Greentech Technology International Limited — Proxy Solicitation & Information Statement 2013

Mar 8, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or otherwise transferred all your shares in L’sea Resources International Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

L’SEA RESOURCES INTERNATIONAL HOLDINGS LIMITED 利 海 資 源 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 195)

(1) CONTINUING CONNECTED TRANSACTION RENEWAL OF TIN SUPPLY CONTRACT AND THE REVISION OF ANNUAL CAPS AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

==> picture [171 x 35] intentionally omitted <==

A letter from the Independent Board Committee containing its advice and recommendation to the Independent Shareholders is set out on page 10 of this circular. A letter from Yu Ming Investment Management Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 11 to 24 of this circular.

A notice convening an extraordinary general meeting of L’sea Resources International Holdings Limited to be held at 11:00 a.m. on Tuesday, 9 April 2013 at Room 2607, Greenfield Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong is set out on page 31 of this circular. Whether or not you intend to be present at the meeting, you are recommended to complete the enclosed proxy form in accordance with the instructions printed thereon and return the same to Tricor Investor Services Limited, the share registrar of the Company, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the extraordinary general meeting or any adjourned meeting. The completion and return of the proxy form will not preclude you from attending and voting in person should you so wish.

11 March 2013

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30

– i –

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

• ‘‘Annual Cap(s)’’ the maximum aggregate amount for the transactions contemplated under the New Tin Supply Contract for the supply of tin concentrates for each of the three years ending 31 January 2016

• ‘‘Board’’ the board of Directors

• ‘‘Brent Crude Oil’’

• Brent Crude Oil which is sourced from the North Sea and forms a benchmark for oil production from Europe, Africa and the Middle East

• ‘‘Buyer’’

• Yunnan Tin Australia TDK Resources Pty Ltd., a whollyowned subsidiary of Yunnan Tin PRC

• ‘‘Company’’

• L’sea Resources International Holdings Limited, a company incorporated in the Cayman Islands whose Shares are listed on the Main Board of the Stock Exchange

• ‘‘connected person(s)’’ the meaning ascribed to it in the Listing Rules

• ‘‘Continuing Connected Transaction’’

• the transactions contemplated under the New Tin Supply Contract between YT Parksong Australia and the Buyer for the period from 1 February 2013 to 31 January 2016

• ‘‘Director(s)’’

• the director(s) of the Company

• ‘‘EGM’’

• the extraordinary general meeting of the Company to be convened for the purpose of considering, and if thought fit, approving (i) the Annual Caps; and (ii) the Continuing Connected Transaction

• ‘‘Existing Tin Supply Contract’’

• the agreement dated 25 March 2011 entered into between YT Parksong Australia and the Buyer in relation to the supply of tin concentrates for the period from April 2011 to December 2013

• ‘‘Framework Agreement’’

• the framework agreement dated 16 April 2010 entered into between YT Parksong Australia and Yunnan Tin Company Ltd., a wholly owned subsidiary of Yunnan Tin PRC, in relation to the supply of tin concentrates for the period from April 2010 to March 2011

• ‘‘Group’’

• the Company and its subsidiaries

• ‘‘HK$’’

• Hong Kong dollar(s), the lawful currency of Hong Kong

– 1 –

DEFINITIONS

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Board Committee’’

• the independent committee of the Board, comprising Mr. Gao Dezhu, Mr. Kang Yi and Mr. Chi Chi Hung, Kenneth, all of whom are independent non-executive Directors, formed to advise the Independent Shareholders as to (i) the Annual Caps; and (ii) the Continuing Connected Transaction

• ‘‘Independent Financial Adviser’’/‘‘Yu Ming’’

• Yu Ming Investment Management Limited, a licensed corporation eligible to carry out Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Shareholders for the purpose of advising as to (i) the Annual Caps; and (ii) the Continuing Connected Transaction

• ‘‘Independent Shareholder(s)’’

• Shareholder(s) who are not required, under the Listing Rules, to abstain from voting at the EGM to consider and, if thought fit, approve (i) the Annual Caps; and (ii) the Continuing Connected Transaction

• ‘‘Latest Practicable Date’’

• 6 March 2013, being the latest practicable date prior to the printing of this circular for ascertaining information contained herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘LME’’

• the London Metal Exchange

• ‘‘New Tin Supply Contract’’

• the agreement dated 31 January 2013 entered into between YT Parksong Australia and the Buyer in relation to the supply of tin concentrates for the period from 1 February 2013 to 31 January 2016

• ‘‘Parksong Mining’’

• Parksong Mining And Resource Recycling Limited, a limited liability company incorporated under the laws of Hong Kong and is also a wholly-owned subsidiary of the Company

• ‘‘PRC’’

• the People s Republic of China and for the sole purpose of this circular shall exclude Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

– 2 –

DEFINITIONS

• ‘‘SFO’’

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Share(s)’’

• Share(s) at par value of HK$0.005 each in the issued share capital of the Company

• ‘‘Shareholder(s)’’

holder(s) of the Share(s)

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘United States’’ or ‘‘US’’ the United States of America

• ‘‘US$’’

• United States dollars, the lawful currency of the United States

• ‘‘YT Parksong Australia’’

• YT Parksong Australia Holding Pty. Ltd., a limited liability company incorporated under the laws of Australia, which is wholly owned by Yunnan Tin HK and therefore is a nonwholly owned subsidiary of the Company

• ‘‘Yunnan Tin HK’’

• Yunnan Tin Hong Kong (Holdings) Group Co., Limited, a limited liability company incorporated under the laws of Hong Kong, which is beneficially owned as to 82% by Parksong Mining and 18% by Yunnan Tin PRC, and is therefore a non wholly-owned subsidiary of the Company

• ‘‘Yunnan Tin PRC’’

• Yunnan Tin Group (Holding) Co., Ltd. (雲南錫業集團（控 股 ） 有 限 責 任 公 司 ), a limited liability company incorporated in the PRC, which is beneficially owned by the Government of the Yunnan Province and is the parent company of the Buyer

• ‘‘%’’

per cent

– 3 –

LETTER FROM THE BOARD

L’SEA RESOURCES INTERNATIONAL HOLDINGS LIMITED 利 海 資 源 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 195)

Executive Directors: Mr. CHEUNG Wai Kuen Mr. PU Xiaodong Mr. NIE Dong

Non-executive Directors: Prof. QIU Guanzhou Mr. CHEN Zhenliang Mr. LI Xiang Hong

Independent non-executive Directors: Mr. GAO Dezhu Mr. KANG Yi Mr. CHI Chi Hung, Kenneth

Registered office: Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Room 2607, Greenfield Tower Concordia Plaza 1 Science Museum Road Tsimshatsui, Kowloon Hong Kong

11 March 2013

To the Shareholders

Dear Sir or Madam,

(1) CONTINUING CONNECTED TRANSACTION RENEWAL OF TIN SUPPLY CONTRACT AND THE REVISION OF ANNUAL CAPS

AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

On 31 January 2013, the Board announced that the Company entered into the New Tin Supply Contract and the transaction pursuant to which will constitute continuing connected transaction for the Company under the Listing Rules. On 5 February 2013, the Board further announced to revise the Annual Caps in order to correspond with the contractual term period with the Annual Caps as set out in the New Tin Supply Contract.

