China Kingstone Mining Holdings Limited — Proxy Solicitation & Information Statement 2016

Apr 5, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Kingstone Mining Holdings Limited (the ‘‘Company’’), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities in the Company.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CHINA KINGSTONE MINING HOLDINGS LIMITED 中 國 金 石 礦 業 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1380)

I. PLACING OF NEW SHARES UNDER SPECIFIC MANDATE; II. RE-ELECTION OF DIRECTORS; AND III. NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to the Company

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Placing Agent

SEEC MEDIA SECURITIES LIMITED

A notice convening the EGM of the Company to be held at 11: 30 a.m. on Thursday, 21 April 2016 at 3/F., Jasmine Room of Best Western Plus Hotel Hong Kong at 308 Des Voeux Road West, Hong Kong, is set out on pages EGM-1 to EGM-3 of this circular.

Whether or not you intend to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the EGM or any adjourned meeting thereof should you so wish.

6 April 2016

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I	— Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

• ‘‘acting in concert’’ has the meaning as ascribed to it under The Code on Takeovers and Mergers of Hong Kong

• ‘‘Announcement’’ the announcement of the Company dated 8 March 2016 relating to, among other things, the Placing

• ‘‘Articles of the articles of association of the Company as amended from time Association’’ to time, and ‘‘Article’’ shall means an article of the Articles of Association

• ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day (other than Saturday, Sunday or public holiday) on which licensed banks in Hong Kong are open for normal banking business during their normal business hours

‘‘Company’’ China Kingstone Mining Holdings Limited, a company incorporated in the Cayman Islands with limited liability, whose Shares are listed on the main board of the Stock Exchange ‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules ‘‘Director(s)’’ the director(s) of the Company ‘‘EGM’’ the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve, among other matters, (i) the Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Placing Shares; and (ii) the Re-election

• ‘‘Group’’ the Company and its subsidiaries ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third a party(ies) who is independent of and not connected with the Party(ies)’’ Company and its connected persons

• ‘‘Last Trading Day’’ 8 March 2016, being the last trading day prior to the entering into of the Placing Agreement

• ‘‘Latest Practicable 31 March 2016, being the latest practicable date before the Date’’ printing of this circular for the purpose of ascertaining certain information contained herein

– 1 –

DEFINITIONS

‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange
‘‘Long Stop Date’’	30 June 2016, or such later date as the Company and the Placing
	Agent may agree in writing
‘‘Placee(s)’’	any person(s) or entity(ies) which the Placing Agent will procure
	to subscribe for any of the Placing Shares on a best effort basis
	pursuant to and in accordance with the Placing Agreement
‘‘Placing’’	the placing of up to 2,000,000,000 new Shares by the Placing
	Agent on a best effort basis pursuant to the terms of the Placing
	Agreement
‘‘Placing Agent’’	SEEC Media Securities Limited, a licensed corporation to carry
	on business in type 1 regulated activity (dealing in securities)
	under the SFO
‘‘Placing Agreement’’	a conditional placing agreement dated 8 March 2016 entered into
	between the Company and the Placing Agent in relation to the
	Placing
‘‘Placing Completion	the date on the third Business Day after the fulfillment of the
Date’’	conditions as set out in the Placing Agreement or such later date
	to be agreed between the Company and the Placing Agent
‘‘Placing Price’’	HK$0.10 per Placing Share
‘‘Placing Shares’’	a maximum of 2,000,000,000 new Shares to be placed under the
	Placing Agreement
‘‘PRC’’	the People’s Republic of China, and for the purpose of this
	circular, excluding Hong Kong, Macau and Taiwan
‘‘Re-election’’	the proposed re-election of Mr. Zhang Weijun and Ms. Zhang
	Cuiwei as executive Directors and Mr. Ma Ho Yin, Ms. Wang
	Yihua and Mr. Sheng Guoliang as independent non-executive
	Directors
‘‘SFO’’	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
‘‘Share(s)’’	ordinary shares of HK$0.10 each in the share capital of the
	Company
‘‘Shareholder(s)’’	the holders of Shares

– 2 –

DEFINITIONS

‘‘Specific Mandate’’ a specific mandate to be sought from the Shareholders at the EGM to approve, inter alia, for the allotment and issuance of the Placing Shares pursuant to the Placing Agreement ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

