ZHEN DING RESOURCES INC.

Mineral Properties

Description of the Property of the Wuxi Gold Project

Zhen Ding JV has relied on Mr. Wei De Gang (formerly Xinzhou Gold) for its supply of metal ores and its processing plant is located on the site of the underground mine where Mr. De Gang has licenses to explore and mine ore (the “Wuxi Gold Project”) to reduce transportation cost. The Wuxi Gold Project is located in Jingxian county, situated in the southeastern part of Anhui Province, PRC. The site is 63km southwest of the city of Xuancheng, a significant city of about 2.8 million inhabitants, and is 15 km south of the town of Jingxian. The project site falls under the administration of the township of Langqaio and is located near the village of Wuxi (see Figure 1).

Figure 1- Location of Wuxi

The geographical position of the Wuxi Gold Project is located within the area bounded by the coordinates: 118°24′20″ to 118°27′20″ E and 30°31′30″ to 30°35′30″ N.

Access to the site from the city of Huangshan, the nearest city with regular air service, is by Express Highway #205 for approximately 125km to the village of Wuxi and subsequently by a 2 km all-weather road to the project site. All roads are public roads. Access is also available through the rail system at Xuancheng. (Please refer to Figure 2 for access to Wuxi via highways).

The area was eroded by glacial activity and subsequently by meteoric waters to a rolling landform. The elevations in the Wuxi Gold Project area are generally higher in the east and lower in the west. The highest elevation, in the area, is less than 300m above sea level.

Gullies and creeks are well developed and are recharged by meteoric water. A river near the Wuxi Gold Project site will, via surface channel, conduit sufficient water for process and mining purposes. All rivers, gullies and creeks in the area flow into the Shuiyang river system.

The area has a mild climate. The highest temperatures occur in July and August reaching highs of + 41ºC and the lowest are during January and February reaching lows of –8ºC. Annual precipitation varies between 1348.2mm and 1422.8mm, concentrated from April to August.

The Wuxi Gold Project is located near the village of Wuxi and the work force comes from this and other nearby villages. A plentiful, although inexperienced, work force is available locally.

Electric power is supplied by the local power grid and additional demand can be met by existing infrastructure. Energy cost is low and reliability is reportedly good. No backup power supply is provided or required on site. Telephone lines are available. Cellular phone coverage is good. Required roads, power lines, and water lines are in place.

Our former joint venture partner, Xinzhou Gold mined ores at the Wuxi Gold Project under two permits: (1) Mining License No. C3400002009114110049341 (the “Mining License”) and (2) Gold Mining License No. (2005) 42 (the “Gold Mining License”).

The Mining License was valid from November 20, 2014 until November 20, 2017 and was issued by the Mining Resources Department of Anhui Province. This license allowed ore to be mined in a specific area spanning 0.744 square kilometers with an ore extraction limit of 60,000 tons per year. The Mining License allows for underground mining.

The Gold Mining License was issued by the National Commission on National Development and Reform and specifically grants the right to extract gold ore up to 200 tons a day in the Wuxi Gold Mine and was valid from June 3, 2005 until June 3, 2015. The permit extension application is currently paused due to the inability of our joint venture to demonstrate adequate capital resources to undertake necessary work and exploration, but may be eligible to be revived. Without a valid Gold Mining License, Mr. De Gang may not mine any gold ore from the Wuxi Gold Mine and therefore would not have any gold ore available for sale to us, which could have a material adverse effect on our revenues and income.

In December, 2016, the application to expand the Wuxi mine permit was rejected due to the company’s insufficient working capital. Mr. Wei De Gang intends to reapply for an extension of the permitted mining area when our joint venture is able to demonstrate sufficient working capital to drill the extended area. As such, mining of ore has been paused indefinitely awaiting an expansion of the working area permitted under the Mining License. However, if sufficient working capital is unavailable, or should the application be denied on other grounds, we would not be able to secure another source with higher grade ores for our processing plant, which would severely limit our ability to execute our plan of operation and our potential profitability.

History of the Wuxi Gold Project

Initial regional geologic work began, in this area, in the 1930’s. Geologists, including Li Yuyao and Wang Hengjie, began investigations into the origin of the carbonaceous zone in southern Anhui. Mineral exploration work began subsequent to the investigation for coal by Zhaoxian Bian and Yunyuan Liu in the 1940’s.

Additional regional geology and mineral geological surveys were performed between 1960 and 1965, by the Anhui Regional Geological Survey Team. This team provided a detailed Lithological/Stratigraphic study of the area. Concomitantly, this team performed stream sampling and investigations of old mine workings as well as additional mineral prospecting which has laid the basis for all subsequent geological work.

• We Potentially Face Intense Competition From Other Companies In The Mining Field That Have Greater Resources Than Us.
• Acts Of Terrorism, Responses To Acts Of Terrorism And Acts Of War May Impact Our Business And Our Ability To Raise Capital.
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• Currency Conversion and Exchange Rate Volatility Could Adversely Affect Our Financial Condition.
• Natural Disasters, Health Epidemics and Other Outbreaks
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• China’s Economic Policies Could Affect Our Business.
• We May Face Obstacles from the Communist System in the People's Republic Of China.
• We May Have Difficulty Establishing Adequate Management, Legal and Financial Controls In The People's Republic Of China.
• Because Our Assets And Operations Are Located In China, You May Have Difficulty Enforcing Any Civil Liabilities Against Us Under The Securities And Other Laws Of The United States Or Any State.
• The PRC Legal System Embodies Uncertainties, Which Could Limit Law Enforcement Availability.
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