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further details of the Continuing Connected Transaction and the Annual Caps; (ii) the letter from the Independent Board Committee to the Independent Shareholders giving its recommendations in relation to the Continuing Connected Transaction and the Annual Caps; (iii) the letter of advice from Yu Ming to the Independent Board Committee and the Independent Shareholders containing its advice and recommendations on the Continuing Connected Transaction and the Annual Caps; and (iv) the notice of the EGM, at which an ordinary resolution will be proposed to consider and, if thought fit, approve the Continuing Connected Transaction and the Annual Caps thereunder.

NEW TIN SUPPLY CONTRACT

Principal terms

The principal terms of the New Tin Supply Contract include:

Date: 31 January 2013

Parties:

Seller: YT Parksong Australia, a non wholly-owned subsidiary of the Company

Buyers: Yunnan Tin Australia TDK Resources Pty. Ltd., a wholly-owned of Yunnan Tin PRC, a substantial shareholder of a non wholly-owned subsidiary of the Company (namely Yunnan Tin HK)

Term: 1 February 2013 to 31 January 2016

Purchase of Tin Concentrates:

Nature of transaction

Pursuant to the New Tin Supply Contract, YT Parksong Australia has agreed to supply tin concentrates to the Buyer in accordance with the terms of the New Tin Supply Contract for the period from 1 February 2013 to 31 January 2016.

Pricing basis

The price of tin concentrates per dry metric ton was agreed by the above-mentioned parties after taking into account the factors (i) the LME cash settlement average price of tin metal; (ii) the treatment charge per dry metric ton; (iii) deduction based on the final tin content; and (iv) penalty for impurity.

– 5 –

LETTER FROM THE BOARD

Payment terms

It was agreed that the Buyer pays 85% of the provisional value of each lot within three working days after the Buyer receives all shipment documents and the remaining part will be settled within 10 working days after the final analysis and weights of tin concentrates confirmed by both YT Parksong Australia and the Buyer.

Summary of Revised Terms and New Terms

Save for (i) the changes to the terms of the contract period from April 2011 to December 2013 to from 1 February 2013 to 31 January 2016, (ii) the changes to the price quotation from 15 days prior to the bill of lading date until 30 days after the bill of lading date to from the bill of lading date until 45 days after bill of lading date, (iii) the expansion of penalty to cover additional metals, namely iron, manganese and wolfram in the event that such metals reach a certain impurity level; and (iv) the inclusion of a new term for the extra treatment charge which equals to the excess amount of the average monthly price of Brent Crude Oil over US$80 per dry metric ton in the event that the average monthly price of Brent Crude Oil exceeds US$80 per barrel, the other terms and conditions of the New Tin Supply Contract are the same as the Existing Tin Supply Contract.

ANNUAL CAPS

Original Annual Caps

The historical aggregate transaction amount for the period from 1 January 2011 and the existing annual caps for each of three years ending 31 December 2013 are set out as follows:

	From	From	From
	1 January 2011	1 January 2012	1 January 2013
	to 31 December	to 31 December	to 31 December
	2011	2012	2013
	(HK$ million)	(HK$ million)	(HK$ million)
Historical aggregate transaction
amount	419	395	36*
Existing approved annual cap	852	1,031	1,248

• figures are up to 31 January 2013

The historical sales amounts between YT Parksong Australia and the Buyer in relation to tin concentrates for the financial year ended 31 December 2011 was HK$419 million. Based on the Group’s latest unaudited management accounts, as at 31 December 2012, the aggregate tin concentrates sale between YT Parksong Australia and Buyer for the period from 1 January 2012 to 31 December 2012 amounted to HK$395 million, representing an annual decrease of 5.7%. The decrease was mainly attributed to the decrease of tin concentrates average settlement price from approximately HK$182,000 to approximately HK$146,000 for the year 2011 to

– 6 –

LETTER FROM THE BOARD

2012, which represent a fall of approximately 20%. The Company has confirmed that the annual caps for the Existing Tin Supply Contract for the year 2011 and 2012 have not been exceeded as at the date of this circular.

Proposed Revision of the Annual Caps

In view of the decreasing trend of tin concentrates price in 2012, the Company expects that the amount supply to the Buyer will fall below the original annual caps provided under the Existing Tin Supply Contract for the year ending 31 December 2013. The Company proposes to revise the Annual Caps to HK$590 million for the 11 months ending 31 December 2013, HK$810 million for the year ending 31 December 2014, HK$1,020 million for the year ending 31 December 2015 and HK$80 million for the month of January 2016.

The Annual Caps were determined with reference to (i) the historical settlement price between YT Parksong Australia and the Buyer; (ii) the historical transaction amount between YT Parksong Australia and the Buyer in 2012; (iii) the estimated increase in volume and settlement price for the supply of tin concentrates in the next three years ending 31 January 2016; and (iv) the historical fluctuation of the LME cash settlement average price of tin metal.

INFORMATION OF THE BUYER

The Buyer is a limited liability company incorporated in Australia and is principally engaged in tin mining in Australia. The Buyer is wholly owned by Yunnan Tin PRC, a substantial shareholder of Yunnan Tin HK (a non-wholly owned subsidiary of the Company which holds a 100% equity interest of the YT Parksong Australia). The Yunnan Tin PRC has the largest production and manufacturing base in the world for metal tin and the largest production centre for tin profiles, tin chemicals and arsenic chemicals in the PRC. It also owns the state-level enterprise technology centre and the biggest tin research and precious metals research and development organization in the PRC.

REASONS FOR AND BENEFIT OF THE CONTINUING CONNECTED TRANSACTION

The Group is principally engaged in exploration of non-ferrous metal resources including mining and sale of tin resources.

In view of the good business relationship between YT Parksong Australia and the Buyer, and having considered the revised terms of the New Tin Supply Contract, the Board proposed to renew the contract for another three years. The Board is of the view that (i) the Group can secure a stable source of revenue as Yunnan Tin PRC is one of the world leading tin producers which requires significant amount of tin for production; and (ii) the Group can focus its resources in monitoring the production of YT Parksong Australia and to diversify its resources to identify additional customers and business, which in turn will enhance the value of the Company and Shareholders as a whole.

The Directors (excluding the independent non-executive Directors) are of the view that the New Tin Supply Contract is entered into on normal commercial terms, in the ordinary and usual course of businesses of the Company on an arm’s length basis and the terms of the

– 7 –

LETTER FROM THE BOARD

Continuing Connected Transaction and the Annual Caps are fair and reasonable so far as the Shareholders are concerned and are in the interests of the Group and the Shareholders as a whole.

