Honbridge Holdings Limited - Proxy Solicitation & Information Statement 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Honbridge Holdings Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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HONBRIDGE HOLDINGS LIMITED 洪橋集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8137)

MAJOR DISPOSAL IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF HILL TALENT LIMITED

A letter from the Board is set out from pages 6 to 20 of this circular.

A notice convening the EGM to be held at Suite 2703, 27th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong on Thursday, 18 April 2013 at 10:00 a.m. is set out on pages 80 to 81 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Union Registrars Limited, 18/F., Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of posting and on the website of Honbridge Holdings Limited at www.8137.hk.

28 March 2013

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Appendix I – Financial information of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix II – Competent Person’s Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Appendix III – Statutory and general information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“Announcements” the announcements of the Company dated 4 January 2013 and 1 February 2013
“associate(s)” has the meaning ascribed to it in the GEM Listing Rules “2009 Acquisition” the acquisition of the Disposal Group from the Purchaser pursuant to the 2009 Equity Transfer Agreement which was completed on 24 March 2010
“2009 Announcement” the announcement of the Company in relation to the 2009 Acquisition dated 12 November 2009
“2009 Consideration Share(s)” 600,000,000 Shares issued by the Company to the Purchaser pursuant to the 2009 Equity Transfer Agreement
“2009 Convertible Note” the zero coupon HK$400,000,000 convertible note due 2015 issued by the Company under the 2009 Equity Transfer Agreement on 24 March 2010 for payment of part of the consideration under the 2009 Acquisition
“2009 Equity Transfer Agreement” the share transfer agreement dated 7 November 2009 entered into between the Company, the Purchaser and Shandong Zhi Xiang in relation to the 2009 Acquisition as more particularly set out under the section headed “The Equity Transfer Agreement dated 7 November 2009” of the 2009 Announcement
“2010 Circular” the circular of the Company in relation to the 2009 Acquisition dated 24 February 2010
“Board” the board of Directors
“Brazil” the Federative Republic of Brazil
“Brazil SAM Iron Mine” the 81 exploration licences held by SAM with over a total of 2,600 million tonnes of measured and indicated iron resources
“Business Day” a day on which banks in Hong Kong are open for general business in Hong Kong other than Saturday or Sunday or public holiday
“BVI” British Virgin Islands

DEFINITIONS

“Companies Law” Company Law (Cap. 22 of the Cayman Islands) “Company” Honbridge Holdings Limited, a company incorporated in the Cayman Islands with limited liabilities, the Shares of which are listed on GEM
“Competent Person” has the meaning ascribed to it in Chapter 18A of the GEM Listing Rules
“Competent Person’s Report” has the meaning ascribed to it in Chapter 18A of the GEM Listing Rules and is set out in Appendix II to this Circular
“Completion” the completion of the Disposal in accordance with the Disposal Agreement
“connected person(s)” has the meaning ascribed to it under the GEM Listing Rules “Consideration” the total consideration of HK$715 million payable by the Purchaser to be satisfied partly by cash, partly by the 2009 Convertible Note and partly by the Promissory Note
“Conversion Price” conversion price at HK$1.00 per Conversion Share, subject to adjustment upon the Shares becoming of a different nominal amount by way of consolidation or subdivision, issue of Shares by way of capitalisation of profits or reserves, and capital distribution by the Company
“Conversion Share(s)” new Share(s) which may fall to be issued by the Company upon the exercise of the conversion rights attached to the 2009 Convertible Note at the Conversion Price
“Convertible Note Repurchase” the proposed repurchase of the 2009 Convertible Note by the Company from the Purchaser for cancellation pursuant to the terms and conditions of 2009 Convertible Note and the Disposal Agreement, which will be made as exempt share purchase under the Repurchase Code
“Director(s)” the director(s) of the Company
“Disposal” the disposal of the entire issued share capital of Hill Talent by the Company pursuant to the terms and conditions of the Disposal Agreement
“Disposal Agreement” the disposal agreement dated 4 January 2013 (after trading hours) entered into between the Company as vendor and the Purchaser for the sale and purchase of the Sale Shares, which is subsequently amended and supplemented by the Supplemental Agreement

	DEFINITIONS
“Disposal Group”	Hill Talent and its subsidiaries
“Disposal Mines”	the 3 manganese mines located in Brazil which are currently held
	by Xianglan Brazil
“EGM”	the extraordinary general meeting of the Company to be
	convened and held to consider and, if thought appropriate, to
	approve, among other matters, the Disposal and the transactions
	contemplated thereunder
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company and its subsidiaries
“Hill Talent”	Hill Talent Limited, a company incorporated in the British Virgin
	Islands which in turn holds 66% of the issued share capital of
	Xianglan Brazil
“HK$”	the Hong Kong dollars, the lawful currency of Hong Kong
“HKFRS”	the Hong Kong Financial Reporting Standards
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Shareholder(s)”	Shareholder(s) of the Company other than the Purchaser, its
	associates and persons acting in concert with it and those who
	have material interests in the Disposal which are different from
	the interests of all other Shareholders
“JORC Code”	the Australasian Code for Reporting of Exploration Results,
	Mineral Resources and Ore Reserves prepared by the Joint Ore
	Reserves Committee of the Australian Institute of Mining and
	Metallurgy, Australian Institute of Geoscientists and Minerals
	Council of Australia (JORC), 2012 Edition
“Latest Practicable date”	26 March 2013, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Long Stop Date”	210 days from the date of signing of the Disposal Agreement or
	such other date as the parties to the Disposal Agreement may
	agree in writing

DEFINITIONS

“PRC”	the People’s Republic of China which, for the purposes of this
	circular excludes Hong Kong, the Macau Special Administrative
	Region of the PRC and Taiwan
“Promissory Note”	the three-year freely negotiable interest-free non-recourse secured
	promissory note in the amount of HK$203.85 million issued by
	the Purchaser for the purpose of settling part of the Consideration
“Purchaser”	Brilliant People Limited, a company incorporated in the BVI with
	limited liabilities
“Repurchase Code”	the Hong Kong Code on Share Repurchases
“ROMA”	Roma Oil and Mining Associates Limited
“Sale Shares”	the entire issued shares of Hill Talent
“SAM”	Sul Amerciana de Metais S.A., a company incorporated in Brazil
	and holding 81 iron exploration licences in Brazil
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Shandong Zhi Xiang”	Shandong Zhi Xiang Trading Limited, a company incorporated in
	the PRC
“Share(s)”	the share(s) of HK$0.001 each in the share capital of the Company
“Shareholder(s)”	the holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial Shareholder”	has the meaning ascribed to it under the GEM Listing Rules
“Supplemental Agreement”	the supplemental agreement dated 1 February 2013 (after trading
	hours) entered into between the Company as vendor and the
	Purchaser to amend certain terms and conditions of the Disposal
	Agreement
“Takeovers Codes”	the Codes on Takeovers and Mergers and Share Repurchases
“Transactions”	together, the Disposal and the Convertible Note Repurchase
“United States”	the United States of America
“US$”	the United States dollars, the lawful currency of the United States

DEFINITIONS

“Xianglan Brazil”	Xianglan Do Brasil Minercoção Ltd, a company incorporated in
	Brazil, which in turn holds the Disposal Mines, 95% of the issued
	share capital of Xianglan Mexico and the entire issued share
	capital of Xianglan Uruguay
“Xianglan Mexico”	Xianglan Minerales de Mexico, S.A. de C.V., a company
	incorporated in the United Mexican States
“Xianglan Uruguay”	Sinwon S.A., a company incorporated in the Oriental Republic of
	Uruguay
“%”	per cent

LETTER FROM THE BOARD

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HONBRIDGE HOLDINGS LIMITED 洪橋集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8137)

Executive Directors:

Mr. He Xuechu (Chairman) Mr. Liu Wei, William (Chief Executive Officer) Mr. Shi Lixin

Registered Office:

Scotia Centre 4th Floor, P.O. Box 2804 George Town, Grand Cayman Cayman Islands

Non-executive Directors:

Mr. Ang Siu Lun, Lawrence Mr. Yan Weimin

Independent non-executive Directors:

Mr. Chan Chun Wai, Tony Mr. Fok Hon Mr. Ma Gang

Principal place of business in Hong Kong: Suite 2703, 27th Floor Great Eagle Centre 23 Harbour Road Wanchai Hong Kong

28 March 2013

To the Shareholders

Dear Sir or Madam,

MAJOR DISPOSAL IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF HILL TALENT LIMITED

INTRODUCTION

Reference is made to the Announcements in relation to the Company’s disposal of the entire issued share capital of Hill Talent to the Purchaser for a total consideration of HK$715 million, of which (i) HK$111.15 million was settled by cash upon signing of the Supplemental Agreement on 1 February 2013; (ii) HK$400 million by the Convertible Note Repurchase; and (iii) HK$203.85 million by the Promissory Note.

LETTER FROM THE BOARD

This circular

The purpose of this circular is to provide you with, among other things, details of the Disposal and the Disposal Agreement, financial information on the Disposal Group, the Competent Person’s Report in relation to the Disposal Mines pursuant to Chapter 18A of the GEM Listing Rules, a notice of EGM and other information as under the GEM Listing Rules.

THE DISPOSAL AGREEMENT

The principal terms of the Disposal Agreement (including the terms as subsequently supplemented by the Supplemental Agreement dated 1 February 2013).

Date : 4 January 2013 Parties Vendor : The Company Purchaser : Brilliant People Limited, a company incorporated in the BVI with limited liabilities

The Purchaser is principally engaged in investment holding. As at the Latest Practicable Date, the Purchaser beneficially holds 440,568,000 Shares (being part of the 2009 Consideration Shares), representing approximately 7.09% of the total issued share capital of the Company as at the Latest Practicable Date. The Purchaser also holds the 2009 Convertible Note with an aggregate outstanding amount of HK$400 million, convertible into 400,000,000 Shares at the conversion price of HK$1.00 each. According to the information provided by the Purchaser, the Purchaser was owned as to 25% by each of four BVI companies, namely, Liye Holdings Limited, Vibrant City Limited, Wing Hing Enterprises Limited and Wisemove Holdings Limited, which is respectively held by Lu Huai Yi, Li Aihong, Zhao Meirong and Wang Ling respectively. Apart from holding 440,568,000 Shares and the 2009 Convertible Note, the Purchaser, these four BVI companies and their respective shareholder do not have any interest in the Company nor have any relationship with the Company or any of its connected persons. According to the Purchaser’s representations, these four BVI companies and its respective shareholder are not connected persons of the Company. To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, as at the Latest Practicable Date, apart from holding the said 440,568,000 Shares and the 2009 Convertible Note, the Purchaser and its ultimate beneficial owner(s) do not hold any shares and securities in the Company and are independent of the Company and its connected persons.

Assets to be disposed of:

The Sale Shares represent the entire issued share capital of Hill Talent as at the Latest Practicable Date. Hill Talent beneficially owns 66% of the issued share capital of Xianglan Brazil. Xianglan Brazil is the holder of three exploration licences for the Disposal Mines in the Bahia State of Brazil. Xianglan Brazil also directly holds 95% of the issued share capital of Xianglan Mexico and the entire issued share capital of Xianglan Uruguay. Xianglan Mexico is a mineral resources trading company and Xianglan Uruguay has not commenced any business since its incorporation. Further details of the exploration licences of Xianglan Brazil are set out in the section headed “Information on the Disposal Mines” below.

LETTER FROM THE BOARD

Consideration

The Consideration for the Disposal shall be HK$715 million, which shall be satisfied in the following manner as at Completion:

(i) as to HK$111.15 million in cash was paid by the Purchaser as refundable deposit upon signing of the Supplemental Agreement on 1 February 2013;
(ii) as to HK$400 million will be paid by way of the Convertible Note Repurchase upon Completion, i.e. by the Purchaser transferring to the Company the outstanding 2009 Convertible Note with an aggregate outstanding amount of HK$400 million for repurchase and cancellation at a price of HK$400 million; and
(iii) as to HK$203.85 million by way of the Purchaser issuing the Promissory Note in favour of the Company upon Completion.

At Completion, the 2009 Convertible Note will be cancelled in accordance with the Companies Law. Pursuant to the terms of the 2009 Convertible Note, the Company shall have the right to redeem any portion of the 2009 Convertible Note outstanding at an amount equals to the principal amount of the 2009 Convertible Note in its sole and absolute discretion at any time and from time to time prior to its maturity date. The Convertible Note Repurchase would therefore be made as exempt share repurchase under the Repurchase Code. The outstanding 2009 Convertible Note to be transferred to the Company shall be free from all encumbrances of any nature and together with all rights attaching to them as at the date of Completion, including the rights to receive in full all dividends and distributions, if any, declared, made or paid on or after the date of Completion. The outstanding 2009 Convertible Note will be cancelled following settlement of the repurchase by the Company.

Terms of the Promissory Note

Issuer	:	The Purchaser
Principal amount	:	HK$203.85 million
Interest	:	0%
Date of issue	:	Date of completion of the Disposal
Duration	:	Three years

As a collateral security for the performance of the Purchaser’s payment obligation under the Promissory Note or any part thereof, the Purchaser will enter into a security agreement with the Company under which the Purchaser grants to the Company a first position lien and security interest in a total number of 226,500,000 Shares owned by the Purchaser (“ Charged Shares ”) and the Purchaser further undertakes to the Company to deposit the Charged Shares with an escrow agent and instruct the escrow agent to sell the Charged Shares on the open market and apply the proceeds of sale of the Charged Shares for payment of the outstanding principal amount of the Promissory Note from time to time during the term of the Promissory Note. For the avoidance of doubt, once the Purchaser has delivered the Promissory Note to the Company and deposited the Charged Shares with the escrow agent, the Purchaser is deemed to have discharged its entire payment obligation under the Promissory Note. The entire proceeds of sale of

LETTER FROM THE BOARD

all the Charged Shares will be applied for payment of the principal amount of the Promissory Note in the manner set out above. Whether the proceeds of sale of all the Charged Shares are higher or lower than the principal amount of the Promissory Note, the Company shall be entitled to the entire sale proceeds.

