Important remarks
William Jefferson "Bill" Clinton (The former President of the United States)
Shibadaogou Hot Spring Resort Project of Changbai County


I. Project Background

Hot Spring (geothermal resource) is a kind of green energy. Since the 70s of last century, developed countries have begun to explore and utilize geothermal energy as important resources and obtained great economic and social benefits.

China is among the first group of countries utilizing geothermal resources in the world with a long history of development and utilization of it. The department of land and resources has carried out geothermal exploration in key areas of hot springs in China since the 50s of last century and pushed forward the exploitation and utilization of geothermal resources. By the present exploration and utilization level estimates the amount of actually direct utilized geothermal resources reached 445.7 million m2 by the end of 2005, ranking the first in the world. Geothermal resources of medium and low temperature find wide application in China including heating, bath spa, cultivation, breeding, drying and other direct utilizations of geothermal resources, of which geothermal heating accounts for 18%, health bath, physical fitness and amusement, 65.2%, cultivation and breeding, 9.1% and others, 7.7%.

Hot spring is called the fourth energy. With the present tense condition of world energies, geothermal exploration and utilization have received additional consideration. The geothermal energy can be developed without fuels and is an ideal energy in preventing air pollution. The Renewable Energy Law of Peoples Republic of China, which was passed by the Standing Committee of the national Peoples Congress and implemented in first January 2005, has opened the door for rapid development of renewable energies in China. It is the right moment for involving in geothermal resources development industry.

   This project is located in Shibadaogou Village of Malugou Town in Changbai County, 5 kilometers west to Changbai county town, 1.5 kilometers southwest to Shibadaocun Village and 1 kilometer south facing North Korea on the other side of the Yalu River. There are 3 big and 6 little springs generated 300 years ago with 500m3 water volume per day in project zone of Shijiudaogou Village. The perennial water temperature is 30 to 35 degrees. The water contains sulfur dioxide, strontium, metasilicic acid, fluorine, radon and more than 20 kinds of microelements, which can produce a good curative effect on rheumatism and skin disorders, as well as improve the function of cardiovascular system and adjust the activities of neurocyte and endocrine glands.

II. Construction Scale and Production Plan

Floor space: 33335m2, overall floorage: 45804m2 including 28,000m2 of main building, 16,000 m2 of hot spring and bath complex building and 1804m2 of utilities.

It is proposed to construct a tourist resort integrating scouring bath, convalescent services, leisure and recreation which includes completed entertainment facilities such as hot spring bath, mineral spring bath, swimming, fishing, climbing, skiing and grass skiing with daily reception capability of over 1,000 person-times.

III. Market Analysis and Economic Benefit Forecast

This project can realize 25.1 million Yuan of annual revenue after entering into normal operation. The overall cost is 11.37 million Yuan and the total profit, 12.41 million Yuan including 3.1 million of income taxes and 9.31 million of net profit. This project may resolve the employment of 800 local laid-off workers and residents with employment difficulties and greatly promote the development of the tourist attractions.

IV. Total Project Investment and Financing Arrangement

Total investment: 104.21 million Yuan, construction investment: 100.84 million Yuan, floating capital: 67 million Yuan, interest incurred during construction: 2.7 million. The funds required for the project are raised by the enterprise.

V. Cooperation Ways

Joint venture.

VI. Foreign Investment and Constitution

Cash investment

Shibadaogou Hot Spring Resort Limited Company of Changbai County and foreign side raise funds through joint-stock cooperative way with financial gap of 35 million Yuan.

VII. Project Construction Venue

1.5 kilometers southwest of Shibadaogou Village of Malugou Town in Changbai County

VIII. Project Progress

The project covers an area of 33335m2 and has obtained the state-owned land use permit, official reply of environment effect evaluating and other preliminary procedures. The principal part of the project has been completed and the interior decoration is under way.

IX. Outline of Project Organizer

Shibadaogou Hot Spring Resort Limited Company of Changbai County was established in June 2008 and the registration address is 28 Minzhu Street, Changbai Town, Changbai County. The company registers capital 40 million Yuan and legal person is Zhan Dangqing. There are 120 employees, among whom 20 are managers. This company is a private enterprise which includes tourist development, resort, catering and hot spring bath.

X. Contact Methods

Mailing Address: No.28 Minzhu Street, Changbai County, Jilin Province

Postal Code: 134400

Contact Person: Piao Songzhe

Tel: 0086-13904498477

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