The Independent Board Committee, comprising of the independent non-executive Directors, having considered the New Tin Supply Contract and the Annual Caps and the transactions contemplated thereunder and taking into account the advice and recommendation from Yu Ming, is of the view that the New Tin Supply Contract and the Annual Caps and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole and the terms of the New Tin Supply Contract and the Annual Caps and the transactions contemplated thereunder are fair and reasonable so far as the interests of the Independent Shareholders are concerned.

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, the Company indirectly holds 82% equity interest in YT Parksong Australia and the remaining 18% equity interest is held by Yunnan Tin PRC, which is the holding company of the Buyer. As such, the Buyer is a connected person of the Company. Accordingly, the transactions contemplated under the New Tin Supply Contract will constitute continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios for the Annual Caps relating to the Continuing Connected Transaction exceeds 25% and HK$10,000,000, the Continuing Connected Transaction are subject to announcement and reporting requirements and Independent Shareholders’ approval in general meeting under the Listing Rules.

Since no Director is considered to have material interest in the Continuing Connected Transaction, no Director had abstained from voting on the relevant resolution(s) approving the Continuing Connected Transaction at the Board meeting. Furthermore, given that no connected person which is a party to the Continuing Connected Transaction is a Shareholder and no Shareholder is considered to have material interest in the New Tin Supply Contract and the Continuing Connected Transaction, all Shareholders are eligible to vote on the ordinary resolution(s) to be proposed at the EGM in respect of the Continuing Connected Transaction and the Annual Caps.

GENERAL INFORMATION OF THE GROUP

The Group was in the past an established insulation and heat-resistance solution provider in the southern PRC specialised in the production, design and sales of insulation and heatresistance materials. The Group was also engaged in the trading of copper and silicon rubber with its trading customers.

Since March 2011, the principal business activities of the Group are exploration of nonferrous metal resources, including mining and sale of tin resources.

– 8 –

LETTER FROM THE BOARD

EGM

The EGM will be convened and held to consider and, if thought fit, to approve, among other matters, (i) the Annual Caps; and (ii) the Continuing Connected Transaction.

A notice convening the EGM to be held at 11:00 a.m. on Tuesday, 9 April 2013 at Room 2607, Greenfield Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong is set out on page 31 to 32 of this circular. 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 as soon as practicable. The form of proxy should be returned to the Company’s branch share registrar, Tricor Investor Services Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, not less than 48 hours before the time appointed for the holding of the EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjourned meeting thereof) should you so wish.

An ordinary resolution as set out in the notice of the EGM will be put to the vote of the Independent Shareholders by way of poll. An announcement will be made by the Company following the conclusion of the EGM to inform you of its results.

RECOMMENDATION

The Directors consider that the terms of the New Tin Supply Contract (including the Annual Caps) are entered into in the ordinary and usual course of business of the Group, on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve (i) the New Tin Supply Contract; and (ii) the Annual Caps.

The Independent Board Committee has been established to advise the Independent Shareholders as to whether the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole and are fair and reasonable so far as the Shareholders are concerned. Yu Ming has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in this regard. The respective letters from the Independent Board Committee and Yu Ming are set out on page 10 and from pages 11 to 24 of this circular respectively. You are advised to read the letters carefully before making your voting decision.

Yours faithfully, For and on behalf of

L’sea Resources International Holdings Limited Nie Dong

Executive Director

– 9 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

L’SEA RESOURCES INTERNATIONAL HOLDINGS LIMITED 利 海 資 源 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

11 March 2013

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

We refer to the circular from the Company to the Shareholders dated 11 March 2013 (the ‘‘Circular’’) of which this letter forms part. Terms defined in the circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders as to whether the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole and are fair and reasonable so far as the Shareholders are concerned. Yu Ming has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in this regard.

Having considered the advice and recommendations of Yu Ming as set out from pages 11 to 24 of the circular, we are of the opinion that the terms of the Continuing Connected Transaction and the Annual Caps and the transactions contemplated thereunder are entered into in the ordinary and usual course of business of the Group, on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Continuing Connected Transaction and the Annual Caps and the transactions contemplated thereunder.

Mr. Gao Dezhu

Yours faithfully, Mr. Kang Yi Mr. Chi Chi Hung, Kenneth Independent Non-executive Directors

– 10 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Shareholders in relation to the Continuing Connected Transaction, which has been prepared for the purpose of inclusion in this circular.

==> picture [214 x 44] intentionally omitted <==

11 March 2013

• To the Independent Board Committee and

• the Shareholders of

• L’sea Resources International Holdings Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTION RENEWAL OF TIN SUPPLY CONTRACT AND THE REVISION OF ANNUAL CAPS

INTRODUCTION

Reference is made to the circular of L’sea Resources International Holdings Limited (the ‘‘Company’’) dated 11 March 2013 in respect of the continuing connected transaction of the Company (the ‘‘Circular’’), of which this letter forms part. Unless the context otherwise requires, capitalized terms used in this letter shall have the same meanings as those defined in the Circular.

On 31 January 2013, the Board announced that YT Parksong Australia, a 82% owned subsidiary of the Company entered into the New Tin Supply Contract with the Buyer, pursuant to which YT Parksong Australia agreed to supply tin concentrates to the Buyer in accordance with the terms of the New Tin Supply Contract for the period from 1 February 2013 to 31 January 2016.

As at the Latest Practicable Date, YT Parksong Australia is a wholly-owned subsidiary of Yunnan Tin HK, which is owned as to 82% by the Company and 18% by Yunnan Tin PRC, which in turn holds 100% equity interest in the Buyer. As such, the Buyer is a connected person of the Company at its subsidiary level by virtue of being a subsidiary of the substantial shareholder of Yunnan Tin HK. Accordingly, the transaction contemplated under the New Tin Supply Contract will constitute continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios for the Annual Caps relating to the Continuing Connected Transaction exceeds 25% and HK$10,000,000, the Continuing Connected Transaction is subject to announcement, reporting requirements and Shareholders’ approval in a general meeting under the Listing Rules.

– 11 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Given the Buyer is a connected person of the Company only at the subsidiary level and none of the Buyer, its substantial shareholder or any of its associates has any shareholding in the Company, no Shareholder is considered to have material interest in the New Tin Supply Contract and the Continuing Connected Transaction. Accordingly, all Shareholders are eligible to vote on the ordinary resolution to be proposed at the EGM to approve the New Tin Supply Contract, the Continuing Connected Transaction contemplated thereunder and the Annual Caps.

The Independent Board Committee, comprising all the independent non-executive Directors, has been formed to advise the Shareholders as to whether the terms of the Continuing Connected Transaction and the Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

We are appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Shareholders as to whether the terms of the Continuing Connected Transaction and the Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. As the Independent Financial Adviser to the Independent Board Committee, we have carried out our work according to Rule 13.80 of the Listing Rules.

In formulating our opinion, we have relied on the statements, information, opinions and representations contained in the Circular and provided to us by the Directors and management of the Company. We have assumed that all such statements, information, opinions and representations contained or referred to in the Circular or provided to us by the Directors or the management of the Company for which the Directors are solely responsible, are, to the best of their knowledge, true, accurate and complete at the time they were made and continue to be so on the date of this letter.

