With the stock reaching the 10 per cent limit for three consecutive days (from August 8 to 10), Tianyi has announced progress has been made in the reform of its shareholder structure. The company announced that after consulting its controlling shareholder, Pingjiang Authority of State-owned Assets, as well as the board of directors and senior management of the Great Wall Asset Management Corporation, the second largest shareholder of the company, it believes the following three factors are the probable cause for the unusual fluctuation in the share price:

Firstly, progress has been made in the reform of the shareholder structure. On 11 Aug 2007, the company issued a notice about the holding of the related shareholders meeting on shareholder structure reform by Hunan Tianyi Science and Technology Co., Ltd, which confirmed the meeting would be held on 31 Aug 2007.

Secondly, to improve the efficiency of the mineral resources development, a meeting was held by the board of directors of Hunan Tianyi Jinyue Mining Company Limited, the company’s holding subsidiary, on 10 Aug 2007. The meeting examined and adopted the proposal of “the establishment of Albite beneficiation processing plants”, with further study still needed on the specific programs and there were still a lot of uncertainties about the project. It was decided that Tianyi will strengthen its financial support to Jinyue Mining as well as increase its holding of part of Jinyue Mining’s shares with some provision.

Thirdly, the company is negotiating with the Agricultural Development Bank of Yueyang City and Yueyang Yinhu Rise Industry Ltd. about cooperation in rice processing projects.

The board confirmed that in addition to the above circumstances, there are no undisclosed matters that should be disclosed.