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CHINA KINGSTONE MINING HOLDINGS LIMITED 中 國 金 石 礦 業 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1380)

Executive Directors:

Mr. Wang Minliang (Chairman) Mr. Zhang Jianzhong Mr. Zhang Weijun Ms. Zhang Cuiwei

Registered office: PO Box 1350 Clifton House, 75 Fort Street Grand Cayman KY1-1108 Cayman Islands

Independent non-executive Directors: Mr. Ma Ho Yin Ms. Wang Yihua Mr. Sheng Guoliang

Principal place of business in Hong Kong: Unit 6812–13, 68/F The Center 99 Queen’s Road Central Hong Kong 6 April 2016

To the Shareholders

Dear Sir or Madam,

I. PLACING OF NEW SHARES UNDER SPECIFIC MANDATE; II. RE-ELECTION OF DIRECTORS; AND III. NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement in relation to the Placing. The purpose of this circular is to provide the Shareholders, among other things, further details of the Placing, the Re-election, and the notice convening the EGM.

– 4 –

LETTER FROM THE BOARD

THE PLACING AGREEMENT

Date

8 March 2016 (after trading hours)

Issuer

The Company

Placing Agent

SEEC Media Securities Limited

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the Latest Practicable Date, the Placing Agent and its ultimate beneficial owner(s) are Independent Third Parties.

Placees

It is anticipated that the Placing Shares will be placed to not less than six Placees, who and whose ultimate beneficial owner(s) will be Independent Third Parties. The Placing Agent will use its best endeavour to ensure that none of the Placees (together with parties acting in concert with him/her/it) will hold 10% or more of the voting rights of the Company as a result of the Placing.

Number of the Placing Shares

A maximum of 2,000,000,000 Placing Shares, which represent (i) approximately 54.9% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 35.5% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares (assuming that there will be no change in the issued share capital of the Company between the Latest Practicable Date and completion of the Placing save for the allotment and issue of such Placing Shares).

The aggregate nominal value of the Placing Shares (with a par value of HK$0.10 each) under the Placing will be HK$200,000,000.

Ranking of the Placing Shares

The Placing Shares, upon issue, will rank pari passu in all respects among themselves and with the Shares in issue as at the date of the allotment and issue of the Placing Shares.

– 5 –

LETTER FROM THE BOARD

Placing Price

The Placing Price of HK$0.10 per Placing Share represents:

• (i) a discount of approximately 2.9% to the closing price of HK$0.103 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a premium of approximately 21.1% over the average closing price of HK$0.0826 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day;

• (iii) a premium of approximately 32.3% over the average closing price of HK$0.0756 per Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day;

• (iv) a premium of approximately 38.9% over the closing price of HK$0.072 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and

• (v) a premium of approximately 47.1% over the audited consolidated net asset value per Share of approximately RMB0.057 (equivalent to approximately HK$0.068) as at 31 December 2015 (based on 3,640,137,954 Shares in issue as at the Latest Practicable Date).

The Placing Price was determined after arm’s length negotiations between the Company and the Placing Agent with reference to the prevailing market price of the Shares. In determining (i) the Placing, in light of its dilution effect, and (ii) the Placing Price, the Directors have considered the following factors:

• (a) The Group has been making loss and recorded net cash outflow from operating activities for the past three years and for the six months ended 30 June 2015;

• (b) the existing tight cash position of the Group and the funding needs of the Group as disclosed in the sub-section headed ‘‘REASONS FOR THE PLACING AND THE USE OF PROCEEDS’’;

• (c) the funding requirements of the Company having regard to the need for setting the Placing Price at a level acceptable to the Placing Agent;

• (d) the downward trend of the Company’s recent Share prices in the past six months which decreased from HK$0.14 per Share on 8 September 2015 to HK$0.103 on the Last Trading Day, representing a decrease of approximately 26.4%; and

• (e) the uncertainties in the financial market in Hong Kong as a result of the uncertainties stemming from fluctuating market sentiment, capital flow, trend of interest rate, volatility in money supply in different major economies and economic decisions made by different countries and prevailing uncertainties in global economic conditions and outlook.

– 6 –

LETTER FROM THE BOARD

Having considered the factors above, the Board is of the view that in light of the above factors, the terms of the Placing is in the interests of the Company and the Shareholders as a whole and the Placing Price is fair and reasonable.

