IRC Limited — Capital/Financing Update 2015

Jan 7, 2015

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

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(Incorporated in Hong Kong with limited liability) (Stock Code: 1029)

IRC CELEBRATES K&S COMMISSIONING

Wednesday, 7 January 2015: IRC Limited (‘‘IRC’’ or the ‘‘Company’’) — is pleased to announce the start of commissioning activities at the K&S Mine. This is a significant milestone for IRC as it transitions toward a larger lower-cost producer, ensuring its place as a profitable operation even in the current low iron ore price environment.

The formal commissioning process began on schedule over the calender new year period with the ball mills being the first items to start commissioning. This marks the start of the full project commissioning process toward annual capacity of a new 3.2 million tonnes of high-quality low-cost production. The balls mills are used for grinding ore and the installation of lubrication stations have allowed preliminary rotation of the main body. There are four Chinese made mills with 5.5 metres diameter and 8.5 metres length. This equipment is by far the most significant in terms of capital cost and operating cost (media and power consumption).

The commissioning of the ball mills will be followed by the larger equipment: the primary, secondary, fine crushing and the dry magnetic separation units. Fine-crushed ore storage, the thickening units, and the beneficiation plant are expected to follow in the early part of the second quarter, and the concentrate storage and loading units, which are already largely constructed, commission in the second quarter of 2015.

Commenting on the positive news, Jay Hambro, Executive Chairman of IRC said: ‘‘It is pleasing to start 2015 on a high-note as we celebrate the start of commissioning K&S. Whilst there is still much work to be done as we bring together all the different parts and pieces of this large-scale operation, we are confident that shareholders and stakeholders alike, will share our excitement for 2015 and the benefits of full-scale commercial production that lie ahead.

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I recognise that the low prices for iron ore at present are challenging the industry. Nevertheless, with our cost position aided by recent optimisation and the impact of currency movements, I am confident that K&S will quickly earn a place as one of the lowest-cost mines in the world. This will provide a strong footing for IRC in the iron ore industry, and indeed, with a significant boost to cash flows, as an investment opportunity too.’’

As announced in December 2014, the forecasts for the project budget and operating costs will be lower than previously estimated with operating costs at the lower end of the industry cost curve. However, during the last quarter, considerable volatility was noted in iron ore prices and Rouble exchange rates and consequently, shareholders are advised that, like many other companies in the sector, IRC could be required to impair the K&S asset due to a lower projected operating cash flows, however, this has no cash flow impact.

As Petropavlovsk is the guarantor of the ICBC facility, and as part of the Petropavlovsk refinancing process, IRC has applied for certain covenant waivers under the ICBC project finance facility for K&S, and subject to the fulfillment of certain conditions precedent, ICBC has agreed to grant the loan covenant waivers.

IRC has also applied for an extension to its loan availability period due to the contractor delay. At present US$52 million remains undrawn following the loan availability closure on 8 December 2014. Consequently, IRC has applied to ICBC for an extension to match the project construction delay to the loan. Positive feedback has been received and it is expected that the extension will be granted shortly.

By Order of the Board G. JAY HAMBRO Executive Chairman

Hong Kong, People’s Republic of China Wednesday, 7 January 2015

As at the date of this announcement, the Executive Directors of the Company are Mr G. Jay Hambro, Mr Yury Makarov and Mr Raymond Kar Tung Woo. The Non-Executive Directors are Mr Simon Murray, CBE, Chevalier de la Légion d’Honneur, Mr Cai Sui Xin and Mr Liu Qingchun. The Independent Non-Executive Directors are Mr Daniel Bradshaw, Mr Jonathan Martin Smith and Mr Chuang-fei Li.

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For further information, please contact:

Nicholas Bias

Head of Communications Telephone: +852 2772 0007 Mobile: +852 9088 1029 Email: nb@ircgroup.com.hk

Shirly Chan (中文查詢) Investor Relations Co-Ordinator Telephone: +852 2772 0007 Mobile: +852 6623 3450 Email: sc@ircgroup.com.hk

Registered Office

IRC Limited 6H, 9 Queen’s Road Central Hong Kong Office: +852 2772 0007 Fax: +852 2772 0329 Website: www.ircgroup.com.hk

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