Huaxing Machinery Corp. Seeks to Settle Loans

Huaxing Machinery Corp. (TSX VENTURE:HUA) ("Huaxing" or the "Company") (
formerly Samurai Capital Corp., TSXV - SMU.P) is pleased to announce that the
Company has entered into two debt settlement and conversion agreements (the
"Loan Settlement Agreements") with Gold Rhino International Investment Limited
("GRIL"), a major shareholder of the Company, whereby the Company agrees to
issue 20,367,422 Series A Convertible Preferred Shares (each, a "Series A
Share") to GRIL at a deemed price of $0.27 per Series A Share to settle two
shareholder loans totaling $5,499,205. The Loan Settlement Agreements are
subject to TSX Venture Exchange (the "Exchange") approval and disinterested
shareholder approval.


On March 1, 2009, the Company's wholly owned subsidiary, Gold Rhino Limited
("GRL"), entered into a shareholder loan agreement with GRIL's five shareholders
(the "Lenders"). Under the terms of the agreement, the Lenders advanced an
aggregate of $5,500,000 to GRL. Of this amount, $1,580,000 was allocated to
share capital and $3,920,000 ("the First Loan") was recorded as an unsecured
loan bearing an interest rate of 6.6% per annum. As at June 30, 2012, the
outstanding principal and accrued interest pursuant to the First Loan was
$4,899,205.


On December 31, 2010, various investors advanced $600,000 to the Company for a
proposed private placement concurrent with the Qualifying Transaction of the
Company as described in the Filing Statement of the Company dated November 29,
2010. On February 21, 2011, the proposed private placement was cancelled and
GRIL refunded the $600,000 to the investors on behalf of the Company. The amount
was recorded as an unsecured and non-interest bearing shareholder loan from GRIL
to the Company (the "Second Loan"). As at June 30, 2012, the outstanding amount
owed to GRIL pursuant to the Second Loan was $600,000. 


The total outstanding amount for the First Loan and the Second Loan as at June
30, 2012 was $5,499,205. GRIL agrees to waive any interest accrued on the First
Loan after June 30, 2012. According to the Loan Settlement Agreements, the
Company agrees to issue a total of 20,367,422 Series A Shares to GRIL at a
deemed price of $0.27 per Series A Share to settle the two shareholder loans.
The Company and GRIL have agreed that $0.27 per Series A Share is a fair market
value based on the valuation report of the Company by Evans & Evans, Inc. dated
June 6, 2012. The Loan Settlement Agreements have obtained conditional approval
from the Exchange, and still requires disinterested shareholders' approval.


"Conversion of the outstanding debts of $5,499,205 into the Company's Series A
Shares will relieve the Company from debt repayment, and enable the Company to
use its cash reserve towards future expansions," said Xinhua Sun, the Chairman
of the Company. "The $0.27 per share conversion price is at a significant
premium over the recent stock trading prices. It shows the confidence of the
Company's major shareholders in the Company's value and potential". 


About Huaxing Machinery Corp.

On January 21, 2011 Samurai Capital Corp. completed its Qualifying Transaction
by acquiring all the issued and outstanding shares of Gold Rhino, a private
company incorporated under the laws of Hong Kong. Gold Rhino holds an 80% equity
interest in SGRHM, a company based in Boxing County, Shandong Province, China.
SGRHM is a manufacturer of stone cutting, polishing and processing machinery and
equipment for the building and construction industry. Upon completion of the
Qualified Transaction, Samurai Capital Corp. changed its name to Huaxing
Machinery Corp.


Forward-Looking Statements 

Certain information regarding Huaxing Machinery Corp. contains herein may
constitute forward-looking statements within the meaning of applicable
securities laws. Forward-looking statements may include estimates, plans,
expectations, opinions, forecasts, projections, guidance or other statements
that are not statements of fact. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct. The
Company cautions that actual performance will be affected by a number of
factors, many of which are beyond the Company's control, and that future events
and results may vary substantially from what the Company currently foresees. The
Company assumes no obligation to update such forward-looking statements, except
as required by applicable securities laws. The Company's forward-looking
statements are expressly qualified in their entirety by this cautionary
statement.