Jinchuan Group International Resources Co. Ltd

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

If you have sold all your shares in Jinchuan Group International Resources Co. Ltd, you should at once hand this circular accompanying proxy form to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 2362)

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 5 to 11 of this circular. A letter from the Independent Board Committee is set out on page 12 of this circular. A letter from Altus containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 25 of this circular.

A notice convening the EGM to be held at Unit 3101, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong at 3:00 p.m. on Monday, 1 August 2016 is set out on pages 34 and 35 of this circular.

Whether or not you are able to attend the EGM in person, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Boardroom Share Registrars (HK) Limited at 31/F., 148 Electric Road, North Point, Hong Kong, as soon as possible but in any event not less than 48 hours before the time fixed for the holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM if you so wish.

15 July 2016

	Pages
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . .	12
LETTER FROM ALTUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
APPENDIX I － SUMMARY OF KEY ORIGINAL TERMS OF THE AGREEMENT. . . .	26
APPENDIX II－ GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	34

DEFINITIONS

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

“Agreement” the agreement dated 2 December 2015 entered into between Golden Harbour and Lanzhou Jinchuan for the sale and purchase of the Products produced by Ruashi Mining, to be supplemented by the Supplemental Agreement “Board” the board of Directors “Business Day” any day (other than a Saturday or Sunday or public holiday) on which banks in Hong Kong are generally open for the transaction of normal business “close associates” has the meaning ascribed to it under the Listing Rules “Cobalt Off-take Agreement” an off-take agreement for cobalt carbonate and/or cobalt hydroxide entered into by Ruashi Mining and Jinchuan Group on 20 August 2007, as amended and novated from time to time, the further details of which are disclosed in the circular of the Company dated 30 August 2013 “Company” Jinchuan Group International Resources Co. Ltd, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange “Continuing Connected collectively, the continuing connected transactions between Transactions” Golden Harbour and Lanzhou Jinchuan contemplated under the Agreement, which were approved by the Independent Shareholders at the extraordinary general meeting of the Company held on 7 January 2016 “Director(s)” the director(s) of the Company “DRC” the Democratic Republic of Congo “EGM” the extraordinary general meeting to be convened on Monday, 1 August 2016 for, among other matters, approving the Supplemental Agreement “FCA” “Free Carrier”, a term defined under Incoterms 2010, whereby the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point

DEFINITIONS

“Golden Harbour” Golden Harbour International Trading Limited, a company incorporated in Hong Kong and an indirectly wholly-owned subsidiary of the Company

“Group”

the Company and its subsidiaries from time to time

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

the Hong Kong Special Administrative Region of the PRC

“Incoterms 2010” a set of International rules for the interpretation of the commonly used terms in international trade published by the International Chamber of Commerce, the short descriptions of which is available on the website of the International Chamber of Commerce at http://www.iccwbo.org/products-and-services/tradefacilitation/incoterms-2010/the-incoterms-rules/, and the full official text can be obtained from its business bookstore
“Independent Board Committee” the independent committee of the Board, consisting of the three independent non-executive Directors, established to advise the Independent Shareholders in connection with the Supplemental Agreement
“Independent Financial Adviser” or “Altus”
Altus Capital Limited, a corporation licensed to carry on Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO is the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in connection with the Supplemental Agreement
“Independent Shareholders” the Shareholders but excluding Jinchuan Group and its close associates
“Jinchuan Group” 金川集團股份有限公司 (Jinchuan Group Co., Ltd.*), a state-owned enterprise established in the PRC and the controlling shareholder of the Company
“Jinchuan HK”
Jinchuan Group (Hongkong) Resources Holdings Limited (金川集團(香港)資源控股有限公司), an investment holding company incorporated in Hong Kong and a wholly-owned subsidiary of Jinchuan Group. It indirectly owns 3,263,022,857 Shares, representing approximately 75.00% of the issued share capital of the Company as at the Latest Practicable Date
“Lanzhou Jinchuan” 蘭州金川新材料科技股份有限公司 (Lanzhou Jinchuan Advanced Materials Technology Co., Ltd.*), a company incorporated in the PRC, approximately 99% interest of which is indirectly held by Jinchuan Group