Basis for the consideration

The Company acquired Hill Talent and Xianglan Brazil from the Purchaser under the 2009 Acquisition at the consideration of HK$880 million, of which HK$480 million was satisfied by the issue of 2009 Consideration Shares at an issue price of HK$0.80 each and the balance of HK$400 million by the issue of 2009 Convertible Note. Completion of the 2009 Acquisition took place on 24 March 2010. Details of the 2009 Equity Transfer Agreement are set out in the 2009 Announcement and 2010 Circular.

Subsequent to the 2009 Acquisition, apart from holding three (3) exploration licences of the Disposal Mines, Xianglan Brazil set up (i) Xianglan Mexico in Mexico for the export of mineral resources from Latin America to the PRC; and (ii) Xianglan Uruguay, in Uruguay. However, Xianglan Uruguay has not commenced business as at the Latest Practicable Date. Both Xianglan Mexico and Xianglan Uruguay have insignificant assets value as compared to Xianglan Brazil. The audited net assets of Xianglan Mexico and Xianglan Uruguay were approximately HK$0.2 million and HK$0.08 million respectively as at 31 December 2010 and the audited net liabilities of Xianglan Mexico and Xianglan Uruguay were approximately HK$0.09 million and HK$0.02 million respectively as at 31 December 2011. The unaudited net liabilities of Xianglan Mexico and Xianglan Urugay were HK$3.5 million and HK$0.03 million respectively as at 30 September 2012. As at the Latest Practicable Date, Xianglan Brazil has not yet commenced any large-scale exploration and other business. The audited net assets of Xianglan Brazil (including the revaluation of the exploration and evaluation assets of the three manganese exploration licences) were approximately HK$1,446 million and HK$1,056 million as at 31 December 2010 and 31 December 2011 respectively, and the unaudited net assets of Xianglan Brazil (including the revaluation of the exploration and evaluation assets of the three manganese exploration licences) were approximately HK$1,043 million as at 30 September 2012.

The Consideration for the Disposal has been negotiated between the parties on an arm’s length basis and taking into account (i) the consideration under the 2009 Equity Transfer Agreement, (ii) the past performance of the Disposal Group in the preceding years; (iii) the fact that there was not much development of the Disposal Group; and (iv) the future prospects and earning capacity of the Disposal Group. Further details of the Disposal Group are set out in the paragraph headed “Information on the Disposal Group” below.

Condition precedent

Completion of the Disposal Agreement (as amended and supplemented by the Supplemental Agreement) is subject to the fulfilment or waiver (as the case may) of the following conditions precedent:–

the Independent Shareholders having approved at the EGM the Disposal Agreement and the transactions contemplated thereunder in accordance with the GEM Listing Rules and other applicable laws, rules and regulations;
the approval of the Disposal Agreement and the transactions contemplated thereunder from the Stock Exchange, if necessary;

LETTER FROM THE BOARD

obtaining by the Purchaser of all necessary registrations, confirmations, consents and approvals in relation to the Disposal and the transactions contemplated under the Disposal Agreement; there having been no laws, regulations, orders, notices, judgments, restrictions materially or adversely affecting the Disposal and the transactions contemplated under the Disposal Agreement or the Disposal Group;
all representations, warranties and undertakings given by the parties under the Disposal Agreement remain true, accurate and not misleading in all aspects; and
there having been no material breach of the terms and conditions of the Disposal Agreement by the parties before the date of Completion.

In the event that the above Conditions have not been fulfilled or waived (other than Conditions (1), (2) and (3) which cannot be waived) by the Purchaser on or before the Long Stop Date or such later date as the Company and the Purchaser may agree, the Disposal Agreement shall lapse and thereafter neither party to the Disposal Agreement shall have any rights or obligations towards each other except in respect of any antecedent breach save that the refundable deposit shall be fully returned to the Purchaser without any interest within seven (7) working days from the Long Stop Date.

It is noted that conditions 4 and 5 under the Disposal Agreement are waivable. The Directors consider that such arrangement provides greater flexibility to the Group and is fair and reasonable and in the interest of the Company and the Shareholders as a whole. As at the date hereof, the parties have no intention to waive any of the conditions under the Disposal Agreement.

Completion

Completion shall take place on the completion date, being the seventh (7th) Business Day after the notification of fulfilment of the Conditions or being waived thereof (as the case may be) (or such other date as agreed by the parties).

Upon Completion, Hill Talent, Xianglan Brazil, Xianglan Mexico and Xianglan Uruguay will cease to be subsidiaries of the Company and the results of the Disposal Group will cease to be consolidated with those of the Company.

For the avoidance of doubt, the Purchaser shall maintain the voting rights attached to the Charged Shares at all times.

INFORMATION ON THE DISPOSAL GROUP

Hill Talent was acquired by the Company pursuant to the 2009 Equity Transfer Agreement at a consideration of HK$880 million. After completion of the 2009 Acquisition and as at the Latest Practicable Date, each of Hill Talent, Shandong Zhi Xiang and Shandong Lantong Trading Co., Ltd legally and beneficially own 66%, 21.89% and 12.11% of the equity interest in Xianglan Brazil respectively. Shandong Zhi Xiang and Shandong Lantong Trading Co. are companies incorporated in the PRC and do not hold any Shares as at the Latest Practicable Date. Xianglan Brazil is a company incorporated in Brazil. Its principal activities are the identification and exploration of mineral resources,

LETTER FROM THE BOARD

process, sales and import and export of mineral resources. The principal assets of Xianglan Brazil are the three exploration licences held by Xianglan Brazil for the Disposal Mines in the Bahia State of Brazil. Apart from holding these three exploration licenses, the 95% shareholding interest in Xianglan Mexico and the entire shareholding interest in Xianglan Uruguay, and operating assets of less than HK$2 million in total, Xianglan Brazil does not hold any other assets as at the Latest Practicable Date.

The Company settled the consideration of the 2009 Acquisition in the sum of HK$880 million by the allotment and issue of the 2009 Consideration Shares (including the Repurchase Shares) issued at a price of HK$0.80 per 2009 Consideration Share and the issue of the 2009 Convertible Note.

Information on the Disposal Mines

Xianglan Brazil holds three (3) exploration licences with a total area of 5,750 hectares and within this area, some of manganese mine ore has been exposed, some are shallow mines, trenches and some are abandoned mining holes and roads. The details of three (3) exploration licences are set out below:

	Exploration Licence	Area(hectares)	Duration
1.	DNPM NO.872.734/2006	2,000	29 December 2006 to 23 March 2013
2.	DNPM NO.872.958/2006	2,000	29 December 2006 to 23 March 2013
3.	DNPM NO.870.140/2007	1,750	23 April 2007 to 23 March 2013

As the Disposal Agreement has expressly set out the respective expiration date of the three (3) exploration licences, the Purchaser should have knowledge about the said expiration dates before it signed the Disposal Agreement. The Company therefore has no obligation on extension or making application for the extension of the exploration licences or the mining licences before Completion pursuant to the terms and conditions of the Disposal Agreement. Nevertheless, the Company cannot rule out the possibility that the Purchaser may institute legal proceedings against the Company on this matter.

Recent developments

Hill Talent is an investment holding company. Apart from holding 66% shareholding interest in Xianglan Brazil, it has not carried on any other business since its incorporation.

Subsequent to the 2009 Acquisition, as at the Latest Practicable Date, Xianglan Brazil has not yet commenced any large-scale exploration and other business.

The Disposal Mines

In compliance with the requirements under Chapter 18A of the GEM Listing Rules, the Company has engaged Roma Oil and Mining Associates Limited to prepare the Competent Person’s Report in relation to the Disposal Mines and the Competent Person is Mr. Philip A. Jones, chief geologist of ROMA. As confirmed by ROMA, the Competent Person satisfies the requirements of Rules 18A.21 and 18A.22 of the GEM Listing Rules. To the Directors’ best knowledge, information and belief, having made all reasonable enquiries, the Competent Person and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

LETTER FROM THE BOARD

The Competent Person’s Report prepared by the Competent Person is set out in Appendix II to this circular.

A summary of certain information relating to the Disposal Mines as extracted from the Competent Person’s Report is set out below. For complete information in relation to the Disposal Mines, reference should be made to “Appendix II – Competent Person’s Report”. Please refer to the Competent Person’s Report for a detailed discussion on all the technical aspects of the Disposal Mines. The Competent Person’s Report is based on information made available to the Competent Person prior to 1 February 2013. The Company confirmed that no material changes have occurred since 1 February 2013.

As at the Latest Practicable Date, Xianglan Brazil holds three (3) exploration licences in respect of the Disposal Mines for the exploration of manganese with a total area of 57.57 square kilometres. The areas covered by these three exploration licences are located within the Gandu and Piraí do Norte region respectively in the central south part of Bahia State of Brazil as squared in the map below.

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The manganese mineralization belongs to the zone named as “Manganese District of South of Bahia”. This zone includes the Itabuna Belt embedded with strongly NNE-oriented and high grade amphibolites to granulites metamorphic rocks of paleo Proterozoic age (2.1 Ga). According to Barbosa (1990, 1991), the previous geological and geotechnical studies conducted within the area obtained by the Company in the 2009 Acquisition, the Itabuna Belt, in the southern sector of the Manganese District of South of Bahia, is composed of three main lithological types of rocks:

(i) Basic granulites whether containing garnet or not (protoliths analogous to the basalt and/or tholeiitic Gabbros);
(ii) Acid and intermediate granulites (protoliths of tonalite type, dacites and trondhjemites, calcalcaline low potassium rhyolite); and

LETTER FROM THE BOARD

(iii) Basic granulites bearing antiperthite (protoliths formed by monzonites and shoshonitic mangerites). Kinzigites, quartzites, banded iron formations, manganiferous formations, besides barite layers occur intercalated in the granulites, mainly in those of intermediate and acid composition.

The manganese occurrences are related to the supergene secondary enrichment of strongly deformed and folded manganiferous supracrustal lenses mainly in the basic granulites unit (III).

According to the previous exploration report (report -Relatório Final Marco 2 E 3A – August 2009 by Mares Geeologia Mineração E Engenharia Ltda., a consultancy firm based in Brazil which provided geology and mining advisory services), the following exploration work had been carried out in the areas covered by the three exploration licences marked in the map hereinabove:

A regional reconnaissance field work;
Semi – detailed geological mapping with registration of manganese occurrences and main geological units and some rock sampling (1:25,000 scale);
Excavation of 10 small pits (around 1 x 1 m 2 with a total of 53,81m 3);
Excavation of 2 small trenches; and
Drilling of 07 vertical holes up to maximum of around 50m and a total of 286,98 m.

Results from these previous explorations indicated the presence of manganese.

The three main manganese mineralization types have been observed, based on the preliminary exploration data available:

(a) Strongly weathered, oxidized, eluvial soil, and heterogeneous regolith covering the regions, up to 30 m deep, with boulders of manganese. The manganese grades, based on some pit samples (Pit -1 and drill holes 04), range from 10 to 45%.
(b) Massive, hard oxidized secondary manganese formation as identified in drill holes and some outcrops. Manganese grades, based on the exploratory drill hole (Hole 05), can be up to 45%. This material also presents high barium grade (> 5%) and anomalously high Ag.
(c) Hard carbonate-silica rock of manganese formation with rhodocrosite, representing probably the proto-mineralization of the secondary and oxidized mineralization. This formation, intercepted by exploration drill hole 05, has MnO2 values between 5 to 25%.

Significant barium and silver grades were noted in the chemical analyses of the few samples collected.

Mineralization	MnO2%	SiO2%	CaO%	Ba%	Ag ppm
Strongly weathered	10 to 56	15 to 75	< 0.1	1 to 3	0 up to 50
Massive	up to 60	10 to 15	< 1	> 5	up to 50
Fresh rock with Rhodocrosite	5 to 25	50 to 90	10 to 32	< 0.5	< 0.1

LETTER FROM THE BOARD

It should be noted that JORC Code compliant procedures have to be complied with when drilling, sampling and carrying out analyses of the samples collected to confirm that proper quality assurance and control measures are undertaken. ROMA encountered difficulties in determining the resources of the Disposal Mines as the Piraí do Norte manganese project has had very limited exploration work carried out over the three properties that are covered in this report. This work has included regional scale mapping, seven vertical drill holes up to maximum of around 50m for a total of 286.98 m and twelve small trenches which have been broadly sampled. This work has been poorly documented and does not meet the minimum standard required by JORC Code (2012) for reporting Mineral Resources and Ore Reserves. As the Disposal Mines are still in preliminary exploratory stage and so no JORC Resources estimates can be estimated. A potential target estimate within the range of 2 to 8 million tones has been estimated. However, according to the JORC code for reporting mineral resources and ore reserves, the target estimate set out in the Competent Report is not an estimate of resources but is conceptual in nature as there has been insufficient exploration sampling done in the areas of the Disposal Mines in order to define a Mineral Resource and it is uncertain if further exploration will eventually result in the determination of a Mineral Resource.

Shareholding structures

Upon Completion, the Company will have disposed of its entire interest in the Disposal Group, Xianglan Brazil and the Disposal Mines. Each of the members of the Disposal Group will cease to be a subsidiary of the Company and the Disposal Group will cease to be consolidated with those of the Company.

