China Silver Group Limited — Capital/Financing Update 2015

May 27, 2015

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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CHINA SILVER GROUP LIMITED 中國白銀集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 815)

PLACING OF NEW SHARES UNDER GENERAL MANDATE AND RESUMPTION OF TRADING

Placing Agent

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PLACING OF NEW SHARES UNDER GENERAL MANDATE

The Board announced that on 26 May 2015, the Company entered into the Placing Agreement with the Placing Agent pursuant to which the Company appointed the Placing Agent as its agent to procure placees who are Independent Third Parties to subscribe up to 17,956,000 Placing Shares at a price of HK$4.25 per Placing Share on a best effort basis on the terms and subject to the condition of the Placing Agreement. On the same day, the Placing Agent has procured five Placees to subscribe 17,956,000 Placing Shares at the Placing Price.

The 17,956,000 Placing Shares represents (i) approximately 1.39% of the existing issued share capital of the Company of 1,289,786,000 Shares as at the date of this announcement; and (ii) approximately 1.37% of the issued share capital of the Company of 1,307,742,000 Shares as enlarged by the allotment and issue of the Placing Shares. The maximum aggregate nominal value of the Placing Shares under the Placing will be HK$179,560.

Assuming that all the Placing Shares are fully placed, the maximum gross proceeds from the Placing will be approximately HK$76.3 million. It is expected that the net proceeds from the Placing (after deducting the placing commission payable to the Placing Agent and other expenses incurred in the Placing) will amount to approximately HK$74 million. The Company intends to apply the net proceeds from the Placing for general working capital and other potential investments.

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The Placing is conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Placing Shares.

The Placing may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange has been halted with effect from 9:00 am on 26 May 2015 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 9:00 am on 27 May 2015.

THE PLACING AGREEMENT

Date: 26 May 2015

Parties (i) Issuer: The Company (ii) Placing Agent: The Placing Agent

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owners are Independent Third Parties.

Principle terms of the Placing Agreement

Placing Shares:

The Placing Agent has procured five Placees to subscribe 17,956,000 Placing Shares at the Placing Price. The 17,956,000 Placing Shares represents (i) approximately 1.39% of the existing issued share capital of the Company of 1,289,786,000 Shares as at the date of this announcement; and (ii) approximately 1.37% of the issued share capital of the Company of 1,307,742,000 Shares as enlarged by the allotment and issue of the Placing Shares. The maximum aggregate nominal value of the Placing Shares under the Placing will be HK$179,560.

Placing Price:

The price of HK$4.25 per Placing Share was determined after arm’s length negotiations between the Company and the Placing Agent with reference to the prevailing market price of the Shares on the Stock Exchange. The Placing Price represents:

• (a) a discount of approximately 19.96% to the closing price of HK$5.31 per Share as quoted on the Stock Exchange on 22 May 2015, being the Last Trading Day; and

• (b) a discount of approximately 13.34% to the average closing price of approximately HK$4.904 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day.

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The Company will bear the costs and expenses in connection with the Placing and the net proceeds from the Placing is estimated to be approximately HK$74 million (assuming the Placing Shares are fully placed). As a result, the net price per Placing Share will be approximately HK$4.12.

• Placing Commission: The Placing Agent will receive a placing commission of 2% of the amount equal to the Placing Price multiplied by the number of the Placing Shares which the Placing Agent has procured the placees to subscribe for the Placing Shares. The placing commission was determined after arm’s length negotiations between the Company and the Placing Agent.

• Ranking of the The Placing Shares, when issued, will be fully paid up and will rank Placing Shares: pari passu in all respects with other Shares in issue at the date of allotment and issue of the Placing Shares and the Placing Shares, when issued, will be free from all liens, charges, encumbrances and third party rights together with all rights attaching to them as at the date of their allotment.

• Condition: The Placing is conditional upon the Listing Committee granting the listing of, and permission to deal in, the Placing Shares.

If the above condition is not fulfilled within 90 days from the date of the Placing Agreement or such later date as the Company and the Placing Agent may agree in writing, the Placing will be terminated and the Placing will not proceed and all obligations and liabilities of the parties under the Placing Agreement will cease and terminate and no party will have any claim against the others.

Completion: Completion is expected to take place on or before the fifth Business Day immediately after the date of the fulfillment of the condition as set out in the Placing Agreement or such other time or date as Company and the Placing Agent shall agree.