We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and the representations and opinions made to us untrue, inaccurate, incomplete or misleading. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading. We have not, however, carried out any independent verification on the information provided to us by the Directors or the management of the Company, nor have we conducted any independent investigation into the business and affairs of the Group.

– 12 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

A. PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background and Reasons of the Continuing Connected Transaction

• a. Information on the Group

The Group is principally engaged in exploration and exploitation of non-ferrous metal resources including mining and sale of tin and copper resources.

Set out below is a summary of the operating results of the Group for the two financial years ended 31 December 2011 as extracted from the annual report of the Company and the six-months period ended 30 June 2011 and 2012 as extracted from the interim report of the Company:

	For the six	months	For the financial years	For the financial years
	ended 30	June	ended 31	December
	2012	2011	2011	2010
	HK$’000	HK$’000	HK$’000	HK$’000
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
		(Restated)		(Restated)
Revenue	169,980	199,291	355,626	—
Loss for the period	(154,652)	(34,481)	(801,879)	(21,995)
Net Asset Value	289,698	N/A	454,510	498,282

Note: The financial results for the financial year ended 31 December 2011 and the six months period ended 30 June 2012 were restated due to the Acquisition (as defined below) and the disposal of the Discontinued Business (as defined below).

For the financial year ended 31 December 2010, the Company was engaged in the manufacturing and the sale of insulation and heat resistance material, and trading of copper and silicone rubber (the ‘‘Discontinued Business’’). On 13 July 2010, the Company announced the acquisition (the ‘‘Acquisition’’) of the entire equity interests in Parksong Mining and Resource Recycling Limited (‘‘Parksong Mining’’), which held 50% interest in the tin mining project in Tasmania, Australia (the ‘‘Mine’’) and is engaged in tin mining business. The Acquisition was completed on 4 March 2011. Subsequent to the Acquisition, the Group entered into a sale and purchase agreement on 5 December 2011 to sell the Discontinued Business through disposal of the entire issued share capital of its subsidiary, Vitar Insulation Holdings Limited (the ‘‘Disposal’’). Upon completion of the Disposal on 29 December 2011, the Group’s principal business is focused on the mining and sale of tin and copper concentrates produced by the Mine.

– 13 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

For the financial year ended 31 December 2011, the Group recorded a loss of approximately HK$802 million due to the impairment loss on mining structure, mining rights and exploration and evaluation assets caused by decrease in tin price. The net asset value of the Group has decreased from approximately HK$498 million as at 31 December 2010 to approximately HK$455 million as at 31 December 2011 due to impairment loss on the mining related assets.

As stated in the interim report of the Company for the six months period ended 30 June 2012, the tin industry and the Group’s business was affected by the slowdown of global economy and a reduction of investments and manufacturing activities in China. The revenue of the Group decreased by approximately 15% to approximately HK$170 million, as compared with approximately HK$199 million for the corresponding period in 2011.

b. Information on the Buyer

The Buyer is a limited liability company incorporated in Australia and is principally engaged in tin mining in Australia. The Buyer is wholly-owned by Yunnan Tin PRC, a 18% shareholder of Yunnan Tin HK (a 82% owned subsidiary of the Company which holds a 100% equity interest of the YT Parksong Australia).

Yunnan Tin PRC is one of the world leading tin producers and owns the largest production and manufacturing base in the world for tin metal. It also possesses a statelevel enterprise technology centre, the largest production centre for tin profiles, tin chemicals and arsenic chemicals, and the largest tin research and precious metals research and development organization in the PRC.

c. Existing Tin Supply Contract

As set out in the announcement of the Company dated 25 March 2011, upon completion of the Acquisition of the Mine on 4 March 2011, the Company entered into the Existing Tin Supply Contract with the Buyer through a 82% owned subsidiary, YT Parksong Australia, for the supply of tin concentrates for the period from 1 April 2011 to 31 December 2013.

In view of the proposed change of terms of the Existing Tin Supply Contract, the Buyer and YT Parksong Australia entered into the New Tin Supply Contract to supply tin concentrates to the Buyer for a three-year period commencing from 1 February 2013 to 31 January 2016. Details on the changed terms in the New Tin Supply Contract will be analysed in the following paragraphs headed ‘‘2. Terms of the New Tin Supply Contract — c. Pricing basis’’ in the later part of this letter.

d. Reasons for and benefit of the Continuing Connected Transaction

As stated in the Letter from the Board, in view of the good business relationship between YT Parksong Australia and the Buyer, and having considered the revised terms of the New Tin Supply Contract, the Board proposed to renew the contract for three years. The Board is of the view that (i) the Group can secure a stable source of revenue as Yunnan Tin PRC is one of the world leading tin producers which requires significant

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

amount of tin for production; and (ii) the Group can focus its resources in monitoring the production of YT Parksong Australia and to diversify its resources to identify additional customers and business, which in turn will enhance the value of the Company and Shareholders as a whole.

2. Terms of the New Tin Supply Contract

On 31 January 2013, YT Parksong Australia and the Buyer entered into the New Tin Supply Contract, pursuant to which YT Parksong Australia agreed to supply tin concentrates to the Buyer in accordance with the terms of the New Tin Supply Contract for the period from 1 February 2013 to 31 January 2016. The principal terms of the New Tin Supply Contract are as follows:

a. Supply quantity

• 2,400 to 6,000 tons tin concentrates per annum.

b. Payment terms

The Buyer pays 85% of the provisional value of each lot within three working days after the Buyer receives all shipment documents and the remaining value within 10 working days after the final analysis and weights of tin concentrates confirmed by both YT Parksong Australia and the Buyer.

c. Pricing basis

The price of tin concentrates per dry metric ton under the New Tin Supply Contract will be calculated based on (i) the average LME cash settlement price of tin metal; (ii) the treatment charge per dry metric ton; (iii) deduction based on the final tin content; and (iv) penalty for impurity. Such pricing basis applies to the Existing Tin Supply Contract which was approved by the Shareholders at the extraordinary meeting of the Company dated 6 May 2011. Detailed changes on the pricing basis under the New Tin Supply Contract as compared to the Existing Tin Supply Contract were analysed in the forthcoming paragraphs.

(i) Revision in the tin price quotation period

According to the New Tin Supply Contract and the Existing Tin Supply Contract, the average LME cash settlement price of tin metal are determined according to the following quotation period:

Tin price quotation period

Existing Tin Supply Contract 15 days before the bill of lading date to 30 days after the bill of lading date (the ‘‘Existing Quotation Period’’) New Tin Supply Contract from the bill of lading date to 45 days after the bill of lading date (the ‘‘New Quotation Period’’)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Under the New Tin Supply Contract, the tin settlement price between YT Parksong Australia and the Buyer will be determined with reference to the average LME cash settlement price of tin metal during the New Quotation Period instead of the Existing Quotation period.