Placing commission

The Placing Agent will receive a placing commission of 1.5% of the aggregate amount equal to the Placing Price multiplied by the actual number of the Placing Shares being placed.

The placing commission was determined after arm’s length negotiations between the Company and the Placing Agent under normal commercial terms with reference to the prevailing market conditions.

Mandate to issue the Placing Shares

The Company proposes to seek the grant of the Specific Mandate from the Shareholders at the EGM for the allotment and issue of the Placing Shares.

Conditions precedent of the Placing

Completion of the Placing is conditional upon:

• (i) the listing committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares;

• (ii) the passing of the resolution(s) by the Shareholders to approve the Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Placing Shares at the EGM; and

• (iii) the obligations of the Placing Agent under the Placing Agreement becoming unconditional and not being terminated in accordance with the terms thereof, including provision regarding the force majeure events.

Termination Events

If any of the following events occur at any time prior to 10: 00 a.m. on the Placing Completion Date, the Placing Agent may (after such consultation with the Company and/or its advisers as the circumstances shall admit or be necessary), by giving a written notice to the Company, at any time prior to the Placing Completion Date provided that such notice is received prior to 6: 00 p.m. on the day immediately preceding the Placing Completion Date,

– 7 –

LETTER FROM THE BOARD

rescind the Placing Agreement without liability to the other parties hereto, the Placing Agreement shall thereupon cease to have effect and none of the parties thereto shall have any rights or claims by reason thereof save for any rights or obligations which may accrue under the Placing Agreement prior to such termination:

• (i) in the reasonable opinion of the Placing Agent there shall have been since the date of the Placing Agreement such a change in national or international financial, political or economic conditions or taxation or exchange controls as would be likely to prejudice materially the consummation of the Placing; or

• (ii) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any matter whatsoever which may adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (iii) any material breach of any of the representations and warranties set out in the Placing Agreement comes to the knowledge of the Placing Agent or any event occurs or any matter arises on or after the date of the Placing Agreement and prior to the Placing Completion Date which if it had occurred or arisen before the date of the Placing Agreement would have rendered any of such representations and warranties untrue or incorrect in any material respect or there has been a material breach by the Company of any other provision of the Placing Agreement; or

• (iv) there is any adverse change in the financial position of the Company which in the reasonable opinion of the Placing Agent is material in the context of the Placing.

Completion of the Placing

Completion of the Placing will take place on the Placing Completion Date. If the above conditions are not satisfied and/or waived in whole or in part by the Placing Agent prior to 5: 00 p.m. on the date falling on the Long Stop Date, the Placing Agreement will be terminated and the Placing will not proceed and all obligations and liabilities of the parties thereunder will forthwith cease and determine and no party will have any claim against the others (save for any antecedent breaches thereof).

Application for listing

An application will be made by the Company to the listing committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The Company is an investment holding company and its principal subsidiaries are engaged in the mining and processing of marble and marble products for subsequent sale.

– 8 –

LETTER FROM THE BOARD

Assuming the maximum of 2,000,000,000 Placing Shares are successfully placed, the gross proceeds and the net proceeds (after deduction of the relevant expenses) from the Placing will be approximately HK$200 million and HK$197 million, respectively. The Company intends to use the net proceeds as to approximately (i) 31%, approximately HK$62 million, to enhance the Group’s production capacity; (ii) 13%, approximately HK$25 million, to repay the loan and accrued interest of the Group; (iii) 36%, approximately HK$71 million, to settle potential damages arising from the lawsuit and litigation; and (iv) 20%, approximately HK$39 million, as the general working capital of the Company, respectively.

Development of existing business and enhancing the Group’s production capacity

The Group owns the largest beige marble mine, namely Zhangjiaba Mine, which is located in Zhenjiang Village, Xiangshui County, Jiangyou City of Sichuan Province, China, in terms of marble reserves, according to the certificate issued by China Stone Material Association in August 2010.

Sentiment of the China property market affects the demand for construction materials and eventually affects the sales of marble and marble products. Standard & Poor’s, a credit rating agency, recently raised its forecast for China’s property sales and prices. It estimates moderate growth in the China’s property market in 2016. Thus, the Group considers that the demand for construction materials in China is expected to rise with the moderately growing property market.