Termination: If at any time prior to 4:00 p.m. (Hong Kong time) on the Completion Date:

• (a) there develops, occurs or comes into force:

• (i) any new law or regulation or any change or development involving a prospective change in existing laws or regulations in any relevant jurisdiction which in the opinion of the Placing Agent has or is likely to have a material adverse effect on the financial position of the Group as a whole; or

• (ii) any significant change (whether or not permanent) in local, national or international economic, financial, political or military conditions which in the opinion of the Placing Agent is or would be materially adverse to the success of the Placing; or

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• (iii) any significant change (whether or not permanent) in local, national or international securities market conditions or currency exchange rates or foreign exchange rates or foreign exchange controls which in the opinion of the Placing Agent is or would be materially adverse to the success of the Placing, or makes it impracticable or inadvisable or inexpedient to proceed therewith; or

• (iv) any suspension of dealings in the Shares for any period whatsoever (other than as a result of the Placing); or

• (v) any outbreak or escalation of hostilities, act of terrorism, the declaration by Hong Kong, the PRC, Japan, Singapore, the United States, the United Kingdom or any other member of the EEA of a national emergency or war or other calamity or crisis; or

• (vi) any material disruption in commercial banking or securities settlement or clearance services in Hong Kong, the PRC, Japan, Singapore, the United States, the United Kingdom or any other member of the EEA and/or a general moratorium on commercial banking activities having been declared by the relevant authorities in Hong Kong, the PRC, Japan, Singapore, the United States, the United Kingdom or any other member of the EEA; or

• (vii) any moratorium, suspension or material restriction on trading in shares or securities generally on the Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Tokyo Stock Exchange, the London Stock Exchange, the New York Stock Exchange, or the Nasdaq National Market at any time prior to the Completion Date; or

• (b) any breach of any of the representations, warranties and undertakings by the Company 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 thereof and prior to the Completion Date which if it had occurred or arisen before the date thereof would have rendered any of such representations, warranties and undertaking untrue or incorrect in any material respect in such a manner as would in the opinion of the Placing Agent, materially and adversely affect the financial position or business of the Group as a whole or there has been a breach of, or failure to perform, any other provision of this Agreement on the part of the Company; or

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• (c) there is any such adverse change, or development involving a prospective adverse change in the general affairs, condition, results of operations or prospects, management, business, prospects, stockholders’ equity or in the financial or trading position of the Group as a whole which in the opinion of the Placing Agent is materially adverse to the success of the Placing;

then and in any such case, the Placing Agent may terminate the Placing Agreement without liability to the Company by giving notice in writing to the Company, which notice may be given at any time prior to 4:00 p.m. (Hong Kong time) on the Completion Date.

In the event that the Placing Agent terminates the Placing Agreement in accordance with the termination clause in the Placing Agreement, all obligations of each of the parties under the Placing Agreement shall cease and determine and no party shall have any claim against any other party in respect of any matter arising out of or in connection with the Placing Agreement except for any antecedent breach of any obligation under the Placing Agreement and certain liabilities clauses under the Placing Agreement.

Application for listing: An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Placing Shares.

Information of the Placees

Placees	Number of Placing Shares
PICC Property and Casualty Company Limited,	2,200,000 Shares
a joint stock limited company incorporated in the PRC,
the shares of which are listed on the Main Board of
the Stock Exchange (Stock Code: 2328)(“PICC”)
PICC Life Insurance Company Limited,	3,100,000 Shares
an associate of PICC and a subsidiary of
The People’s Insurance Company (Group) of
China Limited (“PICC Group”)
PICC Health Insurance Company Limited,	1,600,000 Shares
a subsidiary of PICC Group
China Export & Credit Insurance Corporation,	2,100,000 Shares
a major state-owned insurance company under the
administration of the State-owned
Assets Supervision and Administration Commission

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Number of Placing Shares

Placees

Dongyue Industrial Limited,

8,956,000 Shares

a subsidiary under China Co-op Investment Company Limited

• (中合聯投資有限公司), which is in turn under China

• Co-op Group Company Limited (中國供銷集團有限公司),

• a state-owned enterprise whose establishment was approved by the State Council of the PRC

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Placees and its respective ultimate beneficial owner(s) are Independent Third Parties.

General Mandate

The 17,956,000 Placing Shares will be allotted and issued under the General Mandate. Pursuant to the General Mandate, the total number of new Shares that the Directors are authorised to allot and issue is 217,957,200 new Shares (up to 20% of the issued share capital of the Company (with the number of issued Shares of 1,089,786,000) as at the date of the annual general meeting of the Company held on 21 April 2015). Substantial part, namely 200,000,000 Shares, of the General Mandate have been utilised as at the date of this announcement and the total number of new Shares that can be allotted and issued under the General Mandate as at the date of this announcement is 17,957,200 new Shares. Upon Completion, the General Mandate has been almost fully utilised by the Company.

REASONS FOR THE PLACING AND THE USE OF PROCEEDS

The Company, together with its subsidiaries, are principally engaged in the manufacture of silver and other non-ferrous metals for sale and the retailing of silver products in the PRC.

The Group continues to seek new opportunities with the view to expand and diversify the Group’s businesses and to strive for best utilization of its resources in developing more profitable businesses. The Directors consider that the Placing offers a good opportunity to raise further capital of the Company thereby increasing the liquidity of the Shares as well as to strengthen the financial position of the Group. The Directors consider that the terms of Placing Agreement are fair and reasonable and the Placing is in the interests of the Company and its Shareholders as a whole.

Assuming that all the Placing Shares are fully placed, the maximum gross proceeds from the Placing will be approximately HK$76.3 million. It is expected that the net proceeds from the Placing (after deducting the placing commission payable to the Placing Agent and other expenses incurred in the Placing) will amount to approximately HK$74 million. The Company intends to apply the net proceeds from the Placing for general working capital and other potential investments. As at the date of this announcement, save for the proposed acquisition by the Company, details of which are set out in the announcement of the Company dated 5 May 2015, the Company has not entered into any legally binding agreements in relation to any investments. However, the additional capital on hand will facilitate the efficient execution of such potential investment projects, if any.