Set out below are the simplified shareholding structures of the Disposal Group as at the Latest Practicable Date and immediately upon Completion:

As at the Latest Practicable Date

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Shandong Lantong
The Company Shandong Zhi Xiang
Trading Co., Ltd
100%
Hill Talent
66% 21.89% 12.11%
Xianglan Brazil
95% 100%
Xianglan Mexico Xianglan Uruguay
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LETTER FROM THE BOARD

Immediately upon Completion

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

Shandong Lantong
The Purchaser Shandong Zhi Xiang
Trading Co., Ltd
100%
Hill Talent
66% 21.89% 12.11%
Xianglan Brazil
95% 100%
Xianglan Mexico Xianglan Uruguay
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Financial information of the Disposal Group

A summary of the key consolidated financial information of the Disposal Group for the two years ended 31 December 2011 and unaudited combined financial information of the Disposal Group for the nine months ended 30 September 2012, prepared in accordance with the HKFRS:

			For the nine
	For the year	ended	months ended
	31 December	31 December	30 September
	2010	2011	2012
	(HK$’000)	(HK$’000)	(HK$’000)
	(audited)	(audited)	(unaudited)
Turnover	–	31,689	1,262
Net loss before tax	(3,970)	(331,399)*	(8,136)
Net loss after tax	(3,970)	(229,995)*	(8,136)
	As at		As at
	31 December	31 December	30 September
	2010	2011	2012
	(HK$’000)	(HK$’000)	(HK$’000)
	(audited)	(audited)	(unaudited)
Total assets	2,166,563**	1,594,724**	1,588,529**
Total liabilities	720,129 ***	539,108 ***	542,042 ***
Net assets	1,446,434**	1,055,616**	1,046,487**

LETTER FROM THE BOARD

an impairment loss of the exploration and evaluation assets of approximately HK$298 million was recognised mainly attributable to the significant drop in the selling price of manganese ores during the year ended 31 December 2011.
** included the revaluation of the exploration and evaluation assets of the three manganese exploration licences.
*** included the deferred tax liabilities arisen from the revaluation of the exploration and evaluation assets.

The significant loss of the Disposal Group for the year ended 31 December 2011 was mainly due to the impairment loss of the exploration and evaluation assets of approximately HK$298 million.

REASONS AND BENEFITS FOR DISPOSAL

The Group was principally engaged in the research and exploration of mineral resources, trading of steel products and non-ferrous metal (including copper) and the production and sale of silicone products.

For the nine months ended 30 September 2012, the Group’s unaudited turnover increased to approximately HK$2,129.9 million from approximately HK$832.4 million as compared to the same period in the prior year, which was mainly attributable to the substantial increase in trading of metals and mineral resources of the Group. The trading business recorded an unaudited loss of HK$7.6 million during the period, of which Xianglan Brazil incurred a loss of HK$8.0 million for the nine months ended 30 September 2012.

The Directors consider that the part payment of HK$111.15 million and HK$203.85 million for part settlement of the Consideration by way of cash and Promissory Note respectively will help the Company to improve its capital and liquidity position for its business development in the Brazil SAM Iron Mine.

The Company has concentrated its financial resources on the Brazil SAM Iron Mine, details of which were disclosed in the announcement of the Company dated 16 April 2010 and the circular dated 5 November 2010. The acquisition of Brazil SAM Iron Mine was approved by the Shareholders at the extraordinary general meeting of the Company dated 23 November 2010.

The resources estimation of Brazil SAM Iron Mine was confirmed by the end of year 2011 and the Company released US$10 million as deposit and US$0.4 million as performance bonus to the seller of the Brazil SAM Iron Mine pursuant to the relevant share transfer agreement.

As at the Latest Practicable Date, in addition to the above sums released to the seller pursuant to the relevant share transfer agreement, the Company has disbursed a further sum of US$42 million as a loan to SAM for the working capital of its preliminary exploration works such as drilling, geological mapping, beneficiation testing, and the preparation of geologists technical reports.

In light of the development of Brazil SAM Iron Mine since 2010, the Company has concentrated its financial resources on it and intends to continue to focus on its mining business on this Brazil SAM Iron Mine. As such, the Company has not started any geological work on the Disposal Mines since its acquisition of the Disposal Group. As mentioned above, there has not been much development in the Disposal Group since completion of the 2009 Acquisition.

LETTER FROM THE BOARD

As mentioned in the Company’s 2011 annual report, the Company has been considering between self development and selling the three manganese licences held by Xianglan Brazil. Since February 2011, the price of manganese ores has been on the downward trend. Below is the chart showing the price of manganese ores in the past six years:

Price of manganese ore (US$/mtu)

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20
18
16
14
12
10
8
6
4
2
0
15 Nov 2006 15 Nov 2007 15 Nov 2008 15 Nov 2009 15 Nov 2010 15 Nov 2011
Time (Date)
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Source of information: Bloomberg

The 2009 Acquisition was completed in March 2010 but the price of manganese ores has been decreasing since August 2010 from approximately US$8.63 per metric tonne unit to approximately US$5.1 per metric tonne unit as at the Latest Practicable Date. Save for the aforesaid and the decreasing trend of the price of manganese ores, there is no other circumstance leading the change in the Company’s development intention on the Disposal Group. The difference of the Consideration of HK$715 million from the acquisition price of the 2009 Acquisition was attributable to the decrease in the valuation amount of the valuation of the exploration and evaluation assets (the three manganese exploration licenses) from approximately HK$2,114 million as at 31 December 2010 to approximately HK$1,581 million as at 31 December 2011. As the Company has concentrated its financial resources on Brazil SAM Iron Mine and considers that the price of manganese ores will drop further in the foreseeable future, the Company believes that the Disposal would be beneficial to the interests of the Company as a whole. Having taking into account (i) the expected further decrease in the price of manganese ores; and (ii) the expiry of the three exploration licenses in March 2013, it is expected that the valuation amount of the exploration and evaluation assets will be further decreased. As such the Directors are of the view that the Disposal is fair and reasonable and in the interests of the Company and its shareholders as a whole.

POTENTIAL FINANCIAL IMPACT OF THE DISPOSAL

After Completion, the Company will no longer have any interest in Hill Talent and Hill Talent will cease to be a subsidiary of the Company. For illustration purpose, based on the consideration of the Disposal of HK$715 million (before any fair value adjustments based on the valuation to be carried out for the 2009 Convertible Note on the date of Completion) and the deduction therefrom (i) the Company’s

LETTER FROM THE BOARD

attributable portion of the unaudited net assets value of the Disposal Group as at 30 September 2012 of approximately HK$697.7 million (before any adjustments based on valuation in respect of the Disposal Group or the Disposal Mines); (ii) the exchange reserves of the Disposal Group release upon the Disposal of approximately HK$39.6 million and; (iii) the expenses directly attributable to the Disposal which includes advisory fees, legal fees, accounting fees and other professional fees of approximately HK$2 million, the net loss on the Disposal is estimated to be approximately HK$24.3 million.

(i) Earnings

Based on the unaudited consolidated accounts of Hill Talent for the nine months ended 30 September 2012, the Group expects to record a loss of approximately HK$333 million from the Disposal, which is calculated with reference to the carrying value attributable to the remaining Shares held by the Purchaser as at 30 September 2012.

According to the unaudited management accounts of the Disposal Group for the nine months ended 30 September 2012, a loss of HK$8.0 million was derived from the Disposal Group and thus, upon the Completion, it is expected that the future earnings of the Group would be improved.

(ii) Assets and liabilities

Based on the net assets of the Disposal Group as at 30 September 2012 of approximately HK$1,046.5 million as shown in the unaudited consolidated accounts of the Disposal Group as at 30 September 2012, it is expected that the net assets of the Group would decrease by the said net asset value of the Disposal Group of approximately HK$1,046.5 million and increase by the book value of the Consideration of HK$715 million (which comprised the 2009 Convertible Note of HK$400,000,000, Promissory Note of HK$203.85 million and cash of HK$111.15 million) upon the Completion.

As the Disposal Group has not yet commenced any large-scale exploration and other business and the Company has not concentrated its financial resources in operation and management of the Disposal Group, the operation cashflows of the Disposal Group remains to be on a relatively small scale since the completion of the 2009 Acquisition. In this circumstance, the working capital requirements of the Disposal Group have not been significant to the Group and the Directors are of the view that the Completion would not have any material adverse impact on the working capital of the Group.

FINANCIAL AND TRADING PROSPECT OF THE GROUP

Following the Completion, the Group will continue to focus on the resources and energy sector, in particular the minerals resources and steel metal products trading business, which in the opinion of the Directors, are with better growth potential. In particular, the Group will concentrate its financial resources on the SAM iron-mining project, which are strategically important to the Group’s future development and growth. It is noted that the internal consumption of steel in the PRC has been increasing rapidly since 1990s, and particularly in recent years. Demand for steel in the PRC is driven by the extensive and continual construction of infrastructures (such as power stations, ports, highways and railways) as a result of its rapid industralisation. As iron is a kind of important mineral in the steel refining process, the Company considers that the mining industry related to iron resources has considerable development potential.

LETTER FROM THE BOARD

With reference to the annual report of the Company for the financial year ended 31 December 2011, sales of the Group’s highly purified silicon had increased by approximately 18.0% year on year in 2011. The Group is now focusing on stabilising the output of the highly purified silicon products. Despite the increase in sales volume, prices are still subject to the risks of short-term fluctuation that are affected by the market supply and demand.

Despite the aforesaid, the mineral resources and steel metal trading arm of the Group contributed approximately HK$1,698 million to the Group’s revenue in 2011, which provided steady cash flow and good return to the Group. Based on the third quarterly report of the Company for the nine months ended 30 September 2012, the Group’s revenue increased to approximately HK$2,129.9 million from approximately HK$832.4 million as compared to the same period in 2011, which was mainly attributable to the substantial increase in the trading of steel metal and mineral resources of the Group during the said period.

The Directors expect that the acquisition of SAM will make the business strategy and scope of the Company more focused and the mineral resources and other metal trading business will bring steady cash flow and good return to the Company.

USE OF PROCEEDS

The net cash proceeds of the Disposal in the amount of approximately HK$111.15 million will be used to finance the working capital requirement of its mining business on the Brazil SAM Iron Mine.

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

As the Company and the Purchaser have agreed not to settle part of the Consideration by way of off-market Share Repurchase pursuant to the amendments made under the Supplemental Agreement, there will be no change to the existing shareholdings of the Shareholders. Following Completion, the 2009 Convertible Note will be cancelled by the Company.

GEM LISTING RULES IMPLICATIONS

As the relevant percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceed 25% but below 75%, the Disposal constitutes a major disposal for the Company under Chapter 19 of the GEM Listing Rules. The Disposal is subject to the approval of the Shareholders at the EGM. Except for the Purchaser, its associates and their concert parties who beneficially holds 440,568,000 Shares and 2009 Convertible Note with an aggregate outstanding amount of HK$400 million, convertible into 400,000,000 Conversion Shares at the Conversion Price of HK$1.00 each as at the Latest Practicable Date, no other Shareholder has a material interest in the Disposal, and therefore no Shareholder is required to abstain from voting on the resolution to approve the Disposal at the EGM save for the Purchaser.

The Convertible Note Repurchase is made as an exempt share repurchase under the Share Repurchase Code. Therefore, approvals from the Executive and the Shareholders at the EGM are not required for the Convertible Notes Repurchase.

LETTER FROM THE BOARD

Voting

As at the Latest Practicable Date, the Purchaser and its concert parties were interested in 440,568,000 Shares, representing approximately 7.09% of the issued share capital of the Company. By reason of the requirement of the GEM Listing Rules, the Purchaser and its concert parties will abstain from voting at the EGM. Save for the aforesaid, no other Shareholder is required to abstain from voting on the resolution(s) approving the Disposal Agreement (as amended and supplemented by the Supplemental Agreement).

EGM

The EGM will be held on Thursday, 18 April 2013 at 10:00 a.m., at Suite 2703, 27th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong to consider and if thought fit, approve among other matters, the Transactions.

A notice convening the EGM is set out on pages 80 to 81 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Union Registrars Limited, 18/F., Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

RECOMMENDATION

The Board considers that the terms of the Disposal Agreement (as amended and supplemented by the Supplemental Agreement) are fair and reasonable and the Disposal is in the interest of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

On behalf of the Board Honbridge Holdings Limited LIU Wei, William Director and Chief Executive Officer

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. AUDITED FINANCIAL STATEMENTS OF THE GROUP

The audited consolidated financial statements of the Group prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants for the years ended 31 December 2009, 2010 and 2011 together with the relevant notes thereto can be found from pages 24 to 85 of the Company’s 2009 annual report, from pages 26 to 95 of the Company’s 2010 annual report and on pages 36 to 111 of the Company’s 2011 annual report respectively.

The annual reports are published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (http://www.8137.hk/eng/index/php). The auditors’ report for each of the years ended 31 December 2009, 2010 and 2011 are unqualified.

2. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, the date to which the latest published audited consolidated financial statements of the Group were made up.

3. STATEMENT OF INDEBTEDNESS

As at close of business on 31 December 2012, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Circular, other than convertible notes of the Group with principal amount of HK$400.0 million, the Group had outstanding borrowings, of approximately HK$467.4 million which comprised secured bank borrowings of approximately HK$125.2 million, unsecured government loan of approximately HK$2.6 million, other unsecured loan of approximately HK$6.8 million and unsecured loans from ultimate holding company with principal amount of HK$332.8 million, and the Group had a bank guarantee of approximately HK$3.7 million.

As at close of business on 31 December 2012, the Group had outstanding zero coupon convertible notes with principal amount of HK$400.0 million and initial conversion price of HK$1.00 per conversion share of the Company.

