IRC Limited — Capital/Financing Update 2012

Apr 10, 2012

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.

The information set out below in relation to the Caedmon acquisition is provided for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in the Company.

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

Share transaction: MOLYBDENUM EXPLORATION ACQUISITION

Tuesday 10th April 2012. IRC Limited (‘‘IRC’’ or the ‘‘Company’’, together with its subsidiaries, the ‘‘Group’’; Stock Code 1029) announced today that an agreement has been signed to acquire a controlling 50% plus one share stake and an option over all remaining shares in a molybdenum exploration project situated in the Amur Region of the Far East of Russia. The acquisition will provide IRC with an attractive industrial commodity development opportunity whilst enhancing commodity and regional diversification.

KEY HIGHLIGHTS

• . Low cost entry into a new project with significant exploration upside

• . Complementary commodity diversification: attractive to IRC’s customer base

• . Early stage exploration identified metalised zones hosting high-grade pockets

• . Well located projects close to rail, energy and water infrastructure

Commenting on the announcement, Jay Hambro, Executive Chairman of IRC said: ‘‘With the acquisition of a controlling interest in an early stage exploration project IRC has broadened its commodity exposure within the steel raw materials arena. This is a project that should benefit from IRC’s unique competitive advantages of geology and geography and our proven track record of successfully exploring and developing greenfields deposits.’’

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THE TRANSACTION

On 6th April 2012, IRC has concluded an agreement to acquire from Sangritta Limited (‘‘Sangritta’’) and Lania Consulting Limited (‘‘Lania’’), a controlling 50% plus one share stake in Caedmon Limited (Caedmon) and an option to acquire the remaining shares in Caedmon (‘‘Option’’). Sangritta holds 97.5% of Caedmon’s issued share capital with the balance (2.5%) held by Lania.

The consideration payable for the acquisition comprises share consideration for the acquisition of the controlling interest in Caedmon, cash consideration for the grant of the Option and cash consideration in respect of certain shareholder indebtedness (‘‘Shareholder Debt’’). The share consideration will be the issue and allotment of 57,352,941 ordinary IRC shares with a nominal value of HK$0.01 each (‘‘Consideration Shares’’) to Sangritta and Lania. The Consideration Shares represent a value of US$10,000,000 based on HK$1.36 per Share, arrived at after arm’s length negotiations and represents a 17.2% premium to the closing price of IRC shares on 5th April 2012. The Consideration Shares will be issued under the general mandate granted to the Directors at the 2011 Annual General Meeting of the Company. The cash consideration for the grant of the Option is US$180,000 and the cash consideration in respect of the Shareholder Debt is US$320,000, payable to Sangritta Limited within a month of completion of the transaction. The consideration was determined after arm’s length negotiations between the Company, Sangritta and Lania.

The Company may exercise the Option any time over a two-year period commencing on the date of completion of the transaction. If the Company elects to exercise the Option it will be required to issue up to 57,352,941 ordinary IRC shares with a nominal value of HK$0.01 each (‘‘Option Shares’’) to Sangritta Limited. The Option Shares represent a value of US$10,000,000 (‘‘Option Exercise Price’’) based on HK$1.36 per Share, arrived at after arm’s length negotiations and represents a 17.2% premium to the closing price of IRC shares on 5th April 2012. However, the number of Option Shares issued may be adjusted down if between completion of the transaction and exercise of the Option, Caedmon requires additional financing for its or its subsidiary’s molybdenum operations. In such circumstances the Option Exercise Price shall be reduced by 1% for every additional US$100,000 of funding made available by the Company or associates of the Company.

The agreement is conditional on a number of matters, including the Listing Committee of The Stock Exchange of Hong Kong Limited granting listing of and permission to deal in the Consideration Shares and the results of a confirmatory due diligence process carried out on Caedmon and its subsidiary being acceptable to the Company. An application will be made to The Stock Exchange of Hong Kong Limited for the listing of and permission to deal in the Consideration Shares and the Option Shares, if the Option is exercised.

The Consideration Shares are subject to a one year lock-up from the date of completion of the transaction. The Option Shares, if issued, will be subject to a one year lock-up from the date of exercise of the Option. Under the terms of the lock-ups, neither Sangritta nor Lania are entitled to sell, transfer, grant options over, otherwise dispose of (either conditionally or unconditionally or directly or indirectly, or otherwise) the Consideration Shares or, if issued, the Option Shares, if the Option is exercised. It is currently anticipated that the transaction will be completed by the end of June 2012.

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The Consideration Shares represent approximately 1.71% of the existing issued share capital of the Company and approximately 1.68% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares. Following the completion of the transaction the enlarged share capital of the Group will be 3,419,352,941 Shares.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Sangritta and Lania are third parties independent of the Company and connected persons of the Company.

PROJECTS OVERVIEW

Caedmon, through its wholly-owned subsidiary, LLC ‘‘Goriny Park’’, holds three early stage exploration prospects, namely: 1. Vesyolaya: the prospect where the most exploration work has been undertaken. Presence of veintype and porphyric mineralisation suggests a significant resource potential.

1. Sredneilichinsky: early exploration of this prospect suggests the presence of high-grade copper with molybdenum with a significant resource potential.

2. Mongolijsky: this prospect is smaller in scale. Early exploration suggests a complex of deposits.

As of 31st March 2012, the net asset value of Caedmon was approximately US$0.4 million and Caedmon’s net loss for the year ended 31st December 2011 was approximately US$0.1 million. Caedmon was established in 2011 and hence no 2010 figures were available.

IRC intends to undertake geological and technical studies to confirm and advance the exploration work that has already completed. The budget for all works is not expected to exceed US$7 million for two to three years to provide audited reserves and resource estimates to the JORC standard.

The Company was attracted to this acquisition because it offered an opportunity to make a low cost entry into a new exploration project. The project offers IRC an opportunity to diversify its existing commodity interests, which IRC considers will be an attractive proposition for the Company’s customer base. Another factor which attracted IRC to the transaction is the proximity of the project to existing rail, energy and water infrastructure. IRC considers the project offers a good opportunity for the Company to utilise its experience in exploring and developing greenfields deposits to add value to the project.

The Directors (including the independent non-executive Directors) believe the terms of the transaction are fair and reasonable and in the interests of the shareholders as a whole.

GENERAL

IRC’s vision is to provide shareholders with superior value through its mission of developing a SinoRussian industrial commodities champion. The Group comprises a mining business which is focused on exploring, developing and operating and beneficiating industrial commodities through a portfolio projects in the Russian Far East and the north-eastern region of China. The Group has successfully

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developed the Kuranakh Project from a greenfields site through to initial production of titanomagnetite and ilmenite concentrates. The Group is advancing other projects in the Russian Far East, notably the K&S Project and the Garinskoye Deposit, for sale and distribution of its products into Chinese, Russian and international markets.

By Order of the Board G. JAY HAMBRO Executive Chairman

Hong Kong, People’s Republic of China

Tuesday 10th April 2012

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 Director is Mr Simon Murray, CBE, Chevalier de la Légion d’Honneur. The Independent Non-Executive Directors are Mr Daniel Bradshaw, Mr Jonathan Martin Smith and Mr Chuang-Fei Li.

Investors

Nicholas Bias, Head of Communications Office: +852 2772 0007 Mobile: +852 9088 1029 Email: nb@ircgroup.com.hk

Media (Racepoint Limited)

Tony Turner Office: +852 3111 9988 Mobile: +852 3111 9928 Email: tturner@racepointgroup.com

Monika Yeung Office: +852 3111 9988 Mobile: +852 3111 9964 Email: myeung@racepointgroup.com

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

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