Yalian Steel Announces Financial and Operational Results for the Year Ended September 30, 2011

Yalian Steel Corporation (TSX VENTURE:YL) today announced its financial and
operating results for the year ended September 30, 2011. The "Company" or
"Yalian" refers to Yalian Steel Corporation and its subsidiary, Yangzhou Yalian
Steel Pipe Co. Ltd ("Yangzhou Yalian"), which operates primarily within the
People's Republic of China ("PRC"). Yalian reports its results in Canadian
dollars, as reported here, unless otherwise stated.


For the three months ended September 30, 2011, Yalian reported revenues of
$2,709,000; cost of sales of $2,722,000; operating expenses of $779,000 and
other expenses (net of income) of $857,000. Net loss for the three months ended
September 30, 2011 was $1,649,000, or $0.02 per share.


For the year ended September 30, 2011, Yalian reported revenues of $26,339,000;
cost of sales of $24,808,000; operating expenses of $2,930,000 and other
expenses (net of income) of $1,497,000. Net loss for the year ended September
30, 2011 was $2,897,000, or $0.03 per share.


As at September 30, 2011, cash and cash equivalents were $899,000, restricted
cash was $6,507,000, and the Company's working capital deficiency was
$10,035,000. Total assets were $92,137,000, short-term and long-term loans, net
of financing costs, were $38,016,000, and total shareholders' equity was
$44,077,000.


As at September 30, 2011, the Company has short-term loans and current portion
of long-term loans due to mature within the next twelve months in the amount of
$28,248,000 (comprising RMB 140,000,000, USD $5,100,000 (of which USD $4,700,000
has been repaid subsequent to the year-end) and $170,000). The Company is
currently making arrangements with banks to renew loans or obtain new short term
loans to repay these obligations. Management is confident of securing additional
loans or other financings which are required in order to fund its working
capital and refinancing needs, both in the short and long term. However, there
can be no assurance that adequate loans or other financings can be secured.


Operational and Business Highlights

During the year ended September 30, 2011, the Company manufactured and delivered
a significantly higher number of sales orders. In terms of volume, total sales
orders manufactured and delivered amounted to 35,372 metric tonnes for the year
ended September 30, 2011, as compared to 892 metric tonnes for the year ended
September 30, 2010.


The Company continues to engage with senior officers from a number of major
state owned oil & gas companies within the PRC to develop and be accepted into
key purchasing networks. During the current year, the Company successfully
completed the certification process and thus was added to the Pre-Approved
Suppliers List of CNPC, a major Chinese oil company. This enables the Company to
bid for projects conducted by CNPC and its related companies.


The Company started the construction of its new anti-corrosion line in September
2010. Installation of the exterior coating line has been completed and was put
into production in December 2011. The interior coating line is being installed
and final completion date is expected to be early 2012. Once fully completed,
this new coating line is expected to be an essential part of the Company's
business development plans and integration within its industrial chain. The
anti-corrosion function of the pipe plays an important role in extending the
longevity of the product, saves energy and also decreases environmental safety
accidents that could be caused by leakage of fluids carried by the line pipe.


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.


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.