Yalian Steel Announces Financial and Operational Results for the Year Ended September 30, 2010

VANCOUVER, Dec. 23 /CNW/ -- 
TSX-V:YL


VANCOUVER, Dec. 23 /CNW/ - Yalian Steel Corporation (TSX-V: YL) today
 announced its financial and operating results for the year ended
 September 30, 2010. The "Company" or "Yalian" refers to Yalian Steel
 Corporation (formerly China Drill Corporation) and its subsidiary,
 Yangzhou Yalian Steel Pipe Co. Ltd ("Yangzhou Yalian"), which operates
 primarily within the People's Republic of China ("PRC"). The Company
 completed its qualifying transaction and began trading as a public
 company in December 2008. Yalian reports its results in Canadian
 dollars, as reported here, unless otherwise stated.


For the year ended September 30, 2010, Yalian reported revenues of
 $908,737; cost of sales of $1,335,324; operating expenses of $2,637,896
 and other expenses (net of income) of $349,117. Net loss for the year
 was $3,413,600, or $0.04 per share.


For the three month period ended September 30, 2010, Yalian reported
 revenues of $387,547; cost of sales of $666,954; and operating expenses
 of $545,205. Net loss for the three month period was $823,467, or $0.01
 per share.


As at September 30, 2010, cash and cash equivalents were $7,442,099,
 restricted cash was $5,078,700, and the Company's working capital
 position was $17,677,544. Total assets were $84,493,204, the long-term
 loans, net of financing costs, were $30,975,324, and total
 shareholders' equity was $43,921,511.


Operational and Business Highlights


During the year ended September 30, 2010, Yalian achieved a number of
 operational and business milestones including:


In February 2010, Yangzhou Yalian received approval from the American
 Petroleum Institute for certification and license registration of "5L
 X-70 Grade" for its high grade steel large diameter pipe mill and is in
 the process of applying for additional certification of X-80 grade and
 higher.


In March 2010, Yangzhou Yalian received an A1 Grade production license
 from the State General Administration of the PRC for Quality
 Supervision, Inspection and Quarantine. The "A1 Grade" is the highest
 production license available and permits Yangzhou Yalian to manufacture
 LSAW pipes for all grades of steel to be manufactured and sold within
 the PRC. By the end of March 2010, Yangzhou Yalian had received all of
 its required permits, licenses and industry certifications necessary to
 commence operations in China.


For the quarter ended September 30, 2010, the Company manufactured and
 delivered several sales orders and continued to focus its efforts on
 the development and expansion of its sales and marketing activities
 within PRC and abroad. In addition to completing numerous bid
 submissions for a number of large oil & gas projects in PRC, Europe and
 the Middle East, the Company was added to the pre-approved natural gas
 vendor lists for Hubei province, Jiangsu province, Guangdong province
 and Zhejiang province in the PRC.


As at September 30, 2010, the Company had substantially completed the
 installation, testing and commissioning of plant and equipment and has
 recently commenced commercial operations. During the year ended
 September 30, 2010, the Company completed the planning and engineering
 phase of its new anticorrosion line and the construction commenced
 during the month of September. The project is expected to cost
 approximately $5,300,000 and is expected to be completed in calendar
 year 2011. The Company's production plant has a rated capacity to
 produce up to 200,000 metric tons of LSAW pipes per year, depending on
 product and mix specifications.


For more detailed information, please refer to the Company's filings on
 SEDAR at www.sedar.com.


About Yalian Steel Corporation


Yalian Steel Corporation is a British Columbia corporation focused on
 the production of high quality Longitudinally Submerged Arc Welded
 (LSAW) steel pipe to service Asia's rapidly growing energy
 transportation infrastructure market. The Company has recently
 completed construction of its initial manufacturing facility in city of
 Yangzhou, in the Jiangsu province of China. The Company's production
 line has a rated capacity of up to 200,000 metric tons per year,
 depending on product and mix specifications. The Yangzhou Yalian plant
 utilizes the JCOE (J-ing, C-ing, O-ing, Expanding) process, an advanced
 method of LSAW pipe production that involves the bending and shaping of
 X-70 and higher grade steel.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts
 responsibility for the adequacy or accuracy of this press release.


This press release contains forward-looking statements based on current
 expectations. These forward-looking statements entail various risks and
 uncertainties that could cause actual results to differ materially from
 those reflected in these forward-looking statements. Risks and
 uncertainties about Yalian's business are more fully discussed in the
 Company's disclosure materials filed with the securities regulatory
 authorities in Canada. All amounts are stated in Canadian dollars
 unless noted otherwise.


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pYALIAN STEEL CORPORATION/p pLan Shangguan, Chief Financial Officerbr/ Tel. No.: [phone]/p pbFor further company information please access our website:/bua href="http://www.yaliansteel.com/"www.yaliansteel.com/a/u/p

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