Hephaestus Holdings Limited — M&A Activity 2011

Apr 29, 2011

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.

PAN ASIA MINING LIMITED 寰亞礦業有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8173)

MEMORANDUM OF UNDERSTANDING

IN RELATION TO

A POSSIBLE ACQUISITION

The Board is pleased to announce that on 29 April 2011 (after trading hours), the Company through its wholly-owned subsidiary, i.e. the Purchaser, and the Vendor signed the MOU in respect of the Possible Acquisition by the Purchaser of a direct or indirect 70% of the equity interest in the Target Company. The MOU is non-legally binding save for certain provisions relating to due diligence, exclusivity, representations and warranties, and general provisions.

The Board wishes to emphasize that as at the date of this announcement no definitive agreement in relation to the Possible Acquisition has been entered into and the Possible Acquisition may or may not proceed. Further announcement(s) in respect of the Possible Acquisition will be made by the Company in accordance with the relevant requirements of the GEM Listing Rules as and when appropriate.

As the Possible Acquisition may or may not proceed, shareholders of the Company and potential investors are advised to exercise caution when trading in the shares of the Company.

This announcement is made pursuant to Rule 17.10 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the "GEM Listing Rules").

MEMORANDUM OF UNDERSTANDING

The board of directors (the "Board") of Pan Asia Mining Limited (the "Company") is pleased to announce that on 29 April 2011 (after trading hours), the Company, through its wholly-owned subsidiary, Black Sand Enterprises Limited (the "Purchaser"), and Chinaway Capital Limited (the "Vendor") signed a memorandum of understanding (the "MOU") in respect of a possible acquisition (the "Possible Acquisition") by the Purchaser from the Vendor of a direct or indirect 70% of the equity interest in 懷集樂居礦業有限公司 (the "Target Company"). The MOU is non-legally binding save for certain provisions relating to due diligence, exclusivity, representations and warranties, and general provisions.

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The Target Company is a Sino-foreign equity joint venture established under the laws of the People's Republic of China (the "PRC") and engages in the business of exploiting two mines (the "Mines") in the Guangdong Province, PRC with a total mining area of about 0.3858 square kilometer. The Target Company is in production as of the date of this announcement.

The Vendor is a limited company incorporated in the British Virgin Islands and is at present holding a minority equity interest in the Target Company.

There is no definitive agreement in relation to the Possible Acquisition. Detailed terms (including the consideration) of the Possible Acquisition are still subject to on-going negotiations. Besides, it is anticipated that the Possible Acquisition will be conditional upon various matters including satisfactory due diligence review of the Target Company and the Mines and the completion, to the Purchaser's satisfaction, of the inter-group reorganization (the "Reorganization") to the effect that the Vendor will directly or indirectly own 70% of the equity interest in the Target Company upon completion of the Reorganization.

Pursuant to the MOU, the Vendor has undertaken to the Purchaser that for a period of 6 months from the date of the MOU (the "Exclusivity Period"), neither the Vendor nor any of its affiliates will directly or indirectly through any affiliate, officer, director, agent or otherwise, make, solicit, initiate or encourage submission of any proposal or offer (the "Proposal") from any third party (the "Person") relating to any investment in, or other significant transaction relating to, the Vendor's subsidiaries, the Target Company, its affiliates or the Mines.

The Vendor also agrees to (i) terminate immediately all on-going contacts or negotiations, if any, with respect to any Proposal (except with the Purchaser), and (ii) promptly notify the Purchaser when any Proposal, or any inquiry or contact with any Person with respect thereto, is made, and shall provide the Purchaser with such information regarding such Proposal, inquiry or contact as the Purchaser may request. The Exclusivity Period may be extended for a further period to be agreed in writing by the parties.

The Board wishes to emphasize that at the date of this announcement no definitive agreement in relation to the Possible Acquisition has been entered into and the Possible Acquisition may or may not proceed. Further announcement(s) in respect of the Possible Acquisition will be made by the Company in accordance with the relevant requirements of the GEM Listing Rules as and when appropriate.

As the Possible Acquisition may or may not proceed, shareholders of the Company and potential investors are advised to exercise caution when trading in the shares of the Company.

By order of the Board
Pan Asia Mining Limited
Wong Chung Yu, Denny
Chairman

Hong Kong, 29 April 2011

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As at the date of this announcement, the Board comprises three executive directors, Mr. Wong Chung Yu, Denny, Mr. Liu Junqing and Mr. Eng Wee Meng, one non-executive director, Mr. Yin Mark Teh-min, and three independent non-executive directors, Mr. Lai Kai Jin, Michael, Mr. Chu Hung Lin, Victor and Mr. Tong Wan Sze.

This announcement, for which the directors of the Company (the "Directors") collectively and individually accept full responsibility, includes 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 contained 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 7 days from the date of its posting.

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