Our view

As illustrated by ‘‘Figure 2 — Ten-year LME Tin Price’’ in the paragraph headed ‘‘3. Proposed Annual Caps — d. 15% buffer in sales volume and average tin settlement price’’ in the later part of this letter, tin as one of precious metals fluctuates widely in its settlement prices. It is not uncommon for precious metal producers, dealers or traders to adopt measures to hedge against settlement price fluctuation risks. As advised by the management of the Company, the reason for the revision in the tin price quotation period is mainly to facilitate the Buyer to make effective and more accurate hedging strategy and position by aligning the final tin quantities received from the Company and the tin settlement price paid to the Company as notified on the bill of lading closer to the prevailing LME Tin Price. The New Quotation Period allows the Buyer to align the quantity and the prevailing tin settlement price within 45 days after the bill of lading is received instead of 15 days before and 30 days after the bill of lading under the Existing Quotation Period.

Given (i) the number of quotation days remain 45 days under the New Quotation Period as the Existing Quotation Period under the Existing Tin Supply Contract; and (ii) the tin settlement prices can fluctuate upwards or downwards, we consider the New Quotation Period a neutral factor to the Company but beneficial to the Buyer in making more effective and accurate hedging positions based on the final quantities of tin metals provided by the Company and the prevailing tin prices, which will in turn benefits the Company in the long run by reinforcing the business relationship with the Buyer so as to sell tin concentrates to the Buyer continuously.

(ii) Inclusion of Oil Surcharge

In the Existing Tin Supply Contract, the Group will be charged US$550 per dry metric ton of tin concentrates (‘‘Treatment Fee’’) for processing, treatment and logistic costs. The Treatment Fee was determined based on the average monthly price of Brent Crude Oil at around US$80 per barrel when the Framework Agreement was entered into in April 2010 between the Group with Yunnan Tin Company Limited, a wholly-owned subsidiary of Yunnan Tin PRC. The Treatment Fee is unchanged in the New Tin Supply Contract. However, due to the increase in the oil price after the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Framework Agreement up to the date of the New Tin Supply Contract, it is proposed that the Oil Surcharge (as defined in the table below) will be collected from the Group during the term of the New Tin Supply Contract.

Oil Surcharge Existing Tin Supply Contract Nil New Tin Supply Contract Excess amount of the average monthly price of Brent Crude Oil over US$80 per dry metric ton of tin concentrates (the ‘‘Oil Surcharge’’)

Our view

We have observed Brent Crude Oil prices during the period from 1 January 2010 to 31 January 2013 as follows:

Figure 1 — Brent Crude Oil price from 1 January 2010 to 31 January 2013

==> picture [314 x 205] intentionally omitted <==

----- Start of picture text -----

US$
130
120
110
100
90
80
70
60
Source: Bloomberg
1/1/20101/3/20101/5/20101/7/20101/9/20101/11/20101/1/20111/3/20111/5/20111/7/20111/9/20111/11/20111/1/20121/3/20121/5/20121/7/20121/9/20121/11/2012
----- End of picture text -----

As illustrated in the above chart, the Brent Crude Oil price was around US$80 per barrel in 2010 and fluctuates within the range of US$70 and US$90 per barrel for the period from January 2010 to April 2010. During the period of over 2.5 years from date of the Framework Agreement on 16 April 2010 to the date of the New Tin Supply Contract on 31 January 2013, average monthly price of Brent Crude Oil increased from approximately US$80 per barrel in March 2010 to approximately US$112 per barrel in January 2013, representing an increase of 40%.

To reflect oil price changes since the Framework Agreement, the Company will be charged the Oil Surcharge in the New Tin Supply Contract.

– 17 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Group currently only supply tin concentrates to the Buyer. However, it had entered into tin supply contracts with an independent third party previously in 2010. We have reviewed the terms entered into by the Group with the previous independent third party customer (the ‘‘Third Party Contract’’) in relation to the Oil Surcharge, which is the same as the Oil Surcharge in the New Tin Supply Contract.

After having considered that (i) the Oil Surcharge will only be charged when the average monthly price of Brent Crude Oil is above US$80 per barrel to reflect the cost difference between the old benchmark price of Brent Crude Oil in 2010 and prevailing price of Brent Crude Oil during the term of the New Tin Supply Contract; and (ii) the Oil Surcharge is the same as the terms of the Third Party Contract entered into with the independent third party customer, we consider the Oil Surcharge in the New Tin Supply Contract is in line with market practices and fair and reasonable.

(iii) Deduction and penalty charges

Pursuant to the New Tin Supply Contract, save for the existing deduction items and the impurity metals being charged penalties under the Existing Tin Supply Contract, which was approved by the Shareholders, the New Tin Supply Contract will include the additional impurity metals, namely iron, manganese and wolfram (the ‘‘Additional Impurities’’), which will be charged for impurity penalties.

As advised by the management of the Company, the Additional Impurities lead to a decrease in recovery of tin metal from the tin concentrates supplied by the Group and the inclusion of the Additional Impurities is in line with market practices. We also understand from the management of the Company that the inclusion of the Additional Impurities was due to the fact that the Additional Impurities contained in the tin concentrates supplied by the Group are more than ignorable value after over 1.5 years observation during the term of the Existing Tin Supply Contract.

Our view

We have reviewed the terms of the Third Party Contract on the penalty charges for the Additional Impurities, which is the same as the penalty to be charged by the Buyer in the New Tin Supply Contract. Accordingly, we consider the penalty charges for the Additional Impurities in the New Tin Supply Contract are in line with market practices and are fair and reasonable.

Taking into account that (i) the terms of the Existing Tin Supply Contract were approved by the Shareholders; (ii) the New Quotation Period is a neutral factor to the Company; and (iii) the Oil Surcharge and the penalty charges for the Additional Impurities in the New Tin Supply Contract are in line with market practices, we consider the terms of the New Tin Supply Contract are fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Proposed Annual Caps

Proposed sales volume and proposed annual caps under the New Tin Supply Contracts (the ‘‘Proposed Annual Caps’’) for the period from February 2013 to January 2016 are set out in the following table:

		For the	period
	11 months	12 months	12 months
	ending	ending	ending	For
	31 December	31 December	31 December	January
	2013	2014	2015	2016
Proposed Annual Caps
(HK$ million)	590	810	1,020	80
Proposed sales volume (tons)	2,985	3,390	3,559	297
% change in sales volume	18%	6%	5%	Nil
	(Note 1)			(Note 2)

Notes:

1. The Proposed Annual Cap for 2013 is calculated on the basis of the proposed sale volume of 2,985 tons for the remaining 11 months ending 31 December 2013 and the 207 tons of tin concentrates already sold to the Buyer in January 2013.

