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 any securities of the Company.

PAN ASIA MINING LIMITED 宫亞礦業有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8173)

(1) INCREASE IN AUTHORISED SHARE CAPITAL;
(2) PROPOSED RIGHTS ISSUE ON THE BASIS OF THREE RIGHTS SHARES FOR EVERY TEN SHARES HELD ON THE RECORD DATE;
(3) PROPOSED BONUS ISSUE OF TWO BONUS SHARES FOR EVERY THREE RIGHTS SHARES TAKEN UP UNDER THE RIGHTS ISSUE;
(4) CONNECTED TRANSACTIONS INVOLVING THE RESTRUCTURING OF CONVERTIBLE BONDS AND ISSUE OF NEW CONVERTIBLE BONDS;
(5) UPDATE ON ENFORCEMENT OF CHARGE OVER THE SHARES AND CONVERTIBLE BONDS HELD BY SUBSTANTIAL SHAREHOLDER AND CONNECTED TRANSACTIONS INVOLVING SETTLEMENT AGREEMENT WITH MAGIC STONE;
(6) APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER;
(7) SUPPLEMENTAL ANNOUNCEMENT; AND
(8) RESUMPTION OF TRADING.

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

In order to accommodate future issues of Shares which shall include, the Rights Shares, Bonus Shares and the Conversion Shares, as well as to provide the Company with greater flexibility to raise funds by allotting and issuing Shares in the future, the Board proposes to increase the authorised share capital of the Company from HK$1,000,000,000.00 to HK$2,500,000,000.00 by the creation of an additional 3,000,000,000 unissued Shares of a par value of HK$0.50 each. The Share Capital Increase is subject to the approval of the Shareholders by way of an ordinary resolution at the EGM.

RIGHTS ISSUE AND BONUS ISSUE

The Company proposes to raise approximately HK$151.4 million (assuming no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) to HK$164.0 million before expenses by issuing not less than 302,755,224 new Shares and not more than 327,959,064 new Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) to the Qualifying Shareholders by way of the Rights Issue at a price of HK$0.50 per Rights Share on the basis of three Rights Shares for every ten Shares held on the Record Date. The Company further proposes to allot and issue Shares on the basis of two Bonus Shares for every three Rights Shares taken up under the Rights Issue.

The estimated net proceeds of the Rights Issue will be approximately HK$146.9 million to HK$159.1 million. The Company intends to apply approximately HK$132.6 million of the net proceeds from the Rights Issue to finance its payment obligations under the Settlement Agreement (see section headed “Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone” below) and the remaining portion of the net proceeds will be used for general working capital purposes.

As at the date of this announcement, Kesterion, one of the Underwriters, owns 272,558,400 Shares, representing approximately 27.01% of the existing issued share capital of the Company. Pursuant to the terms of the Underwriting Agreement, Kesterion has irrevocably undertaken to the Company, among other things, that (i) it will not, within the period commencing from the date of the Underwriting Agreement and ending on the two Business Days after the Acceptance Date, transfer or otherwise dispose of, or create any right in respect of, any Shares held by it, (ii) it will not convert any of the Convertible Bonds into the Shares from the date of the Underwriting Agreement and up to (a) the completion of the Rights Issue and the Bonus Issue, or (b) the termination of the Bond Restructuring Agreement, whichever is earlier, and (iii) subject to fulfillment of the conditions of the Rights Issue and the Underwriting Agreement not having been terminated in accordance with its terms, it will take up its provisional entitlements under the Rights Issue. Save for those Rights Shares which Kesterion has conditionally and irrevocably undertaken to take up, the Rights Issue is fully underwritten by the Underwriters. For further details of the irrevocable undertakings, please refer to the section headed “Irrevocable Undertakings”.

The Rights Issue and the Bond Restructuring are inter-conditional. The Rights Issue is also conditional, inter alia, upon the fulfillment of the conditions set out under the sections headed “Underwriting Agreement – Conditions of the Rights Issue and the Bonus Issue” and “Connected transactions involving the restructuring of Convertible Bonds and issue of new convertible bonds – Conditions Precedent” of this announcement. Accordingly, the Rights Issue and the Bonus Issue may or may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue could not become unconditional and may not proceed. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company.

Listing Rule Implications

As Kesterion, one of the Underwriters, is a connected person of the Company, the entering into of the Underwriting Agreement by the Company constitutes a connected transaction for the Company under the GEM Listing Rules. As the Company has not made arrangements for the Qualifying Shareholders to apply for Rights Shares in excess of their entitlements under the Rights Issue in accordance with Rule 10.31(1), and that up to approximately 19.79% of the Untaken Shares will be underwritten by Kesterion (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date), Independent Shareholders’ approval will be required pursuant to Rule 10.31(2) of the GEM Listing Rules in respect of such arrangement under the Rights Issue and Kesterion, Ms. Eva Wong, their associates and those who are involved in or interested in the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring, the Settlement Agreement and/or the Kesterion Charge will abstain from voting.

The payment of the underwriting commission by the Company to Kesterion constitutes a connected transaction of the Company. As the total amount of underwriting commission payable by the Company is within the de minimis threshold for connected transaction under Chapter 20 of the GEM Listing Rules, the payment of commission to Kesterion pursuant to the Underwriting Agreement is exempt from Shareholders’ approval, annual review and all disclosure requirements under Chapter 20 of the GEM Listing Rules.

CONNECTED TRANSACTIONS INVOLVING THE RESTRUCTURING OF CONVERTIBLE BONDS AND THE PROPOSED ISSUE OF NEW BONDS

On 22 September 2014, in consideration of Kesterion agreeing to act as an Underwriter in respect of the Rights Issue, the Company and Kesterion entered into the Bond Restructuring Agreement, pursuant to which it is conditionally agreed that (i) the terms of Convertible Bonds will be amended to grant the Company a right to redeem all the outstanding Convertible Bonds at a redemption price of US$140,000,000 (equivalent to approximately HK$1,092,000,000), (ii) the Company will exercise such Redemption Right and (iii) in satisfaction and cancellation of the Redemption Amount payable under the amended Convertible Bonds following such redemption, the Company will issue the New Bonds to Kesterion.

Under the GEM Listing Rules, Kesterion, being a substantial shareholder of the Company, is a connected person of the Company. Accordingly, the transactions contemplated under the Bond Restructuring Agreement constitute connected transactions of the Company under Chapter 20 of the GEM Listing Rules and are subject to the approval of the Independent Shareholders at the EGM by way of poll.

UPDATE ON ENFORCEMENT OF CHARGE OVER THE SHARES AND CONVERTIBLE BONDS HELD BY SUBSTANTIAL SHAREHOLDER AND CONNECTED TRANSACTIONS INVOLVING SETTLEMENT AGREEMENT WITH MAGIC STONE

of China Shipbuilding as a continuing security to guarantee the due and punctual performance and observance of certain contractual obligations and liabilities by certain subsidiaries of the Company under the Trade Contracts in relation to the trading of fuel oil and trading of the coal. In view of the overdue liabilities payable by the Company to China Shipbuilding and for the purpose of safeguarding the interests in connection with the Trade Contracts, China Shipbuilding appointed the Receivers to exercise all the powers of a receiver given by the terms of the Kesterion Charge. The Kesterion Charge and such payables under the Trade Contracts were assigned to Magic Stone on 7 November 2014. With a view to settling the various overdue liabilities plus interest charges in aggregate net amount of approximately HK$236 million payable by the Group to Magic Stone, on 21 November 2014, the Company and certain of its subsidiaries entered into the Settlement Agreement with Magic Stone and Kesterion, pursuant to which the Group has conditionally agreed to settle the various overdue payables under the Trade Contracts partly by cash and partly by way of the issue and allotment of 80,000,000 new Shares each fully paid at an issue price of HK$0.50 per Share to Magic Stone. As Magic Stone is entitled to exercise the voting rights of the Shares subject to the Kesterion Charge, it is a substantial shareholder of the Company for purposes of the GEM Listing Rules and therefore a connected person of the Company under the GEM Listing Rules. Accordingly, the entering into of the Settlement Agreement and the transactions contemplated thereunder (including the issue of the 80,000,000 new Shares) constitute a connected transaction for the Company and given that the applicable percentage ratios in respect of that exceed 5% and HK$10,000,000, it is subject to the approval of the Independent Shareholders at the EGM. Magic Stone will abstain from voting on the ordinary resolution approving the Settlement Agreement and the transactions contemplated thereunder. The Company will seek a specific mandate at the EGM to authorise the Directors to allot and issue the new 80,000,000 Shares.

The purpose of the Settlement Agreement is to ascertain and settle various overdue payables of the Group under the Trade Contracts in a basket agreement. Such financial assistance received by the Group from Kesterion through the Kesterion Charge was not secured by the assets of the Group. Accordingly, the Kesterion Charge and its consequential release pursuant to the terms of the Kesterion Charge and the Settlement Agreement are fully exempt from Shareholders' approval, annual review and all disclosure requirements under Chapter 20 of the GEM Listing Rules.

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

Committee will formulate its views with respect to the terms of the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement after obtaining and considering the advice of the Independent Financial Adviser. The advice of the Independent Board Committee and the Independent Financial Adviser and other relevant information will be sent to the Shareholders in the circular to be issued by the Company.

PROPOSED CHANGE IN BOARD LOT SIZE

The Shares are currently traded in board lots of 5,000 Shares each. The Board proposes to change the board lot size for trading in the Shares on the Stock Exchange from 5,000 Shares to 10,000 Shares upon the completion of the Rights Issue.

SUPPLEMENTAL ANNOUNCEMENT

Reference is made to the announcements dated 30 October 2014 and 31 October 2014 in respect of the Company’s appointment of an independent non-executive Director. The Company wishes to provide supplemental information as regards such appointment.

RESUMPTION OF TRADING

At the request of the Company, trading in the securities of the Company on the Stock Exchange was suspended from 9:00 a.m. on Tuesday, 23 September 2014 pending release of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the securities of the Company with effect from 9:00 a.m. on Monday, 24 November 2014.

GENERAL

A circular containing, among other things, further details of the Share Capital Increase, the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring and the Settlement Agreement, a letter of recommendation from the Independent Board Committee to the Independent Shareholders, a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement and a notice of EGM, will be despatched to the Shareholders on or before Friday, 12 December 2014.

