to an individual cash-generating unit\nif it can be allocated on a reasonable and consistent basis or, otherwise, to the smallest group of cash-generating units.\n\n \n\nAn impairment loss is recognized only\nif the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted\nto their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks\nspecific to the asset. An impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense\ncategories consistent with the function of the impaired asset.\n\n \n\nAn assessment is made at the end of each\nreporting period as to whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased.\nIf such an indication exists, the recoverable amount is estimated. A previously recognized impairment loss of an asset other than goodwill\nis reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount\nhigher than the carrying amount that would have been determined (net of any depreciation/amortization) had no impairment loss been recognized\nfor the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which\nit arises.\n\n \n\nF-24 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(h)*\n*Investments and other financial assets*\n\n \n\nInitial recognition and measurement\n\nFinancial assets are classified, at initial\nrecognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit\nor loss.\n\n \n\nThe classification of financial assets\nat initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model\nfor managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group\nhas applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial\nasset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs.\n\n \n\nIn order for a financial asset to be\nclassified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are\nsolely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that\nare not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.\n\n \n\nThe Group’s business model for\nmanaging financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines\nwhether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified\nand measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual\ncash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business\nmodel with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the\naforementioned business models are classified and measured at fair value through profit or loss.\n\n \n\nPurchases or sales of financial assets\nthat require delivery of assets within the period generally established by regulation or convention in the marketplace are recognised\non the trade date, that is, the date that the Group commits to purchase or sell the asset.\n\n \n\nSubsequent measurement\n\nThe subsequent measurement of financial\nassets depends on their classification as follows:\n\n \n\nFinancial assets at amortized cost\n(debt instruments)\n\nFinancial assets at amortized cost are\nsubsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the statement\nof profit or loss when the asset is derecognized, modified or impaired.\n\n \n\nFinancial assets at fair value through\nother comprehensive income (debt instruments)\n\nFor debt investments at fair value through\nother comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statement\nof profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes\nare recognized in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income\nis recycled to the statement of profit or loss.\n\n \n\nF-25 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(h)*\n*Investments and other financial assets (continued)*\n\n \n\nFinancial assets at fair value through\nprofit or loss\n\nFinancial assets at fair value through\nprofit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement\nof profit or loss.\n\n \n\nThis category includes derivative instruments\nand equity investments which the Group had not irrevocably elected to classify at fair value through other comprehensive income. Dividends\non the equity investments are also recognized as other income in the statement of profit or loss when the right of payment has been established.\n\n \n\n \n*(i)*\n*Derecognition of financial assets*\n\n \n\nA financial asset (or, where applicable,\na part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s\nstatement of financial position) when:\n\n \n\n \n•\nthe rights to receive cash flows from the asset have expired; or\n\n \n•\nthe Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.\n\n \n\nWhen the Group has transferred its rights\nto receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained\nthe risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of\nthe asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s\ncontinuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability\nare measured on a basis that reflects the rights and obligations that the Group has retained.\n\n \n\nContinuing involvement that takes the\nform of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount\nof consideration that the Group could be required to repay.\n\n \n\n \n*(j)*\n*Impairment of financial assets*\n\n \n\nThe Group recognizes an allowance for\nexpected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on\nthe difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to\nreceive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from\nthe sale of collateral held or other credit enhancements that are integral to the contractual terms.\n\n \n\nF-26 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(j)*\n*Impairment of financial assets (continued)*\n\n \n\nGeneral approach\n\nECLs are recognized in two stages. For\ncredit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit\nlosses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which\nthere has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected\nover the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).\n\n \n\nAt each reporting date, the Group assesses\nwhether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the\nGroup compares the risk of a default occurring on the financial instrument as of the reporting date with the risk of a default occurring\non the financial instrument as of the date of initial recognition and considers reasonable and supportable information that is available\nwithout undue cost or effort, including historical and forward-looking information.\n\n \n\nThe Group considers a financial asset\nin default based on historical patterns and the credit risk management practices of the Group. However, in certain cases, the Group may\nalso consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive\nthe outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.\n\n \n\nA financial asset is written off when\nthere is no reasonable expectation of recovering the contractual cash flows.\n\n \n\nFinancial assets at amortized cost excluding\ntrade receivables and contract assets are subject to impairment under the general approach, and they are classified within the following\nstages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as detailed below:\n\n \n\nStage 1 – Financial instruments\nfor which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount\nequal to 12-month ECLs;\n\n \n\nStage 2 – Financial instruments\nfor which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for\nwhich the loss allowance is measured at an amount equal to lifetime ECLs.\n\n \n\nStage 3 – Financial assets that\nare credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance\nis measured at an amount equal to lifetime ECLs;\n\n \n\nSimplified approach\n\nFor trade receivables and contract assets\nincluding those containing a significant financing component, the Group applies the simplified approach in calculating ECLs. Therefore,\nthe Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date.\nThe Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors\nspecific to the debtors and the economic environment.\n\n \n\n \n*(k)*\n*Financial liabilities*\n\n* *\n\nInitial recognition and measurement\n\nFinancial liabilities are classified,\nat initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives\ndesignated as hedging instruments in an effective hedge, as appropriate.\n\n \n\nAll financial liabilities are recognized\ninitially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.\n\n \n\n \n\nF-27 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n** **\n\n \n*(k)*\n*Financial liabilities (continued)*\n\n \n\nThe Group’s financial liabilities\ninclude trade payables, financial liabilities included in other payables and accruals, dividends payable, derivative financial liabilities,\ninterest-bearing loans and borrowings, due to related companies and due to the shareholders.\n\n \n\nSubsequent measurement\n\nThe subsequent measurement of financial\nliabilities depends on their classification as follows:\n\n \n\nFinancial liabilities at fair value\nthrough profit or loss\n\nFinancial liabilities at fair value through\nprofit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair\nvalue through profit or loss.\n\n \n\nFinancial liabilities are classified\nas held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial\ninstruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated\nembedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses\non liabilities held for trading are recognized in the statement of profit or loss. The net fair value gain or loss recognized in the statement\nof profit or loss does not include any interest charged on these financial liabilities.\n\n** **\n\nFinancial liabilities designated upon\ninitial recognition as at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria\nin IFRS 9 are satisfied. Gains or losses on liabilities designated at fair value through profit or loss are recognized in the statement\nof profit or loss, except for the gains or losses arising from the Group’s own credit risk which are presented in other comprehensive\nincome with no subsequent reclassification to the statement of profit or loss. The net fair value gain or loss recognized in the statement\nof profit or loss does not include any interest charged on these financial liabilities.\n\n \n\nFinancial liabilities at amortized\ncost\n\nAfter initial recognition, lease liabilities\nare subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial,\nin which case they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the liabilities are derecognized\nas well as through the effective interest rate amortization process.\n\n \n\nAmortized cost is calculated by taking\ninto account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective\ninterest rate amortization is included in finance costs in the statement of profit or loss.\n\n \n\n \n*(l)*\n*Derecognition of financial liabilities*\n\n \n\nA financial liability is derecognized\nwhen the obligation under the liability is discharged or canceled, or expires.\n\n \n\nWhen an existing financial liability\nis replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially\nmodified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability,\nand the difference between the respective carrying amounts is recognized in the statement of profit or loss.\n\n \n\n \n*(m)*\n*Offsetting of financial instruments*\n\n \n\nFinancial assets and financial liabilities\nare offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset\nthe recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.\n\n \n\n \n\nF-28 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n* *\n\n \n*(n)*\n*Cash and cash equivalents*\n\n* *\n\nCash and cash equivalents in the statement\nof financial position comprise cash on hand and at banks, and short-term highly liquid deposits with a maturity of generally within three\nmonths that are readily convertible into known amounts of cash, subject to an insignificant risk of changes in value held for the purpose\nof meeting short-term cash commitments.\n\n \n\nFor the purpose of the statement of cash\nflows, cash and cash equivalents comprise cash on hand and at banks, and short-term deposits as defined above, less bank overdrafts which\nare repayable on demand and form an integral part of the Group’s cash management.\n\n \n\n \n*(o)*\n*Employee benefits*\n\n* *\n\nPension obligations\n\nThe Group contributes on a monthly basis\nto various defined contribution retirement benefit plans administered by the PRC government. The relevant government agencies undertake\nto assume the retirement benefit obligation payable to all existing and future retired employees under these plans and the Group has no\nfurther obligation for post-retirement benefits beyond the contributions made. Further information is set out in Note 6 to the consolidated\nfinancial statements.\n\n* *\n\nHousing funds\n\nAll full-time employees of the Group\nin mainland China are entitled to participate in various government-sponsored housing funds. The Group contributes on a monthly basis\nto these funds based on certain percentages of the salaries of the employees. The Group's liability with respect to these funds is limited\nto the contributions payable in each year.