Save as aforesaid and apart from intra-group liabilities and normal trade payables and bills payables, the Group did not have any mortgages, charges or debentures, loan capital, bank overdrafts, loans or other similar indebtedness or any hire purchase commitments, liabilities under acceptance or acceptable credits or any guarantees or other contingent liabilities as at 31 December 2012. Foreign currency amounts have been translated at the approximate exchange rates prevailing at the close of business on 31 December 2012.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. SUFFICIENCY OF WORKING CAPITAL

Except for obtaining the US$65 million financing for the consideration to be paid on the Closing Date, as defined in the circular of the Company dated 5 November 2010, which is expected to be due within the next 12 months from the Latest Practicable Date, after taking into account the existing bank loans, other loans, government loans, undertaking provided by Mr. He Xuechu confirm that he will render adequate financial support to the Group enabling it to continue as a going concern and Mr. He Xuechu, as the controlling shareholder of Hong Bridge Capital Limited, do not intend to demand repayment of approximately HK$294 million due to Hong Bridge Capital Limited from the Company at the Latest Practicable Date until such time when any repayment to Hong Bridge Capital Limited will not affect the Group’s ability to repay other creditors, with at least 12 months from the date of this Circular, the existing shareholder’s loan and internal resources available to the Group and taking into account the effect of this transaction, the Directors of the Company are of the opinion that the Group has sufficient working capital for its present requirements and for at least the next 12 months from the Latest Practicable Date in the absence of unforeseeable circumstances. The ultimate holding company, Hong Bridge Capital Limited, has signed an undertaking that it will render adequate financial support to the Group for completing the SAM acquisition and providing necessary funds for the capital investments and operating working capital for development of the exploration and mining business of SAM. The Directors expect to settle the consideration of the SAM acquisition by way of shareholders’ loan, bank borrowings, equity fund raising and/or debt financing (the “ Acquisition Financing Arrangements ”). On 5 March 2013, the Company as issuer and Zhejiang Geely Holding Group Company Limited (“Zhejiang Geely”) as subscriber entered into a subscription agreement pursuant to which the Company agreed to issue and Zhejiang Geely agreed to subscribe for the 5-year zero coupon convertible bonds in the principal amount of HK$740 million to finance the SAM acquisition. For details, please see the Company’s circular issued on 7 March 2013. Apart from the issue of the convertible bonds, the Company has not made any further concrete agreement, arrangement, understanding or negotiation in relation to the Acquisition Financing Arrangements. Accordingly, in the opinion of the Directors, in view of the issue of the convertible bonds and the other Acquisition Financing Arrangements, the Company shall have sufficient working capital for its present working capital requirements and for at least the next 12 months from the date of the Latest Practicable Date and the payment of the said US$65 million for closing of the SAM Acquisition.

5. BUSINESS REVIEW AND FINANCIAL AND TRADING PROSPECTS OF THE GROUP

For the six months ended 30 June 2012, the Group’s turnover increased by 150% to approximately HK$1,271.0 million as compared to the same period in 2011. The increase was mainly attributable to the substantial increase in trading of metals and mineral resources that contributed approximately HK$1,263.8 million to the revenue of the Group. The trading business recorded a loss of approximately HK$4.4 million during the said period, of which the Disposal Group incurred a loss of approximately HK$4.7 million.

The Group’s turnover for the nine-month period ended 30 September 2012 amounted to approximately HK$2,129.9 million, representing an increase of approximately 160% interest as compared to the same period in 2011. Net loss of the Group for the nine-month period ended 30 September 2012 decreased by approximately 20.3% as compared to the same period in 2011. The basic loss per Share loss attributable to the shareholders of the Company for the nine-month period ended 30 September 2012 was HK$(1.14) cent, representing a decrease of approximately 20.2% as compared to the same period in 2011.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Following completion of the Disposal, the Group expects to continue to concentrate its financial resources on the SAM iron-mining project, which are strategically important to the Group’s future development and growth. As mentioned in the Company’s announcement published on 14 January 2013, the Company and the sellers of the SAM iron-mining project entered into a memorandum of understanding (which is subject to entering into a formal supplemental agreement amongst the parties) purported to amend, among other things, the payment schedule of the entire consideration of the SAM iron-mining project so as to expedite the timetable for the Company to successfully acquire 100% ownership of SAM and to reduce the entire consideration payable by the Company in the SAM project from US$390 million to US$270 million, representing a downward adjustment of approximately 30.77%.

As disclosed in the Company’s half-year report for the six months ended 30 June 2012, in relation to the SAM iron-mining project from the geographical mapping of the new exploration licences five miles north of Block 8, resources potential may reach approximately 2,300 million tonnes. SAM is undergoing beneficiation optimisation tests, and has completed three with positive results. The geotechnical drilling programmed along the slurry pipeline has completed almost 70% of the total work. Up to the Latest Practicable Date, the Company has disbursed approximately US$42 million as to a loan to SAM for prefeasibility study and other usages.

COMPETENT PERSON’S REPORT

APPENDIX II

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26 MARCH 2013
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COMPETENT PERSON’S REPORT

APPENDIX II

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Unit 3806, 38/F, China Resources Building, 26 Harbour Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E‐mail: [email protected] http://www.romagroup.com

26 March 2013

The Directors Honbridge Holdings Ltd. Suite 2703, 27th Floor Great Eagle Centre 23 Harbour Road Wanchai Hong Kong

Dear Sirs/Madams,

Re: Competent Person’s Report concerning the Manganese Project in Brazil

Honbridge Holdings Ltd. (“Company” or “Client”) commissioned Roma Oil and Mining Associates Limited (“ROMA”) to review the manganese project (“Mine” or “Project”) located at Piraí do Norte, Bahia State, Federative Republic of Brazil.

The following is the independent Competent Person’s Report (“Report”) on the Project. This Report was compiled following the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 edition) (the “JORC Code”) which is the code adopted by the Australasian Institute of Mining and Metallurgy (the “AusIMM”) and the standard is binding upon all AusIMM members.

Report Date: 26 March 2013 Effective Date: 1 February 2013

Yours faithfully,

For and on behalf of

Roma Oil and Mining Associates Limited

Mr. Philip A. Jones Competent Person, MAusIMM, MAIG Chief Geologist

Contributors: Emmanuel Mensah, Childs Chow, Brad Chum, and Michael Li

COMPETENT PERSON’S REPORT

APPENDIX II

Executive Summary

The Piraí do Norte manganese project, comprising three extended exploration licences (expiry date as at 23 March 2013), is located within a highly metamorphosed granulitic belt in the central south part of Bahia State, Brazil approximately 100 km to the northwest of Ilheus and 300 km to the south of Salvador.

Very limited exploration work carried out over the three properties that are covered in this Report. This work has included regional scale mapping, seven vertical drill holes up to maximum of around 50m for a total of 286.98 m and twelve small trenches which have been broadly sampled. This work has been poorly documented and does not meet the minimum standards required by JORC Code (2012) for reporting mineral resources and ore reserves.

The manganese mineralisation identified during this exploration occurs as lateritic enrichment in residual soils, as breccia and shear filling in deeply weathered and highly metamorphosed granitic composition rocks and as primary carbonate minerals, mainly rhodocrosite, in the fresh basement calc-silicates.

The Piraí do Norte manganese project is a grass roots exploration project with eleven well defined targets that warrant further exploration. ROMA estimates that these targets have potential for 2-8 million tonnes of manganese mineralisation of variable grade between 5% and 40% Mn. It must be noted that according to the JORC code for reporting mineral resources and ore reserves, a Target estimate is NOT an estimate of resources but is only conceptual in nature as there has been insufficient exploration sampling done in these areas to define a Mineral Resource and it is uncertain if further exploration will eventually result in the determination of a Mineral Resource. Target estimates should not be used in any mining or financial studies.

Significant barium and silver grades were noted in the chemical analyses of the few samples collected.

ROMA also notes that at the effective date of this report of three of Xianglan’s Exploration Licences are valid only until 23 March 2013. Since all three Exploration Licenses have already been extended they cannot be considered for a further extension.

As at the effective date of this report, ROMA has not been informed of any application for Mining Licences over the potential mining areas within the three licences making it likely that the three licences will be defaulted if no application follow-ups are carried out before the prescribed deadline. It is also ROMA’s opinion that the present licence owners may not have conducted sufficient exploration work on any of the three concessions to entitle them to Mining Licences.

COMPETENT PERSON’S REPORT

APPENDIX II

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26	Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26	Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26	Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.	INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
	1.1	Program Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
	1.2	Purpose of the Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
	1.3	Work Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
	1.4	Statement of Independence of ROMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
	1.5	Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
	1.6	Indemnities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
	1.7	Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
	1.8	Sources of Information and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
	1.9	Scope of Personal Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.	RELIANCE ON OTHER EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.	PROPERTY DESCRIPTION AND LOCATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
	3.1	Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
	3.2	Validation of Nature and Extent of the Issuer’s Title to the Property . . . . . . . . . . . . . . 35
	3.3	Terms of Royalties, Back-in rights, Payments or other agreements
		and encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
	3.4	Environmental Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
	3.5	Permits Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.	ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE
	AND PHYSIOGRAPHY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
	4.1	Topography, Elevation and Vegetation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
	4.2	Means of Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
	4.3	Proximity to Population Centre and Nature of Transport . . . . . . . . . . . . . . . . . . . . . . . 36
	4.4	Climate and Length of Operating Season . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
5.	HISTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
	5.1	Prior Ownership of Property and Ownership Changes . . . . . . . . . . . . . . . . . . . . . . . . . 37
	5.2	Type, Amount, Quantity and General Results of Exploration and
		Development Work Undertaken by Any Previous Owners or Operators . . . . . . . . . . 37
	5.3	Historical Mineral Resource and Mineral Reserve Estimates . . . . . . . . . . . . . . . . . . . . 37
	5.4	Production from the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.	GEOLOGICAL SETTING AND MINERALISATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
	6.1	Regional Geology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
	6.2	Local Geology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
	6.3	Mineralisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.	EXPLORATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.	SAMPLE PREPARATION, ANALYSES AND SECURITY. . . . . . . . . . . . . . . . . . . . . . . . 45
9.	DATA VERIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
	9.1	Statement as to whether the Competent Person has verified
		the Data referred to or Relied Upon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.	MINERAL PROCESSING AND METALLURGICAL TESTING. . . . . . . . . . . . . . . . . . .		46
11.	MINERAL RESOURCE ESTIMATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
	11.1	Mineral Resource Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
	11.2	Parameters and Methodology used by ROMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

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APPENDIX II

	11.3 Extent to which Estimate of Mineral Resources and Mineral Reserves may
	be materially Affected by Environmental, Permitting, Legal, Title, Taxation,
	Sociao-economic, Marketing, Political or Other Relevant Issues . . . . . . . . . . . . . . . 50
	11.4 Extent to which Estimate of Mineral Resources and Mineral Reserves may
	be materially Affected by Mining, Metallurgical, Infrastructure and
	Other Relevant Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.	MINERAL RESERVE ESTIMATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.	MINING AND RECOVERY METHOD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
14.	PROJECT INFRASTRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
15.	MARKET STUDIES AND CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.	ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR
	COMMUNITY IMPACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
17.	ADJACENT PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
18.	OTHER RELEVANT DATA AND INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
19.	INTERPRETATION AND CONCLUSIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
20.	RECOMMENDATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
21.	STATEMENT OF QUALIFICATION OF THE COMPETENT PERSON. . . . . . . . . . . . 53
	21.1 Philip A. Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
22.	REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
23.	GLOSSARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Appendix A: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Appendix B: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Appendix C: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

APPENDIX II

COMPETENT PERSON’S REPORT

List of Tables

Table	1-1	Details of the three Exploration Licences issued by the Ministry of
		Mines and Energy (Brazil). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table	3-1	Details of exploration licences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Table	4-1	Climate data for Bahia, Salvador. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Table	6-1	Geochemical characteristics of main mineralization styles . . . . . . . . . . . . . . . . . . . . . . 38
Table	7-1	Summary of Drillholes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Table	7-2	Summary of Pits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Table	8-1	Assays of core samples, after Acme Labs 2009(NOT JORC Code 2012 compliant).	45
Table	8-2	Assays of pit samples, after Acme Labs 2009(NOT JORC Code 2012 compliant). . . 46
Table	11-1	Exploration Target Potential for the three licences areas . . . . . . . . . . . . . . . . . . . . . . . . 47
Table	20-1	ROMA recommended exploration program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

List of Figures

Figure	3-1	Location map of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Figure	3-2	Location of Piraí do Norte. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Figure	3-3	Location of licensed areas and main regional manganese occurrences
		of the Piraí do Norte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Figure	4-1	Topography typical of the Piraí do Norte region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Figure	6-1	Regional geology of Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Figure	6-2	Local structural geology map of Project areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Figure	6-3	Nodular manganese distributed in the weathered regolith.. . . . . . . . . . . . . . . . . . . . . . . 40
Figure	6-4	Massive hard rock manganese formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Figure	7-1	Drillholes and Pits location map for Area 870.140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Figure	7-2	Drillholes and Pits location map for Area 872.734 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure	7-3	Drillholes and Pits location map for Area 872.958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure	12-1	Map of Manganese Blocks (in Red) of Area 870.140 . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure	12-2	Map of Manganese Blocks (in Red) of Area 872.734 . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Figure	12-3	Map of Manganese Blocks (in Red) of Area 872.958 . . . . . . . . . . . . . . . . . . . . . . . . . . 49

COMPETENT PERSON’S REPORT

APPENDIX II

1. INTRODUCTION

1.1 Program Objectives

The objectives of the program were to review available data, conduct a site visit and provide the Company with both verbal feedback and this Competent Person’s Report (“CPR”). The CPR and its mineral resource estimates were made by ROMA according to the guidelines set out in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“The JORC Code”). The JORC Code is adopted by the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the standard is binding upon all AusIMM members.

1.2 Purpose of the Report

The Report is intended only for the use of the person to whom it is addressed. ROMA assumes no responsibility whatsoever to any person other than the Company in respect of, or arising out of, the contents of this Report. If others choose to rely in any way on the contents of this Report they do so entirely at their own risk.

The title to this Report shall not pass to the Company until all professional fees have been paid in full.

1.3 Work Program

ROMA’s work program involved two phases:

Phase 1: review information provided; conduct a site visit of the Project operations located at Piraí do Norte, Brazil; carry out discussions with Company personnel regarding the history, current status and outlook of the Project; and collect and review further documents; and
Phase 2: analyse the data provided, compile first draft of the Report, review additional data and finalise the Report.

1.4 Statement of Independence of ROMA

Neither ROMA nor any of the authors of the Report have any material existing or contingent interest in the outcome of the Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of ROMA.