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

RIGHTS ISSUE WITH BONUS ISSUE

Issue statistics

Basis of the Rights Issue : three Rights Shares for every ten Shares held on the Record Date

Basis of the Bonus Issue : two Bonus Shares for every three Rights Shares taken up under the Rights Issue

Number of Shares in issue as at the date of this announcement : 1,009,184,080 Shares

Number of Rights Shares : not less than 302,755,224 Rights Shares (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and no more than 327,959,064 Rights Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) pursuant to the Rights Issue (Notes)

Aggregate nominal value of Rights Shares to be issued under the Rights issue : not less than HK$151,377,612 (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and HK$163,979,532 (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) pursuant to the Rights Issue (Notes)

Number of Bonus Shares : not less than 201,836,816 Bonus Shares (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and no more than 218,639,376 Bonus Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) pursuant to the Bonus Issue (Notes)

Aggregate nominal value of Bonus Shares to be issued under the Bonus Issue : not less than HK$100,918,408 (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and no more than HK$109,319,688 (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) pursuant to the Bonus Issue (Notes)

Subscription Price

: HK$0.50 per Rights Share with nominal value of HK$0.50 each

Notes:

(1) As at the date of this announcement, the Company has 84,012,800 outstanding Share Options, representing 262,800 outstanding share options with the exercise price of HK$3.58 per Share granted under the Share Option Scheme 2002 and 83,750,000 outstanding share options with the exercise price of HK$0.50 per Share granted under the Share Option Scheme 2012. As at the date of this announcement, each of the exercise prices of the options granted under the Share Option Scheme 2002 and the Share Option Scheme 2012 were approximately 952.94 % and 47.06% higher than the average of the closing prices as quoted on the Stock Exchange for the last five trading days up to and including the date of this announcement, respectively. In this regard, it is unlikely that the holders of those Share Options will exercise those options. Assuming no further grant of Share Options under the Share Option Scheme 2012 by the Company and full exercise of the subscription rights attaching to the Share Options granted on and before the Record Date, an additional 25,203,840 Rights Shares and 16,802,560 Bonus Shares will be issued.

As at the date of this announcement, there were outstanding Convertible Bonds in the aggregate principal amount of US$201,474,359 (equivalent to approximately HK$1,571,500,000). As announced by the Company on 29 July 2014, the Receivers were appointed by China Shipbuilding over such Convertible Bonds held by Kesterion. The Company has been informed that China Shipbuilding has assigned its rights under the Kesterion Charge to Magic Stone. Please see further information concerning the status of the Kesterion Charge in the section headed "Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone" below.

(2) In the circumstances, Kesterion has irrevocably undertaken to the Company and the Underwriters, to the extent permitted, not to convert any of the Convertible Bonds into Shares from the date of the Underwriting Agreement and up to (a) the completion of the Rights Issue and the Bonus Issue, or (b) the termination of the Bond Restructuring Agreement, whichever is earlier. Further, pursuant to the Settlement Agreement, Magic Stone shall not and shall cause the Receivers not to exercise the conversion rights attaching to the Convertible Bonds under the Kesterion Charge and shall not take further enforcement steps in relation to the Kesterion Charge (including the exercise of any voting rights relating thereto) pending the implementation of the Settlement Agreement. For further details, please refer to the section headed "Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone".

Save for the Share Options and the Convertible Bonds, as at the date of this announcement, the Company has no outstanding convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares.

Assuming the Share Options are not exercised and the Convertible Bonds are not converted and there will not be any further issue of new Shares or repurchase of Shares on or before the Record Date, 302,755,224 nil-paid Rights Shares and 201,836,816 Bonus Shares proposed to be provisionally allotted together with 2,184,000,000 Conversion Shares represent approximately $266.41\%$ of the Company's issued share capital as at the date of this announcement and approximately $72.71\%$ of the Company's issued share capital as enlarged by the issue of the Rights Shares, the Bonus Shares and the Conversion Shares.

Bonus Issue

Subject to the satisfaction of the conditions of the Rights Issue, the Bonus Shares will be issued to the registered holders of the fully-paid Rights Shares on the basis of two Bonus

Shares for every three Rights Shares taken up under the Rights Issue.

On the basis of 302,755,224 Rights Shares to be issued under the Rights Issue, 201,836,816 Bonus Shares will be issued (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date).

Qualifying Shareholders

The Company will send the Prospectus Documents to Qualifying Shareholders only. To qualify for the Rights Issue, a Shareholder must:

be registered as a member of the Company at the close of business on the Record Date; and
be a Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, owners of Shares must lodge any transfers of Shares (together with the relevant share certificates) with the Company's Share Registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration no later than 4:30 p.m. on Thursday, 8 January 2015.

Closure of register of members

To determine the eligibility for the Rights Issue and Bonus Issue, the register of members of the Company will be closed from Friday, 9 January 2015 to Monday, 12 January 2015, both days inclusive. No transfer of Shares will be registered during this period.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong. As at date of this announcement, there was one Overseas Shareholder with its address registered in the British Virgin Islands.

In compliance with the necessary requirements of the GEM Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue to the Overseas Shareholders. If, based on legal opinions, the Directors consider that it is necessary or expedient not to offer the Rights Shares to the Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Rights Issue will not be available to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue, to be despatched to the Qualifying Shareholders as soon as practicable. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL to them.

Arrangements will be made for Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their

nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, of more than HK$100 will be paid pro rata to the Non-Qualifying Shareholders. The Company will retain individual amounts of HK$100 or less for the benefit of the Company. Any unsold entitlement of Non-Qualifying Shareholders, together with any Rights Shares provisionally allotted but not accepted, will be underwritten by the Underwriters.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue and the Bonus Issue. Accordingly, Overseas Shareholders should exercise caution when dealing in the securities of the Company.

Subscription Price

The Subscription Price for the Rights Shares is HK$0.50 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(a) a premium of approximately 47.06% to the closing price of HK$0.34 per Share as quoted on the Stock Exchange on the Last Trading Day;

(b) a premium of approximately 47.06% to the average closing price of approximately HK$0.34 per Share for the five consecutive trading days ended on the Last Trading Day; and

(c) a premium of approximately 51.52% to the theoretical ex-rights price of approximately HK$0.33 per Share based on the closing price of HK$0.34 per Share as quoted on the Stock Exchange on the Last Trading Day.

Average subscription price for the Rights Shares and the Bonus Shares to be issued is HK$0.3 per Share (the "Adjusted Subscription Price").

The Adjusted Subscription Price represents:

(a) a discount of approximately 11.76% to the closing price of HK$0.34 per Share as quoted on the Stock Exchange on the Last Trading Day;

(b) a discount of approximately 11.76% to the average closing price of approximately HK$0.34 per Share for the five consecutive trading days ended on the Last Trading Day; and

(c) a discount of approximately 9.09% to the theoretical ex-rights price of approximately HK$0.33 per Share based on the closing price of HK$0.34 per Share as quoted on the Stock Exchange on the Last Trading Day.

The Subscription Price was determined after arm's length negotiations between the Company and the Underwriters with reference to (a) the market price of the Shares prior to the Last Trading Day; and (b) net Adjusted Subscription Price. The estimated net subscription price per Rights Share is expected to be approximately HK$0.49.

The Directors consider the terms of the Rights Issue and the Bonus Issue, including the Adjusted Subscription Price which has been set as a discount to the recent closing prices of the Shares with an objective to encourage existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company, to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

Basis of provisional allotment

The basis of the provisional allotment shall be three Rights Share for every ten Shares in issue and held on Record Date, being 302,755,224 Rights Shares (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) or 327,959,064 Rights Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date), at a price of HK$0.50 per Rights Share. Application for all or any part of a Qualifying Shareholder's provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for.

Fractions of Rights Shares and Bonus Shares

On the basis of provisional allotment of three Rights Shares for every ten Shares held by the Qualifying Shareholders on the Record Date, no fractional entitlements to the Rights Shares will arise under the Rights Issue. No fractional entitlements to the Bonus Issue will arise under the Bonus Issue.

Status of the Rights Shares and Bonus Issue

The Rights Shares and Bonus Shares, when allotted and fully paid, will rank pari passu in all respects with the Shares then in issue. Holders of fully-paid Rights Shares and Bonus Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares and Bonus Shares in their fully-paid form.

No application for excess Rights Shares

The Qualifying Shareholders will not be entitled to subscribe for any Rights Shares in excess of their respective entitlements. Considering that the Rights Issue will give the Qualifying Shareholders an equal and fair opportunity to maintain their respective pro rata shareholding interests in the Company, the Company considers that if application for excess Rights Shares is arranged, the Company would require to put in additional effort and costs to administer the excess Rights Shares application procedures. Accordingly, after arm's length negotiation with the Underwriters, the Board has decided that no excess Rights Shares will be offered to the Qualifying Shareholders and any Untaken Shares will be underwritten by the Underwriters. As the related administration costs would be lowered, the Directors consider that the absence of application for excess Rights Shares is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Share certificates for the Rights Issue and the Bonus Issue

Subject to the fulfillment of the conditions of the Rights Issue, certificates for all fully-paid

Rights Shares and the Bonus Shares are expected to be posted to those entitled thereto by ordinary post at their own risk on or before Wednesday, 4 February 2015.

Application for listing

The Company will apply to the Stock Exchange for the listing of and permission to deal in, (i) the Rights Shares in both their nil-paid and fully-paid forms to be issued and allotted pursuant to the Rights Issue; and (ii) the Bonus Shares to be issued and allotted pursuant to the Bonus Issue. The nil-paid Rights Shares and Bonus Shares will have the same board lot size as the Shares, i.e. 5,000 Shares in one board lot.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms and the Bonus Shares on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms and the Bonus Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange and the commencement date of dealings in the Bonus Shares, respectively, or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms and the Bonus Shares, which are registered in the register of members of the Company in Hong Kong will be subject to the payment of stamp duty and other applicable fees and charges in Hong Kong.