\n\n \n\n \n*(p)*\n*Share-based payments*\n\n* *\n\nThe Company operates a share option scheme\nfor the purpose of providing incentives and rewards to employees (including directors) and consultants who contribute to the success of\nthe Group's business and grants warrants for the Company’s shares for the purpose of paying fees to the placement agent who provided\nthe professional services during the Company’s private placement. The employees and consultants (collectedly with placement agent,\nthe “grantees”) of the Group receive remuneration in the form of share-based payments, whereby the grantees render services\nin exchange for equity instruments (“equity-settled transactions”).\n\n \n\n \n\nF-29 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n** **\n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n** **\n\n \n*(p)*\n*Share-based payments (continued)*\n\n \n\nThe cost of equity-settled transactions\nis recognized in administrative expense, together with a corresponding increase in equity, over the period in which the performance and/or\nservice conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at the end of each reporting period\nuntil the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of\nequity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement\nin the cumulative expense recognized as at the beginning and end of that period.\n\n \n\nService and non-market performance conditions\nare not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed\nas part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions\nare reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement,\nare considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate\nexpensing of an award unless there are also service and/or performance conditions.\n\n \n\nFor awards that do not ultimately vest\nbecause non-market performance and/or service conditions have not been met, no expense is recognized. Where awards include a market or\nnon-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied,\nprovided that all other performance and/or service conditions are satisfied.\n\n \n\nWhere the terms of an equity-settled\naward are modified, as a minimum an expense is recognized as if the terms had not been modified, if the original terms of the award are\nmet. In addition, an expense is recognized for any modification that increases the total fair value of the share-based payments, or is\notherwise beneficial to the employee as measured at the date of modification.\n\n \n\nWhere an equity-settled award is canceled,\nit is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately.\nThis includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a\nnew award is substituted for the canceled award, and is designated as a replacement award on the date that it is granted, the cancelled\nand new awards are treated as if they were a modification of the original award, as described in the previous paragraph.\n\n \n\nThe dilutive effect of outstanding options\nis reflected as additional share dilution in the computation of earnings per share.\n\n \n\n \n\nF-30 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n* *\n\n \n*(q)*\n*Income taxes*\n\n \n\nIncome tax comprises current and deferred\ntax. Income tax relating to items recognized outside profit or loss is recognized outside profit or loss, either as other comprehensive\nincome or loss, or directly in equity.\n\n \n\nCurrent tax assets and liabilities are\nmeasured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the\namount are those that are enacted or substantially enacted by the end of the reporting date, taking into consideration interpretations\nand practices prevailing in the countries in which the Group operates.\n\n \n\nDeferred tax is provided, using the liability\nmethod, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts\nfor financial reporting purposes.\n\n \n\nDeferred tax liabilities are recognized\nfor all taxable temporary differences, except:\n\n \n\n \n·\nWhen the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and\n\n \n\n \n·\nIn respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.\n\n \n\nDeferred tax assets are recognized for\nall deductible temporary differences, and the carryforward of unused tax credits and unused tax losses, to the extent that it is probable\nthat taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and\nunused tax losses can be utilized, except:\n\n \n\n \n·\nWhere the deferred tax assets relating to the deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and\n\n \n\n \n·\nIn respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.\n\n \n\nThe carrying amount of deferred tax assets\nis reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available\nto allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date\nand are recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of\nthe deferred tax asset to be recovered.\n\n \n\nDeferred tax assets and liabilities are\nmeasured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax\nrates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.\n\n \n\nDeferred tax assets and deferred tax\nliabilities are offset if and only if the Group has a legally enforceable right to set off current tax assets and current tax liabilities\nand the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same\ntaxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize\nthe assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or\nassets are expected to be settled or recovered.\n\n \n\nF-31 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n* *\n\n \n*(r)*\n*Foreign currencies*\n\n \n\nThe functional currency of the Company\nis the Hong Kong dollars. The functional currency of substantially all the operations of the Group is the CNY, the national currency of\nthe PRC. Transactions denominated in currencies other than the CNY recorded by the entities of the Group are initially recorded using\ntheir respective functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in\nother currencies have been translated into CNY at the functional currency rates of exchange prevailing at the end of the reporting period.\nThe resulting exchange gains or losses are credited or charged to the consolidated statements of profit or loss. Non-monetary items that\nare measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions.\n\n \n\nThe consolidated financial statements\nof certain overseas subsidiary operations with a functional currency other than the CNY have been translated into CNY. The assets and\nliabilities of these entities have been translated using the exchange rates prevailing at the reporting date and their consolidated statements\nof profit or loss have been translated using the weighted average exchange rate for the year. Resulting translation adjustments are reported\nas a separate component of other comprehensive income.\n\n \n\nOn disposal of a foreign operation, the\ncumulative amount recognized in equity relating to that particular foreign operation is recognized in the consolidated statements of profit\nor loss.\n\n**  **\n\n \n*(s)*\n*Convenience translation*\n\n \n\nThe consolidated financial statements\nare stated in CNY. The translation of amounts from CNY into US$ is supplementary information and is included solely for the convenience\nof the readers and has been made at the rate of exchange quoted by www.ofx.com on December 31, 2025 of US$1.00 = CNY6.9964. No representation\nis made that the CNY amounts could have been, or could be, converted into US$ at that rate on December 31, 2025 or at any other date.\n\n \n\n \n*(t)*\n*Provisions*\n\n \n\nA provision is recognized when a present\nobligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be\nrequired to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.\n\n \n\nWhen the Group expects some or all of\na provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.\nThe expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.\n\n \n\nWhen the effect of discounting is material,\nthe amount recognized for a provision is the present value at the end of the reporting period of the future expenditures expected to be\nrequired to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in\nfinance costs in the statement of profit or loss.\n\n \n\n \n*(u)*\n*Dividends*\n\n \n\nFinal dividends are recognized as a liability\nwhen they are approved by the Directors in a general meeting.\n\n \n\nInterim dividends are simultaneously\nproposed and declared, because the Company’s memorandum and articles of association grant the Directors the authority to declare\ninterim dividends. Consequently, interim dividends are recognized immediately as a liability when they are proposed and declared.\n\n \n\n \n\nF-32 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n** **\n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n* *\n\n \n*(v)*\n*Government grants*\n\n \n\nGovernment grants are recognized at their\nfair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When\nthe grant relates to an expense item, it is recognized as income on a systematic basis over the period in which the costs, for which it\nis intended to compensate, are expensed.\n\n \n\n \n*(w)*\n*Service concession arrangement – Discontinued Operations*\n\n \n\nThe Group has entered into Public-Private\nPartnership (“PPP”) projects under Build-Operate-Transfer (“BOT”) arrangements with the governmental entity of\nGuangdong Shaoguan Wujiang District. The BOT arrangement is a service concession arrangement under IFRIC 12 Service Concession Arrangements,\nbecause the local government controls and regulates the services that the Group must provide with the infrastructure at a pre-determined\nservice charge and, upon expiration of concession right agreements, the infrastructure has to be transferred to the local government at\nnil consideration.\n\n \n\nUnder this service concession arrangement:\n\n \n\n- the grantor controls or regulates the\nservices the Group must provide with the infrastructure, to whom it must provide them, and at what price; and\n\n \n\n- the grantor controls, through ownership,\nbeneficial entitlement or otherwise, any significant residual interest in the infrastructure at the end of the term of the arrangement,\nor the infrastructure is used for its entire useful life under the arrangements, or both the Group’s practical ability to sell or\npledge the infrastructure is restricted and continuing right of use of the infrastructure is given to the grantor throughout the period\nof the arrangements.\n\n \n\nA financial asset (receivable under a\nservice concession arrangement) is recognized to the extent that (a) the Group has an unconditional right to receive cash or another financial\nasset from or at the direction of the grantor for the construction services rendered and/or the consideration paid and payable by the\nGroup for the right to charge users of the public service; and (b) the grantor has little, if any, discretion to avoid payment, usually\nbecause the agreement is enforceable by law. The Group has an unconditional right to receive cash or another financial asset if nothing\nother than the passage of time is required before payment of the consideration is due and the grantor contractually guarantees to pay\nthe Group (a) specified or determinable amounts or (b) the shortfall, if any, between amounts received from users of the public service\nand specified or determinable amounts, even if the payment is contingent on the Group ensuring that the infrastructure meets specified\nquality of efficiency requirements. The financial asset (receivable under service concession arrangement) is accounted for in accordance\nwith the policy set out for loans and receivables under “*(i) Investments and other financial assets*”.\n\n \n\nAn intangible asset (concession right)\nis recognized to the extent that the Group receives a right to charge users of the public service, which is not an unconditional right\nto receive cash because the amounts are contingent on the extent that the public uses the service. The intangible asset (concession right)\nis accounted for in accordance with the policy set out for “(e) Intangible assets (other than goodwill)”.\n\n \n\nConstruction services\n\nIf the Group is paid partly with a financial\nasset and partly with an intangible asset, each component of the consideration is accounted for separately and the consideration received\nor receivable for both components will be recognized initially at the fair value of the consideration received or receivable.\n\n \n\nRevenue relating to construction is accounted\nfor in accordance with the policy set out for “Revenue from contracts with customers - Construction services” below.\n\n  \n\n \n\nF-33 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n** **\n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(w)*\n*Service concession arrangement - Discontinued Operations (continued)*\n\n \n\nOperating services\n\nRevenue relating to operating services\nis accounted for in accordance with the policy for “ *(aa) Revenue recognition*-Revenue from contracts with customers-Operation\nservices of service concession arrangements” below. Costs for operating services are expensed in the period in which they are incurred.