ROMA has no prior association with the Company in relation to the mineral assets that are the subject of the Report. ROMA has no beneficial interest in the outcome of the technical assessment conducted in connection with the preparation of the Report which is being capable of affecting its independence. ROMA’s fee for preparing the Report is based on its normal professional daily rates plus reimbursement for incidental expenses. The payment of ROMA’s professional fee is not contingent upon the outcome of the Report.

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APPENDIX II

1.5 Warranties

The Company has represented in writing to ROMA that full disclosure has been made of all material information and that, to the best of its knowledge and understanding, such information is complete, accurate and true.

1.6 Indemnities

The Company has provided ROMA with an indemnity under which ROMA is to be compensated for any liability and/or any additional work or expenditure resulting from any additional work required:

which results from ROMA’s reliance on information provided by the Company which is inaccurate or incomplete; or
which relates to any consequential extension workload through queries, questions or public hearings arising from the Report.

1.7 Consents

ROMA consents to the Report being included, in full, and the reference to ROMA’s name and names of the authors of the Report in the shareholders’ circular to be issued by the Company, in the form and context in which the technical assessment is provided, and not for any other purpose.

1.8 Sources of Information and Data

All the reports used as references in this report are listed in the References section of this report.

Report

“Xianglan Brazil Mining Co. Ltd., Manganese Project – Piraí do Norte, Bahia, Brazil, Preliminary Data Evaluation and Geological Opinion Report” Coffey Mining, Brazil (“CMB”), November 2009.

Licences

Three Exploration Licences issued by the Ministry of Mines and Energy (Brazil)

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APPENDIX II

Exploration Licence	Area (km2)	Coordinates	Coordinates	Coordinates	Duration
		Point	Latitude	Longitude
872.734/2006	20.00	1	–13°49’16”200	–39°19’19”800	29 December 2006 to 23 March 2013
		2	–13°49’16”190	–39°21’32”989
		3	–13°46’33”497	–39°21’32”963
		4	–13°46’33”507	–39°19’19”800
872.958/2006	20.00	1	–13°54’36”400	–39°20’33”200	29 December 2006 to 23 March 2013
		2	–13°54’36”390	–39°22’46”439
		3	–13°51’53”698	–39°22’46”413
		4	–13°51’53”708	–39°20’33”200
870.140/2007	17.50	1	–13°54’36”700	–39°24’45”700	23 April 2007 to 23 March 2013
		2	–13°54’36”698	–39°25’41”148
		3	–13°54’13”001	–39°25’41”146
		4	–13°54’12”987	–39°27’32”244
		5	–13°52’26”531	–39°27’32”223
		6	–13°52’26”547	–39°24’45”700

Table 1-1 Details of the three Exploration Licences issued by the Ministry of Mines and Energy (Brazil)

1.9 Scope of Personal Inspection

Mr. Emmanuel E. Mensah of ROMA, conducted a site visit between 25 January and 02 February 2013.

During the site visit, Mr. Mensah inspected the Project areas, access roads and completed general inspections of the surrounding countryside. Open discussions were held with site personnel on technical aspects of the project.

The three licenced areas have received very limited exploration activities. Most of the pitting and drilling activities were carried out in one area with licence number 870.140/2007. The drillholes and most of the pits were not preserved, though there are indications on the ground. None of the drill cores was available for verification.

2. RELIANCE ON OTHER EXPERTS

ROMA has not undertaken any legal due diligence on the Company’s mineral rights to the Project, as described in Section 3 of this Report. As such, ROMA has relied on an opinion provided by the Company, Xianglan Brazil Mining Co., Ltd. (“XBM”), regarding the status of the Company’s subsidiaries and the state of Company’s rights, titles and interests in material assets, such as mineral rights. The most recent opinion is dated at 5 February 2013 and the Company confirms that as at that date:

COMPETENT PERSON’S REPORT

APPENDIX II

each subsidiary of the Company is duly incorporated and holds all power and authority to conduct its business in Brazil,
all mineral rights of the Company are validly issued and registered,
the mineral rights constitute good and valid title, enforceable against third parties and free of all encumbrances,
each subsidiary of the Company holds all necessary surface rights, licences, consents and permits to carry on its current operations.
XBM’s opinions have been used to help complete this Report.

3. PROPERTY DESCRIPTION AND LOCATION

3.1 Location

The Project comprises three defined areas and exploration licences covering a total of 57.57 km[2] located in Piraí do Norte region, central south part of Bahia State, Brazil. Those areas are about 100 km to the northwest of Ilheus and 300 km to the south of Salvador. Surface water drains into the Rio de Peixe River and a tributary of the Rio das Almas River.

==> picture [455 x 281] intentionally omitted <==

Figure 3-1 Location map of the Project

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APPENDIX II

The three exploration licences held by the XBM were authorised by Brazil Ministry of Mines and Energy. A summary of the licences is as follows:

	EXPLORATION LICENCE	Area (km2)	DURATION
1.	DNPM NO.872.734/2006	20.00	29 December 2006 to 23 March 2013
2.	DNPM NO.872.958/2006	20.00	29 December 2006 to 23 March 2013
3.	DNPM NO.870.140/2007	17.50	23 April 2007 to 23 March 2013

Table 3-1 Details of exploration licences

==> picture [452 x 255] intentionally omitted <==

Figure 3-2 Location of Piraí do Norte

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APPENDIX II

==> picture [455 x 276] intentionally omitted <==

Figure 3-3 Location of licensed areas and main regional manganese occurrences of the Piraí do Norte

3.2 Validation of Nature and Extent of the Issuer’s Title to the Property

ROMA was not required to validate the legal status of tenements and permits held by XBM. In addition, ROMA has not attempted to establish the legal status of the tenements within the Project areas with respect to potential environmental and access restrictions.

ROMA notes that at the effective date of this report all three of Xianglan’s Exploration Licences are valid only until 23 March 2013. Since all three Exploration Licenses have already been extended they cannot be considered for a further extension.

As at the effective date of this report, ROMA has not been informed of any application for Mining Licences over the potential mining areas within the three licences making it likely that the three licences will be defaulted if no valid Mining Licence applications are made before the prescribed deadline. It is also ROMA’s opinion that the present licence owners may not have conducted sufficient exploration work on any of the three concessions to entitle them to Mining Licences.

3.3 Terms of Royalties, Back-in rights, Payments or other agreements and encumbrances

Since the project is only at a preliminary exploration stage, ROMA have not been noticed any terms of royalties, back-in rights, payments or other agreements and encumbrances on any of the projects.

3.4 Environmental Liabilities

Since the project is only at a preliminary exploration stage, ROMA have not been noticed any environmental liabilities on any of the projects.

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APPENDIX II

3.5 Permits Required

Since the project is only at a preliminary exploration stage, ROMA have not been noticed any permits required on any of the projects.

4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

4.1 Topography, Elevation and Vegetation

The region is characterized by cocoa and cattle farming. The physiography comprises a roughly flat and undulated geomorphology. The elevation ranges between 200 m and 620 m above sea level.

==> picture [340 x 256] intentionally omitted <==

Figure 4-1 Topography of Area

4.2 Means of Access

The first 35 km from Ilheus is along the paved BR656 followed by 85 km along the BR101 heading towards Salvador passing through Ubaitaba and Itamariti cities at 15 to 18 km then along a gravel road to the three license areas.

4.3 Proximity to Population Centre and Nature of Transport

The area from Xianglan do Brasil Mineração Ltda belongs to the Gandu and Piraí do Norte region, located in the central south part of Bahia State. Gandu is a city with 25,000 inhabitants (2004). The access is through BR-101 federal road. Gandu is situated 300 km south-west from Salvador, the capital from Bahia state.

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APPENDIX II

4.4 Climate and Length of Operating Season

The region has a tropical, very wet and humid climate with very strong rainfall and remaining parts of tropical Atlantic forest.

Month	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Year
Record high °C (°F)	37 (99)	37 (99)	37 (99)	37 (99)	32 (90)	32 (90)	35 (95)	32 (90)	35 (95)	35 (95)	35 (95)	37 (99)	37 (99)
Average high °C (°F)	29.9 (85.8)	30.0 (86.0)	30.0 (86.0)	28.6 (83.5)	27.7 (81.9)	26.5 (79.7)	26.2 (79.2)	26.4 (79.5)	27.2 (81.0)	28.1 (82.6)	28.9 (84.0)	29.0 (84.2)	28.21 (82.77)
Daily mean °C (°F)	26.8 (80.2)	27.0 (80.6)	27.1 (80.8)	25.8 (78.4)	25.4 (77.7)	24.3 (75.7)	23.8 (74.8)	23.9 (75.0)	24.5 (76.1)	25.3 (77.5)	25.9 (78.6)	26.1 (79.0)	25.49 (77.89)
Average low °C (°F)	23.7 (74.7)	23.9 (75.0)	24.1 (75.4)	22.9 (73.2)	23.0 (73.4)	22.1 (71.8)	21.4 (70.5)	21.3 (70.3)	21.8 (71.2)	22.5 (72.5)	22.9 (73.2)	23.2 (73.8)	22.73 (72.92)
Record low °C (°F)	20 (68)	18 (64)	17 (63)	15 (59)	12 (54)	12 (54)	17 (63)	16 (61)	16 (61)	17 (63)	18 (64)	17 (63)	12 (54)
Precipitation mm (inches)	110.9 (4.366)	121.2 (4.772)	144.6 (5.693)	321.6 (12.661)	324.8 (12.787)	251.4 (9.898)	203.6 (8.016)	135.9 (5.35)	112.2 (4.417)	122.2 (4.811)	118.5 (4.665)	132.0 (5.197)	2,098.9 (82.634)
Avg. precipitation days (≥ 0.1 mm)	14	17	19	21	23	23	23	20	17	14	14	14	219
% humidity	78	77	78	80	81	80	79	79	78	79	79	79	78.9
Mean monthly sunshine hours	244.9	228.8	232.5	189.0	173.6	168.0	179.8	201.5	210.0	229.4	213.0	223.2	2,493.7

Table 4-1 Climate data for Bahia, Salvador

Source #1: World Meteorological Organization, Hong Kong Observatory (sun only 1961-1990) Source #2: Weatherbase (record highs, lows, humidity)

5. HISTORY

5.1 Prior Ownership of Property and Ownership Changes

ROMA was unable to obtain such data.

5.2 Type, Amount, Quantity and General Results of Exploration and Development Work Undertaken by Any Previous Owners or Operators

ROMA was unable to obtain such data. There is no evidence of any detailed exploration being carried out by any other parties for manganese on the properties.

5.3 Historical Mineral Resource and Mineral Reserve Estimates

ROMA was unable to obtain such data.

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APPENDIX II

5.4 Production from the Property

No mining of manganese is known on the properties.

6. GEOLOGICAL SETTING AND MINERALIZATION

6.1 Regional Geology

The three exploration licences lie within the Precambrian Ridge Supergroup and San Francisco Supergroup, except the Itabuna composite in Pre-ridge. These rocks are composed of high grade metamorphic rocks including gneiss, migmatites, amphibolites and granulites and remnants of the Late Archean metavolcanic-sedimentary sequences grouped in the greenstone belt terrains of Licínio de Almeida, Urandi, etc. The metavolcanic-sedimentary sequence of the Licínio de Almeida includes banded iron formation, calcosilicate rocks, quartzite and volcanics along with sporadic manganese mineralisation.

==> picture [450 x 312] intentionally omitted <==

Figure 6-1 Regional geology of Brazil

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APPENDIX II

6.2 Local Geology

The manganese deposits lie within the Itabuna Belt, which is composed of a Paleoprotozoic (2.1 Ga) high grade metamorphic granulite basement. NE-SW-striking faults are present in the area.

==> picture [452 x 311] intentionally omitted <==

Figure 6-2 Local structural geology map of Project areas

According to Barbosa (1990, 1991) the Itabuna Belt, in the southern sector, is composed of three main lithological types:

Basic granulites with or without garnet (protoliths analogous to basalt and/or tholeiitic gabbros);
Acidic and intermediate granulites (protoliths analogous to tonalite, dacite and trondhjemite, calcalkaline low potassium rhyolite) and;
Basic granulites with antiperthite (protoliths analogous to monzonites and shoshonitic mangerites).

Kinzigites, quartzites, banded iron formations, manganiferous formations and barite occur intercalated in the granulites, mainly in those of intermediate and acid composition. The manganese occurrences are related to the supergene secondary enrichment of strongly deformed and folded manganiferous basic granulites.

COMPETENT PERSON’S REPORT

APPENDIX II

The ore bodies are exposed in several locations in the licensed areas. The ore bodies are dense and hard, and show sub-metallic to metallic lustre. The ore minerals are black in colour, with brownish orange to reddish brown streaks. The ore minerals are mainly manganite, with minor other manganese minerals. They appear as layers in some locations, and also as boulders of 10-70 cm in diameter in the Quaternary deposits.

6.3 Mineralisation

Based on the preliminary exploration data available, three main manganese mineralization types have been observed:

a) Strongly weathered, oxidized, eluvial soil, and heterogeneous regolith covering the regions, up to 30 m deep, with boulders of manganese. The manganese grades, based on some pit samples (Pit -1 and drill holes 04), range from 10 to 45%.

==> picture [340 x 256] intentionally omitted <==

Figure 6-3 Nodular manganese distributed in the weathered regolith

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APPENDIX II

b) Massive, hard oxidized secondary manganese formation as identified in drill holes and some outcrops. Manganese grades, based on the exploratory drill hole (Hole 05), can be up to 45%. This material also presents high barium grade (> 5%) and anomalously high Ag.

==> picture [340 x 256] intentionally omitted <==

Figure 6-4 Massive hard rock manganese formation

c) Hard carbonate-silica rock of manganese formation with rhodocrosite, representing probably the proto-mineralization of the secondary and oxidized mineralization. This formation, intercepted by exploration drill hole 05, has MnO2 values between 5 to 25%.

Significant barium and silver grades were noted in the chemical analyses of the few samples collected.

