IRC Limited — Regulatory Filings 2015

Dec 17, 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 the Hong Kong with limited liability)

(Stock code: 1029)

UPDATE ON K&S PROJECT AND DEMAND UNDER CNEEC CONSTRUCTION BOND AND RESUMPTION OF TRADING

Thursday, 17 December 2015: This announcement is made by IRC Limited (the “Company” and, together with its subsidiaries, the “Group”) pursuant to the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09(2) of the Listing Rules.

The Company noted in its Third Quarter Trading Update dated 12 October 2015 that the Group was encountering delays in the construction timetable at the K&S mine. As noted by the Company in its circular to shareholders dated 17 July 2015 relating to its open offer, the Group’s contract with the main contractor, CNEEC, includes terms that include substantial liquidated damages from the contractor for delays. The Company has been engaged in discussions with its finance provider, Industrial and Commercial Bank of China (“ICBC”) and with CNEEC with regard to these liquidated damages and certain claims made by CNEEC for payment for extra works. The Group has made a claim of approximately US$30 million under its fully funded construction bond which is held with ICBC, on the Group’s behalf, to cover contractor delay penalties.

The Company asked the The Stock Exchange of Hong Kong Limited (“Stock Exchange”) to halt trading in its shares when the Group on 14 December 2015 received a message from ICBC informing that ICBC received an injunction whereby it could not effect payment of approximately US$30 million to the Group under the construction bond. The Company and its advisors believe that the injunction is invalid, and is in consultation with its advisers to determine further course of actions.

At the same time, the Company is in constructive discussion with ICBC and CNEEC with a view to find amicable solutions for various issues, including the treatment of the construction bond and the related injunction, waivers for the Group to maintain certain security deposits, and waivers to comply with certain loan covenants under the ICBC project facility. These discussions have moved toward legal documentation and further updates will be made when details are available.

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IRC remains well funded and work at the K&S site is ongoing. The unaudited cash balance at the end of the third quarter 2015 was US$95.6 million. This figure includes US$28.3 million in the debt service reserve account and does not include the US$30.0 million of fully funded bond payments that ICBC hold on IRC’s behalf as down payments on construction work at K&S. Total debt outstanding was US$309.5 million made up of US$297.5 million of the ICBC project loan and US$12.0 million of working capital facility for the Kuranakh project.

At K&S, the final stages of commissioning are ongoing. The hot commissioning of the first stage of the crushing and screening plant and magnetic separation machinery was completed in August 2015. The Company also announced on 16 October 2015 the successful initiation of the on-site rail logistics which will allow first shipments of commercial product. The Company anticipates that it will soon be able to announce the two remaining milestones – the hot commissioning of the second (final) phase of the crushing and screening facilities and the hot commissioning of the Processing Plant and Drying Unit; both are expected to be completed during the first quarter of 2016.

The building works that are least advanced are those at the Drying Unit and so IRC is looking at ways to temporarily avoid the need to use it during the processing stage. Part of the Processing Plant uses Wet Magnetic Separation where the concentrate is in solution. As a result the product remains wet and is susceptible to freezing in winter when loaded into rail wagons. To avoid this, the Drying Unit is needed to reduce the moisture content during winter. However, the addition of anti-freeze to the concentrate can also prevent the product from freezing. In the long run, the use of anti-freeze is an additional cost we would look to avoid but IRC is reviewing its use currently to expedite shipments of product to customers and improve IRC’s cashflows depending on the ongoing iron ore price.

At the request of the Company, trading in the shares of the Company on Stock Exchange was halted with effect from 9:00 a.m. on Tuesday, 15 December 2015. Application has been made to the Stock Exchange for the resumption of trading in the shares of the Company with effect from 9:00 a.m. on Friday, 18 December 2015.

By Order of the Board IRC Limited G. Jay HAMBRO Executive Chairman

Hong Kong, People’s Republic of China Thursday, 17 December 2015

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

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IRC Limited

6H, 9 Queen’s Road Central Hong Kong Tel: +852 2772 0007 Email: ir@ircgroup.com.hk Website: www.ircgroup.com.hk

For further information please visit www.ircgroup.com.hk or contact:

Shirly Chan

Manager – Communications & Investor Relations Telephone: +852 2772 0007 Mobile: +852 9688 8293 Email: sc@ircgroup.com.hk

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