\n\n \n\n \n*(x)*\n*Revenue recognition – Discontinued Operations*\n\n \n\nRevenue from contracts with customers\n\nRevenue from contracts with customers\nis recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which\nthe Group expects to be entitled in exchange for those goods or services.\n\n \n\nWhen the consideration in a contract\nincludes a variable amount, the amount of consideration is estimated to be that to which the Group will be entitled in exchange for transferring\nthe goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly\nprobable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty\nwith the variable consideration is subsequently resolved.\n\n \n\nWhen the contract contains a financing\ncomponent which provides the customer with a significant benefit of financing the transfer of goods or services to the customer for more\nthan one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected\nin a separate financing transaction between the Group and the customer at contract inception. When the contract contains a financing component\nwhich provides the Group with a significant financial benefit for more than one year, revenue recognized under the contract includes the\ninterest expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment\nby the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the\neffects of a significant financing component, using the practical expedient in IFRS 15.\n\n \n\nThe Group satisfies a performance obligation\nand recognizes revenue over time, if one of the following criteria is met:\n\n \n\n– The customer simultaneously receives\nand consumes the benefits provided by the Group’s performance as the Group performs.\n\n– The Group’s performance\ncreates or enhances an asset that the customer controls as the asset is created or enhanced.\n\n– The Group’s performance\ndoes not create an asset with an alternate use to the Group and the Group has an enforceable right to payment for performance completed\nto date.\n\n \n\nIf none of the above conditions are met,\nthe Group recognizes revenue at the point in time at which the performance obligation is satisfied.\n\n \n\nThe progress towards complete satisfaction\nof the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation,\nby reference to the surveyors’ assessment of work performed and the costs incurred up to the end of the reporting period as a percentage\nof total estimated costs for each contract.\n\n \n\nWhen the Group provides more than one\nservice in a service concession arrangement, the transaction price will be allocated to each performance obligation by reference to their\nrelative stand-alone selling prices. In determining the transaction price, the Group adjusts the promised amount of consideration for\nthe effect of a financing component if it is significant.\n\n \n\nF-34 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(x)*\n*Revenue recognition – Discontinued Operations (continued)*\n\n \n\nRevenue from contracts with customers\n(continued)\n\n* *\n\n*Construction services*\n\nThe Group’s performance with respect\nto construction services creates or enhances an asset or work in progress that the customer controls as the asset is created or enhanced.\nThe Group satisfies the performance obligation and recognizes revenue over time, by reference to completion of the specific transaction\nassessed on the basis of either the surveyors’ assessment of work performed for Engineering Procurement Construction (EPC) contracts\nor the costs incurred up to the end of the reporting period as a percentage of total estimated costs for certain contracts solely associated\nwith equipment installation.\n\n \n\nIn some circumstances, the Group as subcontractor\nof the construction service may not be able to reasonably measure the outcome of a performance obligation in the early states of a contract.\nThe Group recognizes revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the\nperformance obligation.\n\n \n\nThe fair value of the construction services\nunder a service concession arrangement is initially estimated at the date of the agreement based on a cost-plus-margin basis with reference\nto the prevailing market rate of gross margin applicable to similar construction services rendered\n\n \n\n*Operation services of service concession\narrangements*\n\nOperation revenue from service concession\narrangements is recognized over the period of time that the services are rendered, and the benefits are received and consumed simultaneously\nby the customers.\n\n \n\n*Sales of water treatment equipment*\n\nRevenue from the sales of water treatment\nequipment is recognized at the point in time when control of the asset is transferred to the customer. Control is generally transferred\nwhen: (i) the customer obtains the physical possession or the legal title of water treatment equipment; and (ii) the Group has a present\nright to payment and the collection of the consideration is probable.\n\n \n\n*Maintenance services*\n\nRevenue from maintenance services is\nrecognized over the period of time that the services are rendered, and the benefits are received and consumed simultaneously by the customers.\n\n \n\n*Trading of copper ores*\n\nThe Group purchased copper ores from\nthird-party suppliers and then resells to a third-party trading company. The Group controlled the copper ores prior to selling them to\ncustomers. Revenue was recognized on a gross basis, and at the point in time when control of the asset was transferred to the customer,\nupon delivery of the copper ores to the customers.\n\n \n\n \n\nF-35 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**2.5**\n \n**MATERIAL ACCOUNTING POLICIES (CONTINUED)**\n\n \n\n \n*(x)*\n*Revenue recognition - Discontinued Operations (continued)*\n\n \n\nOther income\n\nImputed finance income under a service\nconcession arrangement is recognized on an accrual basis using the effective interest rate method by applying the rate that discounts\nthe estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net\ncarrying amount of the financial asset.\n\n \n\nInterest income is recognized on an accrual\nbasis using the effective interest method by applying the rate that discounts the estimated future cash receipts over the expected life\nof the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.\n\n \n\n \n*(y)*\n*Contract assets and contract liabilities – Discontinued Operations*\n\n \n\nContract assets\n\nIf the Group performs by transferring\nservices or goods to a customer before being unconditionally entitled to the consideration under the contract terms, a contract asset\nis recognized for the earned consideration that is conditional. Contract assets are subject to impairment assessment according to the\npolicy set out for “*(k) Impairment of financial assets”*above. They are reclassified to trade receivables when the\nright to the consideration becomes unconditional.\n\n \n\nContract liabilities\n\nA contract liability is the obligation\nto transfer services or goods to a customer from which the Group has received consideration (or from which an amount of consideration\nis unconditionally due) from the customer. If a customer pays consideration before the Group transfers services or goods to the customer,\na contract liability is recognized when the payment is made or the payment is unconditionally due (whichever is earlier). Contract liabilities\nare recognized as revenue when the Group performs under the contract.\n\n \n\n \n\nF-36 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n**2.6****SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES**\n\n \n\nThe preparation of the consolidated financial\nstatements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the reported amounts\nof assets, liabilities, revenues and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require\na material adjustment to the carrying amount of the asset or liability affected in future periods.\n\n \n\n**Judgments**\n\n \n\nIn the process of applying the Group’s\naccounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant\neffects on the amounts recognized in the financial statements.\n\n \n\nIncome taxes\n\n \n\nThe Group is subject to income taxes\nin Hong Kong and the PRC. The Group carefully evaluates tax implications of its transactions in accordance with prevailing tax regulations\nand makes tax provision accordingly. However, judgment is required in determining the Group’s provision for income taxes as there\nare many transactions and calculations, of which the ultimate tax determination is uncertain, during the ordinary course of business.\nWhere the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact\non the income tax and deferred tax provision in the periods in which such determination is made.\n\n \n\n**Estimation uncertainty**\n\n \n\nContract asset and intangible asset\nunder IFRIC 12 *Service Concession Arrangements – Discontinued Operations*\n\n \n\nThe Group recognizes the consideration\nreceived or receivable in exchange for the construction services as a contract asset and an intangible asset under a service concession\narrangement. However, if the Group is paid for the construction services partly by a cash consideration and partly by an intangible asset,\nit is necessary to separately account for each component of the operator’s consideration. Both components of consideration received\nor receivable initially are recognized at their respective fair values.\n\n \n\nThe segregation of the consideration\nfor a service concession arrangement between the contract asset component and the intangible asset component, if any, requires the Group\nto make an estimate of a number of factors, which include, the fair value of the construction services, expected future water treatment\nvolume of the relevant water treatment plant over its service concession period, future guaranteed receipts and unguaranteed receipts,\nand a discount rate in order to calculate the present value of those cash flows. These estimates, including revenue recognition of the\ncontract asset and intangible asset components are determined by the Group’s management based on their experience and assessment\nof current and future market conditions.\n\n \n\nProvision for expected credit losses\non financial assets at amortized cost and contract assets – Discontinued Operations\n\n \n\nThe policy for provision for ECLs on\ncontract assets and financial assets at amortized cost including trade receivables, other receivables and amounts due from related parties\nis based on an ECL model. A considerable amount of estimation is required in assessing the available information which includes past collection\nhistory, age of balances, customer type and forecasts of future economic conditions to estimate the ECLs. The amount of ECLs is sensitive\nto changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic\nconditions may also not be representative of a customers’ actual default in the future. The information about the ECLs on the Group’s\ncontract assets and financial assets at amortized cost is disclosed in Note 12.\n\n \n\n \n\nF-37 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**3.****DISCONTINUED OPERATIONS**\n\nOn July 28, 2023, the Company’s\nboard of directors had approved the Sale and Purchase Agreement (“SPA\") with Feishang Group. Pursuant to the SPA, the Company\nagreed to sell 100% equity interest of Precise Space-Time Technology Limited (\"PSTT\") to Feishang Group, together with PSTT's\noutstanding payable owed to the Company, for consideration of approximately CNY95,761 comprising: (i) CNY-34,197, the fair value of 100%\nequity interest of PSTT as determined by the independent valuation report dated July 28, 2023. (ii) CNY129,958, the book value of PSTT's\noutstanding payable owed to the Company (referred as Disposal of PSTT). PSTT operated the wastewater treatment segment. After the disposal,\nthe Company will not operate any wastewater treatment business and will continue operating its exploration and mining business.\n\nThe disposal of PSTT was accounted for\nas an equity transaction of entities under common control. The consideration received by the Company for the disposal has been accounted\nfor as a deemed contribution from the controlling shareholder in the consolidated statement of changes in equity. The assets and liabilities\nof the wastewater treatment transferred to Mr. Li Feilie were accounted for as a deemed distribution to the controlling shareholder on\nthe closing date of the transaction.\n\n \n\nThe results of PSTT for the period\nis presented below.\n\n Schedule of disposal pstt \n  \n\n  \nFor the period from January 1, 2023 to July 28, 2023 \n\n  \n **CNY** \n\nRevenue \n 12,748 \n\nCost of sales \n (5,872)\n\nGross profit \n 6,876 \n\nSelling and distribution expenses \n (442)\n\nAdministrative expenses \n (5,699)\n\nOther income \n 142 \n\nImpairment losses on financial assets \n (9,931)\n\nFinance costs \n (1,906)\n\nFinance income \n 8,785 \n\n  \n   \n\nLOSS\nBEFORE INCOME TAX  \n (2,175)\n\n  \n   \n\nIncome tax expense \n (1,931)\n\n  \n   \n\nLOSS FOR THE PERIOD\nFROM THE DISCONTINUED OPERATIONS  \n (4,106)\n\nAttributable to: \n   \n\nOwners of the company \n (5,504)\n\nNon-controlling interests \n 1,398 \n\n \n\n \n\nF-38 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**3.