Yalian Steel Corporation Announces $8.5 Million Bought Deal Private Placement Financing

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THE UNITED STATES


Yalian Steel Corporation (TSX VENTURE:YL) ("Yalian" or the "Company") is pleased
to announce that it has entered into an agreement with GMP Securities L.P. (the
"Underwriter"), which has agreed to purchase 5,000,000 common shares of the
Company (the "Common Shares') at a price of $1.70 per Common Share to raise
gross proceeds of $8.5 million, on a "bought deal" underwritten private
placement basis (the "Offering"). A cash commission equal to 6% of the gross
proceeds of the Offering will be paid to the Underwriter. As additional
compensation, the Company will grant the Underwriter broker warrants (the
"Broker Warrants") entitling the Underwriter to acquire that number of Common
Shares as is equal to 6% of the number of Common Shares issued pursuant to the
Offering exercisable for 18 months following the closing date of the Offering. 


Both the Common Shares and the Common Shares underlying the Broker Warrants
issued pursuant to the Offering are subject to a four-month hold period from the
date of closing.


The Common Shares to be sold under this Offering will be offered on a private
placement basis to Canadian residents who are accredited investors under
applicable securities laws, and in the United States on a private placement
basis pursuant to an exemption from the registration requirements of the United
States Securities Act of 1933, as amended.


The closing date of the Offering is expected to be on or around June 19, 2009
and is subject to certain conditions including, but not limited to, the receipt
of all necessary approvals, including the approval of the TSX Venture Exchange
and any other applicable securities regulatory authorities. The proceeds from
the sale of the Common Shares will be used for working capital and general and
corporate purposes.


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 is currently completing construction of its initial manufacturing
facility in city of Yangzhou, in the Jiangsu province of China. Completion of
the first production line, with a capacity of 200,000 tonnes per year, is
scheduled for the fall of 2009. The Yangzhou Yalian plant will utilize the JCOE
(J-ing, C-ing, O-ing, Expanding) process, an advanced method of LSAW pipe
production that involves the bending and shaping of X80 grade steel. The process
is well established worldwide, but relatively new in the China market. 


Not for distribution to United States newswire services or for dissemination in
the United States.