For identification purpose only

DEFINITIONS

“Latest Practicable Date”	12 July 2016, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	for inclusion in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
“Metal Bulletin”	a premium intelligence service for metal and steel professionals,
	being part of the Euromoney Institutional Investor Plc Group of
	companies and a recognised publisher of reference prices for
	long-term cobalt trading contracts which are timely published on
	its designated website (www.metalbulletin.com) for subscribed
	members and publications
“PRC”	the People’s Republic of China, for the purposes of this circular,
	excluding Hong Kong, the Macau Special Administrative Region
	of the PRC and Taiwan
“Products”	cobalt hydroxide
“Purchase and Sales Contract”	the purchase and sales contract for cobalt hydroxide entered into
	between Golden Harbour and Ruashi Mining dated 2 December
	2015
“Ruashi Mine”	an opencast oxide copper and cobalt mine owned by Ruashi
	Mining and situated in the DRC on the outskirts of Lubumbashi,
	the capital of Katanga province and processing operations within
	exploitation permit number 578
“Ruashi Mining”	Ruashi Mining SAS, a company incorporated in the DRC and a
	subsidiary of Ruashi Holdings (Proprietary) Limited, a company
	incorporated in South Africa and held as to 75% by Metorex
	(Proprietary) Limited (an indirect wholly-owned subsidiary of the
	Company)
“SFO”	the Securities and Futures Ordinance, Chapter 571 of the Laws of
	Hong Kong
“Share(s)”	ordinary shares of HK$0.01 each in the issued share capital of the
	Company
“Shareholder(s)”	the holder(s) of the Share(s)
“South Africa”	the Republic of South Africa
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiaries”	has the meaning ascribed to it under the Companies Ordinance
	(Chapter 622 of the Laws of Hong Kong)

DEFINITIONS

“Supplemental Agreement” the conditional supplemental agreement dated 15 June 2016 entered into between Golden Harbour and Lanzhou Jinchuan for the sales and purchase of the Products produced by Ruashi Mining, the terms of which are supplementing the Agreement “US$” US dollars, the lawful currency of the United States “%” per cent.

Certain English translation of Chinese names or words in this circular are included for information only, and are not official English translations of such Chinese names or words.

LETTER FROM THE BOARD

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JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2362)

Executive Directors:

Mr. Yang Zhiqiang (Chairman of the Board) Mr. Zhang Sanlin (Deputy Chairman of the Board) Mr. Chen Dexin (Chief Executive Officer) Mr. Zhang Zhong

Registered office: P.O. Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands

Independent non-executive Directors:

Mr. Wu Chi Keung Mr. Yen Yuen Ho, Tony Mr. Neil Thacker Maclachlan

Head office and principal place of business in Hong Kong:

Unit 3101, 31/F United Centre 95 Queensway Admiralty, Hong Kong

15 July 2016

To the Shareholders

Dear Sir or Madam,

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the announcement of the Company dated 2 December 2015, and the circular of the Company dated 21 December 2015 in relation to the Continuing Connected Transactions. On 2 December 2015, Golden Harbour entered into the Agreement with Lanzhou Jinchuan, a company indirectly held as to approximately 99% by Jinchuan Group, pursuant to which Golden Harbour has agreed to sell and Lanzhou Jinchuan has agreed to purchase the Products produced by Ruashi Mining, a company indirectly held as to 75% by the Company, and further sold to Golden Harbour under the Purchase and Sales Contract entered into between Golden Harbour and Ruashi Mining dated 2 December 2015. Approval from the Independent Shareholders was obtained at the extraordinary general meeting of the Company held on 7 January 2016 for the Agreement and the Continuing Connected Transactions contemplated thereunder. Appendix I to this circular reproduces a summary of the key original terms of the Agreement (prior to it being supplemented by the Supplemental Agreement).

LETTER FROM THE BOARD

Reference is also made to the announcement of the Company dated 15 June 2016. On 15 June 2016 (after trading hours), Golden Harbour and Lanzhou Jinchuan entered into the Supplemental Agreement to amend certain terms of the Continuing Connected Transactions under the Agreement. The Supplemental Agreement is conditional upon the approval of the Independent Shareholders at the EGM.

The Independent Board Committee consisting of Mr. Wu Chi Keung, Mr. Yen Yuen Ho, Tony and Mr. Neil Thacker Maclachlan, being the three independent non-executive Directors, has been established to advise the Independent Shareholders in connection with the Supplemental Agreement. Altus Capital Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this connection.

The purposes of this circular are, among other things:

(i) to provide the Shareholders with the details of the proposed amendments under the Supplemental Agreement to the terms of the Continuing Connected Transactions;
(ii) to set out the letter of the Independent Board Committee setting out its recommendations in connection with the Supplemental Agreement to the Independent Shareholders;
(iii) to set out the letter from Altus containing its advice in connection with the Supplemental Agreement to the Independent Board Committee and the Independent Shareholders; and
(iv) to give notice to convene the EGM to consider and, if thought fit, to approve, among other things, the Supplemental Agreement for the Continuing Connected Transactions.