In view of the current market condition, the Group will invest in and develop the marble mining and processing business in order to increase its competitiveness. The Directors believe that improvement in the Group’s marble operations, including but not limited to enhancing its production capacities, techniques and efficiency, will be crucial for its business development. In order to maintain its competitiveness, the Group integrates a variety of cutting techniques, including diamond wire cutting, chain saw cutting, and disc saw cutting, which are highly advanced in the marble mining industry. In addition, the Group utilizes highly-efficient, semi-automatic machinery and equipment to achieve the estimated low-cost production and to maintain the low-cost advantage. It is also essential for the Group to meet customers’ specific requirements for marble and marble products in order to cater for different needs so that it can increase its competitiveness. In order to maintain the Group’s competitive advantages, the Company intends to enhance the Group’s production technologies and facilities by acquiring new machinery and equipment. The Company believes that with the aforesaid technology improvement, it will provide it with greater flexibility in its marble cutting operation and improve its efficiency in refining marble and marble products for its marble processing operations.

Repayment of loan and accrued interest

As at the Latest Practicable Date, the outstanding interest bearing loan of the Group was approximately HK$25 million which will be substantially due on 30 June 2016. The Board has made attempts to reduce the funding costs of the Group and improve its gearing. The Group intends to apply part of the net proceeds to repay the aforesaid loan in order to improve the Group’s financial position.

– 9 –

LETTER FROM THE BOARD

Potential litigation claims

On 13 July 2015, Royal Moon International Company Limited (‘‘Royal Moon’’), the underwriter of the open offer announced by the Company on 14 May 2015, issued a writ of summons at the High Court of Hong Kong (the ‘‘Writ’’) against the Company. Pursuant to the Writ, Royal Moon claims against the Company, amongst others, a sum of not less than HK$150 million being damages for breach of the underwriting agreement made between Royal Moon and the Company dated 13 May 2015. The Company has filed acknowledgement of service of writ of summons to contest the proceedings and has been seeking legal advice in relation to the Writ.

On 7 March 2016, by consent between the Company and Royal Moon, the High Court of Hong Kong ordered that, among others, the Company do file and serve its defense by 4: 00 p.m. on 29 March 2016. The Company has filed and served its defense accordingly.

The Group has reviewed the aforesaid significant outstanding litigations in order to assess the need for provisions. Among the factors considered, such as the nature of the litigation, legal processes and potential level of damages, the Company intends to reserve a readily available fund of approximately HK$71 million for any possible cash outflow for the potential damages compensation.

General working capital

The Group plans to set aside the remaining portion of the net proceeds from the Placing of approximately HK$39 million for general working capital of the Group. As disclosed in the annual report of the Company for the year ended 31 December 2014, the net cash flows used in operating activities for 2014 was approximately RMB25.6 million (equivalent to approximately HK$30.7 million). Based on the 2015 interim report of the Company for the six months ended 30 June 2015, the net cash flows used in operating activities was approximately RMB14.5 million (equivalent to approximately HK$17.4 million), and will result in approximately RMB29.0 million (equivalent to approximately HK$34.8 million) if extrapolated to a full year basis.

Based on the unaudited consolidated management accounts of the Group, the Group’s bank and cash balances amounted to approximately RMB8.5 million (equivalent to approximately HK$10.1 million) as at 29 February 2016. The management of the Group periodically monitors and reviews the Group’s current assets and liabilities to ensure there is sufficient working capital for the Group’s daily operation. The Board considers that it will be a merit for the Group to have available working capital for its business operation and development.

The Directors are of the view that the Placing can strengthen the financial position of the Group and provide working capital to the Group to meet any future development and obligations. The Placing also represents good opportunities to broaden the shareholders’ base and the capital base of the Company.

– 10 –

LETTER FROM THE BOARD

The Company has considered various ways of raising funds and believes that the Placing represents the preferred way to raise capital for the Group while broadening its shareholder and capital base. In comparison with debt financing exercises such as bank borrowings, debt financing will increase the gearing ratio of the Group and the Group will also have to bear the corresponding interest expenses. Rights issue and open offer are less effective in terms of time and cost and securing underwriter(s) for a rights issue and/or an open offer exercise would also take time particularly in negotiating terms and timing. Accordingly, the Directors decided to conduct the Placing on a best effort basis which allows the Company to secure the Placing Agent more easily and the documentation involved in the Placing is less complicated and thus the Placing can be completed within a short period of time subject to Shareholders’ approval. Since the Placing is subject to Shareholders’ approval, the Shareholders can have a right to disapprove the Placing. In view of the above, the Board considers that raising funds by way of the Placing to be a preferred financing means as compared with debt financing, rights issue or open offer.