Irrevocable Undertaking from Kesterion

As at the date of this announcement, Kesterion has irrevocably undertaken to the Company and CL Securities, subject to fulfillment of the conditions of the Rights Issue and the Bonus Issue and the Underwriting Agreement not having been terminated in accordance with its terms:

(i) to subscribe or procure the subscription of 81,767,520 Rights Shares which will constitute the provisional allotment of Rights Shares in respect of the Shares beneficially owned by Kesterion pursuant to the terms of the Rights Issue;

(ii) that the Shares referred to in paragraph (i) above will remain registered in the name of Kesterion at the close of business on the Record Date as they are on the date of the undertaking;

(iii) to procure that the acceptances in full in respect of 81,767,520 Rights Shares provisionally allotted to Kesterion and/or its nominees shall be lodged with the Share Registrar or the Company, with payment in full therefor in cash (whether by cheque, bank cashier's order or such other form as the Company may approve), by no later than 4:00 p.m. on the Acceptance Date or such later date as the Company may agree;

(iv) that Kesterion shall not, and shall procure that (so far as reasonably possible) companies controlled by Kesterion do not, dispose of or transfer any Shares, or any interests therein from the date of the Underwriting Agreement up to and including two Business Days after the Acceptance Date; and

(v) that Kesterion will not convert any of the Convertible Bonds into the Shares from the date of the Underwriting Agreement and up to (a) the completion of the Rights Issue and the Bonus Issue, or (b) the termination of the Bond Restructuring Agreement, whichever is earlier.

In the event that Kesterion should fail to comply with the undertakings given above, Kesterion irrevocably authorises the Company in its discretion to treat the undertaking as (i) Kesterion’s acceptance of such of the Rights Shares provisionally allotted to Kesterion on the terms of the Prospectus Documents (save as regards the time for acceptance and payment), to allot and issue the same in the name of Kesterion and to procure the registration of the same in the name of Kesterion; and/or (ii) cancellation of the request for exercising the conversion rights attaching to all of the Convertible Bonds.

THE UNDERWRITING AGREEMENT

Date : 22 September 2014 (as amended by a supplemental agreement dated 21 November 2014)

Underwriters :
(i) Kesterion, an investment holding company and does not underwrite issues of securities in its ordinary course of business.
(ii) CL Securities

Total number of Rights Shares being underwritten by the Underwriter : All Underwritten Shares, being not less than 220,987,704 Rights Shares (assuming no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and not more than 246,191,544 Rights Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date), subject to the terms and conditions of the Underwriting Agreement. The Rights Issue is fully undertaken severally by the Underwriters in the following manner:

(i) Kesterion: firstly, out of all the Untaken Shares, Kesterion shall take up to 26,106,156 Untaken Shares (in the case where no new Shares being issued or repurchased by the Company and no Convertible Bonds are converted on or before the Record Date) and not more than 48,714,000 Untaken Shares (in the case where no new Shares being issued and no Convertible Bonds being converted

other than those falling to be issued upon full exercise of the Share Options and no Shares being repurchased by the Company on or before the Record Date)

(ii) CL Securities:

if there is any balance of the Untaken Shares after deducting the Kesterion portion disclosed above, such remaining balance of Untaken Shares shall be taken up by CL Securities, being not more than 194,881,548 Untaken Shares (in the case where no new Shares being issued or repurchased by the Company and no Convertible Bonds being converted on or before the Record Date) and not more than 197,477,544 Untaken Shares (in the case where no new Shares being issued, no Share Option being exercised and no Convertible Bonds being converted other than those falling to be issued upon full exercise of the Share Options and no Shares being repurchased by the Company on or before the Record Date)

Commission

: 3.0% of the aggregate Subscription Price of the respective portion of the respective maximum Rights Shares underwritten by each Underwriter.

Fees and expenses

: The Company shall pay all costs, charges and expenses (if any) documented in writing and properly incurred by the Company of or incidental to the Rights Issue and the arrangements hereby contemplated including financial advisory and documentation fees, printing and translation charges, the fees of the Company's auditors, solicitors and registrars, and the fees payable to the Stock Exchange, but excluding sub-underwriting fees and expenses relating to sub-underwriting (if any).

Other than acting as co-underwriter with Kesterion (a connected person) pursuant to the Underwriting Agreement, to the best of the Directors' knowledge, information and belief, CL Securities and its ultimate beneficial owners are independent of the Company and its connected persons. As at the date of this announcement, the Company received the information on Ms. Eva Wong's intention to take up 81,360 Rights Shares to be

provisionally allotted to her. In the unlikely event that Ms. Eva Wong has not subscribed those 81,360 Rights Shares, Kesterton, a company wholly owned by Ms. Eva Wong, and/or CL Securities shall take up those Untaken Shares with the commission fee of approximately HK$1,220.40 pursuant to the Underwriting Agreement. Such arrangement could eventually result in up to 3% discount on Ms. Eva Wong’s entitlement in 81,360 Rights Shares.

The Board (excluding the non-executive Directors and the independent non-executive Directors) considers the terms of the Underwriting Agreement including the commission rate (and the insignificant resultant discounts on Ms. Eva Wong’s entitlement in 81,360 Rights Shares subject to the Underwriting) accord with the market practice and are fair and reasonable so far as the Company and the Shareholders are concerned.

Conditions of the Rights Issue

The Rights Issue is conditional on (i) the satisfaction (or, as applicable, waiver) of the conditions of the Underwriting Agreement referred to this section; (ii) the satisfaction (or, as applicable, waiver) of the conditions of the Bond Restructuring Agreement; and (iii) the Underwriting Agreement and the Bond Restructuring Agreement not being terminated in accordance with its terms. The obligations of the Underwriters under the Underwriting Agreement are conditional on:

(i) the passing at a duly convened general meeting of the Shareholders held on or before the Posting Date of the necessary resolutions of the Independent Shareholders approving the Rights Issue, the Bonus Issue, the Bond Restructuring and the transactions contemplated under the Underwriting Agreement;

(ii) the delivery to the Stock Exchange and registration by the Registrar of Companies in Hong Kong respectively on or prior to the Posting Date of one copy of each of the Prospectus Documents each duly certified by two Directors or their duly authorised agents in compliance with section 342C of the Companies (WUMP) Ordinance (and all other documents required to be attached thereto), and otherwise complying with the requirements of the Companies (WUMP) Ordinance and the GEM Listing Rules;

(iii) the posting on the Posting Date of copies of the Prospectus Documents to the Qualifying Shareholders and the posting of copies of the Prospectus marked “For information only” together with a letter in agreed form to the Non-Qualifying Shareholders explaining the circumstances in which they are not permitted to participate in the Rights Issue on or before the Posting Date;

(iv) compliance with and performance of all the undertakings and obligations of the Company under the Underwriting Agreement in all material respects;

(v) compliance with and performance of all the undertakings and obligations of Kesterion under its irrevocable undertaking in all material respects;

(vi) the Listing Committee of the Stock Exchange agreeing to grant listings of, and permission to deal in, the Rights Shares in their nil-paid and fully-paid forms either

unconditionally or subject to such conditions which the Company accepts and the satisfaction of such conditions (if any) by no later than the Posting Date and the Listing Committee of the Stock Exchange not having withdrawn or revoked such listings and permission on or before the Acceptance Date; and

(vii) the Bond Restructuring Agreement becoming unconditional in accordance with the terms thereof (other than the condition (c) relating to the Bond Restructuring Agreement as set out in the section headed "Connected transactions involving the restructuring of Convertible Bonds and issue of new convertible bonds – Conditions Precedent").

None of the conditions in paragraphs (i), (ii), (iii) and (vi) above can be waived by the Underwriters and the Company. In the event that the conditions above have not been satisfied (or waived in respect of conditions in paragraphs (iv), (v) and (vii) by the Underwriters) in accordance with the terms of the Underwriting Agreement by the Acceptance Date (or in each case, such later date as the Underwriters and the Company may agree), all liabilities of the parties to the Underwriting Agreement shall cease and terminate and neither party shall have any claim against the other save that the Company shall indemnify the Underwriters for all reasonable costs, fees and other out-of-pocket expenses (other than the underwriting commission mentioned above) that have been properly incurred and documented in writing by the Underwriters in connection with the underwriting of the Underwritten Shares.

As at the date of this announcement, other than paragraphs (iv) and (v), all the conditions precedent above have not been satisfied. Unless the Rights Issue and/or the Bond Restructuring having been terminated, it is expected that other than paragraph (vii), all conditions precedent above would have been satisfied immediately prior to the commencement of the trading of the nil-paid Rights Shares. If the conditions precedent are not satisfied in accordance with the Underwriting Agreement, the Rights Issue and the Bond Restructuring will not proceed and the Company will seek to raise capital via other financing channels.

Termination of the Underwriting Agreement

The Underwriters may by notice in writing to the Company given served at any time prior to 4:30 p.m. on the second Business Day after the Acceptance Date as the Company and the Underwriters may agree, terminate the Underwriting Agreement if any of the following grounds of termination happens:

(i) in the reasonable opinion of the Underwriters, the success of the Rights Issue would be materially and adversely affected by:

(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the sole and absolute opinion of the Underwriters materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue;

(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriters materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue;

(ii) any material breach of any of the representations, warranties or undertakings under the Underwriting Agreement comes to the knowledge of the Underwriters;

(iii) any adverse change in market conditions in Hong Kong or the PRC (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction or trading in securities) occurs which in the sole and absolute opinion of the Underwriters is likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue;

(iv) there is any change in the circumstances of the Company or any member of the Group which in the sole and absolute opinion of the Underwriters will adversely affect the prospects of the Company, including without limiting the generality of the foregoing the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group;

(v) any event of force majeure including, without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out; or

(vi) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole whether or not ejusdem generis with any of the foregoing; or

(vii) any matter which, had it arisen or been discovered immediately before the date of the Prospectus and not having been disclosed in the Prospectus, would have constituted, in the reasonable opinion of the Underwriter, a material omission in the context of the Rights Issue.

Upon the giving of notice by the Underwriters, all obligations of the Underwriters under the Underwriting Agreement shall cease and determine and no party shall have any claim against any other party in respect of any matter or thing arising out of or in connection with the Underwriting Agreement provided that the Company shall remain liable to pay to the Underwriters such fees as may then be agreed by the parties to the Underwriting Agreement.