2. The Proposed Annual Cap for January 2016 is calculated based on the Proposed Annual Cap of 2015 on a prorate basis.

As disclosed in the ‘‘Letter from the Board’’ of the Circular, the Proposed Annual Caps were determined with reference to: (a) the historical settlement price between YT Parksong Australia and the Buyer; (b) the historical transaction amount between YT Parksong Australia and the Buyer in 2012; (c) the estimated increase in volume and settlement price for the supply of tin concentrates in the next three years ending 31 January 2016; and (d) the historical fluctuation of the average LME cash settlement price of tin metal.

a. Historical annual caps, transaction amount and sales volume

We have reviewed the historical annual caps, transaction amount and the sales volume for the three financial years ended 31 December 2011, 2012 and 2013, which are summarized below:

	For	the financial years ended	the financial years ended
		31 December
	2011	2012		2013
	(HK$ million)	(HK$ million)	(HK$ million)
Existing annual caps approved	852	1,031		1,248
Historical transaction amount	419	395		36
			(up to January)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

	For the financial years ended	For the financial years ended	For the financial years ended
		31 December
	2011	2012	2013
Historical sales volume (tons)	2,298	2,713	207
			(up to January)
% change in sales volume	18%	18%	N/A
Historical average settlement
price/ton (HK$)	182,282	145,573	172,812

Note: For the purpose of this letter, exchange rate used is US$1 = HK$7.8.

The historical transaction amount for the two financial years ended 31 December 2011 and 2012 was approximately HK$419 million and HK$395 million respectively, representing an annual decrease of approximately 6%. However, the historical sales volume increased about 18% per annum. The decrease in the historical transaction amount was mainly attributable to the decrease in average settlement price of tin concentrates per dry metric ton from approximately US$23,370 (approximately HK$182,282) to approximately US$18,663 (approximately HK$145,573) for the financial years ended 31 December 2011 to 2012, which represents a fall of approximately 20%.

b. Estimated increase in sales volume

For the period from 2013 to 2015, the Company expects the sales volume of tin concentrates to be 3,192, 3,390 and 3,559 tons respectively, representing a year-on-year increase of approximately 18%, 6% and 5% respectively. Such estimation for increase in sales volume is mainly based on the expected increase in tin concentrate grading to be explored and produced as well as the expected improvement in production capacity.

(i) Expected increase in tin content grading

The management of the Company conservatively expects that the tin concentrates grading will improve gradually in the year 2013 to 2015 by about 3% in 2013 and 5% in each of 2014 and 2015, so that the grading of the tin concentrate would reach on average of approximately 1.56%, 1.63% and 1.71% for 2013, 2014 and 2015 respectively.

We were advised by the management of the Company that the tin content grading of the Group explored and produced in the past ranged from approximately 1.27% to 1.85%. In 2012, an average tin content grading explored and produced was approximately 1.51%.

As set out in the announcement of the Company dated 11 January 2013, the Company’s joint venture partner holding the remaining 50% interest in the Mine, Metals X Limited (a company listed on the Australian Securities Exchange),

– 20 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

continued underground exploration activity in the Mine and discovered significantly higher tin content reserve areas in the North Renison area and the Central Federal Bassett (CFB) area with the best result of tin concentrates grading in the stopping of 5.26%.

On 4 February 2013 and 1 March 2013, the Company announced the increase in total production volume of the Mine from an aggregate of 703 tons in January and February 2012 to 1,030 tons in January and February 2013, representing an increase of approximately 47%. The increase in the production volume was attributable to an increase in average tin content grading from approximately 1.29% in January and February 2012 to approximately 1.52% in January and February 2013, which represent an increase of approximately 18%.

Our view

In light of the (i) existing tin content grading of the Group explored and produced in the past ranged from approximately 1.27% to 1.85%; (ii) the average tin content grading explored and produced of approximately 1.51% in 2012; and (iii) the newly discovered mining areas mentioned above with much higher tin grading potentials, we consider the expectation of the Company to explore higher grading tin concentrates in the coming three years on average of approximately 1.56%, 1.63% and 1.71% reasonable.

(ii) Improvement in production capacity

We are given to understand that for the year 2013, in order to improve processing and production capacity, the Company (i) replaced an existing mine processing filter ‘‘banana screen’’, which is expected to improve the feed rate of the processing capacity; and (ii) installed two new gravity concentrators, which are expected to improve the recovery capacity of the Group. The replacement and installation of these machineries were completed in January and February 2013 respectively. The improvement in the processing and recovery capacity will increase the production volume of the Company. The Company will continue to seek measures to improve the production capacity and volume of the Company in order to supply more tin concentrates to the Buyer. In particular, it is proposed that new exploitation contract will be entered into by the Company with a new contractor upon expiry of the existing exploitation contract with the existing contractor in March 2013.

Our view

It is noted from the sales volume of the Company as set out in the paragraph headed ‘‘3. Proposed Annual Caps — a. Historical annual caps, transaction amount and sales volume’’ in the earlier part of this letter that the sales volume increased by approximately 18% per annum for each of the two financial years ended 2011 and 2012 respectively. With (i) the replacement of the existing mine processing filter, the installation of the two new gravity concentrators and continuous measures of the Company to improve the production capacity; and (ii) the expected increase in the tin

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

content grading set out above, we are of the view that such estimated increase in sales volume at approximately 18%, 6% and 5% in each of 2013, 2014 and 2015 possible and it is a fair and reasonable estimation.

c. Estimated increase in average tin settlement price

Pursuant to the New Tin Supply Contract, the settlement price of tin concentrates supplied by the Group to the Buyer will be referenced to the average cash settlement price of tin metal on the LME (the ‘‘LME Tin Price(s)’’).

In determination of the Proposed Annual Caps, the Company assumed an annual increase of 20% in average tin settlement price for the period from 2013 to 2015 based on the actual average tin settlement price of approximately US$18,663 in 2012 between the Company and the Buyer.

We have reviewed the LME Tin Price during the past ten-year period ending on the date of the New Tin Supply Contract on 31 January 2013 and the LME Tin Prices movement during the period is illustrated in the following chart.

Figure 2 — Ten-year LME Tin Price

==> picture [335 x 204] intentionally omitted <==

----- Start of picture text -----

US$
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Source: Bloomberg
1/2/2003 1/2/2004 1/2/2005 1/2/2006 1/2/2007 1/2/2008 1/2/2009 1/2/2010 1/2/2011 1/2/2012 1/2/2013
----- End of picture text -----

As shown in the above chart, LME Tin Prices during the past ten-year period is in an increasing trend with significant fluctuations. The LME Tin Price was about US$4,300 per ton at the beginning of 2003 and gradually increased to approximately US$25,000 in May 2008. Due to the global financial crisis in the second half of 2008, tin price dropped drastically to a low of approximately US$10,000 per ton in December 2008. Since early 2009, tin price regained its momentum and increased sharply to about US$33,000 per ton in April 2011. However, due to the European sovereign-debt crisis in the middle of 2011, tin price dropped to approximately US$17,000 per ton in July 2012. With signs of easing in the European sovereign-debt crisis and the announcement of the third round of quantitative easing policy by the United States of America in September 2012, the tin price began to rebounce and reached approximately US$24,000 per ton in January 2013.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

For the ten years up to 2012, the average year-on-year increase of tin price is approximately 25%. The average annual volatility of LME Tin Price in the past five years up to 2012 is approximately 54%. As at the Latest Practicable Date, the LME Tin Price was approximately US$23,446 per ton.

