U.S. China Mining Group, Inc.

[1]	Certain preferred stock and stock options were excluded for the calculation of diluted loss per share due to anti-dilutive feature for the three months ended March 31, 2014 and 2013

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,806,360)	$ (2,210,306)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	424,420	380,235
Changes in fair value of warrant derivative	(52,813)	169,151
Accretion of interest on asset retirement obligation	66,475	62,263
Stock option compensation	1,891	6,720
Changes in deferred tax	(4,334)	(10,220)
(Increase) decrease in assets and liabilities:
Other receivables, deposits and prepaid expenses	4,991,549	58,245
Deposit for mine brokerage account	(5,000)
Accounts payable	(26,436)
Advance from customers	(30,330)	165,908
Accrued liabilities and other payables	98,853	25,026
Taxes payable	557,688	506,940
Net cash used in (provided by) operating activities	4,215,603	(846,038)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of fixed assets		181
Net cash provided by investing activities		181
EFFECT OF EXCHANGE RATE CHANGE ON CASH & EQUIVALENTS	(267,845)	105,137
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS	3,947,758	(740,720)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD	27,255,927	40,289,757
CASH & EQUIVALENTS, END OF PERIOD	31,203,685	39,549,037
Supplemental Cash flow data:
Income tax paid
Interest paid

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash & equivalents	$ 31,203,685	$ 27,255,927
Other receivables and prepaid expenses	15,033	4,935,698
Taxes receivable	758,535	744,152
Deposit for coal trading	1,685,575	1,770,545
Deposit for brokerage account	5,000
Inventory	263,273	265,673
Advance to shareholder	277,109	282,618
Total current assets	34,208,210	35,254,613
NONCURRENT ASSETS
Deposits for mine acquisition	4,876,428	4,920,579
Coal production safety deposit	4,883,419	4,927,632
Prepaid mining rights, net	13,948,394	14,074,679
Property and equipment, net	17,848,159	18,430,855
Construction in progress	15,523,573	15,664,120
Deferred tax asset, net	772,035	774,675
Asset retirement cost, net	2,432,448	2,458,718
Total noncurrent assets	60,284,456	61,251,258
TOTAL ASSETS	94,492,666	96,505,871
CURRENT LIABILITIES
Accounts payable	173,327	199,763
Advance from customers	9,847	40,371
Accrued liabilities and other payables	923,564	832,551
Taxes payable	6,177,863	5,652,858
Warrant derivative liability	50,312	103,125
Loan payable	4,388,745	4,428,480
Total current liabilities	11,723,658	11,257,148
NONCURRENT LIABILITIES
Asset retirement obligation, net of deposit for mine restoration of $1,343,598 and $1,355,763 as of March 31, 2014 and December 31, 2013, respectively	5,276,613	5,257,682
Total noncurrent liabilities	5,276,613	5,257,682
Total liabilities	17,000,271	16,514,830
CONTINGENCIES AND COMMITMENTS
STOCKHOLDERS' EQUITY
Series A Preferred Stock, $0.001 par value, 8,000,000 shares authorized, 400,000 shares issued and outstanding	400	400
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,852,182 and 18,852,582 shares issued and outstanding as of March 31, 2014 and December 31, 2013	18,852	18,852
Treasury stock, 400 shares
Additional paid in capital	41,212,383	41,210,492
Statutory reserves	13,691,366	13,680,145
Accumulated other comprehensive income	11,522,283	12,216,460
Retained earnings	11,047,111	12,864,692
Total stockholders' equity	77,492,395	79,991,041
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 94,492,666	$ 96,505,871