China Gengsheng Minerals (NYSE AMEX:CHGS)

GONGYI, China, June 13, 2011 /PRNewswire-Asia/ -- China GengSheng Minerals, Inc. (AMEX:CHGS), a leading China-based high-tech industrial materials manufacturer producing heat resistant, energy efficient materials for a variety of industrial applications, today announced that it has been awarded a $4.2 million follow-on fracture proppants supply contract from AMSAT International, a Florida-based technology company specializing in advanced ceramics. The Company will begin shipping fracture proppants under this new contract in July 2011, and expects to supply approximately 1,500 metric tons per month through December 2011, with specific quantities determined on a monthly basis, subject to available capacity.

This award follows the fulfillment of a $5.4 million contract with AMSAT International, under which GengSheng supplied approximately12,000 metric tons of proppant materials between January and June 2011.

"This represents our fourth supply contract with AMSAT, and we are proud that they continue to recognize GengSheng as a long-term, value-added partner and supplier of high quality proppant materials to their North American customers," said Mr. Shunqing Zhang, Chairman and CEO of China GengSheng Minerals. "This latest order reinforces our belief in the sizeable growth opportunity for fracture proppants in the overseas markets, as we continue to build our brand, expand our sales channels, increase capacity and advance our products through continued technological development."

Mr. Zhang continued, "We remain excited about the international opportunities for our proppants business, as export sales typically carry more favorable payment terms than our domestic contracts. We believe that the continued expansion of our overseas business will help reduce receivables and DSOs, while improving cash flow from operations and supporting our overall working capital needs as we grow the Company."

Similar to the Company's December 2010 order from AMSAT, this contract is for the supply of customized 69 MPa-sized proppant materials, which AMSAT will distribute to its North American customers in the oil and gas industry.

The Company launched its fracture proppant products in late 2007, and achieved revenue of $14.3 million in 2010, representing a three-year compound annual growth rate of 217%. In order to address growing domestic and international demand, GengSheng expanded manufacturing capacity to 90,000 metric tons in the first quarter of 2011, through a combination of in-house and OEM capacity. Additionally, the Company has begun construction on its second 60,000 metric ton fracture proppant manufacturing facility, which is expected to begin production in the third quarter of 2011. In 2011 to date, GengSheng has signed fracture proppant supply contracts totaling $20.1 million.