****DISCONTINUED OPERATIONS (CONTINUED)**\n\nThe net cash flows incurred by PSTT are\nas follows:\n\nSchedule of discontinued operations cash flow \n  \n\n  \nFor the period from January 1, 2023 to July 28, 2023 \n\n  \n **CNY** \n\nOperating activities \n 15,162 \n\nInvesting activities \n (12)\n\nFinancing activities \n (3,378)\n\nNet foreign exchange difference \n 33 \n\nNet increase in cash and cash equivalents \n 11,805 \n\n  \n   \n\nLoss per share \n   \n\n– Basic, from the discontinued operations \n (5.35)\n\n– Diluted, from the discontinued operations \n (5.35)\n\nThe calculations of basic and diluted\nearnings per share from discontinued operations are based on:\n\n  \nFor the period from January 1, 2023 to July 28, 2023 \n\n  \n **CNY** \n\nLoss for the period attributable to owners of the Company from discontinued operations \n (5,504)\n\nWeighted average number of ordinary shares in issue during the period used in the basic and diluted earnings per share calculation (Note 8) \n 1,027,832 \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nF-39 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**4.****SEGMENT INFORMATION**\n\nOperating segments are identified on\nthe basis of internal reports about components of the Group that are regularly reviewed by the Group’s management and the Company’s\nBoard of Directors for the purpose of resource allocation and performance assessment.\n\nManagement assesses the performance of\noperating segments based on profit or loss before income tax in related periods. The manner of assessment is consistent with that applied\nin these financial statements.\n\nAfter the disposal of PSTT in July 2023,\nthe Group only operates in one operating segment: exploration and mining. Segment performance is evaluated based on reportable segment\nprofit / (loss), which is a measure of adjusted profit / (loss) before tax from continuing operations. The segment analysis below is provided\nfor the Group's continuing operations and does not include any amount from a discontinued operation, namely the wastewater treatment (see\nNote 3 for information on discontinued operations).\n\nAs of and for the year ended December\n31, 2025, the segment results were as follows:\n\nSchedule of segment results \n   \n   \n  \n\n  \nCNY \n\n  \nExploration\nand mining  \nCorporate\nactivities  \nTotal \n\nDepreciation and amortization \n (4) \n (1) \n (5)\n\nInterest income \n —  \n 1  \n 1 \n\nFinance costs \n (1) \n (43) \n (44)\n\nFair value gain on financial instruments, net \n —  \n 2,077  \n 2,077 \n\nLoss before income tax \n (413) \n (818) \n (1,231)\n\nLoss for the year from continuing operations \n (413) \n (818) \n (1,231)\n\nTotal assets \n 246,857  \n 325  \n 247,182 \n\nTotal liabilities \n 5,957  \n 154,897  \n 160,854 \n\n \n\n  \n\n \n\nF-40 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**4.****SEGMENT INFORMATION****(CONTINUED)**\n\n As of and for the year ended December 31, 2025, the segment results\nwere as follows (continued):\n\n  \n   \n   \n  \n\n  \nUS$ \n\n  \nExploration\nand mining  \nCorporate\nactivities  \nTotal \n\nDepreciation and amortization \n (1) \n —  \n (1)\n\nInterest income \n —  \n —  \n — \n\nFinance costs \n —  \n (6) \n (6)\n\nFair value gain on financial instruments, net \n —  \n 297  \n 297 \n\nLoss before income tax \n (59) \n (117) \n (176)\n\nLoss for the year from continuing operations \n (59) \n (117) \n (176)\n\nTotal assets \n 35,283  \n 46  \n 35,329 \n\nTotal liabilities \n 851  \n 22,141  \n 22,992 \n\n  \n\nAs of and for the year ended December\n31, 2024, the segment results were as follows: \n\n  \n   \n   \n  \n\n  \nCNY \n\n  \nExploration\nand mining  \nCorporate\nactivities  \nTotal \n\nDepreciation and amortization \n (4) \n —  \n (4)\n\nInterest income \n 3  \n 66  \n 69 \n\nFinance costs \n (1) \n (27) \n (28)\n\nFair value gain on financial instruments, net \n —  \n 3,996  \n 3,996 \n\nLoss before income tax \n (2,190) \n (970) \n (3,160)\n\nLoss for the year from continuing operations \n (2,190) \n (970) \n (3,160)\n\nTotal assets \n 259,091  \n 1,798  \n 260,889 \n\nTotal liabilities \n 162,039  \n 10,788  \n 172,827 \n\n \n\n \n\nAs of and for the year ended December\n31, 2023, the segment results were as follows: \n\n  \n   \n   \n  \n\n  \nCNY \n\n  \nExploration\nand mining  \nCorporate\nactivities  \nTotal \n\nDepreciation and amortization \n (4) \n (692) \n (696)\n\nInterest income \n 1  \n 4  \n 5 \n\nFinance costs \n (1) \n (47) \n (48)\n\nFair value gain on financial instruments, net \n —  \n 847  \n 847 \n\nProfit/(loss) before income tax \n 1,263  \n (9,600) \n (8,337)\n\nOther income* \n 3,742* \n —  \n 3,742 \n\nProfit/(loss)for the year from continuing operations \n 1,263  \n (9,600) \n (8,337)\n\nTotal assets \n 252,133  \n 1,674  \n 253,807 \n\nTotal liabilities \n 159,285  \n 18,527  \n 177,812 \n\n \n\n*In 2023, the Company received RMB3,742 from government of Dengkou County, Inner Mongolia\nAutonomous Region as reimbursement payments for discontinuing the exploration and development activities in certain nature reserve areas.\nThe amount is recognized in other income as the expenditure on the exploration and development have been fully expensed before 2023.\n\n \n\n \n\n \n\nF-41 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**4.****SEGMENT INFORMATION****(CONTINUED)**\n\nThe reconciliation from loss for the\nyear from continuing operations to net loss is as follows:\n\n \n\nSchedule of reconciliation from loss \n   \n   \n   \n  \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n    \n    \n    \n   \n\nLoss for the year from continuing operations \n (8,337) \n (3,160) \n (1,231) \n (176)\n\nLoss for the year from discontinued operations \n (4,106) \n —  \n —  \n — \n\nNet loss (including non-controlling interests) \n (12,443) \n (3,160) \n (1,231) \n (176)\n\n \n\nGeographical information\n\n*(a)**Non-current assets*\n\nSchedule of non-current assets \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nMainland China \n 49  \n 30  \n 4 \n\nHong Kong \n 256,484  \n 245,400  \n 35,075 \n\nTotal \n 256,533  \n 245,430  \n 35,079 \n\nThe non-current assets information above is based\non the locations of the assets and excludes financial instruments an deferred tax assets.\n\n \n\n \n\nF-42 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**5.****LOSS BEFORE INCOME TAX**\n\nThe Group’s loss before tax from\ncontinuing operations is arrived at after (crediting)/charging: \n\nSchedule of loss before tax from continuing operations is arrived at after (crediting)/charging \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nCrediting: \n    \n    \n    \n   \n\nFinance income \n (5) \n (69) \n (1) \n — \n\n  \n    \n    \n    \n   \n\nDepreciation \n    \n    \n    \n   \n\n- Property, plant and equipment (Note 9) \n 5  \n 4  \n 5  \n 1 \n\n- Right-of-use assets (Note 10) \n 691  \n 346  \n —  \n — \n\nExpense relating to short-term leases (Note 10) \n 194  \n 371  \n 690  \n 99 \n\nFair value gain on financial instruments: \n    \n    \n    \n   \n\n- Financial assets at fair value through profit or loss \n —  \n —  \n —  \n — \n\n- Derivative financial liabilities \n (847) \n (3,996) \n (2,077) \n (297)\n\nExpenses related to issuance of shares \n —  \n 1,354  \n —  \n — \n\nExpenses related to share-based payment \n 3,074  \n 125  \n —  \n — \n\nOther income \n (3,742) \n (2) \n (34) \n (5)\n\nFinance costs \n 48  \n (28) \n 44  \n 6 \n\n  \n    \n    \n    \n   \n\nEmployee benefit expenses ** (Note 6) \n 1,192  \n 1,251  \n 1,103  \n 157 \n\n \n\n \n\nThe Group’s loss before tax from\ndiscontinued operations is arrived at after (crediting)/charging:\n\n \n\n  \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nCrediting: \n    \n    \n    \n   \n\nFinance income \n (8,785) \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\nCharging: \n    \n    \n    \n   \n\nCost of sales \n    \n    \n    \n   \n\n- Sales of water treatment equipment \n —  \n —  \n —  \n — \n\n- Construction service \n 2,435  \n —  \n —  \n — \n\n- Operation and maintenance services \n 307  \n —  \n —  \n — \n\n- Operation services related to service concession arrangement \n 3,130  \n —  \n —  \n — \n\n- Construction services related to service concession arrangement \n —  \n —  \n —  \n — \n\nCost of sales \n 5,872  \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\nDepreciation \n    \n    \n    \n   \n\n- Property, plant and equipment (Note 9) \n 95  \n —  \n —  \n — \n\n- Right-of-use assets (Note 10) \n 359  \n —  \n —  \n — \n\nAmortization of intangible assets * \n 460  \n —  \n —  \n — \n\nExpense relating to short-term leases (Note 10) \n 129  \n —  \n —  \n — \n\nImpairment losses/(reversal) on financial assets: \n    \n    \n    \n   \n\n- Trade receivables \n 383  \n —  \n —  \n — \n\n- Contract assets \n 3,545  \n —  \n —  \n — \n\n- Other receivables \n 6,003  \n —  \n —  \n — \n\n- Amounts due from related companies \n —  \n —  \n —  \n — \n\nOther losses / (income) \n 142  \n —  \n —  \n — \n\nFinance costs \n 1,906  \n —  \n —  \n — \n\nEmployee benefit expenses ** \n 4,960  \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\n*The\namortization of intangible assets allocated to cost of sales amounted\nto CNY425, and administrative expenses amounted to CNY35 on the consolidated statements of profit or loss for the years ended December\n31, 2023, and nil for the years ended December 31, 2024 and 2025.\n\n**The\nemployee benefit expenses allocated to cost of sales amounted\nto CNY870, selling and distribution expenses amounted to CNY70, and administrative expenses amounted to CNY5,212 on the consolidated statements\nof profit or loss for the years ended December 31, 2023, and nil for the years ended December 31, 2024 and 2025.\n\n \n\n \n\n \n\nF-43 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**6.****EMPLOYEE BENEFITS**\n\nThe\nGroup’s employee benefits from continuing operation comprise the following:\n\nSchedule of employee benefits \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nWages, salaries and allowances \n 1,073  \n 1,126  \n 968  \n 138 \n\nHousing funds (a) \n 12  \n 49  \n 15  \n 2 \n\nContribution to pension plans (a) \n 70  \n 42  \n 52  \n 7 \n\nWelfare and other expenses \n 37  \n 34  \n 68  \n 10 \n\n  \n    \n    \n    \n   \n\nTotal employee benefits \n 1,192  \n 1,251  \n 1,103  \n 157 \n\n \n\n \n(a)\nAccording to the Mainland China state regulations, the employees of the Group's subsidiaries which operate in Mainland China are required to participate in a central pension scheme operated by the local municipal government and government-sponsored housing funds. These subsidiaries are required to contribute a certain percentage of their payroll costs for those qualified urban employees to the central pension scheme as well as to housing funds.\n\nEmployee\nbenefit expenses include remuneration payables to Directors and senior management as set out in Note 20 (d).\n\n \n\n \n\nF-44 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n** **\n\n**7.****INCOME TAX EXPENSE**\n\nThe\nCompany is incorporated in the BVI and conducts its primary business operations through its subsidiaries in the PRC. It also has intermediate\nholding companies in the BVI and Hong Kong. Under the current laws of the BVI, the Company and its subsidiaries incorporated in the BVI\nare not subject to tax on income or capital gains. Effective from April 1, 2018, a two-tier corporate income tax system was officially\nimplemented in Hong Kong. The applicable income tax rate is 8.25% for the first HK$2.0 million profits, and the subsequent\nprofits are taxed at 16.5%. The Company’s Hong Kong subsidiaries have both Hong Kong–sourced and non-Hong Kong–sourced\nincome. The latter is not subject to Hong Kong Profits Tax and the related expenses are non-tax-deductible. For the Hong Kong–sourced\nincome, no provision for Hong Kong Profits Tax was made as such operations sustained tax losses during the years ended December 31, 2023,\n2024 and 2025. Furthermore, there are no withholding taxes in Hong Kong on the remittance of dividends.\n\n*China*\n\nUnder the law of the PRC on corporate\nincome tax and the Implementation Regulation of the Corporate Income Tax Law (collectively, the “CIT Law”), the Company’s\nPRC subsidiaries are generally subject to PRC corporate income tax at the statutory rate of 25% on their respective estimated assessable\nprofits for the years ended December 31, 2023, 2024 and 2025.\n\nUnder the prevailing CIT Law and its\nrelevant regulations, any dividends paid by the Company’s PRC subsidiaries from their earnings derived after January 1, 2008 to\nthe Company’s Hong Kong subsidiaries are subject to PRC dividend withholding tax of 5% or 10%, depending on the applicability of\nthe Sino-Hong Kong tax treaty.