Listing Rule Implications

As Kesterion, one of the Underwriters, is a connected person of the Company, the entering into of the Underwriting Agreement by the Company constitutes a connected transaction for the Company under the GEM Listing Rules. As the Company has not made arrangements for the Qualifying Shareholders to apply for Rights Shares in excess of their entitlements under the Rights Issue in accordance with Rule 10.31(1), and that up to approximately 19.79% of the Untaken Shares will be underwritten by Kesterion (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date), Independent Shareholders' approval will be required pursuant to Rule 10.31(2) of the GEM Listing Rules in respect of such arrangement under the Rights Issue and Kesterion, Ms. Eva Wong and their associates and those who are involved in or interested in the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring, the Settlement Agreement and/or the Kesterion Charge will abstain from voting.

The payment of the underwriting commission by the Company to Kesterion constitutes a connected transaction of the Company. As the total amount of underwriting commission payable by the Company is within the de minimis threshold for connected transaction under Chapter 20 of the GEM Listing Rules, the payment of commission to Kesterion pursuant to the Underwriting Agreement is exempt from Shareholders' approval, annual review and all disclosure requirements under Chapter 20 of the GEM Listing Rules.

EXPECTED TIMETABLE

The expected timetable of the Rights Issue and the Bonus Issue is as follows:

| Publication of the announcement about, inter alia, the Rights Issue
and the Bonus Issue | Sunday, 23 November 2014 |
| --- | --- |
| Despatch of Circular about, inter alia, Rights Issue and the Bonus Issue .. | Friday, 12 December 2014 |
| Latest time for returning and lodging proxy forms for EGM | 11:00 a.m. on Saturday, 3 January 2015 |
| EGM | 11:00 a.m. on Monday, 5 January 2015 |
| Announcement of poll results of EGM | Monday, 5 January 2015 |
| Last day of dealings in the Shares on cum-rights basis... | Tuesday, 6 January 2015 |
| Ex-date (the first day of dealings in the Shares on ex-rights basis)... | Wednesday, 7 January 2015 |
| Latest time for lodging transfers of Shares to qualify for the Rights Issue | 4:30 p.m. on Thursday, 8 January 2015 |
| Register of members closes (both dates inclusive) | Friday, 9 January 2015 to Monday, 12 January 2015 |
| Record Date | Monday, 12 January 2015 |
| Despatch of Prospectus Documents | Tuesday, 13 January 2015 |
| First day of dealings in NPR | 9:00 a.m. on Thursday, 15 January 2015 |
| Latest time for splitting of PAL | 4:30 p.m. on Monday, 19 January 2015 |
| Last day of dealings in NPR | 4:00 p.m. on Thursday, 22 January 2015 |
| Latest time for acceptance and payment of Right Shares. | 4:30 p.m. on Tuesday, 27 January 2015 |

Latest time for the termination of the Underwriting Agreement... 4:30 p.m. on Thursday, 29 January 2015
Announcement of allotment results ... Tuesday, 3 February 2015
Despatch of certificates for fully-paid Rights Shares and the Bonus Shares Wednesday, 4 February 2015
Last day of trading of Shares in board lot of 5,000 Shares in the original counter... 4:00 p.m. on Wednesday, 4 February 2015
Expected date of dealings in fully-paid Rights Shares and the Bonus Shares 9:00 a.m. on Thursday, 5 February 2015
Effective date of change of board lot size... 9:00 a.m. on Thursday, 5 February 2015
First day for the designated broker to stand in the market to provide matching services for odd lots of Shares... Thursday, 5 February 2015
The last day for the designated broker to provide matching services for odd lots of Shares... Tuesday, 3 March 2015

The Company will make further announcement if there is any change to the above timetable. Dates or deadlines specified in this announcement for events in the above timetable for (or otherwise in relation to) the Rights Issue and the Bonus Issue are indicative only and may be extended or varied by the Company. It is expected that the circular with respect to the Share Capital Increase, the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring and the Settlement Agreement will be despatched to the Shareholders on or before Friday, 12 December 2014.

Any changes to the anticipated timetable for the Rights Issue and the Bonus Issue, if required, will be published or notified to the Shareholders and the Stock Exchange as and when appropriate.

REASONS FOR THE RIGHTS ISSUE AND BONUS ISSUE AND USE OF PROCEEDS

The Company is an investment holding company. The Group is principally engaged in exploration and exploitation of mineral resources and trading of metals, natural resources and trading and distribution of beverage.

The estimated net proceeds of the Rights Issue will be approximately HK$146.9 million (assuming no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) to approximately HK$159.1 million (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date). The Company intends to apply approximately HK$132.6 million of the net proceeds from the Rights Issue to finance its payment obligations under the Settlement Agreement (see the section headed “Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone” below) and the remaining portion of the net proceeds will be used for general working capital purposes.

The Board considers that it is prudent to finance the Group’s long-term growth by long-

term financing, preferably in the form of equity which will not increase the Group's finance costs. The Rights Issue and the Bonus Issue will give the Qualifying Shareholders the opportunity to maintain their respective pro-rata shareholding interests in the Company and to continue to participate in the future development of the Group. Accordingly, the Board considers that fund raising through the Rights Issue is in the interests of the Company and the Shareholders as a whole.

FUND RAISING EXERCISES OF THE COMPANY

The Company did not conduct any other fund raising exercise in the past 12 months immediately preceding the date of this announcement.

CONNECTED TRANSACTIONS INVOLVING THE RESTRUCTURING OF CONVERTIBLE BONDS AND THE PROPOSED ISSUE OF NEW BONDS

The Bond Restructuring Agreement

Date : 22 September 2014 (as amended by a supplemental agreement dated 21 November 2014)

Parties : (i) the Company
(ii) Kesterion, a company wholly owned by Ms. Eva Wong, the spouse of Mr. Michael Koh Tat Lee, the chairman of the Board

Principal terms of the Bond Restructuring Agreement

In consideration of Kesterion agreeing to act as an Underwriter in respect of the Rights Issue, the Company conditionally agreed with Kesterion to restructure the terms of the Convertible Bonds as follows (collectively, the "Bond Restructuring") and subject to and in accordance with the terms of the Bond Restructuring Agreement:

(a) the terms and conditions of the Convertible Bonds shall be amended to provide that the Company as issuer of such bonds shall have the right by notice in writing to redeem the Convertible Bonds (the "Redemption Right") at any time at a redemption price of US$140,000,000 (equivalent to approximately HK$1,092,000,000) (the "Redemption Amount") and as further set out in accordance with the terms of the amendment deed. The Redemption Right shall be exercisable by the Company at any time on or prior to 15 April 2015; and

(b) following the amendment to the Convertible Bonds referred to in paragraph (a) above becoming effective, the Company shall contemporaneously exercise the Redemption Right to redeem the amended Convertible Bonds and in satisfaction and cancellation of the Redemption Amount, the Company shall issue the New Bonds at 100% of their principal amount to Kesterion.

Conditions Precedent

Completion of the Bond Restructuring shall be subject to and conditional upon:

(a) the passing of a resolution by the Independent Shareholders at an extraordinary general meeting approving the Share Capital Increase, the Bond Restructuring Agreement and the transactions contemplated thereunder;

(b) the Listing Committee of the Stock Exchange having granted the listing approval in respect of, and permission to deal in, the Conversion Shares;

(c) the Rights Issue and the Bonus Issue being completed (and Underwriting Agreement being entered into between the parties thereto and the Underwriting Agreement becoming unconditional in accordance with the terms thereof);

(d) Magic Stone, Kesterion and the Company entering into a settlement and release agreement and Magic Stone indicating its consent to the implementation of the Bond Restructuring, each on terms reasonably satisfactory to Kesterion;

(e) representations and warranties given by the Company having remained true and accurate, and not misleading in all material respects, as at the date of the Bond Restructuring Agreement and the Completion Date; and

(f) representations and warranties given by Kesterion having remained true and accurate, and not misleading in all material respects, as at the date of Bond Restructuring Agreement and the Completion Date.

The Bond Restructuring and the Rights Issue are inter-conditional and it is expected that the Bond Restructuring and the Rights Issue will be completed at or about the same time. As per the Settlement Agreement, Magic Stone has agreed to the restructuring of the Convertible Bonds (including the amendment to the terms thereof, redemption of the amended Convertible Bonds and issue of the New Bonds). Further, pursuant to the Settlement Agreement, Magic Stone shall not and shall cause the Receivers not to exercise the conversion rights attaching to the Convertible Bonds under the Kesterion Charge and shall not take further steps to enforce the Kesterion Charge pending the implementation of the Settlement Agreement. For further details, please refer to the section headed "Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone".

None of the conditions in paragraphs (a) and (b) above can be waived by Kesterion and the Company. If any of the conditions precedent is not satisfied or (in the case of the condition in paragraphs (c), (d), (e) and (f) only, waived by Kesterion and the Company, respectively in accordance with the Bond Restructuring Agreement on or before 15 April 2015, the Bond Restructuring Agreement shall automatically terminate without liability to any party, provided certain obligations under the Bond Restructuring Agreement shall continue in force following the termination of the Bond Restructuring Agreement. The termination of the Bond Restructuring Agreement shall be without prejudice to the rights of any party against the other parties for breach of the Bond Restructuring Agreement accrued prior to such termination.

As at the date of this announcement, other than paragraph (d), all the conditions precedent above have not been satisfied. Unless the Rights Issue and/or the Bond Restructuring having been terminated, it is expected that other than paragraph (c), all conditions precedent above would have been satisfied immediately prior to the commencement of the trading of the nil-paid Rights Shares. If the conditions precedent are not satisfied in accordance with the Bond Restructuring Agreement, the Rights Issue and the Bond Restructuring will not proceed.

Completion

Subject to the fulfillment of the conditions precedent, completion of the Bond Restructuring Agreement will take place on the second business day after the latter of (i) the last of the conditions set out in paragraph (a) or (b) above shall have been fulfilled or (ii) the date of the redemption notice issued pursuant to the Bond Restructuring Agreement, or such other date as the Company and Kesterion may agree.

Termination

If the conditions precedent above are not fulfilled or waived in accordance with the Bond Restructuring Agreement on or before 15 April 2015 (or such later date as the Company and Kesterion may agree) or if completion of the Bond Restructuring Agreement does not take place by 15 April 2015 (or such later date as the Company and Kesterion may agree), the Bond Restructuring Agreement shall be terminated automatically.