As at the Latest Practicable Date, based on current information available to the Group, the Company estimated that it will have sufficient working capital for the next twelve months following completion of the Placing. In addition, to the best knowledge of the Directors, as at the Latest Practicable Date, save for the Placing, the Company did not have any immediate and concrete plan or was not contemplating to have further fund raising for at least the next twelve months for financing its business or investments referred to in this circular and any potential projects or transactions now contemplated by the Company.

The Directors consider that the terms of the Placing (including the Placing Price and the placing commission) are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

– 11 –

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

Save as disclosed below, the Company had not conducted any fund raising activity in the past 12 months immediately preceding the Latest Practicable Date:

Date of			Intended use of	Intended use of	Actual use of	Actual use of
announcement	Fund raising activity	Net proceeds raised	the net proceeds		the net proceeds
14 May 2015	Open offer on the basis	approximately	(i)	as to approximately	(i)	as to approximately
	of one offer share for	HK$117.7 million		HK$78.0 million for		HK$78.0 million
	every two existing			the acquisition of the		for the acquisition
	shares			loan note (‘‘Loan		of the Loan Note
				Note’’) of principal
				amount of US$10.0	(ii)	as to approximately
				million (equivalent to		HK$39.7 million
				approximately		for the general
				HK$78.0 million by		working capital of
				China Kingsmount		the Company
				Industrial Group
				Limited, a wholly
				owned subsidiary of
				the Company from
				Qilu International
				Investment Limited
			(ii)	as to approximately
				HK$39.7 million for
				the acquisition of
				China Fortune
				Investment Holdings
				Limited and the
				general working
				capital of the
				Company

– 12 –

LETTER FROM THE BOARD

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) upon completion of the Placing (assuming there will not be any change in the issued share capital of the Company from the Latest Practicable Date up to the completion of the Placing and the Placing Shares are placed in full):

Shareholders Director: Mr. Wang Minliang (Note) Substantial Shareholder: Ninotre Investment Limited Public Shareholders: Placees Other public Shareholders	As at the Latest Practicable Date Number of Shares Approximate 109,430,819 3.0% 549,660,831 15.1% — — 2,981,046,304 81.9% 3,640,137,954 100%	Immediately upon completion of the Placing Number of Shares Approximate 109,430,819 1.9% 549,660,831 9.7% 2,000,000,000 35.5% 2,981,046,304 52.9% 5,640,137,954 100%	Immediately upon completion of the Placing Number of Shares Approximate 109,430,819 1.9% 549,660,831 9.7% 2,000,000,000 35.5% 2,981,046,304 52.9% 5,640,137,954 100%
			100%

Note:

109,430,819 Shares were directly owned by Jiang Tong Investments Limited, where Mr. Wang Minliang owns the entire issued share capital of Jiang Tong Investments Limited.

RE-ELECTION OF DIRECTORS

As disclosed in the announcements of the Company dated 24 December 2015, 28 December 2015 and 31 December 2015, (i) Mr. Zhang Weijun was appointed as an executive Director and Mr. Ma Ho Yin was appointed independent non-executive Directors; (ii) Ms. Wang Yihua and Mr. Sheng Guoliang were appointed as independent non-executive Directors; and (iii) Ms. Zhang Cuiwei was appointed as an executive Director respectively.

Pursuant to the code provision of A.4.2 of Appendix 14 to the Listing Rules, Mr. Zhang Weijun, Ms. Zhang Cuiwei, Mr. Ma Ho Yin, Ms. Wang Yihua and Mr. Sheng Guoliang should be subject to election by the Shareholders at the first general meeting of the Company after their appointment.

Information of Mr. Zhang Weijun, Ms. Zhang Cuiwei, Mr. Ma Ho Yin, Ms. Wang Yihua and Mr. Sheng Guoliang, the Directors subject to re-election, as required to be disclosed by the Listing Rules is set out in Appendix I — ‘‘Re-election of Directors’’ in this circular.

– 13 –

LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

EGM

The EGM will be held at 11: 30 a.m. on Thursday, 21 April 2016 at 3/F., Jasmine Room of Best Western Plus Hotel Hong Kong at 308 Des Voeux Road West, Hong Kong, for the purpose of considering and, if thought fit, approving the Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Placing Share and the Re-election.