\n\nThe\ncurrent and deferred components of income tax benefit are as follows:\n\nSchedule of current and deferred components of income tax expense \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nCurrent income tax expense \n —  \n —  \n —  \n — \n\nDeferred income tax benefit \n —  \n —  \n —  \n — \n\nTotal tax credit for the year from continuing operations \n —  \n —  \n —  \n — \n\nTotal tax charge for the year from a discontinued operation \n 1,931  \n —  \n —  \n — \n\nTotal \n 1,931  \n —  \n —  \n — \n\nLoss before income tax from\ncontinuing and discontinued operations consists of the following: \n\nSchedule of Profit/(loss) before income tax \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nPRC \n (1,718) \n (2,631) \n (811) \n (116)\n\nBVI \n (8,738) \n (473) \n (360) \n (51)\n\nHong Kong \n (56) \n (56) \n (60) \n (9)\n\n  \n    \n    \n    \n   \n\nTotal loss before income tax for the year \n (10,512) \n (3,160) \n (1,231) \n (176)\n\n \n\n \n\nF-45 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**7.****INCOME TAX EXPENSE (CONTINUED)**\n\nA\nreconciliation of the income taxes from continuing and discontinued operations computed at the PRC statutory tax rate of 25% to the actual\nincome tax expense is as follows:\n\nSchedule of reconciliation of the income tax expenses \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nLoss before income tax\nfor the year from continuing operations \n (8,337) \n (3,160) \n (1,231) \n (176)\n\nLoss\nbefore income tax for the year from a discontinued operation \n (2,175) \n —  \n —  \n — \n\nTotal \n (10,512) \n (3,160) \n (1,231) \n (176)\n\nTax at the\nstatutory tax rate \n 25% \n 25% \n 25% \n 25%\n\nComputed income tax benefit \n (2,628) \n (790) \n (308) \n (44)\n\nEffect of different\ntax rates of the Company and certain subsidiaries \n 2,190  \n 123  \n 100  \n 14 \n\nTax losses with\nno deferred tax assets recognized \n 290  \n 667  \n 208  \n 30 \n\nNon-deductible expenses \n 617  \n —  \n —  \n — \n\nStatutory income \n —  \n —  \n —  \n — \n\nDeductible temporary\ndifferences with no deferred tax assets recognized \n 2,430  \n —  \n —  \n — \n\nUtilization of\npreviously unrecognized deductible temporary differences and tax losses \n (2,021) \n —  \n —  \n — \n\nWrite-off of\nunrecoverable deferred tax assets previously recognized \n —  \n —  \n —  \n — \n\nPreferential tax rate \n 95  \n —  \n —  \n — \n\nOthers \n 958  \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\nTotal tax credit\nfor the year from continuing operations \n —  \n —  \n —  \n — \n\nTotal tax charge\nfor the year from a discontinued operation \n 1,931  \n —  \n —  \n — \n\nIncome tax\nbenefit \n 1,931  \n —  \n —  \n —\n\n  \n\n \n\nF-46 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**8.**\n \n**LOSS PER SHARE**\n\nBasic loss per share is calculated by\ndividing the loss for the period attributable to ordinary equity holders of the Company by the weighted average number of common shares\noutstanding during the period.\n\nDiluted loss per share is calculated\nby dividing the loss attributable to ordinary equity holders of the Company by the weighted average number of common shares outstanding\nduring the period plus the weighted average number of common shares that would be issued on conversion of all outstanding dilutive securities\ninto common shares.\n\nBasic and diluted net loss per share\nfor the years ended December 31, 2023, 2024 and 2025 are as follows:\n\nSchedule of basic and diluted net loss per share \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nLoss for the year attributable to owners of the Company \n    \n    \n    \n   \n\nFrom continuing operations \n (8,337) \n (3,160) \n (1,231) \n (176)\n\nFrom discontinued operations \n (5,504) \n —  \n —  \n — \n\n  \n    \n    \n    \n   \n\n**Weighted average number of ordinary shares for basic and diluted earnings per share *** \n 1,027,832  \n 1,207,305  \n 1,256,388  \n 1,256,388 \n\n  \n    \n    \n    \n   \n\nLoss per share: \n    \n    \n    \n   \n\nBasic and diluted \n    \n    \n    \n   \n\nFor loss from continuing operations \n (8.11)** \n (2.62)** \n (0.98) \n (0.14)\n\nFor loss from discontinued operations \n (5.35)** \n —  \n —  \n — \n\nLoss per share \n (13.46)** \n (2.62)** \n (0.98) \n (0.14)\n\n*\n \nOn June 13, 2025, the\nCompany effected a share combination in which all of the Company's issued and outstanding ordinary shares were combined on an 8-to-1\nbasis. The basic and diluted earnings/(loss) per ordinary share has been retrospectively adjusted to reflect the impact of the share\ncombination.\n\n**\n\nRetrospectively restated for effect of the 8-to-1 share combination\neffective on June 13, 2025, see Note 19(a).\n\nFor the years ended December 31, 2023,\n2024 and 2025, the effects of the outstanding warrants and share options were anti-dilutive and excluded from the computation of diluted\nloss per share. Accordingly, the diluted loss per share amounts are the same as the basic loss per share amounts for the periods presented.\n\n** **\n\n** **\n\nF-47 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**9.****PROPERTY, PLANT AND EQUIPMENT**\n\n** **\n\n****\n\nSchedule of property plant and equipment \n   \n   \n   \n   \n  \n\n  \nBuildings  \nMachinery and equipment  \nMotor vehicle  \nOffice and other equipment  \nTotal \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY** \n\nCost \n    \n    \n    \n    \n   \n\nAs of January 1, 2024 \n 46  \n 1,096  \n 601  \n (94) \n 1,649 \n\nAdditions \n —  \n 4  \n —  \n —  \n 3 \n\nDisposal \n —  \n —  \n (99) \n —  \n (98)\n\nAs of December 31, 2024 \n 46  \n 1,100  \n 502  \n (94) \n 1,554 \n\n  \n    \n    \n    \n    \n   \n\nAccumulated depreciation \n    \n    \n    \n    \n   \n\nAs of January 1, 2024 \n (18) \n (1,083) \n (583) \n 88  \n (1,596)\n\nDepreciation charge \n (3) \n (1) \n —  \n —  \n (4)\n\nDisposal \n    \n    \n 95  \n    \n 95 \n\n  \n (21) \n (1,084) \n (488) \n 88  \n (1,505)\n\nNet book value \n    \n    \n    \n    \n   \n\nAs of January 1, 2024 \n 25  \n 16  \n 14  \n (6) \n 49 \n\nAs of December 31, 2024 \n 4  \n 2  \n 2  \n (1) \n 7 \n\n  \n    \n    \n    \n    \n   \n\nCost \n    \n    \n    \n    \n   \n\nAs of January 1, 2025 \n 46  \n 1,100  \n 502  \n (94) \n 1,554 \n\nDisposal \n —  \n —  \n (502) \n 94  \n (408)\n\nAs of December 31, 2025 \n 46  \n 1,100  \n —  \n —  \n 1,146 \n\n  \n    \n    \n    \n    \n   \n\nAccumulated depreciation \n    \n    \n    \n    \n   \n\nAs of January 1, 2025 \n (21) \n (1,084) \n (488) \n 88  \n (1,505)\n\nDepreciation charge \n (4) \n (7) \n —  \n 6  \n (5)\n\nWritten back on disposal \n    \n    \n 488  \n (94) \n 394 \n\n  \n (25) \n (1,091) \n —  \n —  \n (1,116)\n\nNet book value \n    \n    \n    \n    \n   \n\nAs of December 31, 2025 \n 21  \n 9  \n —  \n —  \n 30 \n\nAs of December 31, 2025 (US$) \n 3  \n 1  \n —  \n —  \n 4 \n\n**** \n\nThere was no impairment loss on property,\nplant and equipment for the years ended December 31, 2023, 2024 and 2025.\n\n \n\n \n\nF-48 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**10.****LEASES**\n\n \n\n*(a)**Right-of-use assets*\n\nThe\ncarrying amounts of the Group’s right-of-use assets and the movements during the years indicated are as follows:\n\nSchedule of right-of-use assets \n   \n   \n  \n\n  \n\n**Motor**\n\n**vehicles**\n  \n\n**Offices and**\n\n**warehouses**\n  \nTotal \n\n  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n   \n\nAs of January 1, 2024 \n —  \n 346  \n 346 \n\nDepreciation charge \n —  \n (346) \n (346)\n\nForeign currency translation difference \n —  \n —  \n — \n\n  \n —  \n —  \n — \n\nAs of December 31, 2024 and 2025 \n —  \n —  \n — \n\nThere\nwas no impairment loss on right-of-use assets for the years ended December 31, 2023, 2024 and 2025.\n\n \n\n*(b)**Lease liabilities*\n\nThe\ncarrying amount of lease liabilities and the movements during the years are as follows:\n\nSchedule of lease liabilities  \n   \n   \n  \n\n  \n\n**Motor**\n\n**vehicles**\n  \nOffices and warehouses  \nTotal \n\n  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n   \n\nAs of January 1, 2024 \n —  \n 360  \n 360 \n\nAddition \n —  \n —  \n — \n\nAccretion of interest recognized during the year \n —  \n 6  \n 6 \n\nPayments \n —  \n (366) \n (366)\n\n  \n    \n    \n   \n\nAs of December 31, 2024 and 2025 \n —  \n —  \n — \n\n \n\n \n\n*(c)**Lease-related expenses*\n\nThe\namounts recognized in profit or loss in relation to leases are, as follows:\n\nSchedule of lease-related expenses \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nDepreciation expense of right-of-use assets \n 1,050  \n 346  \n —  \n — \n\nInterest on lease liabilities \n 99  \n 6  \n —  \n — \n\nExpense relating to short-term leases \n 323  \n 371  \n 690  \n 99 \n\n  \n    \n    \n    \n   \n\nTotal amounts recognized in profit or loss \n 1,472  \n 723  \n 690  \n 99 \n\n \n\n*(d)*The total cash outflow for leases is disclosed in Note 22 (c)\nto the financial statements.\n\n \n\n \n\nF-49 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**11.****OTHER NON-CURRENT ASSETS**\n\n \n\nSchedule of other non-current assets \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nZimbabwe lithium deposits (i) \n 256,484  \n 245,400  \n 35,075 \n\nOthers \n —  \n —  \n — \n\n  \n    \n    \n   \n\nTotal \n 256,484  \n 245,400  \n 35,075 \n\n(i) Please refer to Note 20 (b) for more\ndetails.\n\n**12.****OTHER RECEIVABLES**\n\n \n\nSchedule of other receivables \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\nFinancial assets  \n   \n   \n  \n\nDeposits \n —  \n 3  \n 1 \n\n  \n —  \n 3  \n 1 \n\n  \n    \n    \n   \n\nStaff advance \n —  \n 31  \n 4 \n\nOthers \n 32  \n 9  \n 1 \n\nTotal of staff advance and Others \n 32  \n 40  \n  5 \n\n  \n    \n    \n   \n\nImpairment allowance \n —  \n —  \n — \n\n  \n    \n    \n   \n\nTotal \n 32  \n 43  \n 6 \n\nFor\nthe financial assets included above, an impairment analysis is performed at each reporting date using the probability-of-default approach\nto measure ECL. The probability of default rates are estimated based on comparable companies with published credit ratings. The calculation\nreflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at the\nreporting date about past events, current conditions, and forward-looking credit risk information. As of December 31, 2025, the probability\nof default applied was nil, and the loss given default was nil.\n\n \n\n \n\nF-50 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**13.****CASH AND CASH EQUIVALENTS**\n\nCash and cash equivalents are set out\nbelow as of December 31, 2024 and 2025:\n\nSchedule of cash and cash equivalents \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nCash and cash equivalents \n    \n    \n   \n\n- Cash on hand \n 1  \n 1  \n — \n\n- Cash at bank \n 3,081  \n 474  \n 68 \n\n  \n    \n    \n   \n\n \n 3,082  \n 475  \n 68 \n\nThe\ncarrying amounts of the Group’s cash and cash equivalents are denominated in the following currencies:\n\nSchedule of cash and cash equivalents denominated in different currencies  \n   \n   \n  \n\n   \nDecember 31, \n\n   \n2024  \n2025  \n2025 \n\n   \nCNY  \nCNY  \nUS$ \n\n   \n   \n   \n  \n\nCNY   \n 1,469  \n 341  \n 49 \n\nUS$   \n 1,366  \n 34  \n 5 \n\nHK$   \n 247  \n 100  \n 14 \n\n   \n    \n    \n   \n\n   \n 3,082  \n 475  \n 68 \n\nCash at banks earns interest at floating\nrates based on daily bank deposit rates. The bank balances and time deposits are deposited with creditworthy banks with no recent history\nof default.\n\n \n\n \n\nF-51 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**14.****TRADE PAYABLES**\n\n \n\nSchedule of trade payables \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n    \n    \n   \n\nTrade payables \n 280  \n 280  \n 40 \n\nThe\naging analysis of trade payables as of December 31, 2024 and 2025 is as follows:\n\nSchedule of aging analysis of trade payables \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nWithin 1 year \n 180  \n —  \n — \n\nBetween 1 and 2 years \n —  \n 180  \n 26 \n\nOver 2 years \n 100  \n 100  \n 14 \n\n  \n    \n    \n   \n\nTotal \n 280  \n 280  \n 40 \n\n \n\nTrade payables are mainly due to the\nvendors of exploration service.\n\n \n\n \n\n \n\nF-52 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**15.****OTHER PAYABLES AND ACCRUALS**\n\n \n\nSchedule of other payables and accruals \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\nFinancial liabilities   \n   \n   \n  \n\nAccrued expenses \n 1,910  \n 777  \n 111 \n\nTotal accrued expenses \n 1,910  \n 777  \n 111 \n\n  \n    \n    \n   \n\nAccrued payroll \n 189  \n 224  \n 32 \n\nTransaction deposit of mining right acquisition (Note 20 (b)) \n 76,945  \n 73,620  \n 10,523 \n\nOthers \n 1,437  \n 150  \n 21 \n\nTotal Accrued payroll  \n 78,571  \n  73,994  \n  10,576 \n\n  \n    \n    \n   \n\nTotal \n 80,481  \n 74,771  \n 10,687 \n\n  \n    \n    \n   \n\nAnalyzed into: \n    \n    \n   \n\n  Current portion \n 3,536  \n 1,151  \n 164 \n\n  Non-current portion (Note 20 (b)) \n 76,945  \n 73,620  \n 10,523 \n\n  \n 80,481  \n 74,771  \n 10,687 \n\n \n\n \n\n \n\nF-53 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n  \n\n**16.