Hephaestus Holdings Limited — M&A Activity 2014

Aug 11, 2014

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 宴亞礦業有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8173)

MEMORANDUM OF UNDERSTANDING IN RELATION TO POSSIBLE ACQUISITIONS

This announcement is made by the Company pursuant to the disclosure obligation under the Inside Information Provisions (as defined in the GEM Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and Rule 17.10 of the GEM Listing Rules.

The Board is pleased to announce that after trading hours on 11 August 2014, the Purchaser (being an indirect wholly owned subsidiary of the Company) and the Vendor entered into the MOU, pursuant to which the Purchaser agrees to acquire or procures its associate(s) to acquire and the Vendor agrees to sell the Target Companies by stages subject to the entering into formal agreements in connection therein. The Target Companies are principally engaged in coal mining business in Indonesia.

Pursuant to the MOU, the Purchaser is required to pay to the Vendor a sum of US$1,000,000 as Earnest Money for furtherance the negotiations in relation to the Proposed Acquisitions upon the signing of the MOU.

The MOU may or may not lead to the entering into of any definitive agreement(s) for the Proposed Acquisitions. The Company will make further announcement(s) as and when appropriate and comply with all other applicable requirements under the GEM Listing Rules. As the Proposed Acquisitions may or may not be materialised, shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

This announcement is made by the Company pursuant to the disclosure obligation under the Inside Information Provisions (as defined in the GEM Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and Rule 17.10 of the GEM Listing Rules.

The Proposed Acquisitions

The Board is pleased to announce that after trading hours on 11 August 2014, the Purchaser (being an indirect wholly owned subsidiary of the Company) and the Vendor entered into the MOU, pursuant to which the Purchaser agrees to acquire or procures its associate(s) to acquire and the Vendor agrees to sell the Target Companies by stages subject to the entering into formal agreements in connection therein. The parties agreed that the Proposed Acquisitions will be conducted in stages in accordance with relevant law and the exploitation schedule of the Vendor but the terms for acquisition of each Target Company will be discussed on individually.

---

The Vendor and the Target Companies are principally engaged in coal mining business in Indonesia. The Vendor and the Target Companies are the legal owners of certain coal mines located in East Kalimantan and Central Kalimantan, with an approximate area of 13,000 hectares. The Vendor estimates that total coal reserves fulfilling economic exploitation conditions amount to approximately 60 million tons and the Vendor guarantees that total production of such coal mines will reach 100,000 tons or above per month from December 2014.

To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, the Vendor and the Target Companies (and their ultimate beneficial owners) are not connected persons (as defined under the GEM Listing Rules) of the Company and are independent third parties of the Company and its connected persons.

Earnest Money

Pursuant to the MOU, the Purchaser is required to pay to the Vendor a sum of US$1,000,000 as Earnest Money for furtherance the negotiations in relation to the Proposed Acquisitions upon the signing of the MOU. Such Earnest Money has been wholly settled by deducting and transferring the same amount from the coal purchase deposit temporarily held by the Vendor.

Termination

In the event that no definitive agreement for any of the Proposed Acquisitions is entered into by the relevant parties within three months of the signing of the MOU (or extended period as may be mutually agreed between the Vendor and the Purchaser by entering into supplemental memorandum of understanding), the Vendor shall immediately and unconditionally refund the Earnest Money to the Purchaser and the MOU shall be automatically terminated.

The MOU is governed by the laws of Indonesia.

The MOU may or may not lead to the entering into of any definitive agreement(s) for the Proposed Acquisitions. The Company will make further announcement(s) as and when appropriate and comply with all other applicable requirements under the GEM Listing Rules. As the Proposed Acquisitions may or may not be materialised, shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

Definitions

Unless the contexts otherwise require, the following terms shall have the following meanings as used in this announcement:

"associate(s)" has the meaning ascribed thereto in the GEM Listing Rules

"Board" the board of Directors of the Company

"Company" Pan Asia Mining Limited, a company incorporated in Cayman Islands with limited liability whose shares are listed and traded on the Growth Market of The Stock Exchange (Stock Code : 8173)

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

"Earnest Money" the earnest money in the amount of US$1,000,000 payable by the Purchaser to the Vendor upon the signing of the MOU

---

3

“GEM Listing Rules” the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

“HK$” Hong Kong Dollar, the lawful currency of Hong Kong

“MOU” the legally binding memorandum of understanding dated 11 August 2014 entered into between the Vendor and the Purchaser in relation to the Proposed Acquisitions

“Proposed Acquisitions” the proposed by-stage acquisitions of shareholdings in the Target Companies by the Purchaser or its associate(s)

“Purchaser” PT. Yaozhong Resources, a company incorporated under the laws of Indonesia with limited liability, being an indirect wholly owned subsidiary of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Target Company(ies)” company(ies) owned by the Vendor

“US$” USD, the lawful currency of the United States of America

“Vendor” PT Sino International Mining Group, a company incorporated under the laws of Indonesia with limited liability

“%” per cent

By order of the Board

Pan Asia Mining Limited

KOH Tat Lee, Michael

Chairman

Hong Kong, 11 August 2014

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

This announcement, for which the Directors of the Company 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 seven days from the date of its posting.