If Kesterion becomes aware at any time prior to completion of the Bond Restructuring Agreement that any of the representations and warranties provided by the Company in the Bond Restructuring Agreement is not true in any material respect, Kesterion may terminate the Bond Restructuring Agreement by notice to the Company.

Principal Terms of the New Bonds

Issuer: the Company

Subscriber: Kesterion

Principal amount: approximately US$140,000,000 (equivalent to approximately HK$1,092,000,000).

Form and denomination: The New Bonds will be issued in registered form and in the denomination of US$100,000 each and in integral multiples of US$100,000 thereof.

Maturity date: 5 years from the issue date

Coupon: 2.0% per annum payable in arrear semi-annually from the issue date.

Security: The New Bonds will be unsecured.

Conversion Price:

HK$0.50 per Conversion Share (subject to adjustment as mentioned below), which was determined after arm's length negotiations between the Company and Kesterion with reference to the recent market price of the Shares (at the time when the Bond Restructuring Agreement was entered into between the Company and Kesterion) and the net asset value per Share as at 31 March 2014 of HK$0.43, represents (i) a premium of approximately 16.28% over the net asset value per Share as at 31 March 2014 of HK$0.43; (ii) a premium of approximately 47.06% to the closing price of HK$0.34 per Share as quoted on the Stock Exchange on the Last Trading Day; (iii) a premium of approximately 47.06% to the average of the closing prices as quoted on the Stock Exchange for the last five trading days up to and including the Last Trading Day of HK$0.34 per Share; and (iv) a premium of approximately 51.52% to the average of the closing prices as quoted on the Stock Exchange for the last ten trading days up to and including the Last Trading Day of HK$0.33 per Share.

Conversion:

Bondholders have the right to convert their New Bonds into Conversion Shares at any time during the period from the date of issue of such New Bonds up to the maturity date of the New Bonds, in amounts of not less than a whole multiple of US$100,000, save that if at any time the outstanding principal amount of the New Bonds held by a Bondholder is less than US$100,000, or if a Bondholder intends to exercise the conversion rights attaching to the entire principal amount of all the New Bonds held by him, the Bondholder may convert the whole (but not part only) of such outstanding principal amount of the New Bonds.

Upon full conversion of the New Bonds into Conversion Shares (assuming no further issue of new Shares on or before the Record Date), a total of 2,184,000,000 Conversion Shares will be issued by the Company, representing:

(a) approximately 216.41% of the issued ordinary share capital of the Company as at the date of this announcement; and
(b) approximately 59.06% of the issued ordinary share capital of the Company as enlarged by the issue of the Rights Shares, Bonus Shares and Conversion Shares.

No conversion right may be exercised by a Bondholder, to the extent that, following such exercise, a Bondholder and parties acting in concert with it, taken together, will directly or indirectly, control or be interested in 29.90% or more of the entire issued Shares (or in such lower percentage as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer).

Each Bondholder shall exercise the conversion rights attaching to the New Bonds only if the allotment and issue of the Conversion Shares to such Bondholder pursuant to an exercise of the conversion right will not cause the Company to be in breach of the minimum public float requirement stipulated under Rule 11.23 of the GEM Listing Rules.

The Conversion Shares will be issued pursuant to a specific mandate to be granted to the Directors by the Shareholders at the EGM.

Transferability:

The New Bonds may be transferred to any person in whole multiples of US$100,000 (or such lesser amount as may represent the entire principal amount thereof).

Redemption and purchase:

The Company shall have the right, at its options, to redeem any portion (must be in whole multiples of US$100,000) of or the entire outstanding principal amount of all of the New Bonds held by such Bondholder anytime before the Maturity Date by giving the Bondholder a notice in writing at the 110% of the principal amount of the New Bonds. The date of redemption in respect of such outstanding amount shall be the date falling ten business days of the date of such notice. Upon serving the redemption notice the Bondholder shall not convert such portion of the New Bonds into Conversion Shares.

The Company shall redeem any New Bonds which remains outstanding on the maturity date of the New Bonds at its principal amount.

Cancellation:

Immediately upon redemption by the Company or purchase by the Company or any of its subsidiaries, the New Bonds so redeemed or purchased shall be cancelled. The New Bonds so cancelled shall not be re-issued or re-sold.

Adjustment to Conversion Price:

The Conversion Price is subject to adjustments upon the occurrence of, among other matters, subdivision or consolidation of Shares, capitalisation issues, rights issues and grant to Shareholders of options, warrants or other rights to subscribe for or purchase any Shares (depending on the subscription or purchase prices).

Voting rights and ranking:

Unless and until the Bondholders acquire the Conversion Shares upon conversion of the New Bonds, they will have no rights with respect to those Shares, including any voting rights or rights to receive any regular dividends or other distributions with respect to those Shares. Upon the issue and allotment, the Conversion Shares shall rank in all respects pari passu with all Shares in issue as at the date of allotment and issue.

Reasons for entering into the Bond Restructuring Agreement

The Group is principally engaged in exploration and exploitation of mining resources and trading of metals, natural resources and trading and distribution of beverage. Kesterion is an investment holding company.

In the event that the Bond Restructuring does not take place, the Company would be required to repay an amount of approximately US$201,474,359 (equivalent to approximately HK$1,571,500,000) to the holder of the Convertible Bonds upon maturity on 18 December 2018. In the event that Bond Restructuring takes place, (a) the principal amount and accrued interests of the New Bonds throughout the whole period up to maturity of the New Bonds would amount to US$154,000,000 (equivalent to approximately HK$1,201,200,000), which is approximately US$47,474,359 (equivalent to approximately HK$370,300,000) less than the repayment of the Convertible Bonds upon its maturity; and (b) the issue of New Bonds will have the effect that the maturity date will be extended to 5 years from the issue of the New Bonds. The Directors (excluding the non-executive Directors and the independent non-executive Directors whose opinion on the matter will be set forth in the circular after having been advised by the Independent Financial Adviser in this regard) consider that the terms and conditions of the Bond Restructuring Agreement and the transactions contemplated thereunder (including the redemption of the amended Convertible Bonds and the proposed issue of the New Bonds) are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

Application for Listing

The Convertible Bonds will not be listed on the Stock Exchange or any other stock exchange. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

Listing Rules Implications

Under the GEM Listing Rules, Kesterion, being a substantial shareholder of the Company, is a connected person of the Company. Accordingly, the Bond Restructuring contemplated under the Bond Restructuring Agreement constitute connected transactions of the Company under Chapter 20 of the GEM Listing Rules and are subject to the approval of the Independent Shareholders at the EGM by way of poll.

UPDATE ON ENFORCEMENT OF CHARGE OVER THE SHARES AND CONVERTIBLE BONDS HELD BY SUBSTANTIAL SHAREHOLDER AND CONNECTED TRANSACTIONS INVOLVING SETTLEMENT AGREEMENT WITH MAGIC STONE

As disclosed in the Previous Announcements, Kesterion previously created the Kesterion Charge over 252,153,400 Shares and the US$201,474,359 (equivalent to approximately HK$1,571,500,000) principal amount of the Convertible Bonds held by Kesterion in favour of China Shipbuilding as a continuing security to guarantee the due and punctual performance and observance of certain contractual obligations and liabilities by certain subsidiaries of the Company under the Trade Contracts in relation to the trading of fuel oil and trading of the coal. In view of the overdue payables by the Company to China

Shipbuilding and safeguarding the interests in connection with the Trade Contracts, China Shipbuilding had previously appointed two (2) Receivers to exercise all the powers of a receiver given by the terms of the Kesterion Charge.

The Company has since been informed that China Shipbuilding has assigned its rights with respect to the Kesterion Charge and the payables under the Trade Contracts to Magic Stone on 7 November 2014. Following such assignment, the Company has reached settlement with Magic Stone on the terms of repayment on 21 November 2014.

Based on information available to the Company, Magic Stone and its ultimate beneficial owners (being Mr. Yang Dongjun and Mr. Bin Jing) are independent of China Shipbuilding, the Company and its connected persons. Magic Stone does not hold any interests in the securities of the Company, save for the interests in the Kesterion Charge and the 80,000,000 new Shares to be issued under the Settlement Agreement as disclosed below.

With a view to settling the various overdue liabilities including interest charges in aggregate net amount of approximately HK$236 million payable by the Group to Magic Stone, on 21 November 2014, the Company and certain of its subsidiaries entered into the Settlement Agreement with Magic Stone and Kesterion in respect of the complete and full settlement of the claims, liabilities and obligations arising from the Trade Contracts. Pursuant to which, amongst others, the Group has conditionally agreed to settle the liabilities under the Trade Contracts by way of the following arrangements:

(a) the Group shall pay Magic Stone RMB51.88 million (equivalent to approximately HK$64.85 million) in cash before 28 February 2015;

(b) the Group shall pay Magic Stone US$17 million (equivalent to approximately HK$132.6 million) in cash before 28 February 2015; and

(c) the Company shall issue and allot 80,000,000 new Shares each fully paid at an issue price of HK$0.50 per Share to Magic Stone after the completion of the Rights Issue and before 28 February 2015.

The Settlement Agreement is subject to the condition precedent that all applicable laws and regulations in Hong Kong (including the GEM Listing Rules) are complied with. The Rights Issue is conditional upon the Bond Restructuring Agreement becoming unconditional in accordance with the terms thereof (and the entering into the Settlement Agreement is one of the conditions precedent under the Bond Restructuring Agreement).

The payment obligations in respect of paragraph (a) above will be financed by the Group's internal resources and the payment obligations in respect of paragraph (b) will be financed by part of the net proceeds of the Rights Issue.

Pursuant to the Settlement Agreement, Magic Stone (a) has undertaken that Magic Stone shall not and shall cause the Receivers not to exercise the voting rights attaching to 252,153,400 Shares and the conversion rights attaching to the Convertible Bonds under the Kesterion Charge and shall not take any further enforcement action in relation to the Kesterion Charge (including the exercise of any voting rights) pending the implementation of the Settlement Agreement; and (b) has consented to the restructuring of the Convertible Bonds (including the amendment to the terms thereof, redemption of the

amended Convertible Bonds and issue of the New Bonds).