To the best of the Director’s knowledge, information and belief having made all reasonable enquiries, no Shareholders have a material interest in the Placing Agreement which is different from other Shareholders. Accordingly, no Shareholder is required to abstain from voting on the resolutions approving the Placing Agreement and the transactions contemplated thereunder and the Re-election at the EGM.

The notice convening the EGM is set out on pages EGM-1 to EGM-3 of this circular. A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the office of the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible but in an event not less than 48 hours before the time scheduled for the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the EGM or any adjourned meeting should you so wish, and in such case, the form of proxy submitted by you shall be deemed to be revoked. Voting on the proposed resolutions at the EGM will be taken by poll.

– 14 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider the Placing Agreement and the allotment and issue of the Placing Shares and the transactions contemplated thereunder and the Re-election are in the interests of the Company and the Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the proposed resolutions as set out in the notice of EGM approving the Placing and the transactions contemplated thereunder and the Re-election.

By order of the Board China Kingstone Mining Holdings Limited Martin Pak Company Secretary

– 15 –

APPENDIX I

RE-ELECTION OF DIRECTORS

RE-ELECTION OF DIRECTORS

The following is the information required to be disclosed by the Listing Rules on the Directors proposed to be re-elected at the EGM:

Mr. Zhang Weijun (‘‘Mr. Zhang’’)

Mr. Zhang, aged 57, was appointed as an executive Director with effect from 24 December 2015, has about 10 years of experience in mining industry. Mr. Zhang is responsible for the business development of the Group. Mr. Zhang is currently a vice president of a mining company in the PRC.

Mr. Zhang will enter into a service contract with the Company for a term of three years commencing from 24 December 2015, pursuant to which he shall hold office until the next general meeting of the Company and be eligible for re-election at that meeting in accordance with the Articles of Association. The remuneration to which Mr. Zhang is entitled will be determined at a later stage.

As at the Latest Practicable Date, to the best knowledge of the Board, (i) Mr. Zhang has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas during the last three years, (ii) Mr. Zhang has not held any other positions in the Company and other members of the Group, and (iii) Mr. Zhang does not have any relationship with any Director, senior management or substantial or controlling Shareholder.

As at the Latest Practicable Date, Mr. Zhang does not have, and is not deemed to have any interests or short positions in the Shares within the meaning of Part XV of the SFO (Chapter 571 of the Law of Hong Kong).

Saved as disclosed herein, Mr. Zhang has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders nor is there any information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules.

Ms. Zhang Cuiwei (‘‘Ms. Zhang’’)

Ms. Zhang, aged 47, was first appointed as an executive Director on 30 April 2013 and ceased to be an executive Director on 14 July 2015. Ms. Zhang was appointed as an executive Director with effect from 1 January 2016. Ms. Zhang graduated in Foreign Languages and Literature from Jilin University of the PRC. She is currently a director of Kingstone (HK) Group Limited. Ms. Zhang has more than 20 years of experience in corporate management, personnel and administration affairs. In view of the extensive management experience of Ms. Zhang, the Board believes Ms. Zhang would be an asset of the Company.

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RE-ELECTION OF DIRECTORS

APPENDIX I

Ms. Zhang will enter into a service contract with the Company for a term of three years commencing from 1 January 2016, pursuant to which she shall hold office until the next general meeting of the Company and be eligible for re-election at that meeting in accordance with the Articles of Association. The remuneration to which Ms. Zhang is entitled will be determined at a later stage.

As at the Latest Practicable Date, to the best knowledge of the Board and except as stated above, (i) Ms. Zhang has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas during the last three years, (ii) Ms. Zhang has not held any other positions in the Company and other members of the Group, and (iii) Ms. Zhang does not have any relationship with any Director, senior management or substantial or controlling Shareholder.

As at the Latest Practicable Date, Ms. Zhang does not have, and is not deemed to have any interests or short positions in the Shares within the meaning of Part XV of the SFO except that she is interested in share options granted under the share option scheme adopted by the Company on 24 January 2011 with the right to subscribe for 30,461,539 Shares.

Saved as disclosed herein, Ms. Zhang has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders nor is there any information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules.