Mineralization	MnO2%	SiO2%	CaO%	Ba%	Ag ppm
Stronglyweathered	10 to 56	15 to 75	<0.1	1 to 3	0 upto 50
Massive	upto 60	10 to 15	<1	>5	upto 50
Fresh rock with Rhodocrosite	5 to 25	50 to 90	10 to 32	<0.5	<0.1

Table 6-1 Geochemical characteristics of main mineralization styles

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APPENDIX II

7. EXPLORATION

During 2009 Xianglan Brazil Mining Co. Ltd. carried out the following exploration work over the three exploration permits as reported in “MARES GEEOLOGIA MINERAÇÃO E ENGENHARIA LTDA. – RELATÓRIO FINAL MARCO 2 E 3A – August 2009)”:

Regional reconnaissance field work
Semi-detailed geological mapping locating manganese occurrences and main geological units and some geochemical rock sampling (1:25,000 scale).
Excavation of 10 small pits at a total of 43.85m3). The diamensions of the pits are indicated in Table 7.2.
Excavation of 2 small trenches
Drilling of seven vertical drill holes at a total of 286,98m. The depth of the drillholes ranges from 34 m to 50.19 m. Table 7.1 indicates the depth of the drillholes.
Geologging and sampling of drill core
Complete ICP 42 chemical analyses at ACME lab – Brazil and Vancouver, of following samples:
a. Hole F2 – 01 sample
b. Hole F4 – 08 samples
c. Hole F5 – 16 samples
d. Pit 1 – 5 samples
e. Pit 4 – 1 sample
f. Pit PA, PD, TR A2 – 1 sample each
g. Other 5 samples were analysed at the USP lab in Sao Paulo.

Hole ID	Easterns	Northerns	Angle (°)	Depth (m)
F01	452972	8463792	90	50
F02	453110	8464303	90	40.86
F03	453002	8463817	90	35
F04	453005	8463779	90	50.19
F05	453083	8464248	90	29.85
F06	453018	8463824	90	34
F07	460835	8464688	90	47.08
Total				286.98

Table 7-1 Summary of Drillholes

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APPENDIX II

Pit ID	Easterns	Northerns	Diamension (m)	Volume (m3)
P01	453006	8463803	1.10 x 1.10 x 4.95	5.99
P02	453097	8464298	1.20 x 1.20 x 2.83	4.07
P03	453004	8463762	1.20 x 1.30 x 4.0	6.24
P04	461022	8464718	2.0 x 3.0 x 1.40	8.4
P05	463234	8474555	1.10 x 1.20 x 2.90	3.83
P06	462302	8467270	1.0 x 1.07 x 3.10	3.32
PA	452991	8463788	1.0 x 1.0 x 3.0	3.0
PB	452995	8463802	1.0 x 1.0 x 3.0	3.0
PC	452998	8463827	1.0 x 1.0 x 3.0	3.0
PD	453019	8463839	1.0 x 1.0 x 3.0	3.0
Total				43.85

Table 7-2 Summary of Pits

No exploration activity has been carried out by ROMA.

The locations of the drill holes and pits are illustrated as follows:

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Figure 7-1 Drillholes and Pits location map for Area 870.140 *the licence boundary is outside the figure area

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APPENDIX II

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Figure 7-2 Drillholes and Pits location map for Area 872.734

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Figure 7-3 Drillholes and Pits location map for Area 872.958

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APPENDIX II

8. SAMPLE PREPARATION, ANALYSES AND SECURITY

No details including QA/QC reports on drilling techniques, sample collection, chemical analysis techniques and sample security have been made available to ROMA. As a consequence the analyses reported cannot be considered as being meeting minimum standards required by the JORC Code (2012).

BHID	FROM	TO	LENGTH (m)	MnO (%)	Remark
F02	0	1	1	14.3
F04	2	3	1	19.15
F04	3	4	1	10.8
F04	4	5.11	1.11	14.37
F04	5.11	6.08	0.97	45.5	Highgrade zone
F04	6.08	7.15	1.07	56.54	Highgrade zone
F04	7.15	8.21	1.06	13.1
F04	8.21	9.25	1.04	24.8
F04	9.25	10.31	1.06	19.32
F05	1	2	1	14.22
F05	10	11	1	23.2
F05	11	12	1	61.93	Highgrade zone
F05	12	13	1	60.37	Highgrade zone
F05	17	18	1	18.66
F05	18	19	1	16.14
F05	19	20	1	12.07
F05	20	21	1	7.78
F05	21	22	1	6.62
F05	22	23	1	6.91
F05	23	24	1	10.73
F05	24	25	1	4.37
F05	26	27	1	6.85
F05	27	28	1	25.29
F05	28	29	1	8.17
F05	29	29.85	0.85	15.99

Table 8-1 Assays of core samples, after Acme Labs 2009 (NOT JORC Code 2012 compliant)

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APPENDIX II

PITID	FROM	TO	LENGTH (m)	MnO (%)	Remark
P01	0.95	1.79	0.84	5.86
P01	1.79	1.95	0.16	5.86
P01	1.95	2.95	1	13.93
P01	2.95	3.95	1	37.02	Highgrade zone
P01	3.95	4.95	1	53.21	Highgrade zone
PA	2	3	1	14.47
PD	2	3	1	11.16

Table 8-2 Assays of pit samples, after Acme Labs 2009 (NOT JORC Code 2012 compliant)

9. DATA VERIFICATION

ROMA conducted a site visit from 25 January to 2 February, 2013. Some verification samples were taken from the mineralised outcrop during the visit. Chemical analysis of these samples confirmed the presence of manganese mineralisation at the sites sampled of the expected tenor.

9.1 Statement as to whether the Competent Person has verified the Data referred to or Relied Upon

Due to the lack of verifiable sampling and geological study that meets the minimum standards required by the JORC Code (2012), any statements in this report relating to tonnage and grade estimates must be considered as a broad indicative guide only and resource estimates are not at all possible.

10. MINERAL PROCESSING AND METALLURGICAL TESTING

No metallurgical tests have been conducted on any representative ore samples.

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APPENDIX II

11. MINERAL RESOURCE ESTIMATES

11.1 Mineral Resource Statement

This project is still in its preliminary exploratory stage and so no resource estimates have been made.

A potential target estimate within the range of 2 – 8 million tonnes has been estimated by ROMA. Table 12-1 summarises the potential exploration Target estimates for the respective licenced areas. According to the JORC code for reporting Mineral Resources and Ore Reserves, a Target estimate is NOT an estimate of resources but is only conceptual in nature as there has been insufficient exploration sampling done in these areas to define a Mineral Resource and it is uncertain if further exploration will eventually result in the determination of a Mineral Resource. Target estimates should not be used in any mining or financial studies.

			Width (m)	Width (m)			Exp. Potential (Tons)	Exp. Potential (Tons)
Area	Mn Block No.	Length (m)	Min	Max	Ave Depth (m)	Density	Min. Thousand Tonnes	Max. Thousand Tonnes
870.140	1	370	15	50	24	1.8	240	800
	2	440	15	50	24	1.8	285	950
	3	600	15	50	24	1.8	400	1,296
872.734	4	280	15	50	24	1.8	180	605
	5	270	15	50	24	1.8	175	583
872.958	6	380	15	50	24	1.8	246	821
	7	250	15	50	24	1.8	162	540
	8	380	15	50	24	1.8	246	821
	9	260	15	50	24	1.8	168	562
	10	230	15	50	24	1.8	149	497
	11	220	15	50	24	1.8	143	475
Total		3,680					*2,000	*8,000

Table 11-1 Exploration Target Potential for the three licences areas

* Value rounded to nearest million

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APPENDIX II

11.2 Parameters and Methodology used by ROMA

From the geological mapping conducted in the three licenced areas (870.140, 872.734 and 872.958) a total of 15 blocks were mapped as containing manganese minerals. An inferred contact with the surrounding Basic Granulite rocks was used to estimate the Target areas. Figures 12-1 to 12-3 show the mapped mineralised areas.

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Figure 12-1 Map of Manganese Blocks (in Red) of Area 870.140

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APPENDIX II

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Figure 12-2 Map of Manganese Blocks (in Red) of Area 872.734

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Figure 12-3 Map of Manganese Blocks (in Red) of Area 872.958

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APPENDIX II

Of the mapped 15 manganese mineralised blocks, 11 were considered as exploration targets since their strike lengths exceed 200 m.

In estimating the exploration target potential, the following assumptions were made,

Mineralisation has minimum width of 15 m and a maximum width of 50 m.
All the eleven mineralised zones have similar characteristics.
Average depth of weathered material is 24 m.
Specific gravity of 1.8 was used in estimating the targets.

Based on the core and pit sample assays, the percentage of manganese in the high and low grade zones are estimated to be within the range of 35 – 45% and 10 – 20% respectively.

11.3 Extent to which Estimate of Mineral Resources and Mineral Reserves may be materially Affected by Environmental, Permitting, Legal, Title, Taxation, Sociao-economic, Marketing, Political or Other Relevant Issues

None of these issues have been considered by ROMA for this report.

11.4 Extent to which Estimate of Mineral Resources and Mineral Reserves may be materially Affected by Mining, Metallurgical, Infrastructure and Other Relevant Factor

None of these issues have been considered by ROMA for this report.

12. MINERAL RESERVE ESTIMATES

No ore reserve estimates for this project have been made by ROMA.

13. MINING AND RECOVERY METHOD

Since there are no reportable resources, ROMA have not conducted any mining studies on the deposits. Since the ore is shallow it would be expected that if mining does occur it will be by utilising standard open pit mining methods with probably a gravity separation plant to produce a marketable concentrate of sufficient manganese grade for export.

14. PROJECT INFRASTRUCTURE

No purpose built mining or exploration infrastructure exists at any of the exploration target sites.

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APPENDIX II

15. MARKET STUDIES AND CONTRACTS

Since there are no resource estimates for any of the deposits, ROMA have not conducted any market studies on the mineralisation at the project since quantities and grades are essential for any study.

16. ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

Since the project is only at a preliminary exploration stage, ROMA have not conducted any environmental studies on any of the projects.

17. ADJACENT PROPERTIES

ROMA has not researched any nearby properties that may have similar mineralisation.

18. OTHER RELEVANT DATA AND INFORMATION

There is no additional data or information relevant to the reported project that would assist with the understanding of the project.

19. INTERPRETATION AND CONCLUSIONS

The Piraí do Norte manganese project is located within a highly metamorphosed granulitic belt in the central south part of Bahia State, Brazil approximately 100 km to the northwest of Ilheus and 300 km to the south of Salvador.

The Piraí do Norte manganese project has had very limited exploration work carried out over the three properties that are covered in this report. This work has included regional scale mapping, seven vertical drill holes up to maximum of around 50m for a total of 286.98 m and twelve small trenches which have been broadly sampled. This work has been poorly documented and does not meet the minimum standards required by JORC Code (2012) for reporting Mineral Resources and Ore Reserves.

Significant barium and silver grades were noted in the chemical analyses of the few samples collected.

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APPENDIX II

ROMA also notes that at the effective date of this report all three Exploration Licences will expire in less than two months and it is doubtful that the licences can be converted to Mining Licences upon their expiry since the exploration work conducted on the Exploration Licences by the Company would appear to be insufficient to meet the Brazil government minimum requirements for conversion.

20. RECOMMENDATIONS

If the three Exploration Licences can be converted to Mining Licences, ROMA recommends continued exploration on all three project areas. This work should be staged with each successive stage dependent on the success of the previous stages. At this early stage ROMA can only detail a reconnaissance exploration program designed to identify and broadly delimit any resources that may be found. More detailed work including close spaced grid drilling would be required over targets outlined in the initial stage before any Measured and Indicated resources can be estimated and mining and financial studies initiated.

ROMA recommends the following exploration program:

Description	Estimated Quantity	Period	*Estimated Cost (US$ million)
Administration		2 Year	0.5
Regional mappingandgeochem sampling		0.5year	1.0
Detailed 1:1000 scale mapping		1.0year
RC or Aircore Drilling on 80m grid spacing over selected targets	50 holes averaging 25 meters depth	0.15 year
Geological supervision, interpretation and resource estimation
Pre-feasibilitystudy			0.2

Dependingonprevious results	N/A	N/A	N/A
RC or Aircore Drilling on 40m grid spacing over selected targets	N/A	N/A	N/A
Metallurgical test work	N/A	N/A	N/A
Miningstudies	N/A	N/A	N/A
Geological supervision, interpretation and resource estimation	N/A	N/A	N/A
Bankable FeasibilityStudy	N/A	N/A	N/A
Applyfor MiningLicences andpermits	N/A	N/A	N/A

Table 20-1 ROMA recommended exploration program

* Note: The estimated cost is an estimation only, and may be subjected to change in the future.

COMPETENT PERSON’S REPORT

APPENDIX II

21. STATEMENT OF QUALIFICATION OF THE COMPETENT PERSON

21.1 Philip A. Jones

I, Philip A. Jones, hereby confirm that:
I have carried out the assignment for Roma Oil & Mining Associates Limited, located at: Unit 3806, 38/F, China Resources Building,
26 Harbour Road, Wan Chai, Hong Kong Tel: (852) 2529 6878 Fax: (852) 2529 6808 Email: [email protected]
I am the author of this report titled “Competent Person’s Report – Manganese Project, Piraí do Norte, Bahia State, Federative Republic of Brazil.”
I graduated with a Bachelor’s degree in Applied Science, Applied Geology from South Australian Institute of Technology in 1974 and a Restricted Quarry Managers Certificate (W.A.).
I am a member of the Australasian Institute of Mining and Metallurgy and Australian Institute of Geoscientists.
I have studied the revised Chapter 18 of the Hong Kong Listing Rules and understand the definitions of “competent person”. My past relevant experience, qualifications and my affiliation with professional associations have fulfilled the requirements to be a “competent person” as set out in the listing rules for the purpose of the Report:

HKEx Requirements of “Competent Person”

18.21

1. I have a minimum of five years experience relevant to the style of mineralization and type of deposit.

2. I am a member of the relevant Recognized Professional Organization, i.e. Australasian Institute of Mining and Metallurgy.