As Magic Stone is entitled to exercise the voting rights of the Shares subject to the Kesterion Charge, it is a substantial shareholder of the Company for purposes of the GEM Listing Rules and therefore a connected person of the Company under the GEM Listing Rules. Accordingly, the entering into of the Settlement Agreement and the transactions contemplated thereunder (including the issue of the 80,000,000 new Shares) constitute a connected transaction for the Company and given that the applicable percentage ratios in respect of that exceed 5% and HK$10,000,000, it is subject to the approval of the Independent Shareholders at the EGM. Magic Stone will abstain from voting on the ordinary resolution approving the Settlement Agreement and the transactions contemplated thereunder. The Company will seek a specific mandate at the EGM to authorise the Directors to allot and issue the new 80,000,000 Shares.

The purpose of the Settlement Agreement is to ascertain and settle various overdue payables of the Group under the Trade Contracts in a basket agreement. As disclosed in the Previous Announcements, the financial assistance received by the Group from Kesterion through the Kesterion Charge was not secured by the assets of the Group. Accordingly, the Kesterion Charge and its consequential release pursuant to the terms of the Kesterion Charge and the Settlement Agreement are fully exempt from Shareholders' approval, annual review and all disclosure requirements under Chapter 20 of the GEM Listing Rules.

Based on the above, the Directors (other than the non-executive Directors and the independent non-executive Directors who will express their view after considering the advice from the Independent Financial Adviser) consider that the Settlement Agreement is fair and reasonable and on normal commercial terms, and the entering into of the Settlement Agreement is in the interests of the Company and the Shareholders as a whole.

Application for listing

The Company will apply to the Stock Exchange for the listing of and permission to deal in, New Shares to be issued and allotted pursuant to the Settlement Agreement.

Information on the Company and Magic Stone

The Group is principally engaged in exploration and exploitation of mineral resources and trading of coal, metals, bunker fuel and beverages.

Magic Stone is an investment holding company incorporated in the Cayman Islands and is owned as to 70% by Mr. Yang Dongjun and 30% by Mr. Jing Bin.

Issue Price

The issue price of HK$0.50 for the 80,000,000 new Shares represents:

(i) a premium of approximately 47.06% over the closing price of HK$0.34 per Share as quoted on the Stock Exchange on 21 November 2014, being the date of the

Settlement Agreement; and

(ii) a premium of approximately 47.06% over the average closing price of HK$0.34 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Settlement Agreement.

The issue price was arrived at after arm's length negotiation between the Company and Magic Stone with reference to the trading prices of the Shares on the date of the Settlement Agreement and the average closing price of the last five consecutive trading days immediately prior to the date of the Settlement Agreement. The Directors consider that the terms and conditions of the Settlement Agreement (including the issue price of the 80,000,000 new Shares) are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

SHAREHOLDING OF THE COMPANY

The table below sets out the Company's shareholding structure as at the date of this announcement, upon completion of the Rights Issue and Bonus Issue, the conversion of the New Bonds and the issue of the 80,000,000 new Shares pursuant to the Settlement Agreement under the scenarios as further detailed below (see also "Notes" below):

Scenario 1

Assuming no outstanding Share Option is exercised, no Qualifying Shareholders (other than Kesterion) takes up any of the Rights Shares and the Underwriters take up the Rights Shares to the maximum extent

	As at the date of this announcement		Immediately after completion of the Rights Issue and the Bonus Issue		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and conversion of New Bonds subject to 29.90% restriction		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and full conversion of New Bonds without 29.90% restriction
	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %
Kesterion, Ms. Eva Wong and parties acting in concert
Kesterion (See Notes (1) and (3))	272,558,400	27.01%	452,347,860	29.88%	452,347,860	28.38%	486,547,860	29.89%	2,636,347,860	69.79%
Ms. Eva Wong (See Notes (1) and (2))	271,200	0.03%	271,200	0.02%	271,200	0.02%	271,200	0.01%	271,200	0.01%
Sub-total	272,829,600	27.04%	452,619,060	29.90%	452,619,060	28.40%	486,819,060	29.90%	2,636,619,060	69.80%
Mr. Cheung Hung Man	116,295,000	11.52%	116,295,000	7.68%	116,295,000	7.30%	116,295,000	7.14%	116,295,000	3.08%
Mr. Liang Tong Wei	100,000,000	9.91%	100,000,000	6.61%	100,000,000	6.27%	100,000,000	6.14%	100,000,000	2.64%
CL Securities	-	-	324,802,580	21.46%	324,802,580	20.38%	324,802,580	19.95%	324,802,580	8.60%
Magic Stone	-	-	-	-	80,000,000	5.02%	80,000,000	4.91%	80,000,000	2.12%
Public	520,059,480	51.53%	520,059,480	34.35%	520,059,480	32.63%	520,059,480	31.96%	520,059,480	13.76%
Total	1,009,184,080	100.00%	1,513,776,120	100.00%	1,593,776,120	100.00%	1,627,976,120	100.00%	3,777,776,120	100.00%

Scenario 2

Assuming no outstanding Share Option is exercised and all Qualifying Shareholders takes up their respective allotment of Rights Shares in full

	As at the date of this announcement		Immediately after completion of the Rights Issue and the Bonus Issue		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and conversion of New Bonds subject to 29.90% restriction		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and full conversion of New Bonds without 29.90% restriction
	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %
Kesterion, Ms. Eva Wong and parties acting in concert
Kesterion (See Notes (1) and (3))	272,558,400	27.01%	408,837,600	27.01%	408,837,600	25.65%	504,837,600	29.88%	2,592,837,600	68.63%
Ms. Eva Wong (See Notes (1) and (2))	271,200	0.03%	406,800	0.03%	406,800	0.03%	406,800	0.02%	406,800	0.01%
Sub-total	272,829,600	27.04%	409,244,400	27.04%	409,244,400	25.68%	505,244,400	29.90%	2,593,244,400	68.64%
Mr. Cheung Hung Man	116,295,000	11.52%	174,442,500	11.52%	174,442,500	10.95%	174,442,500	10.32%	174,442,500	4.62%
Mr. Liang Tong Wei	100,000,000	9.91%	150,000,000	9.91%	150,000,000	9.41%	150,000,000	8.88%	150,000,000	3.97%
CL Securities	-	-	-	-	-	-	-	-	-	-
Magic Stone	-	-	-	-	80,000,000	5.02%	80,000,000	4.73%	80,000,000	2.12%
Public	520,059,480	51.53%	780,089,220	51.53%	780,089,220	48.94%	780,089,220	46.17%	780,089,220	20.65%
Total	1,009,184,080	100.00%	1,513,776,120	100.00%	1,593,776,120	100.00%	1689,776,120	100.00%	3,777,776,120	100.00%

Scenario 3

Assuming all outstanding Share Options are exercised and no Qualifying Shareholders (other than Kesterion) takes up any of the Rights Shares and the Underwriters take up the Rights Shares to the maximum extent (see note 6)

	As at the date of this announcement		Immediately after completion of the Rights Issue and the Bonus Issue		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and conversion of New Bonds subject to 29.90% restriction		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and full conversion of New Bonds without 29.90% restriction
	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %
Kesterion, Ms. Eva Wong and parties acting in concert
Kesterion (See Notes (1) and (3))	272,558,400	24.93%	490,027,600	29.88%	490,027,600	28.49%	524,027,600	29.88%	2,674,027,600	68.50%
Ms. Eva Wong (See Notes (1) and (2))	271,200	0.02%	271,200	0.02%	271,200	0.02%	271,200	0.02%	271,200	0.01%
Sub-total	272,829,600	24.95%	490,298,800	29.90%	490,298,800	28.51%	524,298,800	29.90%	2,674,298,800	68.51%
Mr. Cheung Hung Man	116,295,000	10.64%	116,295,000	7.09%	116,295,000	6.76%	116,295,000	6.63%	116,295,000	2.98%
Mr. Liang Tong Wei	100,000,000	9.15%	100,000,000	6.10%	100,000,000	5.81%	100,000,000	5.70%	100,000,000	2.56%
CL Securities	-	-	329,129,240	20.07%	329,129,240	19.14%	329,129,240	18.77%	329,129,240	8.43%
Magic Stone	-	-	-	-	80,000,000	4.56%	80,000,000	4.65%	80,000,000	2.05%
Share Option holders	84,012,480	7.69%	84,012,800	5.12%	84,012,800	4.89%	84,012,800	4.79%	84,012,800	2.15%
Public	520,059,480	47.57%	520,059,480	31.72%	520,059,480	30.24%	520,059,480	29.65%	520,059,480	13.32%
Total	1,093,196,880	100.00%	1,639,795,320	100.00%	1,719,795,320	100.00%	1,753,795,320	100.00%	3,903,795,320	100.00%

Scenario 4

Assuming all outstanding Share Options are exercised and all Qualifying Shareholders take up their respective allotment of Rights Shares in full (Note 6)

	As at the date of this announcement		Immediately after completion of the Rights Issue and the Bonus Issue		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and conversion of New Bonds subject to 29.90% restriction		Immediately after completion of the Rights Issue and the Bonus Issue and the issue of 80,000,000 new Shares and full conversion of New Bonds without 29.90% restriction
	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %	Number of shares	Approximate %
Kesterion, Ms. Eva Wong and parties acting in concert
Kesterion (See Notes (1) and (3))	272,558,400	24.93%	408,837,600	24.93%	408,837,600	23.78%	558,637,600	29.88%	2,592,837,600	66.42%
Ms. Eva Wong (See Notes (1) and (2))	271,200	0.02%	406,800	0.02%	406,800	0.02%	406,800	0.02%	406,800	0.01%
Sub-total	272,829,600	24.95%	409,244,400	29.95%	409,244,400	23.80%	559,044,400	29.90%	2,593,244,400	66.43%
Mr. Cheung Hung Man	116,295,000	10.64%	174,422,500	10.64%	174,442,500	10.14%	174,442,500	9.33%	174,442,500	4.47%
Mr. Liang Tong Wei	100,000,000	9.15%	150,000,000	9.15%	150,000,000	8.72%	150,000,000	8.02%	150,000,000	3.84%
CL Securities	-	-	-	-	-	-	-	-	-	-
Magic Stone	-	-	-	-	80,000,000	4.65%	80,000,000	4.28%	80,000,000	2.05%
Share Option holders	84,012,800	7.69%	126,019,200	7.69%	126,019,200	7.33%	126,019,200	6.74%	126,019,200	3.23%
Public	520,059,480	47.57%	780,089,220	47.57%	780,089,200	45.36%	780,089,220	41.73%	780,089,220	19.98%
Total	1,093,196,880	100.00%	1,639,795,320	100.00%	1,719,795,320	100.00%	1,869,595,320	100.00%	3,903,795,320	100.00%