Mr. Ma Ho Yin (‘‘Mr. Ma’’)

Mr. Ma, aged 33, was appointed as an independent non-executive Director with effect from 24 December 2015, obtained a Bachelor Degree of Engineering in Industrial Engineering and Engineering Management (Transportation Logistics Management) from The Hong Kong University of Science and Technology. Mr. Ma has about 10 years of experience in financial planning, asset and risk management and dealing in securities. Mr. Ma is currently an associate director of a leading wealth management company focusing on wealth management services.

Mr. Ma has entered into a letter of appointment with the Company for a term of three years commencing from 24 December 2015, pursuant to which he shall hold office until the next general meeting of the Company and be eligible for re-election at that meeting in accordance with the Articles of Association. The remuneration to which Mr. Ma is entitled will be determined at a later stage.

As at the Latest Practicable Date, to the best knowledge of the Board, (i) Mr. Ma has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas during the last three years, (ii) Mr. Ma has not held any other positions in the Company and other members of the Group, and (iii) Mr. Ma does not have any relationship with any Director, senior management or substantial or controlling Shareholder.

As at the Latest Practicable Date, Mr. Ma does not have, and is not deemed to have any interests or short positions in the Shares within the meaning of Part XV of the SFO.

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APPENDIX I

RE-ELECTION OF DIRECTORS

Saved as disclosed herein, Mr. Ma has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders nor is there any information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules.

Ms. Wang Yihua (‘‘Ms. Wang’’)

Ms. Wang, aged 45, was appointed as an independent non-executive Director with effect on 28 December 2015, holds a Bachelor Degree in Management from the Party School of the Central Committee of the Communist Party of China (Hubei Branch) (中共中央黨校 函授學院湖北分院) and obtained the Qualification Certificate of Speciality and Technology (專業技術資格證書) approved and issued by Ministry of Personnel, PRC (中華人民共和國人 事部) with speciality in intermediate level of accountancy (中級會計) conferred by the Ministry of Finance, PRC (中華人民共和國財政部). She has over 20 years of experience in finance, accounting and relevant management gained from an investment company in the PRC.

Ms. Wang has entered into a letter of appointment with the Company for a term of three years commencing from 28 December 2015, pursuant to which she shall hold office until the next general meeting of the Company and be eligible for re-election at that meeting in accordance with the Articles of Association. The remuneration to which Ms. Wang is entitled will be determined at a later stage.

As at the Latest Practicable Date, to the best knowledge of the Board, (i) Ms. Wang has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas during the last three years, (ii) Ms. Wang has not held any other positions in the Company and other members of the Group, and (iii) Ms. Wang does not have any relationship with any Director, senior management or substantial or controlling Shareholder.

As at the Latest Practicable Date, Ms. Wang does not have, and is not deemed to have any interests or short positions in the Shares within the meaning of Part XV of the SFO (Chapter 571 of the Law of Hong Kong).

Saved as disclosed herein, Ms. Wang has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders nor is there any information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules.

Mr. Sheng Guoliang (‘‘Mr. Sheng’’)

Mr. Sheng, aged 48, was appointed as an independent non-executive Director with effect on 28 December 2015, has completed a three years’ course in Public Affairs Management (公共事業管理) at Huzhou University (湖州師範學院). Mr. Sheng has about 5 years of experience in mining industry and hotel management respectively.

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APPENDIX I

RE-ELECTION OF DIRECTORS

Mr. Sheng has entered into a letter of appointment with the Company for a term of three years commencing from 28 December 2015, pursuant to which he shall hold office until the next general meeting of the Company and be eligible for re-election at that meeting in accordance with the Articles of Association. The remuneration to which Mr. Sheng is entitled will be determined at a later stage.

As at the Latest Practicable Date, to the best knowledge of the Board, (i) Mr. Sheng has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas during the last three years, (ii) Mr. Sheng has not held any other positions in the Company and other members of the Group, and (iii) Mr. Sheng does not have any relationship with any Director, senior management or substantial or controlling Shareholder.

As at the Latest Practicable Date, Mr. Sheng does not have, and is not deemed to have any interests or short positions in the Shares within the meaning of Part XV of SFO.

Saved as disclosed herein, Mr. Sheng has confirmed that there are no other matters relating to his appointment as a Director that need to be brought to the attention of the Shareholders nor is there any information to be disclosed pursuant to any of the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules.

