SOUTH MANGANESE(01091): Proper measures have been taken to control and reduce production costs.

SOUTH MANGANESE (01091) announces that the Board of Directors has noted the appearance of certain information online regarding the company's operations. After conducting reasonable inquiries, the Board has understood the following: 1. The company's core products, electrolytic manganese metal and electrolytic manganese dioxide, rely on key raw materials such as manganese ore, sulfuric acid, and anode plates, the cost of which has increased over the past year. The company has been reviewing and adjusting its cost structure, as well as taking appropriate measures to control and reduce production costs. 2. The mining rights certificate for the Tian Deng manganese mine branch of SOUTH MANGANESE Group Co., Ltd., a wholly-owned subsidiary of the company, is set to expire on December 2, 2024. As of the date of this announcement, the relevant mining rights certificate is still under application. Due to the lack of a valid mining rights certificate at present, the production of manganese ore at the Tian Deng branch has been temporarily suspended, resulting in significant losses. The company is actively following up on the application process. 3. Due to ongoing weak demand for manganese ore in the Zunyi area and heavy personnel costs, the operational performance of the company's non-wholly-owned subsidiary, Guizhou Zunyi Huixing Ferroalloy Co., Ltd. (Zunyi Company), has experienced significant losses. The company is continuously evaluating feasible solutions to improve the operational performance of the Zunyi Company.