Notes:
(1) The entire issued share capital of Kesterion is beneficially owned by Ms. Eva Wong, the spouse of Mr. Michael Koh Tat Lee.
(2) Ms. Eva Wong is interested in 271,200 Shares beneficially held by herself and 272,558,400 Shares held by Kesterion. Mr. Michael Koh Tat Lee is the husband of Ms. Eva Wong. By virtue of SFO, Mr. Michael Koh Tat Lee is deemed to be interested in the Ms. Eva Wong's interests in the Shares. Save for such deemed interests, Mr. Michael Koh Tat Lee does not hold any interests in the securities of the Company as at the date of this announcement.
(3) 252,153,400 Shares out of 272,558,400 Shares held by Kesterion are subject to the Kesterion Charge which was created in favour of China Shipbuilding. The Company has been informed that the rights under the Kesterion Charge has been assigned by China Shipbuilding to Magic Stone on 7 November 2014. Under the terms of the Kesterion Charge, Magic Stone is entitled to exercise the voting rights of the 252, 153,400 Shares subject to the Kesterion Charge. Save for the interests in Shares arising under the Kesterion Charge and the 80,000,000 new Shares to be issued under the Settlement Agreement, Magic Stone does not hold any interests in the securities of the Company. For further details, please refer to the section headed "Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone".
(4) Subject to the fulfillment of the conditions precedent to the Bond Restructuring Agreement, the Convertible Bonds will be amended and redeemed by the Company on the Completion Date.

Accordingly, the illustration of the potential changes to shareholding as a result of the Convertible Bonds has not been illustrated.

(5) Save as disclosed above, the Company has no other substantial shareholder and no Director is interested in any Shares or securities of the Company.

(6) As at the date of this announcement, the Company has 84,012,800 outstanding Share Options, representing 262,800 outstanding share options with the exercise price of HK$3.58 per Share granted under the Share Option Scheme 2002 and 83,750,000 outstanding share options with the exercise price of HK$0.50 per Share granted under the Share Option Scheme 2012. As at the date of this announcement, each of the exercise prices of the options granted under the Share Option Scheme 2002 and the Share Option Scheme 2012 were approximately 952.94 % and 47.06% higher than the average of the closing prices as quoted on the Stock Exchange for the last five trading days up to and including the date of this announcement, respectively. In this regard, it is unlikely that the holders of those Share Options will exercise those options. Assuming no further grant of Share Options under the Share Option Scheme 2012 by the Company and full exercise of the subscription rights attaching to the Share Options granted on and before the Record Date, an additional 25,203,840 Rights Shares and 16,802,560 Bonus Shares will be issued

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

The Board has established an Independent Board Committee comprising all the non-executive Directors and the independent non-executive Directors of the Company, to advise the Independent Shareholders as to (a) whether the terms of the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole; and (b) to advise the Independent Shareholders how to vote, after taking into account the advice from the Independent Financial Adviser. The Independent Board Committee has approved the appointment of Changjiang Corporate Finance (HK) Limited as the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders the fairness and reasonableness of the terms of the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement. The Independent Board Committee will formulate its views with respect to the terms of the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement after obtaining and considering the advice of the Independent Financial Adviser. The advice of the Independent Board Committee and the Independent Financial Adviser and other relevant information will be sent to the Shareholders in the circular to be issued by the Company.

PROPOSED CHANGE IN BOARD LOT SIZE

ARRANGEMENT ON ODD LOT TRADING

In order to facilitate the trading of odd lots (if any), the Company will arrange odd lot matching services during Thursday, 5 February 2015 to Tuesday, 3 March 2015 (both dates inclusive). Shareholders should note that matching of the sale and purchase of odd lots of

the Shares is on a best effort basis and successful matching of the sale and purchase of such odd lots is not guaranteed.

SHARE CERTIFICATES

All existing share certificates in board lot of 5,000 Shares will remain good evidence of the legal title to the Shares and continue to be valid for delivery, transfer, trading and settlement purposes. No new share certificates for existing Shareholders will be issued as a result of the change in the board lot size, and therefore no arrangement for free exchange of existing share certificates in board lot size 5,000 Shares to new share certificate in board lot size of 10,000 Shares is necessary.

SUPPLEMENTAL ANNOUNCEMENT

Reference is made to the announcements dated 30 October 2014 and 31 October 2014 in respect of the Company's appointment of an independent non-executive Director. The Company wishes to provide supplemental information as regards such appointment in that the disciplinary action carried out by the Institute was initiated under section 34(1A) of the Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong) against the practices of (i) having accepted application of exemption pursuant to section 141D of the predecessor Companies Ordinance (Chapter 32 of the Laws of Hong Kong) for the preparation of a private company's financial statements prior to obtaining written consents from all shareholders of such company; and (ii) failure to obtain sufficient appropriate audit evidence of the sales, purchases and inventories of such company.

RESUMPTION OF TRADING

OTHERS

The Prospectus Documents setting out details of the Rights Issue will be despatched to the Qualifying Shareholders on the Posting Date and the Prospectus will be despatched to the Non-Qualifying Shareholders for information only.

WARNING OF THE RISKS OF DEALING IN SHARES AND RIGHTS SHARES

The Rights Issue and the Bond Restructuring are inter-conditional. The Rights Issue is also conditional, inter alia, upon the fulfillment of the conditions set out under the sections headed "Underwriting Agreement – Conditions of the Rights Issue and the Bonus Issue" and "Connected transactions involving the restructuring of Convertible Bonds and issue of new convertible bonds – Conditions Precedent" of this announcement. Accordingly, the Rights Issue and the Bonus Issue may or may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue could not become unconditional and may not proceed. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

"Acceptance Date"

the latest date on which the Rights Shares are accepted and paid, which is expected to be Tuesday, 27 January 2015 (or such other date as the Underwriters and the Company may agree from time to time);

"Adjusted Subscription Price"

has the meaning ascribed to it in the section headed "Rights Issue with Bonus Issue – Subscription Price";

"associate(s)"

has the meaning ascribed thereto under the GEM Listing Rules;

"Board"

the board of Directors;

"Bond Restructuring"

the proposed restructuring of the terms of the Convertible Bonds in accordance with the terms of the Bond Restructuring Agreement comprising (i) the amendment to the terms of the Convertible Bonds to grant the Company a right to redeem all the outstanding Convertible Bonds at a redemption price of US$140,000,000 (equivalent to approximately HK$1,092,000,000), (ii) the redemption of such amended Convertible bonds pursuant to such redemption right; and (iii) the issue of the New Bonds in satisfaction and cancellation of the Redemption Amount payable by the Company following such

"Bond Restructuring Agreement"

"Bondholder(s)"

"Bonus Issue"

"Bonus Share(s)"

"Business Day"

"CCASS"

"China Shipbuilding"

"CL Securities"

redemption;

the conditional debt restructuring agreement dated 22 September 2014 (as amended by a supplemental agreement on 21 November 2014) entered into between the Company and Kesterion, in respect of the Bond Restructuring;

Holder(s) of the New Bonds;

the proposed issue of Bonus Shares on the basis of two Bonus Shares for every three Rights Shares taken up under the Rights Issue;

New Shares to be allotted and issued pursuant to the Bonus Issue, being not less than 201,836,816 Bonus Shares (assuming no outstanding Share Options are exercised, no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and no more than 218,639,376 Bonus Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date);

any day (excluding Saturdays, Sundays and a day on which a tropical cyclone warning signal No. 8 or above or a black rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 4:00 p.m.) on which banks generally are open for business in Hong Kong;

the Central Clearing and Settlement System established and operated by HKSCC;

China Shipbuilding Industrial Complete Equipment and Logistics Company Limited (中船工業成套物流有限公司), a company established in the PRC, which is a wholly owned subsidiary of China State Shipbuilding Corporation (中國船舶工業集團有限公司). China State Shipbuilding Corporation is a state-owned enterprise in the PRC;

Cheong Lee Securities Limited, a company

"Companies (WUMP) Ordinance"
incorporated in Hong Kong with limited liability;
Companies (Winding Up and Miscellaneous Provisions) Ordinance, Chapter 32 of the Laws of Hong Kong;

"Company"
Pan Asia Mining Limited, a company incorporated in Cayman Islands with limited liability, the shares of which are listed on the Growth Enterprise Market of the Stock Exchange;

"Completion Date"
completion of the Bond Restructuring Agreement in accordance with the terms and conditions of the Bond Restructuring Agreement;

"connected person(s)"
has the meaning ascribed thereto under the GEM Listing Rules;

"Convertible Bonds"
the ten-year unsecured, non-interests bearing convertible bonds issued to Kesterion by the Company on 18 December 2008, the outstanding principal amount of which is US$201,474,359 (equivalent to approximately HK$1,571,500,000) as at the date of this announcement;

"Conversion Price"
the price at which new Shares will be issued upon the conversion of the New Bonds which will initially be HK$0.50 per Conversion Share and will be subject to adjustment in the manner provided for in the terms and conditions of the New Bonds;

"Conversion Shares"
new Shares falling to be issued and allotted upon exercise of the conversion rights attaching to the New Bonds;

"Director(s)"
director(s) of the Company;

"EGM"
an extraordinary general meeting of the Company to be convened to approve, among other things, the Share Capital Increase, the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring and the Settlement Agreement;

"GEM Listing Rules"
the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange;

“Group” the Company and its subsidiaries;

“HK$” Hong Kong dollar, the lawful currency of Hong Kong;

“HKSCC” Hong Kong Securities Clearing Company Limited;

“Hong Kong” the Hong Kong Special Administrative Region of the PRC;

“Independent Board Committee” an independent board committee of the Company comprising the non-executive Directors and the independent non-executive Directors which has been established to advise the Independent Shareholders on the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement;

“Independent Financial Adviser” Changjiang Corporate Finance (HK) Limited, the independent financial adviser appointed by the Independent Board Committee for the purpose of advising the Independent Board Committee and the Independent Shareholders on the Rights Issue, the Bonus Issue, the Bond Restructuring and the Settlement Agreement;