Based on the actual average tin settlement price of approximately US$18,663 per ton between the Company and the Buyer in 2012 and the assumption of 20% increase in the average tin price per year, the average tin price is estimated to be approximately US$22,396, US$26,875 and US$32,250 for 2013, 2014 and 2015 respectively.

Our view

Having reviewed (i) the average year-on-year increase of tin price in the past ten years of approximately 25%; (ii) the average annual volatility of LME Tin Price in the past five years up to 2012 of approximately 54%; (iii) the prevailing LME Tin Price of US$23,446 per ton as at the Latest Practicable Date, which is approximately 26% above the reference average tin settlement price in 2012 and exceeded the estimated increase in average tin settlement price of 20% by the management for year 2013; and (iv) the prevailing market conditions, we consider the estimation of 20% increase in LME Tin Price is within the historical fluctuation range and possible.

d. 15% buffer in sales volume and average tin settlement price

With the high volatility of tin prices as illustrated above and the newly discovered high grading potential tin concentrates in the Mine, which expose great uncertainties in the tin concentrate grading to be explored and produced in the coming years, the Directors consider it difficult to predict the tin prices and the sales volume as usual. To facilitate the smooth production and supply of tin concentrates to the Buyer and at the same time comply with the requirement of the Listing Rules, the Directors applied a 15% buffer in calculation of the Proposed Annual Caps under the New Tin Supply Contract.

Our view

Taking into account that (i) the average annual volatility of LME Tin Price in the past five years of approximately 54%, (ii) tin price fluctuates in great magnitude under different market conditions; (iii) the prevailing LME Tin Price at US$23,446 per ton as at the Latest Practicable Date, which is approximately 26% above the reference average tin settlement price in 2012 and exceeded the estimated price increase of 20% by the management for year 2013; (iv) the Group’s tin content grading in 2012 fluctuates from approximately 1.27% to 1.85%; (v) the great potential of exploration and production of high grading tin concentrates in the coming three years by the Group, which could substantially affect the production and sales volume of tin concentrates; and (vi) the increase in the average tin content grading of tin concentrates explored of approximately 18% in January and February 2013 in comparison to the corresponding period in 2012, resulting in the increase in the tin concentrates production volume by 47% from 703 tons to 1,030 tons during the same period, we consider the Directors’ decision to include a 15% buffer in calculation of the Proposed Annual Caps appropriate and acceptable.

– 23 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Taking into account of the above factors, basis and assumptions, in particular, all the terms of the New Tin Supply Contract are determined based on market price and market practises with third parties, the supply of tin concentrates to the Buyer is in the interest of the Group and the Shareholders as a whole. In addition, the Continuing Connected Transaction will be reviewed by the Directors and auditors on an annual basis in the coming 3 years in accordance with the Listing Rules. Accordingly, we consider the Proposed Annual Caps of approximately HK$590 million for the 11 months ending 31 December 2013, HK$810 million for the year ending 31 December 2014, HK$1,020 million for the year ending 31 December 2015 and HK$80 million for the month of January 2016 fair and reasonable.

B. RECOMMENDATION

Having considered the above principal factors, we are of the view that the New Tin Supply Contract is entered into by the Group and the Buyer on normal commercial terms in the ordinary course of business of the Company, and terms of the New Tin Supply Contract and the Proposed Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Shareholders and the Independent Board Committee to advise the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM for approving the New Tin Supply Contract, the Continuing Connected Transaction contemplated thereunder and the Proposed Annual Caps.

Yours faithfully, For and on behalf of YU MING INVESTMENT MANAGEMENT LIMITED Warren Lee Managing Director

– 24 –

GENERAL INFORMATION

APPENDIX

1. 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 Company. 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 facts the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

• (A) Save as disclosed below, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions, if any, which they were taken or deemed to have under such provisions of the SFO); (ii) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to in such provisions of the SFO; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules to be notified to the Company and the Stock Exchange.

Long position in the Shares

							Approximate
							percentage
							of the
	Number	of ordinary shares of HK0.005 each					Company’s
Name of	Personal	Family		Corporate	Other		total issued
Director	interests	interest		interest	interests	Total	share capital
Mr. Xie Hai Yu	994,610,000		—	—	— 994,610,000		19.39%
Mr. Cheung Wai
Kuen (Note)	—		—	617,000,000	— 617,000,000		12.03%

Note: On 27 June 2012, (i) Wright Source, a company wholly owned by Mr. Cheung Wai Kuen and a substantial shareholder of the Company, transferred 560,000,000 Shares to Munsun Global in exchange for approximately 65.14% of equity interest in Munsun Global; and (ii) Munsun Global acquired 57,000,000 Shares from Independent Third Parties. Mr. Cheung Wai Kuen’s interest in the Company is held through the shareholding in Wright Source and Munsun Global.

– 25 –

GENERAL INFORMATION

APPENDIX

(B) Substantial Shareholders’ interests

Save as disclosed below, the Directors and the chief executive of the Company were not aware that there was any person who, as at the Latest Practicable Date, had an interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would fall to be disclosed under provisions of Division 2 and 3 of Part XV of the SFO, or who, as at the Latest Practicable Date, was directly and indirectly interested in ten per cent or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Group.

Long positions in the Shares

			Percentage
		Number	of issued
		of ordinary	ordinary
Name	Capacity	shares held	shares
Xie Hai Yu	Personal	994,610,000	19.39%
Munsun Global Mining	Corporate	617,000,000	12.03%
Investment Fund LP		(Note 1)

Notes:

• (1) Wright Source, which is wholly-owned by Mr. Cheung Wai Kuen, owns 65.14% interest in Munsun Global.

As at the Latest Practicable Date, none of the Directors or proposed Directors was a director or employee of a company which had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

As at the Latest Practicable Date, none of the Directors and their respective associates were considered to have interests in businesses apart from the Group’s businesses which compete, or are likely to compete, either directly or indirectly, with the businesses of the Group pursuant to Rule 8.10 of the Listing Rules.

4. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group.

– 26 –

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2011 (being the date to which the latest published audited accounts of the Group were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Group.

5. DIRECTORS’ SERVICE CONTRACTS

Mr. Nie Dong, an executive Director, has entered into a service contract with the Company for a term of 1 year commencing from 1 January 2013 and will continue thereafter until terminated by not less than one month’s notice in writing served by either party on the other subject to compensation payable to Mr. Nie Dong by the Company in the amount equivalent to 3 months’ salary.

Save as disclosed, as at the Latest Practicable Date, none of the Directors has a service contract with the Company or any of its subsidiaries which is not determinable within one year without payment of compensation (other than statutory compensation).

6. LITIGATION

The Company is a party to a litigation under HCA1357/2011.