3. I take overall responsibility for the Competent Person’s Report.

18.22

1. I have no economic or beneficial interest (present or contingent) in any of the assets being reported on.

2. I have not been remunerated with a fee dependent on the findings of the Competent Person’s Report.

3. I am not an officer, employee or proposed officer of the issuer or any group, holding or associated company of the issuer.

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APPENDIX II

I have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. I consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
I have neither present nor prospective interests in the Company, the Project or the values reported herein.
I am not aware of any material fact or material change with respect to the subject matter of the Report that is not reflected in the Report.
I am the Chief Geologist of Roma Oil and Mining Associates Limited.
The Report has been prepared consistent with the guidelines set by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“The JORC Code”) for Independent Expert Reports.
As of the date of this certificate, to my best knowledge, information and belief, the Report contains all scientific and technical information that is required to be disclosed to make the Report accurate and not misleading.

Competent Person’s Past Industry Experience

Mr. Philip A. Jones , an Australian aged 59, is ROMA’s Chief Geologist. He graduated with a Bachelor of Applied Science Degree (Applied Geology) from the South Australian Institute of Technology in December 1975. He has been a member of the Australian Institute of Geoscientists since 1992 and Australasian Institute of Mining and Metallurgy since 1983.

Philip has over 35 years of experience as a geologist in exploration, prospect evaluation, project development, open pit and underground mining as well as various management roles. He has experience in various commodities including gold, uranium, iron ore, phosphate, copper, lead, zinc, silver, nickel, coal and silica in Australia, Kyrgyzstan, China, Indonesia, New Zealand, Malaysia, Papua New Guinea and Africa.

Mr. Jones’ past industry experience is summarized as follow:

Extensive experience in open pit and underground mining operations including grade control, mine planning and production scheduling, production reconciliation and reporting, compiling departmental budgets.
Managed numerous exploration programs ranging from regional mapping and geochemical sampling through to resource delineation using RC and diamond drilling.
Extensive experience in JORC compliant ore reserve and mineral resource estimation on numerous orebodies in wide ranging geological environments. Conducted numerous technical and financial feasibility studies on projects prior to development or part of due diligence studies.

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APPENDIX II

Co-authored and authored many, many dozens of JORC Code compliant reports on a very wide range of mineral commodities, geological settings and geographical locations as an independent consultant and as a sub-consultant to Al Maynard & Associates, ROMA, MacKay & Schnellman and CSA Global for most of the period since 1990 as well as the many companies he has been employed by since the JORC Code was first adopted by the ASX in 1989 and similar standard reports since 1975.
Competent in a wide variety of computer software packages including specialised exploration and mining software such as MineMap, Arcview GIS, MapInfo, Micromine and Surpac as well as various database, spreadsheet, word processing, graphical design and presentation packages.

In summary, Mr Jones has evaluated, explored, drilled, mined and estimated resources for well over 100 mineral deposits having worked in Australia, China, Kyrgyzstan, Papua New Guinea, New Zealand, Zimbabwe, Indonesia, Laos, Vietnam, Malaysia, Ecuador and Brazil and reported on many other mineral deposits in many other countries. Mr Jones has over 35 years of relevant detailed experience in open pit and underground mining, exploration and project evaluation geology.

Competent Person’s Past Experience Relevant to the Style of Mineralization and Type of Deposit

Mr. Philip A. Jones has a minimum of five years experiences relevant to the style of mineralization and type of deposit of the target project.

Since the target manganese mineralisation described in the report is mostly residual soils and fracture fillings, Mr Jones’ experience of over 15 years in phosphate, which is also a secondary accumulation in soils and on limestone surfaces, is entirely relevant to the report, especially since this experience is in an operating mine where this style of mineralisation is recovered.

Both styles of mineralisation, phosphate and manganese, are residual in soils and in fracture fillings. The only big difference is that the phosphate is derived from bird guano and the manganese is a weathering product of the bedrock, but much the same chemical processes affect the accumulation and grade of both types of mineralisation in the soils and filling the fractures and rock surfaces.

As well as this relevant experience in phosphate, Mr Jones has worked as an exploration and mining geologist for many years in the Yilgarn of Western Australia which is covered by ubiquitous lateritic iron, and to the south-west of Western Australia especially, lateritic bauxite. Much of the reported manganese mineralisation is lateritic accumulations in soils which is very much analogous to the laterites in the Yigarn. It is extremely difficult not to experience laterite while exploring for gold, nickel and base metals in this Yilgarn region of Western Australia! Mr Jones has worked on numerous laterites in the Yilgarn, mainly when exploring for gold. During over two years working as a geologist at Marvel Loch in WA, Mr Jones explored and eventually the mine Mr Jones worked at as mine geologist mined and recovered gold from several lateritic gold deposits. Although the target mineral was gold, it was absolutely essential to understand the lateritic iron mineralisation to locate and sample the gold contained in the laterite.

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APPENDIX II

Mr Jones also worked for over five years in iron ore mines at Tom Price and Paraburdoo, and for shorter periods at various other iron projects in Western Australia that included residual secondary iron deposits in soils called canga. These deposits, in many ways, are also analogous to the manganese deposits described in the report. One such job at the Cashmere project in Western Australia Mr Jones authored and co-authored several JORC Code compliant public reports over several years on the project’s iron resources including cangas.

Drilling and sampling phosphate at Christmas Island, laterites in the Yilgarn and cangas in the Pilbara and at Cashmere are all entirely relevant to the Brazil manganese mineralisation.

Signed and dated 26 March 2013 at Hong Kong, China

Mr. Philip A. Jones

Competent Person, MAusIMM, MAIG Chief Geologist

22. REFERENCES

Reinhardt M., November 2009, Preliminary Data Evaluation, Xianglan do Brasil Mineração Ltda, Manganese Project – Piraí do Norte Bahia Brazil. Coffee Partners

The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC). 2012 Edition. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves: The JORC Code (2012 Edition).

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APPENDIX II

23. GLOSSARY

The following web sites are recommended to the reader for information and definitions of terms used in this Report.

Geotech[®] Dictionary of Geologic Terms http://www.geotech.org/survey/geotech/dictiona.html

Webref[®] – A glossary – dictionary – collection of terms – terminology related to the field of geology http://www.webref.org/geology/geology.htm

Geologylink[®] geologic glossary. http://college.cengage.com/geology/resources/geologylink/glossary.html

COMPETENT PERSON’S REPORT

APPENDIX II

Appendix A: Risk Analysis

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APPENDIX II

Risk Analysis

The following risk analysis follows Guidance Note 7 of the Stock Exchange of Hong Kong. Risk has been classified from major to minor as follows:

High Risk: the factor poses an immediate danger of a failure which, if uncorrected, will have a material effect (>15% to 20%) on the project cash flow and performance and could potentially lead to project failure.

Medium Risk: the factor, if uncorrected, could have a significant effect (10% to 15%) on the project cash flow and performance unless mitigated by some corrective action.

Low Risk: the factor, if uncorrected, will have little or no effect (<10%) on project cash flow and performance.

Project Risks

The main risks pertaining to these projects are as follows:

Resource Risk (High)

The JORC (2012) Code ranks resource and reserve estimates according to reliability of the estimates. This project is still in its preliminary exploratory stage and so no JORC Resources estimates can be estimated.

Target estimates as quoted in this report are NOT an estimate of resources but are conceptual in nature. If the resources are over estimated in either quantity or quality of manganese, the profitability of the project will be adversely affected. If however the quantity or quality of the manganese is underestimated the profitability of the project will be enhanced.

It is believed that without resource and reserve estimates, an accurate valuation of the projects is not possible.

Sovereign Risk (Low to Medium)

The Brazil mining regulations and laws have changed considerably over recent years and are expected to continue to evolve. The extent and direction of further changes to the mining regulations and laws and their impact on these projects cannot be estimated.

Manganese Price Risk (Low to Medium)

The world economy is currently unstable resulting in widely fluctuating manganese prices. Current prices for manganese are rising gradually but it is not certain if the price will continue to rise in the future Demand of manganese ore from the local steel industry is expected to increase along with economic development. An accurate price for the manganese produced cannot be predicted until all the test work is completed on processing the manganese ore to determine the quality of the manganese produced. The marketability and actual price received for the manganese mined and processed will depend on the quality of the manganese produced and availability and proximity to markets.

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APPENDIX II

Natural Disasters Risk (Low to Medium)

Storms and floods are possible in the project areas. There is possibility of unpredicted flooding occurring in the potential mining areas. As the mining area is situated in the equator, it has the typical equatorial humid climate with events of high intensity rainfall. Flooding will unavoidably affect the any future mining activities in the area, including any production schedules, mining activities with potential for damaging mining facilities.

Tenure (High)

ROMA believes that the company has failed to meet the minimum exploration work and expenditure requirements and no final reports have been submitted to the relevant authorities on any work carried out during the tenure of the Exploration Licences. As a consequence it is likely that any application for Mining Licences will be refused and tenure on the properties lost.

Overall Risks

The likelihood of a risk event occurring within a nominal 7 year time frame has been considered as:

Likely: will probably occur Possible: may occur Unlikely: unlikely to occur

The degree or consequence of a risk and its likelihood are combined into an overall risk assessment, as shown below:

Likelihood of Risk (within 7 years)	Consequence of Risk	Consequence of Risk	Consequence of Risk
	Minor	Moderate	Major
Likely	Medium	High	High
Possible	Low	Medium	High
Unlikely	Low	Low	Medium

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APPENDIX II

A summary of the main Project risks are included, summarized and ranked by their importance as follows:

Risk Issue Likelihood Consequence	Likelihood	Consequence Rating	Risk
Geological &Geotechnical
Resource/Reserve Tonnes and grades not achieved	Likely	Major	High

Economic Conditions
Manganese Price	Possible	Moderate	Medium
Sovereign Risk	Possible	Moderate	Medium

Tenure
Mining Licence Applications not Approved	Likely	Major	High

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APPENDIX II

Appendix B: Photos of Drill Core

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APPENDIX II

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F01 drilled at Area 870.140/2007

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F02 drilled at Area 870.140/2007

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F03 drilled at Area 870.140/2007

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F04 drilled at Area 870.140/2007

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F05 drilled at Area 870.140/2007

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F06 drilled at Area 870.140/2007

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F07 drilled at Area 872.958/2006

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APPENDIX II

Appendix C: Photos of Pit

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APPENDIX II

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P01 dug at Area 870.140/2007

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P03 dug at Area 870.140/2007

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P05 dug at Area 872.734/2006

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P02 dug at Area 870.140/2007

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P04 dug at Area 872.958/2006

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P06 dug at Area 872.958/2006

COMPETENT PERSON’S REPORT

APPENDIX II

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PA dug at Area 870.140/2007

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PC dug at Area 870.140/2007

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PB dug at Area 870.140/2007

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PD dug at Area 870.140/2007

COMPETENT PERSON’S REPORT

APPENDIX II

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COMPETENT PERSON’S REPORT

APPENDIX II

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STATUTORY AND GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which 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 circular 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 circular misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date and immediately after Completion will be as follows:

As at the Latest Practicable Date

HK$

Authorised share capital:

1,000,000,000,000 Shares 1,000,000,000.000

Issued and fully paid share capital:

6,215,679,716 Shares as at the Latest Practicable Date 6,215,679.716

All the Shares in issue rank pari passu in all respects with each other including as regards to dividends, voting rights and return of capital. The Shares in issue are listed on the Stock Exchange.

Since 31 December 2011, the date to which the latest audited consolidated accounts of the Company were made up, and up to the Latest Practicable Date, the Company has issued 10,000,000 new ordinary Shares in 2012 and there had not been any repurchase of Share. As at the Latest Practicable Date, the Company has 138,000,000 outstanding options granted pursuant to two Company’s employee share option schemes adopted by the Company on 20 December 2001 and 21 May 2012 respectively. The exercise period of such outstanding options in respect of:–

(i) the employee share option schemes adopted by the Company on 20 December 2001 is between 6 May 2010 and 5 May 2018 with an exercise price of HK$2.60 per Share; and
(ii) the employee share option schemes adopted by the Company on 21 May 2012 is between 28 May 2012 and 27 May 2020 with an exercise price of HK$0.95 per Share.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

As at the Latest Practicable Date, the Company has 300,000,000 outstanding options granted to Xinwen Mining Group Co., Ltd. pursuant to the option deed dated 26 March 2010 and approved by the Shareholders in an extraordinary general meeting of the Company held on 23 November 2010 with an exercise price of HK$3.15 per Share (subject to adjustment) and the exercise period in respect of which is between 25 November 2010 and 24 November 2013.

As at the Latest Practicable Date:–

(i) there are outstanding convertible Note of HK$400 million, being the entire 2009 Convertible Note, with the Conversion Price of HK$1.0 per Conversion Share issued on 24 March 2010; and
(ii) there was no conversion of the 2009 Convertible Note, whether wholly or in part.

Save as disclosed herein, as at the Latest Practicable Date, there were no outstanding options, warrants, or convertible securities which may confer any right to the holder thereof to subscribe for, convert or exchange into new Shares.

There had been no reorganization of capital of the Company during the two financial years preceding the date of the Circular.