“Independent Shareholders” shareholders of the Company, other than Kesterion, Ms. Eva Wong, their associates and any Shareholders who are involved or interested in the transactions regarding the Rights Issue, the Bonus Issue, the Underwriting, the Bond Restructuring, Settlement Agreement and/or the Kesterion Charge;

“Kesterion” Kesterion Investments Limited, a company incorporated in the British Virgin Islands, which is wholly and beneficially owned by Ms. Eva Wong and a substantial shareholder of the Company;

“Kesterion Charge” a security over 252,153,400 Shares and the Convertible Bonds held by Kesterion created in favour of China Shipbuilding pursuant to the security document dated 13 March 2013 and a supplemental and amendment deed dated 11 October 2013 entered into between Kesterion and China Shipbuilding. Such security was assigned to

“Last Trading Day”
“Listing Committee”
“Magic Stone”
“New Bonds”
“Non-Qualifying Shareholders”
“NPR”
“Overseas Shareholder(s)”
“PAL(s)”
“Posting Date”
“PRC”
“Previous Announcements”

Magic Stone;
22 September 2014, being the date of the Underwriting Agreement;
has the meaning ascribed thereto under the GEM Listing Rules;
Magic Stone Fund (China), a company incorporated in Cayman Islands with limited liability;
the five-year 2.0% convertible bonds in principal amount of US$140 million to be issued by the Company and to be created and constituted pursuant to the Bond Restructuring;
those Overseas Shareholders whom the Directors, based on legal opinions provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place;
nil-paid Rights Shares;
Shareholder(s) whose name(s) appear(s) on the register of members of the Company at the close of business on the Record Date and whose address(es) as shown on such register is (are) outside Hong Kong;
the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue;
Tuesday, 13 January 2015 or such other date as the Underwriters may agree in writing with the Company, as the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus for information only (as the case may be) to the Non-Qualifying Shareholders;
the People’s Republic of China;
announcements of the Company dated 13 March 2013, 11 October 2013 and 29 July 2014;

"Prospectus"
the prospectus to be despatched to the Shareholders containing details of the Rights Issue and the Bonus Issue;

"Prospectus Documents"
the Prospectus and the PAL;

"Qualifying Shareholders"
Shareholders, other than the Non-Qualifying Shareholders;

"Receivers"
two (2) receivers appointed by China Shipbuilding to exercise all the powers of a receiver given by the terms of the Kesterion Charge;

"Record Date"
Monday, 12 January 2015 (or such other date as the Underwriters may agree in writing with the Company), as the date by reference to which entitlements to the Rights Issue are expected to be determined;

"Redemption Amount"
the redemption amount to be satisfied and cancelled for the purpose of the redemption of the amended Convertible Bonds;

"Redemption Right"
the rights to redeem the amended Convertible Bonds under the Bond Restructuring Agreement;

"Rights Issue"
the proposed issue by way of rights on the basis of three Rights Shares for every ten Shares in issue and held on the Record Date at the Subscription Price on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents;

"Rights Share(s)"
new Shares to be issued and allotted under the Rights Issue, being not less than 302,755,224 Rights Shares (assuming no outstanding Share Options are exercised and no further issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date) and no more than 327,959,064 Shares (assuming all the outstanding Share Options are exercised and no other issue of new Shares and no conversion of the Convertible Bonds on or before the Record Date);

"RMB"
Renminbi, the lawful currency of the PRC;

"SFC"
the Securities and Futures Commission of Hong Kong;

"SFO"
the Securities and Futures Ordinance

“Settlement Agreement”

(Chapter 571 of the Laws of Hong Kong);

the settlement agreement dated 21 November 2014 entered into between the Company, certain of its subsidiaries and Magic Stone. Please refer to the section headed “Update on enforcement of charge over the Shares and Convertible Bonds held by substantial Shareholder and connected transactions involving Settlement Agreement with Magic Stone”;

“Share(s)”

ordinary share(s) of HK$0.50 each in the share capital of the Company;

“Share Capital Increase”

the increase in the authorised share capital of the Company from HK$1,000,000,000.00 divided into 2,000,000,000 Shares to HK$2,500,000,000.00 divided into 5,000,000,000 Shares by the creation of 3,000,000,000 new Shares to be proposed at the EGM;

“Share Options”

outstanding share options granted under the Share Option Scheme 2002 and Share Option Scheme 2012;

“Share Option Scheme 2002”

the share option scheme of the Company adopted on 25 April 2002;

“Share Option Scheme 2012”

the share option scheme of the Company adopted on 30 July 2012;

“Share Registrar”

the branch share registrar of the Company in Hong Kong, being Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong;

“Shareholder(s)”

holder(s) of Shares;

“Stock Exchange”

The Stock Exchange of Hong Kong Limited;

“Subscription Price”

HK$0.50 per Rights Share;

“subsidiary”

has the meaning ascribed thereto under the GEM Listing Rules;

“substantial shareholder”

has the meaning ascribed thereto under the GEM Listing Rules;

“Takeovers Code”

the Hong Kong Code on Takeovers and Mergers;

“Trade Contracts”

a trade contract dated 13 March 2013 and two trade contracts dated 6 May 2013

“Underwriters”
“Underwriting”
“Underwriting Agreement”

“Underwritten Shares”

“Untaken Shares”

“US$”

“%” or “per cent.”

entered into by certain subsidiaries of the Group with China Shipbuilding in relation to trading of fuel oil and coal. Such trade contracts were assigned to Magic Stone;

Kesterion and CL Securities;

the underwriting by the Underwriters in respect of the Rights Issue;

the underwriting agreement dated 22 September 2014 (as amended by a supplemental agreement on 21 November 2014) entered into between the Company and the Underwriters in relation to the underwriting arrangement in respect of the Rights Issue;

all the Rights Shares (other than the Rights Shares to be subscribed by Kesterion pursuant to its irrevocable undertaking);

Rights Shares not taken up at or before 4:30 p.m. on the date of acceptance of, and payment for, the Rights Shares;

United States dollar, the lawful currency of United States; and

per cent.

By Order of the Board
Pan Asia Mining Limited
CHAN Ming Cho, Joe
Company Secretary

Hong Kong, 23 November 2014

As at the date of this announcement, the Board comprises two executive Directors, Mr. Michael Koh Tat Lee and Mr. Cheung Hung Man, one non-executive Director, Mr. Liang Tong Wei, and two independent non-executive Directors, Mr. Chu Hung Lin, Victor, Mr. Tong Wan Sze and Mr. Fung Kwok Leung.

For the purpose of illustration only, the amounts denominated in US$ in this announcement are translated into HK$ at the rate of US$1 = HK$7.8. Such translation should not be construed as a representation that the currency could actually be converted into HK% at that rate or at all.

This announcement, for which the Directors jointly and individually accept full responsibility, including the particulars given in compliance with the GEM 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 in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the page of “Latest Company Announcement” on the GEM website for at least seven days from the date of its positing.

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Hephaestus Holdings Limited — Capital/Financing Update 2014

51310_rns_2014-11-23_1cfbd38c-48fd-42c1-8b7f-965b5cad4a04.pdf

PAN ASIA MINING LIMITED 宫亞礦業有限公司

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

RIGHTS ISSUE AND BONUS ISSUE

Listing Rule Implications

CONNECTED TRANSACTIONS INVOLVING THE RESTRUCTURING OF CONVERTIBLE BONDS AND THE PROPOSED ISSUE OF NEW BONDS

UPDATE ON ENFORCEMENT OF CHARGE OVER THE SHARES AND CONVERTIBLE BONDS HELD BY SUBSTANTIAL SHAREHOLDER AND CONNECTED TRANSACTIONS INVOLVING SETTLEMENT AGREEMENT WITH MAGIC STONE

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

PROPOSED CHANGE IN BOARD LOT SIZE

SUPPLEMENTAL ANNOUNCEMENT

RESUMPTION OF TRADING

GENERAL

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

RIGHTS ISSUE WITH BONUS ISSUE

Issue statistics

Qualifying Shareholders

Closure of register of members

Rights of Overseas Shareholders

Subscription Price

Basis of provisional allotment

Fractions of Rights Shares and Bonus Shares

Status of the Rights Shares and Bonus Issue

No application for excess Rights Shares

Share certificates for the Rights Issue and the Bonus Issue

Application for listing

Irrevocable Undertaking from Kesterion

Conditions of the Rights Issue

Termination of the Underwriting Agreement

Listing Rule Implications

EXPECTED TIMETABLE

REASONS FOR THE RIGHTS ISSUE AND BONUS ISSUE AND USE OF PROCEEDS

FUND RAISING EXERCISES OF THE COMPANY

CONNECTED TRANSACTIONS INVOLVING THE RESTRUCTURING OF CONVERTIBLE BONDS AND THE PROPOSED ISSUE OF NEW BONDS

The Bond Restructuring Agreement

Principal terms of the Bond Restructuring Agreement

Conditions Precedent

Completion

Termination

Principal Terms of the New Bonds

Conversion Price:

Conversion:

Transferability:

Redemption and purchase:

Cancellation:

Adjustment to Conversion Price:

Voting rights and ranking:

Reasons for entering into the Bond Restructuring Agreement

Application for Listing

Listing Rules Implications

UPDATE ON ENFORCEMENT OF CHARGE OVER THE SHARES AND CONVERTIBLE BONDS HELD BY SUBSTANTIAL SHAREHOLDER AND CONNECTED TRANSACTIONS INVOLVING SETTLEMENT AGREEMENT WITH MAGIC STONE

Application for listing

Information on the Company and Magic Stone

Issue Price

SHAREHOLDING OF THE COMPANY

Scenario 1

Scenario 2

Scenario 3

Scenario 4

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

PROPOSED CHANGE IN BOARD LOT SIZE

ARRANGEMENT ON ODD LOT TRADING

SHARE CERTIFICATES

SUPPLEMENTAL ANNOUNCEMENT

RESUMPTION OF TRADING

OTHERS

WARNING OF THE RISKS OF DEALING IN SHARES AND RIGHTS SHARES

DEFINITIONS

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Hephaestus Holdings Limited Capital/Financing Update 2014