****FINANCIAL INSTRUMENTS**\n\n \n\n*(a)**Financial assets*\n\nSet\nout below is an overview of financial assets, other than cash and short-term deposits, held by the Group as of December 31, 2024 and\n2025:\n\nSchedule of financial assets \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nDebt instruments at amortized cost: \n    \n    \n   \n\nFinancial assets included in other receivables \n 15  \n 3  \n 1 \n\n  \n    \n    \n   \n\nTotal current \n 15  \n 3  \n 1 \n\nTotal non-current \n —  \n —  \n — \n\n \n\n \n\n \n\nF-54 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**16.**\n \n**FINANCIAL INSTRUMENTS (CONTINUED)**\n\n \n\n*(b)**Financial liabilities*\n\nSet\nout below is an overview of financial liabilities of the Group as of December 31, 2024 and 2025:\n\nSchedule of financial liabilities \n   \n   \n  \n\n  \nDecember 31,  \nDecember 31,  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n    \n    \n   \n\nDerivatives not designated as hedging instruments: \n    \n    \n   \n\nDerivative financial liabilities (i) \n 3,996  \n 19  \n 3 \n\nFinancial liabilities at amortized cost: \n    \n    \n   \n\nTrade payables \n 280  \n 280  \n 40 \n\nFinancial liabilities in other payables and accruals \n 3,536  \n 777  \n 111 \n\nDue to related companies \n 11,361  \n 12,709  \n 1,817 \n\nDue to the Shareholder \n 78,567  \n 73,075  \n 10,445 \n\n  \n    \n    \n   \n\nTotal \n 97,740  \n 86,860  \n 12,416 \n\n  \n    \n    \n   \n\nTotal current \n 19,173  \n 13,785  \n 1,971 \n\nTotal non-current \n 78,567  \n 73,075  \n 10,445 \n\n(i)This represents certain warrants issued to institutional investors\non February 21, 2024, which was recognized as derivative financial liabilities (not designated as hedging instruments) with a fair value\nof CNY6,134 (US$843)* on the issue date as the investors have the right to exercise their warrants on a cashless basis. In accordance\nwith IAS 32, a contract settled by a single net payment (generally referred to as net cash-settled or net equity-settled as the case\nmay be) is a financial liability and not an equity instrument. The fair value gain of derivative financial liabilities for the year ended\nDecember 31, 2023, 2024 and 2025 was CNY847, CNY3.996.and CNY2,077\n(US$297).\n\n \n*\nAs the changes in equity from this private placement transaction are denominated in US$, the amount in US$ is the actual transaction amount and the corresponding amount in CNY was translated from US$ at the applicable exchange rate of the transaction date, February 21, 2024.\n\n*(c)**Fair value*\n\nThe following table provides the fair\nvalue measurement hierarchy of the Group's financial assets and financial liabilities as of December 31, 2024 and 2025:\n\n \n\nSchedule of fair\nvalue measurement \n    \n    \n    \n   \n\nDecember\n31, 2024 \nFair\nvalue measurement using \n\n  \n **Quoted\nPrices in active market**  \n **Significant\nobservable inputs**  \n **Significant\nunobservable inputs**  \n   \n\n  \n **(Level\n1)**  \n **(Level\n2)**  \n **(Level\n3)**  \n **Total** \n\n** **** **\n** ****CNY **** **** **\n** ****CNY**** **** **\n** ****CNY**** **** **\n** ****CNY**** **\n\nRecurring\nfair value measurement: \n —  \n —  \n —  \n — \n\nFinancial\nliabilities \n —  \n —  \n —  \n — \n\n    Derivative\nfinancial liabilities \n —  \n 2,138  \n —  \n 2,138 \n\n \n\n \n\n  \n    \n    \n    \n   \n\nDecember\n31, 2025 \nFair\nvalue measurement using \n\n  \n **Quoted\nPrices in active market**  \n **Significant\nobservable inputs**  \n **Significant\nunobservable inputs**  \n   \n\n  \n **(Level\n1)**  \n **(Level\n2)**  \n **(Level\n3)**  \n **Total** \n\n** **** **\n** ****CNY **** **** **\n** ****CNY**** **** **\n** ****CNY**** **** **\n** ****CNY**** **\n\nRecurring\nfair value measurement: \n —  \n —  \n —  \n — \n\nFinancial\nliabilities \n —  \n —  \n —  \n — \n\n    Derivative\nfinancial liabilities \n —  \n 19  \n —  \n 19 \n\n \n\n  \n    \n    \n    \n   \n\nDecember\n31, 2025 \nFair\nvalue measurement using \n\n  \n **Quoted\nPrices in active market**  \n **Significant\nobservable inputs**  \n **Significant\nunobservable inputs**  \n   \n\n  \n **(Level\n1)**  \n **(Level\n2)**  \n **(Level\n3)**  \n **Total** \n\n** **** **\n** ****US$ **** **** **\n** ****US$**** **** **\n** ****US$**** **** **\n** ****US$**** **\n\nRecurring\nfair value measurement: \n —  \n —  \n —  \n — \n\nFinancial\nliabilities \n —  \n —  \n —  \n — \n\n    Derivative\nfinancial liabilities \n —  \n 3  \n —  \n 3 \n\n \n\n \n\n \n\n  \n\n \n\nF-55 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**16.**\n \n**FINANCIAL INSTRUMENTS (CONTINUED)**\n\n \n\nLevel 2:\n\n \n\nDerivative financial liabilities\n\n \n\nThe fair value of financial instruments\nthat are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of relevant\nobservable inputs and minimize the use of unobservable inputs. If all significant inputs required to fair value an instrument are observable,\nthe instrument is included in Level 2. \n\n \n\nThere is no established public\ntrading market for the warrants issued to investors on February 21, 2024. As of December 31, 2024 and 2025, the Group measured the\nfair value of those warrants on a recurring basis using a binomial lattice pricing model with significant inputs including, among\nother relevant observable inputs, the underlying spot price of the Company’s common shares, exercise price, time to\nexpiration, risk-free rate and equity volatility.\n\n \n\n \n\nF-56 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**17.****FINANCIAL RISK MANAGEMENT OBJECTIVES AND\nPOLICIES**\n\n \n\nThe\nfinancial instruments of the Group primarily include cash and cash equivalents, trade receivables, bills receivable at fair value through\nother comprehensive income, other receivables, contract assets, trade payables, other payables, amounts due to related companies, amounts\ndue to the Shareholder, derivative financial liabilities, and interest-bearing loans and borrowings.\n\nThe\nGroup is exposed to credit risk, foreign currency risk, business and economic risk and liquidity risk. The Group has not used any derivatives\nand other instruments for hedging purposes. The Group does not hold or issue derivative financial liabilities for trading purposes. The\nGroup reviews and agrees policies for managing each of these risks and they are summarized below.\n\n*(a)**Credit risk*\n\nManagement\nhas a credit policy in place and the exposures to credit risk are monitored on an ongoing basis. Debts are usually due within 30 to 90\ndays from the date of billing.\n\nAs\nof December 31, 2025 and 2024, no trade receivables were held by the Company.\n\nManagement\ngroups financial instruments based on shared credit risk characteristics, such as instrument type and credit risk ratings for the purpose\nof determining significant increase in credit risk and calculation of impairment. The carrying amount of each financial asset in the\nconsolidated statements of financial position represents the Group’s maximum exposure to credit risk in relation to its financial\nassets.\n\nA\nfinancial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that\nfinancial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:\n\n \n\n- significant financial difficulty of\nthe debtor;\n\n- a breach of contract such as a default\nor past due event;\n\n- it is probable that the debtor will\nenter bankruptcy or other financial reorganization\n\n \n\nTo\nmanage credit risk arising from trade receivables and contract assets, the Group assesses the credit quality of the debtors, taking into\naccount their financial position, historical settlement records, past experience and other factors. The Group applies the simplified\napproach to provide for ECLs prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables.\nThe ECLs also incorporated forward-looking information.\n\nFor\nfinancial assets assessed for impairment under the general approach, the Group established a policy to perform an assessment at the end\nof each reporting period of whether a financial instrument’s credit risk has increased significantly since initial recognition,\nby considering the change in the risk of default occurring over the remaining life of the financial instrument. The Group groups its\nother receivables into Stage 1, Stage 2 and Stage 3, as described below:\n\nStage\n1 – When other receivables are first recognized, the Group recognized an allowance based on 12 months’ ECLs.\n\nStage\n2 – When other receivables have shown a significant increase in credit risk since origination, the Group records an allowance for\nthe lifetime ECLs.\n\nStage 3 – Other receivables are\nconsidered credit-impaired. The Group records an allowance for the lifetime ECLs.\n\n \n\nManagement\nalso makes periodic collective assessments for other receivables and amounts due from related companies as well as individual assessments\nof the recoverability of other receivables based on historical settlement records, past experience and other factors. The Group classified\nother receivables and amounts due from related companies in Stage 1 and continuously monitored their credit risk. Management believes\nthat there is no material credit risk inherent in the Group’s outstanding balance of other receivables as of December 31, 2025\nand 2024.\n\nThe\nGroup does not provide any guarantees that would expose the Group to credit risk. Further quantitative disclosures with respect to the\nGroup’s exposure to credit risk arising from financial assets are set out in Note 12 to the financial statements.\n\nCash\nand cash equivalents\n\nThe\nGroup maintains its cash and cash equivalents primarily with various PRC state-owned banks and Hong Kong based financial institutions,\nwhich management believes are of high credit quality. The Group performs periodic evaluations of the relative credit standing of those\nfinancial institutions.\n\n \n\n \n\nF-57 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n** **\n\n**17.****FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)**\n\n \n\n*(b)**Foreign currency risk*\n\nForeign\ncurrency risk primarily arises from certain significant foreign currency deposits denominated in US$ and HK$ and related exposures are\ndisclosed in Note 16. The Group treasury closely monitors the change of exchange rates on the international foreign currency market and\ntakes these into consideration when investing in foreign currency deposits and borrowing loans.\n\nThe\nCNY is not freely convertible into foreign currencies. The State Administration for Foreign Exchange, under the authority of the People's\nBank of China, controls the conversion of the CNY into foreign currencies. The value of the CNY is subject to changes in PRC government\npolicies and to international economic and political developments affecting the supply and demand in the China Foreign Exchange Trading\nSystem market. All foreign exchange transactions continue to take place either through the People's Bank of China or other banks authorized\nto buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China.\n\nThere\nis no significant exposure to foreign currency risk as of December 31, 2025 and 2024 for the Company.\n\n*(c)**Interest rate risk*\n\nThe\nfair value interest rate risk of the Group mainly arises from long-term loans at fixed rates. As fluctuation of the comparable interest\nrate (Loan Prime Rate of PRC market) with similar terms was relatively low, the Directors are of the opinion that the Group is not exposed\nto any significant fair value interest rate risk for its fixed interest rate borrowings held as of December 31, 2025 and 2024.\n\n*(d)**Business and economic risk*\n\nThe\nGroup's operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC\ngovernment has been pursuing economic reform policies for more than 40 years, no assurance can be given that the PRC government will\ncontinue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership,\nsocial or political disruption or unforeseen circumstances affecting the political, economic and social conditions in the PRC. There\nis also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.\n\n \n\n \n\nF-58 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**17.****FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)**\n\n \n\n*(e)**Liquidity risk*\n\nThe\nGroup manages its liquidity risk by regularly monitoring its liquidity requirements and its compliance with debt covenants to ensure\nthat it maintains sufficient cash and cash equivalents, as well as adequate time deposits, to meet its liquidity requirements in the\nshort and long term.\n\nThe\nGroup expects that its existing cash and cash equivalents, shareholder financial support and subsequent equity financing (see Note 19)\nwill be sufficient to fund its operations and meet all of its obligations as they fall due for at least twelve months from the date of\nfinancial statements. See Note 2.1.1 for details related to going concern basis.