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FUND RAISING DURING THE PAST TWELVE MONTHS

The following equity fund raising activity has been carried out by the Company in the twelve (12) months immediately prior to the date of this announcement:

Date of	Fund raising	Net proceeds	Intended use of net	Actual use of net
announcement	activity	raised	proceeds	proceeds
2 November	Issue of	Approximately	All the net proceeds	Approximately 80%
2014 and 2	180,000,000	HK$272	will be applied	had been utilised
January 2015	new Shares at	million	for the expansion	for the expansion
	HK$1.51 each		of the Company’s	of the Company’s
	by way of		downstream silver	downstream silver
	subscription		retailing business, its	retailing business;
			potential upstream	and approximately
			acquisitions and	20% had been utilized
			general working	for general working
			capital	capital
8 May 2015,	Placing of	Approximately	Approximately 30%	Approximately 30%
13 May 2015	200,000,000	HK$512	of the net proceeds	of the net proceeds
and 22 May	existing	million	for the expansion	will be used for
2015	Shares and		of the Company’s	the expansion of
	subscription		downstream silver	the Company’s
	of		retailing business,	downstream silver
	200,000,000		approximately 30%	retailing business,
	new Shares at		for the development	approximately 30%
	HK$2.64 each		of commodity	of which will be used
			trading platforms and	for the development
			related services and	of commodity
			approximately 40%	trading platforms and
			of the net proceeds	related services and
			for general working	approximately 40%
			capital and other	of which will be used
			potential investments	for general working
				capital and other
				potential investments

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EFFECT ON SHAREHOLDING OF THE PLACING

The shareholding structure of the Company before and after Completion, are as follows:

Rich Union Enterprises Ltd.(Note) Luo Shandong Public Shareholders: The Placees Other public Shareholders Total	As at the date of this announcement No. of Shares Approximate per cent. 397,080,000 30.79 132,206,000 10.25 – – 760,500,000 58.96 1,289,786,000 100.00	Immediately after Completion No. of Shares Approximate per cent. 397,080,000 30.36 132,206,000 10.11 17,956,000 1.37 760,500,000 58.16 1,307,742,000 100.00

Note:

Mr. Chen Wantian, an executive Director, owns 100% of the entire issued share capital of Rich Union Enterprises Limited.

GENERAL

The Placing may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange has been halted with effect from 9:00 am on 26 May 2015 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 9:00 am on 27 May 2015.

DEFINITIONS

Terms or expressions used in this announcement shall, unless the context otherwise requires, have the meanings ascribed to them below:

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

“Company” China Silver Group Limited (中國白銀集團有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

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“Completion”	completion of the Placing
“Completion Date”	on or before the fifth Business Day immediately after the date of
	the fulfillment of the condition of the Placing Agreement, or such
	other date or time as Company and the Placing Agent shall agree
“connected persons”	has the meaning ascribed to it under the Listing Rules
“Director(s)”	director(s) of the Company
“EEA”	European Economic Area
“General Mandate”	the general mandate granted to the Directors to allot, issue and
	deal with up to 217,957,200 Shares, representing approximately
	20% of the issued share capital of the Company as at the annual
	general meeting of the Company held on 21 April 2015
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent	party(ies) shall not be connected person(s) of the Company and
Third Party(ies)”	shall be third parties independent of and not connected with any
	connected persons of the Company
“Last Trading Day”	22 May 2015, being the last day on which the Shares were traded
	on the Stock Exchange prior to the issue of this announcement
“Listing Committee”	the listing sub-committee of the board of directors of the Stock
	Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Placees”	parties procured by the Placing Agent to subscribe for any of the
	Placing Shares
“Placing”	the placing of the Placing Shares to the Placee pursuant to the
	Placing Agreement
“Placing Agent”	CCB International Capital Limited, a licensed corporation to carry
	out type 1 (dealing in securities), type 4 (advising on securities)
	and type 6 (advising on corporate finance) regulated activities
	under the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Placing Agreement”	the placing agreement dated 26 May 2015 entered into between
	the Company and the Placing Agent in respect of the Placing

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“Placing Price” HK$4.25 per placing Share “Placing Share(s)” 17,956,000 new Shares, to be allotted and issued pursuant to the terms and condition of the Placing Agreement “PRC” The People’s Republic of China “Share(s)” share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of the Shares(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “%” per cent.

By Order of the Board CHINA SILVER GROUP LIMITED Sung Kin Man Chief Executive Officer and Executive Director

Hong Kong, 27 May 2015

As at the date of this announcement, the executive Directors are Mr. Chen Wantian, Mr. Song Guosheng, Mr. Sung Kin Man and Mr. Chen Guoyu; and the independent non-executive Directors are Mr. Guo Bin, Dr. Jiang Tao, Dr. Li Haitao and Dr. Zeng Yilong.

• For identification purpose only

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