The Company has not declared any dividends to the Shareholders during the two years immediately prior to the date of this circular. The Directors are of the view that the ability of the Company to pay dividends will depend on, among other things, the Group’s operation and financial performance, cash flows, operating and capital requirements, and the requirements of the applicable laws and regulations. The Company has no plan or intention to alter its present dividend policy.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

3. DIRECTORS’ INTERESTS

(I) Directors and chief executive of the Company

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company and each of their respective associates, in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which are required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions in which they are deemed or taken to have under such provisions of the SFO); or (b) pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by Directors as required to be notified to the Company and the Stock Exchange, were as follows:

Long positions in the ordinary shares of the Company

			Number of Shares
			Interest of			Approximate
	Beneficial	Interest of	controlled	Number of		percentage of
Name of Director	owner	spouse	corporation	share option	Total	shareholding
				(Note 2)		%
HE Xuechu	–	22,460,000	4,065,000,000	–	4,087,460,000	65.76
			(Note 1)
LIU Wei, William	–	–	–	40,000,000	40,000,000	0.64
SHI Lixin	–	–	–	30,000,000	30,000,000	0.48
YAN Weimin	30,000,000	–	–	30,000,000	60,000,000	0.97
ANG Siu Lun, Lawrence	–	–	–	15,000,000	15,000,000	0.24
CHAN Chun Wai, Tony	–	–	–	3,000,000	3,000,000	0.05
FOK Hon	–	–	–	3,000,000	3,000,000	0.05
MA Gang	–	–	–	3,000,000	3,000,000	0.05

Notes:

(1) The 4,065,000,000 Shares were held by Hong Bridge Capital Limited. Mr. HE Xuechu is the controlling shareholder and director holding 68% equity interest in Hong Bridge Capital Limited. Mr. LI Xing Xing holds 32% equity interest in Hong Bridge Capital Limited.

(2) This refers to the number of underlying shares of the Company covered by its share option scheme.

Save as disclosed above and the interests as disclosed below, none of the Directors or chief executives of the Company had, as at the Latest Practicable Date, any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the required standard of dealings by Directors of listed issuers as referred to in Rule 5.46 of the GEM Listing Rules.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

(II) Substantial shareholders

So far as is known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, the following persons (other than a Director or the chief executive of the Company) had an interest or short position in the Shares and underlying Shares which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at a general meeting of any member of the Group, or held any option in respect of such capital:

	Number of Shares and	Number of Shares and	underlying shares
				Total number
			Interest of	of Shares	Approximate
	Beneficial	Interest of	controlled	and underlying	percentage of
Name of Shareholder	owner	spouse	corporation	shares held	shareholding
					%
Hong Bridge Capital Limited	4,065,000,000	–	–	4,065,000,000	65.40
	(Note 1)
HE Xuechu_(Note 2)_	–	22,460,000	4,065,000,000	4,087,460,000	65.76
			(Note 1)
FOO Yatyan_(Note 2)_	22,460,000	4,065,000,000	–	4,087,460,000	65.76
LI Xing Xing	–	–	4,065,000,000	4,065,000,000	65.40
			(Note 3)
The Purchaser	840,568,000	–	–	840,568,000	13.52
	(Note 4)

Notes:

(1) The 4,065,000,000 Shares were held by Hong Bridge Capital Limited. Mr. HE Xuechu is the controlling shareholder and director holding 68% equity interest in Hong Bridge Capital Limited. Mr. LI Xing Xing holds 32% equity interest in Hong Bridge Capital Limited.
(2) Ms. FOO Yatyan is the spouse of Mr. HE Xuechu.
(3) Mr. LI Xing Xing holds 32% equity interest in Hong Bridge Capital Limited.
(4) The 840,568,000 Shares held by the Purchaser represent 440,568,000 Shares, and 400,000,000 Shares to be allotted and issued upon exercise of Conversion rights attaching to the 2009 Convertible Note with an initial Conversion Price of HK$1.0 per Conversion Share.

Save as disclosed above, as at the Latest Practicable Date, the Company had not been notified by any other persons (other than the Directors or the chief executive of the Company) who had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

4. SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors nor proposed Directors had any existing or proposed service contracts with any member of the Group which will not expire or is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

5. DIRECTORS’ INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENT SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors, directly or indirectly, had any interest in any assets which had since 31 December 2011 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

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

6. LITIGATION

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

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save for the Disposal, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, being the date to which the latest published consolidated audited financial statements of the Group were made up.

8. COMPETING INTEREST

Mr. Yan Weimin (“ Mr. Yan ”), a non-executive Director, is a shareholder holding approximately 98.75% equity interest in Shanghai Yingyue Industrial Co. Ltd. (“ Yingyue ”). Yingyue is principally engaged in the provision of raw materials for construction (including steel products) to sizeable PRC companies. Shanghai Hongying Trading Co. Ltd. (“ Hongying Trading ”) is principally engaged in the trading of (i) steel and steel related products; and (ii) copper and copper related products. Hongying Trading had entered into a distribution agreement with Yingyue, pursuant to which Yingyue would become a non-exclusive distributor of the steel products sourced by Hongying Trading. Accordingly, Mr. Yan is regarded as interested in such competing business of the Group by virtue of his interest in Yingyue.

Save for disclosed above, as at the Latest Practicable Date, none of the Directors or any of their respective associates had any business or interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

9. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business, were entered into by the Group during the period commencing two years preceding the Latest Practicable Date and are or may be material:

(i) the subscription agreement dated 19 May 2011 (as supplemented by a confirmation letter dated 20 June 2011 and supplemental agreements dated 1 September 2011, 16 September 2011, 3 October 2011 and 18 October 2011) entered into between the Company as issuer and Zhe Shuang Investment Holdings Group Ltd as subscriber in relation to the subscription for 148,000,000 new Shares;
(ii) the framework agreement entered into between Shanghai Hongying Trading Co. Ltd (“ Hongying Trading ”) and Shanghai Yingyue Industrial Co. Ltd (“ Yingyue ”) on 24 September 2012 (as supplemented by a supplemental agreement dated 16 October 2012) in relation to the continuing connected transaction between Hongying Trading and Yingyue regarding the sale of its copper products by Hongying Trading to Yingyue for the proposed caps of RMB206.35 million and RMB353.10 million for the year ended 31 December 2011 and 31 December 2012 respectively, details of the transaction were set out in the announcements and circular of the Company dated 24 September 2012, 17 October 2012 and 19 October 2012;
(iii) the Disposal Agreement;
(iv) the Supplemental Agreement; and
(v) the subscription agreement dated 5 March 2013 entered into between the Company as the issuer and Zhejiang Geely Holding Group Company Limited at the subscriber in relation to the issue of the zero coupon convertible bonds in principal amount of HK$740,000,000 to be issued by the Company to the subscriber.

10. EXPERT AND CONSENT

(i) The following is the qualification of the expert who has been named in this circular and has given opinions and advice which is contained in this circular:

Name Qualification Mr. Philip A. Jones of Roma Oil and Mining Competent Person Associates Limited

STATUTORY AND GENERAL INFORMATION

APPENDIX III

(ii) Roma Oil and Mining Associates Limited has given and has not withdrawn its written consents to the issue of this circular with the inclusion of their letters and/or reference to their names or opinions in the form and context in which they appear.
(iii) As at the Latest Practicable Date, Roma Oil and Mining Associates Limited was not beneficially interested in the share capital of any member of the Group nor did it has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(iv) As at the Latest Practicable Date, Roma Oil and Mining Associates Limited did not, directly or indirectly, had any interest in any assets which had since 31 December 2011 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

11. MISCELLANEOUS

(i) The registered office of the Company is situated at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands.
(ii) The head office and principal place of business of the Company in Hong Kong is situated at Suite 2703, 27th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong.
(iii) The share registrar and transfer office of the Company in Hong Kong is Union Registrars Limited at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong.
(iv) The company secretary of the Company is Mr. Lam King Ho, a member of the American Institute of Certified Public Accountants, the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants.
(v) The company compliance officer of the Company is Mr. Liu Wei, William. Mr. Liu is the Chief Executive Officer of the Company and holds a master degree in business administration from the University of San Francisco.
(vi) The Company established an audit committee with written terms of reference in compliance with Rules 5.28 and 5.33 of the GEM Listing Rules. The primary duties of the audit committee are to review and supervise the financial reporting process and internal control systems of the Group. The audit committee comprises three members, including Mr. Chan Chun Wai, Tony, Mr. Fok Hon and Mr. Ma Gang, all are independent non-executive Directors. Mr. Chan Chun Wai, Tony has the appropriate financial and accounting experience required experience required by the GEM Listing Rules and acts as the chairman of the audit committee.
(vii) There has been no qualification contained in the auditors’ report in respect of each of the financial years ended 31 December 2010 and 31 December 2011.

STATUTORY AND GENERAL INFORMATION

APPENDIX III

(viii) None of the Directors or any persons acting in concert with them has borrowed or lent the Shares as at the Latest Practicable Date.
(ix) In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the registered office of the Company at Suite 2703, 27th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong from the date of this circular up to and including the date of the EGM:

(i) the memorandum of association and articles of association of the Company;
(ii) the annual reports of the Company for the two years ended 31 December 2011 and the third quarterly report of the Company for the nine months ended 30 September 2012;
(iii) the Competent Person’s Report prepared and issued by Roma Oil and Mining Associates Limited, the text of which is set out in Appendix II to this circular;
(iv) the written consent referred to under the paragraph headed “Expert and consent” in this appendix;
(v) the material contracts referred to in the paragraph headed “Material contracts” in this appendix;
(vi) the circular of the Company dated 19 October 2012 in relation to the continuing connected transaction of the Company;
(vii) the circular of the Company dated 7 March 2013 in relation to the connected transaction in respect of the issue of convertible bonds in the principal amount of HK$740,000,000; and
(viii) this circular.

NOTICE OF EGM

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HONBRIDGE HOLDINGS LIMITED 洪橋集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8137)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ Meeting ”) of Honbridge Holdings Limited (the “ Company ”) will be held at Suite 2703, 27th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong, on Thursday, 18 April 2013 at 10:00 a.m. for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(a) the disposal agreement dated 4 January 2013, as amended and supplemented by a supplemental agreement dated 1 February 2013 (collectively, the “ Disposal Agreement ”) entered into between the Company as the vendor and Brilliant People Limited as the purchaser, (a copy of the same having been produced at the meeting marked “A” and signed by the chairman of the meeting for identification purposes) in relation to, among others, the sale and purchase of the entire issued share capital of Hill Talent Limited at a total consideration of HK$715,000,000 and the transactions contemplated thereunder (including the repurchase of the convertible note in the principal amount of HK$400,000,000) be and are hereby approved, ratified and confirmed; and
(b) the directors of the Company (the “ Director(s) ”) be and are hereby authorized to do such acts and things as the Directors may consider necessary, desirable or expedient to carry out or give effect to the transactions contemplated under the Disposal Agreement.”

On behalf of the Board Honbridge Holdings Limited LIU Wei, William Director and Chief Executive Officer

Hong Kong, 28 March 2013

NOTICE OF EGM

Registered office: Scotia Centre 4th Floor, P.O. Box 2804 George Town Grand Cayman Cayman Islands

Principal place of business in Hong Kong: Suite 2703, 27th Floor Great Eagle Centre 23 Harbour Road Wanchai Hong Kong

Notes:

A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and on a poll vote instead of him. A proxy need not be a member of the Company.
In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited with the Company’s share registrar and transfer office in Hong Kong, Union Registrars Limited, at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude any member from attending and voting in person at the Meeting or any adjourned meeting thereof should he so wishes.
In case of joint shareholdings, the vote of the senior joint shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint shareholder(s) and for this purpose seniority will be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint shareholdings.
Shareholders are advised to read the circular of the Company dated 28 March 2013 which contains information concerning the resolution to be proposed in this notice.
As of the date of this notice, the Board comprises Mr. He Xuechu, Mr. Liu Wei, William and Mr. Shi Li Xin as executive Directors; Mr. Ang Siu Lun, Lawrence and Mr. Yan Weimin as non-executive Directors and Mr. Chan Chun Wai, Tony, Mr. Fok Hon and Mr. Ma Gang as independent non-executive Directors.

AI assistant

Honbridge Holdings Limited — Proxy Solicitation & Information Statement 2013

51290_rns_2013-03-27_3d68962e-3f97-47c4-a9dc-83c78a097450.pdf

HONBRIDGE HOLDINGS LIMITED 洪橋集團有限公司

MAJOR DISPOSAL IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF HILL TALENT LIMITED

CONTENTS

CHARACTERISTICS OF GEM

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

HONBRIDGE HOLDINGS LIMITED 洪橋集團有限公司

MAJOR DISPOSAL IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF HILL TALENT LIMITED

INTRODUCTION

LETTER FROM THE BOARD

This circular

THE DISPOSAL AGREEMENT

Assets to be disposed of:

LETTER FROM THE BOARD

Consideration

Terms of the Promissory Note

LETTER FROM THE BOARD

Basis for the consideration

Condition precedent

LETTER FROM THE BOARD

Completion

INFORMATION ON THE DISPOSAL GROUP

LETTER FROM THE BOARD

Information on the Disposal Mines

Recent developments

The Disposal Mines

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Shareholding structures

As at the Latest Practicable Date

LETTER FROM THE BOARD

Financial information of the Disposal Group

LETTER FROM THE BOARD

REASONS AND BENEFITS FOR DISPOSAL

Price of manganese ore (US$/mtu)

POTENTIAL FINANCIAL IMPACT OF THE DISPOSAL

LETTER FROM THE BOARD

(i) Earnings

(ii) Assets and liabilities

FINANCIAL AND TRADING PROSPECT OF THE GROUP

LETTER FROM THE BOARD

USE OF PROCEEDS

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

GEM LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

Voting

EGM

RECOMMENDATION

ADDITIONAL INFORMATION

1. AUDITED FINANCIAL STATEMENTS OF THE GROUP

2. MATERIAL ADVERSE CHANGE

3. STATEMENT OF INDEBTEDNESS

4. SUFFICIENCY OF WORKING CAPITAL

5. BUSINESS REVIEW AND FINANCIAL AND TRADING PROSPECTS OF THE GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Re: Competent Person’s Report concerning the Manganese Project in Brazil

Yours faithfully,

Roma Oil and Mining Associates Limited

Executive Summary

APPENDIX II

Table of Contents

COMPETENT PERSON’S REPORT

List of Tables

List of Figures

1. INTRODUCTION

1.1 Program Objectives

1.2 Purpose of the Report

1.3 Work Program

1.4 Statement of Independence of ROMA

1.5 Warranties

1.6 Indemnities

1.7 Consents

1.8 Sources of Information and Data

Honbridge Holdings Limited Proxy Solicitation & Information Statement 2013