\n\nThe\ntable below summarizes the maturity profile of the Group’s financial liabilities and lease liabilities based on contractual undiscounted\npayments:\n\nSummary the maturity profile of financial liabilities and lease liabilities \n   \n   \n   \n   \n  \n\nDecember 31, 2024 \nOn demand  \nLess than\n1 year  \n1 to 5 years  \nMore than\n5 years  \nTotal \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n    \n    \n   \n\nTrade payables \n 280  \n —  \n —  \n —  \n 280 \n\nFinancial liabilities in other payables and accruals \n —  \n 1,910  \n —  \n —  \n 1,910 \n\nDue to related companies \n —  \n 11,361  \n —  \n —  \n 11,361 \n\nDue to the shareholder \n —  \n —  \n 78,567  \n —  \n 78,567 \n\n  \n    \n    \n    \n    \n   \n\n  \n 280  \n 13,271  \n 78,567  \n —  \n 92,118 \n\n \n\n \n\nF-59 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**17.****FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)**\n\n \n\n*(e)**Liquidity risk (continued)*\n\n \n\n  \n   \n   \n   \n   \n  \n\nDecember 31, 2025 \nOn demand  \nLess than\n1 year  \n1 to 5 years  \nMore than\n5 years  \nTotal \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n    \n    \n   \n\nTrade payables \n 280  \n —  \n —  \n —  \n 280 \n\nFinancial liabilities in other payables and accruals \n —  \n 777  \n —  \n —  \n 777 \n\nDue to related companies \n —  \n 12,709  \n —  \n —  \n 12,709 \n\nDue to the shareholder \n —  \n —  \n 73,075  \n —  \n 73,075 \n\n  \n    \n    \n    \n    \n   \n\n  \n 280  \n 13,486  \n 73,075  \n —  \n 86,841 \n\n \n\n \n\n  \n   \n   \n   \n   \n  \n\nDecember 31, 2025 \nOn demand  \nLess than\n1 year  \n1 to 5 years  \nMore than\n5 years  \nTotal \n\n  \n **US$**  \n **US$**  \n **US$**  \n **US$**  \n **US$** \n\n  \n    \n    \n    \n    \n   \n\nTrade payables \n 40  \n —  \n —  \n —  \n 40 \n\nFinancial liabilities in other payables and accruals \n —  \n 111  \n —  \n —  \n 111 \n\nDue to related companies \n —  \n 1,817  \n —  \n —  \n 1,817 \n\nDue to the shareholder \n —  \n —  \n 10,445  \n —  \n 10,445 \n\n  \n    \n    \n    \n    \n   \n\n  \n 40  \n 1,928  \n 10,445  \n —  \n 12,413 \n\n \n\n*(f)**Capital management*\n\nThe\nGroup monitors capital on the basis of the debt to capital ratio (gearing ratio), which is calculated as interest-bearing debt\ndivided by total capital. Interest-bearing debt mainly includes lease liabilities as of December 31, 2023 and there was no\ninterest-bearing debt as of December 31, 2024 and 2025. Capital includes total equity and interest-bearing debt. The gearing ratios\nwere nil 0 as of December 31, 2024 and 2025.\n\n \n\n \n\nF-60 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**18.****DEFERRED TAX ASSETS AND LIABILITIES**\n\n \n\n*(a)**Deferred tax balance*\n\nNo\ndeferred tax assets and liabilities was recognized in the consolidated statements of financial position as at December 31, 2025 and 2024\nas no taxable temporary differences are recognized. There were no movements of deferred tax balance in year 2024 and 2025.\n\n \n\n*(b)**Deferred tax not recognized*\n\nAs\nof December 31, 2024 and 2025, the total amounts of deductible temporary differences and unused tax losses for which no deferred tax\nassets were recognized with respect to certain deductible temporary differences and accumulated tax losses of the Company’s subsidiaries\nestablished in Mainland China and Hong Kong that can be carried forward against future taxable income are as follows:\n\nSchedule of gross movement of the deferred tax account \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n    \n    \n   \n\nTax losses with no deferred tax assets recognized \n 667  \n 208  \n 30 \n\n \n\n*(c)**Expiration dates of the tax losses*\n\n \n\nThe\ntax losses in Mainland China can be carried forward for five years to offset future taxable profit. The expiration dates of the unused\ntax losses of the subsidiaries established in Mainland China for which no deferred tax assets were recognized are summarized as follows:\n\nSchedule of expiration dates of the tax losses  \n   \n   \n  \n\n   \nDecember 31, \n\n   \n2024  \n2025  \n2025 \n\n   \nCNY  \nCNY  \nUS$ \n\n   \n   \n   \n  \n\n Year\nof expiration   \n    \n    \n   \n\n 2024  \n —  \n —  \n — \n\n 2025  \n 1,462  \n —  \n — \n\n 2026  \n 1,411  \n 1,411  \n 202 \n\n 2027  \n 499  \n 499  \n 71 \n\n 2028  \n 828  \n 828  \n 118 \n\n 2029  \n 440  \n 440  \n 63 \n\n 2030  \n —  \n 811  \n 116 \n\n    \n    \n    \n   \n\n Total\n  \n 4,640  \n 3,989  \n 570 \n\n \n\n \n\nF-61 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**19.****EQUITY**\n\n \n\n*(a)**Issued capital*\n\nSchedule of issued capital \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nAuthorized: \n    \n    \n   \n\n10,000,000 preferred shares, no par value \n —  \n —  \n — \n\n200,000,000 common shares, no par value \n —  \n —  \n — \n\n  \n    \n    \n   \n\nCommon shares issued and fully paid: \n    \n    \n   \n\nDecember 31, 2025: 1,256,388 (December 31, 2024: 9,865,767*) common shares, no par value \n 450,782  \n 450,782  \n 64,431 \n\n \n\nSchedule of issued capital shares combination \n   \n   \n  \n\n  \nNumber of shares  \nShare capital \n\n  \n   \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nAs of January 1, 2024 \n 8,377,897  \n 450,782  \n 64,431 \n\n  \n    \n    \n   \n\nIssue of shares \n 1,487,870  \n —  \n — \n\n  \n    \n    \n   \n\nAs of December 31, 2024 \n 9,865,767  \n 450,782  \n 64,431 \n\n  \n    \n    \n   \n\nEffect of Eight-to-One Share Combination*  \n (8,609,379) \n —  \n — \n\n  \n    \n    \n   \n\nAs of December 31, 2025 \n 1,256,388  \n 450,782  \n 64,431 \n\n*The numbers of common shares above are before giving effect\nto the Share Combination which became effective on June 13, 2025. On June 13, 2025, the Company effected a share combination in\nwhich all of the Company's issued and outstanding ordinary shares were combined on an 8-to-1 basis. The basic and diluted earnings/(loss)\nper ordinary share has been retrospectively adjusted to reflect the impact of the share combination. All outstanding options, warrants\nand other rights to purchase the Company's common shares were adjusted proportionately as a result of the share combination.\n\n \n\n  \n\nF-62 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**19.****EQUITY(CONTINUED)**\n\n \n\n*(b)**Other capital reserves*\n\nSchedule of other capital reserves \n   \n  \n\n  \n **Other capital reserves** \n\n  \n **CNY**  \n **US$** \n\n  \n    \n   \n\nAs of January 1, 2024 \n 758,775  \n 108,452 \n\n  \n    \n   \n\nIssuance of shares \n 13,207  \n 1,888 \n\n  \n    \n   \n\nEquity-settled share-based payments \n 483  \n 69 \n\n  \n    \n   \n\nAs of December 31, 2024 \n 772,465  \n 110,409 \n\n  \n    \n   \n\nAs of December 31, 2025 \n 772,465  \n 110,409 \n\n \n\nOther capital reserves of the Company\nare mainly for equity-settled share-based compensation, the exercise of stock options, the exercise of warrants, the business combination\nand the deemed contribution from the Shareholder and related companies.\n\n*(c)**Dividend restrictions and reserves*\n\n \n\nDue to the Group's structure, the payment\nof dividends is subject to numerous controls imposed under PRC law, including foreign exchange control on the conversion of the local\ncurrency into U.S. dollars and other currencies.\n\n \n\nIn accordance with the relevant PRC regulations,\nappropriations of net income as reflected in its PRC statutory financial statements are to be allocated to each of the general reserve\nand enterprise expansion reserve, respectively, as determined by the resolution of the Board of Directors annually.\n\n \n\n \n\nF-63 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**20.**\n \n**RELATED PARTY BALANCES AND TRANSACTIONS**\n\n \n\nIn\naddition to the transactions detailed elsewhere in the consolidated financial statements, the Group had the following transactions and\nbalances with related companies:\n\n*(a)**Commercial transactions with related companies*\n\nSchedule of commercial transactions with related companies \n   \n   \n   \n   \n  \n\n  \n   \nYear Ended December 31, \n\n  \n   \n2023  \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n   \n  \n\nCHNR’s share of office rental, rates and others to Anka Consultants Limited (“Anka”) (a)  \n (i)   \n 445  \n 797  \n 736  \n 105 \n\nFeishang Management's share of office rental to Feishang Enterprise (b)  \n (ii)   \n 166  \n 166  \n 146  \n 21 \n\nShenzhen New PST’s share of office rental to Feishang Enterprise (b)  \n (iii)   \n 53  \n —  \n —  \n — \n\n \n\n(i)\n \nOn July 1, 2018, the Company signed a contract with Anka to lease 184 square meters of office premises for two years from July 2018 to June 30, 2020, subsequently extended it to June 30, 2025. The agreement also provides that the Company shares certain costs and expenses in connection with its use of the office, in addition to some of the accounting and secretarial services and day-to-day office administration services provided by Anka. On July 1, 2025, the Company signed a new contract with Anka to lease 110 square meters of office premises for one year from July 1, 2025 to June 30, 2026.\n\n \n\n \n\n(ii)\n \nOn January 1, 2018, Feishang Management signed an office-sharing agreement with Feishang Enterprise. Pursuant to the agreement, Feishang Management shares 40 square meters of office premises for 33 months, subsequently extended to September 30, 2025. On September 30, 2025, Feishang Management signed a new contract with Feishang Enterprise for one year from October 1, 2025 to September 30, 2026.\n\n \n\n(iii)\n \nShenzhen New PST signed a contract with Feishang Enterprise to lease 96 meters of office premises for 12-month period from March 14, 2022 to March 13, 2023 and renewed the contract with same terms for another 12-month period from March 14, 2023 to March 13, 2024. Due to the disposal of PSTT, the transaction amount in 2023 contains 7 months rentals.\n\n \n\n(a)\n \nAnka is jointly owned by Mr. Wong Wah On Edward and Mr. Tam Cheuk Ho, who are officers of the Company.\n\n(b)\n \nFeishang Enterprise is controlled by Mr. Li Feilie, who is the controlling shareholder of the Company.\n\n \n\n \n\nF-64 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**20.****RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)**\n\n \n\n*(b)**Other transactions with related parties*\n\nOn\nFebruary 27, 2023, the Company entered into a sale and purchase agreement (the “SPA”) with Feishang Group and Top Pacific\n(China) Limited (together, the “Sellers”), and the respective beneficial owner of the sellers, Mr. Li Feilie and Mr. Yao\nYuguang, to acquire 100% equity interests of Greatfame Investments Limited, which owns 100% equity interest in Williams Minerals (Pvt)\nLtd (“Williams Minerals”) (the “Acquisition”). Williams Minerals owns the mining permit for the Zimbabwean lithium\nmine. The consideration to be paid by the Company for the Acquisition will be calculated by multiplying the qualified measured, indicated\nand inferred resources quantity of lithium oxide proven to be in the mine by independent technical reports by a unit price of US$500\nper ton, less certain due diligence costs and expenses incurred by the Company for the issuance of the independent technical reports. \n\nAccording\nto the SPA, the Company issued a US$24,500 promissory note (Promissory Note No. 1) and a US$10,500 promissory note to Feishang Group and Top Pacific (China) Limited respectively on April 14, 2023 to proceed with the acquisition.\nThe Company recognized a liability due to shareholders amounted to US$$24,500 and other payable amounted to US$10,500 respectively for\nthe present obligations of these two promissory notes with corresponding non-current assets amounted to US$35,000. The Company obtained\nguarantee from Feishang Group and Top Pacific (China) Limited which would not demand to repay the balances due with them on or before\nApril 30, 2027. The balances due to these two parties were reclassified as non-current liabilities thereon.\n\nOn\nAugust 3, 2023, the Company entered into a set-off letter with Feishang Group, pursuant to the letter, the consideration of CNY95,761\nliable to be paid by Feishang Group pursuant to the SPA for the disposal of the water treatment segment (Note 3) shall be set off against\nPromissory Note No. 1 using the exchange rate CNY1.00 = US$0.1400 such that a sum of US$13,407 shall be deducted from the Principal Amount\nas defined in Promissory Note No. 1. According to the letter, the Company derecognized the receivables from Feishang Group amounted to\nCNY95,761 and a liability due to shareholders amounted to CNY95,761.