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NOTICE OF EGM

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CHINA KINGSTONE MINING HOLDINGS LIMITED 中 國 金 石 礦 業 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1380)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘Meeting’’) of China Kingstone Mining Holdings Limited (the ‘‘Company’’) will be held at 11: 30 a.m. on Thursday, 21 April 2016 at 3/F., Jasmine Room of Best Western Plus Hotel Hong Kong at 308 Des Voeux Road West, Hong Kong, for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions of the Company:

ORDINARY RESOLUTIONS

1. ‘‘THAT

2. (a) the conditional placing agreement dated 8 March 2016 (the ‘‘Placing Agreement’’) entered into between the Company as issuer and SEEC Media Securities Limited as placing agent (the ‘‘Placing Agent’’) in relation to the placing of up to 2,000,000,000 shares (the ‘‘Placing Shares’’) of HK$0.10 each in the share capital of the Company in accordance with the terms and conditions of the Placing Agreement at the placing price of HK$0.1 per Placing Share, on a best effort basis (a copy of which is produced to the Meeting marked ‘‘A’’ and signed by the chairman of the Meeting for the purpose of identification), and all the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

3. (b) conditional upon, among others, The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) granting the listing of, and permission to deal in, the new Placing Shares to be allotted and issued under the Placing Agreement, the allotment and issue of the Placing Shares to the relevant placee(s) in accordance with the terms and conditions of the Placing Agreement be and are hereby approved and the board of directors (the ‘‘Directors’’) of the Company be and is hereby granted with a specific mandate to allot and issue the Placing Shares to the relevant placee(s); and

4. (c) any one Director of the Company be and is hereby authorised to do all such things and acts as he may in his discretion consider as necessary, expedient or desirable for the purpose of or in connection with the implementation of the Placing Agreement and the transactions contemplated thereunder, including

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NOTICE OF EGM

but not limited to the execution all such documents under seal where applicable, as he considers necessary or expedient in his opinion to implement and/or give effect to the issue and allotment of the Placing Shares and to agree with such variation, amendment or waiver as, in the opinion of the Directors, in the interests of the Company and its shareholders as a whole.’’

1. ‘‘THAT to consider and, if thought fit, re-elect Mr. Zhang Weijun as an executive Director.’’

2. ‘‘THAT to consider and, if thought fit, re-elect Ms. Zhang Cuiwei as an executive Director.’’

3. ‘‘THAT to consider and, if thought fit, re-elect Mr. Ma Ho Yin as an independent non-executive Director.’’

4. ‘‘THAT to consider and, if thought fit, re-elect Ms. Wang Yihua as an independent non-executive Director.’’

5. ‘‘THAT to consider and, if thought fit, re-elect Mr. Sheng Guoliang as an independent non-executive Director.’’

6. ‘‘THAT to consider and, if thought fit, authorize the board of Directors to fix the remuneration of the Directors.’’

By order of the Board China Kingstone Mining Holdings Limited Martin Pak Company Secretary

Hong Kong, 6 April 2016

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NOTICE OF EGM

Registered office: PO Box 1350 Clifton House, 75 Fort Street Grand Cayman KY1-1108 Cayman Islands

Principal place of business in Hong Kong: Unit 6812–13, 68/F The Center 99 Queen’s Road Central Hong Kong

Notes:

• (a) Any shareholder of the Company (‘‘Shareholders’’) entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote on behalf of him/her/it. A proxy needs not be a Shareholder. A Shareholder who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her/it to attend and vote on his/her/its behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares of the Company in respect of which each such proxy is so appointed.

• (b) In order to be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority, must be deposited at the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Meeting or any adjournment thereof. Completion and delivery of the form of proxy shall not preclude a Shareholder from attending and voting in person at the Meeting or any adjournment thereof should such member so wishes and, in such event, the form of proxy shall be deemed to be revoked.

• (c) Where there are joint registered holders of any shares of the Company, any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present being the most, or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand in the register of members of the Company in respect of the relevant joint holding.

• (d) All votes to be taken at the Meeting shall be conducted by way of poll.

As at the date of this notice, the Board comprises Mr. Wang Minliang (Chairman), Mr. Zhang Jianzhong, Mr. Zhang Weijun and Ms. Zhang Cui Wei as executive Directors; and Mr. Ma Ho Yin, Ms. Wang Yihua and Mr. Sheng Guoliang as independent non-executive Directors.

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