The proceedings involves disputes arising from a sale and purchase agreement in relation to the sale and purchase of the entire issued share capital of Parksong Mining dated 13 July 2010 (the ‘‘Agreement’’) and the completion of the acquisition took place on 4 March 2011.

On 12 August 2011, the Company received a writ of summons and a statement of claim (the ‘‘Statement of Claim’’) which were issued against the Company and Gallop Pioneer Limited (‘‘GPL’’), a wholly owned subsidiary of the Company, by Mr. Chan Kon Fung (the ‘‘Plaintiff’’). As alleged by the Plaintiff in the Statement of Claim, GPL and the Company failed to make payment of AUD15,143,422.44, being the alleged amount of receivables payable to the Plaintiff, should the Company be held liable to the alleged breach of the Agreement and claimed for the said sum of AUD15,143,422.44 (equivalent to approximately HK$121,720,000) from both GPL and the Company (the ‘‘claim’’). The Company and GPL disagreed with the claim amount because management considered the Plaintiff has breached certain conditions in the Agreement and, accordingly, the Company and GPL made a counterclaim of approximately of HK$223,890,000 against the Plaintiff on 11 October 2011 (the ‘‘Counterclaim’’).

The Plaintiff and the Company and GPL had attended a mediation in relation to the disputes regarding the Claim and the Counterclaim (the ‘‘Mediation’’) on 16 August 2012. However, no settlement had been reached in the Mediation. The parties will proceed with the legal proceedings and the present stage is to obtain counsel’s advice. The Directors confirm that the Group will continue to defend the action and/or the claims made by the Plaintiff.

– 27 –

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, save as disclosed above, no member of the Group was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading positions of the Group since 31 December 2011, being the date on which the latest published audited financial statements of the Group were made up.

8. QUALIFICATIONS OF EXPERT

The following is the qualification of the expert or professional adviser who has given opinion or advice contained in this circular:

Name Yu Ming

Qualification

a licensed corporation eligible to carry out Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO

9. CONSENTS OF EXPERT

Yu Ming has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

10. INTERESTS OF EXPERT

As at the Latest Practicable Date, Yu Ming:

• (a) did not have any shareholding in any member of the Group, or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

• (b) was not interested, directly or indirectly, in any assets which had been acquired or disposed of by or leased to, or proposed to be acquired or disposed of by or leased to, any member of the Group since 31 December 2011, being the date on which the latest published audited accounts of the Company were made up.

11. GENERAL

• (a) The registered address of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

– 28 –

GENERAL INFORMATION

APPENDIX

• (b) The head office and principal place of business of the Company in Hong Kong is at Room 2607, 26/F., Greenfield Tower Concordia Plaza, 1 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong.

• (c) The share registrar and transfer agent of the Company in Hong Kong is Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (d) The company secretary of the Company is Ms. Tse Wun Ying (‘‘Mr. Tse’’). Ms. Tse is responsible for the financial and secretarial affairs of the Group. Mr. Tse joined the Company in December 2012. Ms. Tse obtained a Master Degree in China Accountancy from Guangzhou Jinan University in January 2004. Ms. Tse is an associate member of the Hong Kong Institute of Certified Public Accountants, a fellow of Association of the Chartered Certified Accountants, an associate member of the Institute of the Chartered Accountants in England and Wales, a member of the Taxation Institute of Hong Kong and registered as a Certified Tax Advisor since 2010. Ms. Tse has over 26 years of experience in financial management in various commercial and industrials sectors. Prior to joining the Group, Ms. Tse was previously a chief financial officer, financial controller, qualified accountant and company secretary of several companies listed on the main board of the Stock Exchange.

• (e) In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the principal place of business of the Company in Hong Kong at Room 2607, 26/F., Greenfield Tower Concordia Plaza, 1 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong from the date of this circular up to and including the date of the EGM:

• (i) the New Tin Supply Contract and the Existing Tin Supply Contract;

• (ii) the letter from the Independent Board Committee, the text of which is set out on page 10 of this circular;

• (iii) the letter from the Independent Financial Adviser, the text of which is set out from pages 11 to 24 of this circular;

• (iv) the written consent from the Independent Financial Adviser referred to in paragraph 9 of this appendix;

• (v) the service agreement referred to in paragraph 5 of this appendix; and

• (vi) this circular.

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NOTICE OF EGM

L’SEA RESOURCES INTERNATIONAL HOLDINGS LIMITED 利 海 資 源 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 195)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the ‘‘EGM’’) of L’sea Resources International Holdings Limited (the ‘‘Company’’) will be held at Room 2607, Greenfield Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui, Kowloon, Hong Kong at 11:00 a.m. on Tuesday, 9 April 2013, for the purpose of considering and, if thought fit, passing, with or without modification, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT

• (1) the new tin supply contract dated 31 January 2013 (the ‘‘New Tin Supply Contract’’) entered into between YT Parksong Australia Holding Pty Ltd. and Yunnan Tin Australia TDK Resources Pty. Ltd., which is wholly-owned by Yunnan Tin Group (Holding) Co. Ltd. (a substantial shareholder of Yunnan Tin Hong Kong (Holdings) Group Co., Limited, which is a non wholly-owned subsidiary of L’sea Resources International Holdings Limited (the ‘‘Company’’)), in relation to supplying tin concentrates to Yunnan Tin Australia TDK Resources, details of the New Tin Supply Contract are set out in the company’s circular date 11 March 2013 (the ‘‘Circular’’) be and is hereby approved, confirmed and ratified;

• (2) the annual caps (as defined and more particularly described in the Circular) be and is hereby approved and confirmed; and

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NOTICE OF EGM

• (3) the directors of the Company be and are hereby authorized to do all such acts and execute all such other documents as they may consider necessary, desirable or expedient to carry out or give effect to or otherwise in connection with or in relation to the New Tin Supply Contract, the Annual Caps and all transaction contemplated thereunder.’’

By the order of the Board L’sea Resources International Holdings Limited Nie Dong Executive Director

Hong Kong, 11 March 2013

Head office and principal place of

business in Hong Kong:

Room 2607, 26/F., Greenfield Tower Concordia Plaza 1 Science Museum Road Tsim Sha Tsui, Kowloon Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the EGM is entitled to appoint another person as his proxy to attend and vote in his stead. A member who is the holder of two or more shares may appoint more than one proxy to attend and vote on his behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. A proxy need not be a member of the Company, but must attend the EGM in person to represent you.

2. 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 thereof, must be delivered to the office of the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. Completion and delivery of the form of proxy will not preclude a member from attending and voting in person at the EGM if the member so desires and in such event, the instrument appointing a proxy shall be deemed to be revoked.

4. Where there are joint holders of any share, any one of such persons may vote at any meeting, either in person or by proxy, in respect of such share as if he was solely entitled thereto; but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

5. Shareholders are advised to read the circular to the shareholders of the Company dated 11 March 2013 which contains information concerning the resolution(s) to be proposed in this notice.

6. The votes at the EGM will be taken by poll.

7. A form of proxy for use at the EGM is enclosed.

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