\n\n*(c)**Balances with related companies*\n\nThe\nGroup’s balances with related companies are unsecured and non-interest bearing. Feishang Enterprise and the Shareholder have provided\nletters stating their continuous financial support to the Group and that they will not recall any amounts due to them until the Group\nhas sufficient liquidity to finance its operations. The balances are summarized as follows:\n\nSchedule of balances with related companies \n   \n   \n   \n  \n\n  \n   \nDecember 31, \n\n  \n   \n2024  \n2025  \n2025 \n\n  \n   \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nCurrent: \n    \n    \n    \n   \n\nPayable to related companies: \n    \n    \n    \n   \n\nFeishang Enterprise (a)  \n (i)   \n 10,422  \n 10,225  \n 1,461 \n\nAnka Capital Ltd. (“Anka Capital”) (b)  \n (ii)   \n 939  \n 1,528  \n 219 \n\nAnka (b) \n    \n —  \n 956  \n 137 \n\n  \n    \n 11,361  \n 12,709  \n 1,817 \n\n  \n    \n    \n    \n   \n\nPayable to the Shareholder: \n    \n    \n    \n   \n\nFeishang Group Ltd. (a)  \n    \n 78,567  \n 73,075  \n 10,445 \n\n  \n    \n 78,567  \n 73,075  \n 10,445 \n\n \n\n \n\nF-65 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**20.****RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED)**\n\n \n\n*(c)**Balances with related companies (continued)*\n\n**\n\n(i)\n \nThe payable to Feishang Enterprise by Feishang Management represents the net amount of advances from Feishang Enterprise and its subsidiaries. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.\n\n \n\n(ii)\n \nThe payable to Anka Capital represents the net amount of advances from Anka Capital. The balance is unsecured and interest-free. The balance is repayable when the Group is in a position to settle the amounts due without having a detrimental impact on the financial resources of the Group.\n\n   \n\n(a)\n \nFeishang Enterprise and Feishang Group are controlled by Mr. Li Feilie, who is the controlling shareholder of the Company.\n\n \n\n(b)\n \nAnka Capital and Anka are each jointly owned by Mr. Wong Wah On Edward and Mr. Tam Cheuk Ho, who are officers of the Company.\n\n  \n\n*(d)**Compensation of key management personnel of the Group*\n\nSchedule of compensation of key management personnel of the group \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n  \n\nWages, salaries and allowances \n 843  \n 593  \n 85 \n\nHousing funds \n —  \n 15  \n 2 \n\nContribution to pension plans \n 76  \n 44  \n 6 \n\n  \n    \n    \n   \n\n  \n 919  \n 652  \n 93 \n\n  \n\nThe amounts disclosed in the table are\nthe amounts recognized as expenses during the respective period related to key management personnel. ** **\n\n \n\n** **\n\nF-66 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n****\n\n**21.****SHARE-BASED PAYMENT**\n\nShare-based\npayment\n\nOn\nJune 26, 2023, the Board of Directors of the Company approved to grant share-based payment of 180,000 common shares for consultant’s\nservice between June 26 to December 25, 2023. As the Group cannot measure reliably the fair value of the service received, it is based\non the fair value of the common shares granted measured over the period the services is received. The Group recognized administrative\nexpenses associated with the consultant service reward with a corresponding increase in equity using the average fair value of the common\nshares over the service period. The 180.000 common shares were vested and issued in 2023.\n\nWarrants relating to the placement\n\n \n\nThe Company issued and sold an aggregate\nof 1,487,870 of its common shares at a price of US$2.20 per share to certain institutional investors on February 21, 2024 through a private\nplacement. In a concurrent private placement, the Company issued the warrants:\n\n \n\n(i) to the institutional investors (the\n“investor warrants”), which gave the right to purchase an aggregate of 1,115,903 common shares of the Company with an exercise\nprice of US$3.00 per share. The investor warrants are exercisable up to 42 months after February 21, 2024. The Company recognized the\ninvestor warrants issued as derivative financial liabilities as the investors have the right to exercise their warrants on a cashless\nbasis according to the agreement clause.\n\n \n\n(ii) to the placement agent (the “agent\nwarrants”) as part of placement service fees, which gave the right to purchase an aggregate of 74,394 common shares with an exercise\nprice of US$2.20 per share. The agent warrants are exercisable up to 42 months after February 21, 2024. There are no cash settlement alternatives.\nThe Group does not have a past practice of cash settlement for the warrants. The Group accounts for the warrants as equity-settled share-based\npayment, and recognized other capital reserves in an amount of CNY483 (US$67*), which represented the fair value of agent warrants as\nof issuance date. The fair value of services recorded is not used since it cannot be reliably estimated. The amount was allocated to the\nissuance of the common shares and investor warrants according to their relative fair values at the date of issuance and CNY 359 (US$50*)\nand CNY124 (US$17*) were charged to share capital and administrative expenses, respectively.\n\nThe\nfair value of the agent warrants is estimated at the issue date using a binomial lattice pricing model using significant observable inputs\nincluding underlying spot price of the Company's ordinary shares, exercise price, time to expiration, risk-free rate and equity volatility,\netc.\n\n*As\nthe changes in equity from this private placement transaction are dominated in US$, all the amount in US$ of this disclosure paragraph\nare actual transaction amount and corresponding amount in CNY were translated from US$ at the applicable exchange rate of the transaction\ndate, February 21, 2024.\n\n*(a)**Expense arising from share-based payment transactions*\n\nThe\nexpense recognized during the year for above share-based payments is shown in the following table: \n\nSchedule of expense arising from share-based payments \n   \n   \n   \n  \n\n  \nYear Ended December 31, \n\n  \n2023  \n2024  \n2025  \n2025 \n\n  \nCNY  \nCNY  \nCNY  \nUS$ \n\n  \n   \n   \n   \n  \n\nConsultants share-based payment expense \n 3,074  \n 483  \n —  \n — \n\n  \n    \n    \n    \n   \n\n \n\n \n\nF-67 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**21.****SHARE-BASED PAYMENT (CONTINUED)**\n\n \n\n*(b)**Movements during the year*\n\nThe\nfollowing table illustrates the number of, and movements in, agent warrants during the year:\n\nSchedule of agent warrants \n   \n  \n\n  \nNumber of shares  \nExercise price per share \n\n  \n    \n **US$** \n\n  \n    \n   \n\nOutstanding as of December 31, 2023 \n 79,200  \n 3.115 \n\nExpired \n (79,200) \n — \n\nIssued during the year \n 74,394  \n 2.20 \n\nOutstanding as of December 31, 2024 \n 74,394  \n 2.20 \n\nEffect of Eight-to-One Share Combination (Note 19) \n (65,094) \n — \n\nOutstanding as of December 31, 2025 \n 9,300  \n 17.60*\n\nThe\nremaining contractual life for the agent warrants as of December 31, 2025 and 2024, were 1.63 years and 2.63 years, respectively.\n\n*\nOn June 13, 2025, the Company effected a share combination in which\nall of the Company's issued and outstanding ordinary shares were combined on an 8-to-1 basis. The exercise price was revised to $17.60\nper share.\n\nThe\nfollowing table illustrates the number of, and movements in share options during the year:\n\nSchedule of share options \n   \n  \n\n  \nNumber of shares  \nExercise price per share \n\n  \n    \n **US$** \n\n  \n    \n   \n\nOutstanding as of December 31, 2023 and 2024 \n 1,620,000  \n 3.115 \n\nEffect of Eight-to-One Share Combination (Note 19) \n (1,417,500) \n — \n\nExpired* \n (202,500) \n — \n\nOutstanding as of December 31, 2025 \n —  \n — \n\n \n\n*The share options expired and lapsed on July 13, 2025, in accordance with the terms of the\nshare option plan.\n\n \n\n \n\n \n\nF-68 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n**21.****SHARE-BASED PAYMENT (CONTINUED)**\n\n \n\n*(c)**Inputs to the models*\n\n \n\nThe\nfollowing tables list the inputs to the models used for agent warrants for the year ended December 31, 2024:\n\nSchedule of inputs to the models for fair value \n  \n\n  \nAgent warrants\n2024 \n\n  \n  \n\nFair value at the measurement date (US$) \n 24,451 \n\nFair value at the measurement date (CNY) \n 178,443 \n\nExpected volatility (%) \n 121.79 \n\nRisk-free interest rate (%) \n 4.17 \n\nExpected life (years) \n 2.63 \n\nShare price (US$) \n 0.68 \n\n  \n   \n\n \n\nThe\nexpected life of share options and agent warrants is based on historical data and current expectations and is not necessarily indicative\nof exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar\nto the life of the options is indicative of future trends, which may not necessarily be the actual outcome.\n\n \n\n \n\nF-69 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n \n\n \n\n**22.****NOTES TO THE CONSOLIDATED STATEMENTS OF\nCASH FLOWS**\n\n \n\n*(a)**Major non-cash transactions*\n\nOn February 27, 2023, the Company entered\ninto a sale and purchase agreement of Zimbabwean lithium mine, which is a non-cash transaction (Note 20 (b)) for more details. On July\n28, 2023, the Group had non-cash disposal of PSTT (Note 3). On August 3, 2023, the Company entered into a set-off letter with Feishang\nGroup to net off the consideration of the disposal of PSTT and promissory note issued under the SPA of the sale and purchase agreement\nof Zimbabwean lithium mine (Note 20 (b)).\n\n \n\n*(b)**Changes in liabilities arising from financing activities*\n\nSchedule of changes in liabilities arising from financing activities \n   \n   \n   \n   \n  \n\nYear Ended December 31, 2024 \nInterest-bearing loans and borrowings  \n\n**Dividends**\n\n**payable**\n  \nDue to related companies  \nDue to the Shareholder  \n\n**Lease**\n\n**liabilities**\n \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n    \n    \n   \n\nAs of January 1, 2024 \n —  \n —  \n 9,069  \n 85,673  \n 360 \n\nChanges from financing cash flows \n —  \n —  \n 1,858  \n (5,035) \n (373)\n\nForeign exchange difference \n —  \n —  \n 434  \n (2,071) \n 7 \n\nInterest expenses \n —  \n —  \n —  \n —  \n 6 \n\n  \n —  \n —  \n    \n    \n   \n\nAs of December 31, 2024 \n —  \n —  \n 11,361  \n 78,567  \n — \n\n \n\n  \n   \n   \n   \n   \n  \n\nYear Ended December 31, 2025 \nInterest-bearing loans and borrowings  \n\n**Dividends**\n\n**payable**\n  \nDue to related companies  \nDue to the Shareholder  \n\n**Lease**\n\n**liabilities**\n \n\n  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY**  \n **CNY** \n\n  \n    \n    \n    \n    \n   \n\nAs of January 1, 2025 \n —  \n —  \n 11,361  \n 78,567  \n — \n\nChanges from financing cash flows \n —  \n —  \n 2,276  \n (2,595) \n — \n\nForeign exchange difference \n —  \n —  \n (928) \n (2,897) \n — \n\n  \n    \n    \n    \n    \n   \n\nAs of December 31, 2025 \n —  \n —  \n 12,709  \n 73,075  \n — \n\n \n\n  \n   \n   \n   \n   \n  \n\nYear Ended December 31, 2025 \nInterest-bearing loans and borrowings  \n\n**Dividends**\n\n**payable**\n  \nDue to related companies  \nDue to the Shareholder  \n\n**Lease**\n\n**liabilities**\n \n\n  \n **US$**  \n **US$**  \n **US$**  \n **US$**  \n **US$** \n\n  \n    \n    \n    \n    \n   \n\nAs of January 1, 2025 \n —  \n —  \n 1,557  \n 10,766  \n — \n\nChanges from financing cash flows \n —  \n —  \n 325  \n (371) \n —\n\nForeign exchange difference \n —  \n —  \n (65) \n 50 \n — \n\n  \n    \n    \n    \n    \n   \n\nAs of December 31, 2025 \n —  \n —  \n 1,817  \n 10,445  \n — \n\n \n\n \n\n \n\nF-70 \n\n**CHINA NATURAL RESOURCES, INC.**\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n**YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**\n\n**(Amounts in thousands, except share and per share data)**\n \n\n  \n\n**22.****NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS****(CONTINUED)**\n\n \n\n*(c)**Total cash outflow for leases*\n\n \n\nSchedule of Cash Outflow for Leases \n   \n   \n  \n\n  \n2024  \n2025  \n2025 \n\n  \n **CNY**  \n **CNY**  \n **US$** \n\n  \n    \n    \n   \n\nWithin operating activities \n —  \n (29)  \n (4) \n\nWithin financing activities \n (366) \n —  \n — \n\n Total cash outflow for leases \n (366) \n (29)  \n (4) \n\n  \n    \n    \n   \n\n** **\n\n**23.****COMMITMENTS**\n\n \n\nAt\nDecember 31 2025, the Company had capital commitments of CNY 2,432 (December 31 2024: CNY 2,432) associated with mineral exploration\nfor the Zimbabwean lithium mine. The corresponding capital expenditures will be paid along with the progress of the exploration works\nonce the mine formally enters into the exploration phase.\n\n** **\n\n**24.**\n \n**SUBSEQUENT EVENTS**\n\n \n\nOn March 19, 2026, the Company signed\na non-binding letter of intent to acquire a majority stake in HooRii Technology (HK) Limited, a physical AI and IoT technology company,\nfrom its principal shareholder. The estimated consideration ranges from US$37 million to US$40 million, payable in cash and stock.\n\n \n\nThe transaction is subject to definitive\nagreements, due diligence, regulatory and corporate approvals, and other closing conditions. No assurance can be given that the transaction\nwill be completed.\n\n \n\n \n\n \n\nF-71"}