PROPOSED AMENDMENTS PROVIDED IN THE SUPPLEMENTAL AGREEMENT

The principal amendments contemplated under the Supplemental Agreement are summarized below:

Passing of risks associated with the Products

Pursuant to the Agreement, all risks of loss, damages and/or destruction to the Products would pass from Golden Habour to Lanzhou Jinchuan when the Products have passed the ship’s rail at the ocean port of loading in South Africa. Under the Supplemental Agreement, it is proposed that such risks of loss, damages and/or destruction to the Products will pass from Golden Habour to Lanzhou Jinchuan at the mine site of Ruashi Mine, DRC when the Products are loaded onto Lanzhou Jinchuan’s or its agent’s means of transport. Accordingly, the burden of risks associated with the Products will be shifted to Lanzhou Jinchuan at a much earlier stage of a transaction pursuant to the Supplemental Agreement, as compared with the previous arrangement under the Agreement. Both parties also agreed that the allocation of risks associated with the Products in all uncompleted transactions that have been entered into prior to the date of the EGM will be retrospectively adjusted in accordance with the proposed amendments under the Supplemental Agreement, subject to the Independent Shareholders’ approval for such proposed amendments being obtained at the EGM.

LETTER FROM THE BOARD

Transportation costs of the Products

Pursuant to the Agreement, Golden Harbour should bear all of the transportation costs for transporting the Products from the mine site of Ruashi Mine, DRC to the Tianjin Port, PRC. Under the Supplemental Agreement, Golden Harbour has agreed to deliver the Products from the mine site of Ruashi Mine, DRC to Johannesburg, South Africa (bearing approximately two third of the total transportation costs) and Lanzhou Jinchuan has agreed to bear the transportation costs to be incurred for delivery of the Products therefrom to the Tianjin Port, PRC (bearing approximately one third of the total transportation costs).

Basis of the selling prices of the Products

Under the Supplemental Agreement, for the purpose of calculating the basis of the selling prices of the cobalt contained in cobalt hydroxide delivered by Golden Harbour (as determined by a basis price multiplied by a basis coefficient as detailed in the announcement of the Company dated 2 December 2015), it is proposed that:

(i) the quotation of the basis price to be amended and tied to the low quotation for lowgrade cobalt in the free market as published on the Metal Bulletin during the quotation period (which is a specified pricing period being the month following the month of despatch from the mine site of Ruashi Mine, DRC), with reference to FCA Incoterms 2010 (instead of adopting the low quotation for such low-grade cobalt with reference to the “cost, insurance and freight” trade term under Incoterms 2010 under the Agreement); and
(ii) the basis coefficient to be amended from 73% to 69.5%, subject to an adjustment based on the cobalt content and impurity element content in the metals, the further details of which are disclosed in Appendix I to this circular.

Settlement of payment for the Products

Pursuant to the Agreement, payment for the Products amounting to 95% of the provisional invoice was required to be settled by Lanzhou Jinchuan upon Golden Harbour presenting certain documentation including the bill of lading and the insurance certificate to Lanzhou Jinchuan’s collecting bank, which will be at least one week after the Products are loaded on board of vessel in Durban, South Africa. Under the Supplemental Agreement, it is proposed that such payment be settled by Lanzhou Jinchuan upon Golden Harbour presenting certain documentation including the original waybills to Lanzhou Jinchuan’s collecting bank, which will be within one week after the Products are loaded onto Lanzhou Jinchuan’s or its agent’s means of transport at the mine site of Ruashi Mine, DRC. Taking into account that the reference loading time will be earlier in the DRC (which is at the mine site) versus in Durban, South Africa, according to the new arrangement under the Supplemental Agreement, Golden Harbour would be able to receive payments approximately four to eight weeks earlier as compared to the arrangements originally contemplated under the Agreement.

Save for the amendments disclosed above, there is no other material change to the terms and conditions of the Agreement and hence the Continuing Connected Transactions (including the relevant annual caps as contemplated thereunder). For further details of the annual caps in respect the Continuing Connected Transactions, please refer to the section headed “The Annual Caps for the Continuing Connected Transactions” of this circular.

LETTER FROM THE BOARD

THE ANNUAL CAPS FOR THE CONTINUING CONNECTED TRANSACTIONS

The following table sets out the annual caps for the years ending 31 December 2016, 2017 and 2018 in respect of the Continuing Connected Transactions:

		Year	ending	Year	ending	Year	ending
		31 December 2016		31 December 2017		31 December 2018
		(US$)	(tonnes)	(US$)	(tonnes)	(US$)	(tonnes)
Amounts and volumes	106	million	5,000	106 million	5,000	106 million	5,000

Such annual caps are determined by reference to (i) the historical amount of supply of contained cobalt metals provided under the Cobalt Off-take Agreement; (ii) the maximum tonnage for the supply and demand of contained cobalt metals provided under the Agreement; (iii) the expected growth in output as compared to the actual output of Ruashi Mining up to 31 October 2015; (iv) the historical price of low-grade cobalt published by the Metal Bulletin from time to time and the recent price volatility of lowgrade cobalt; (v) the transportation costs to be incurred; and (vi) certain buffer due to numerical rounding.

As disclosed in the circular of the Company dated 21 December 2015, following the acquisition by the Company of the entire equity interest in Jin Rui Mining Investment Limited in November 2013 (the details of which are set out in the circular of the Company dated 30 August 2013), the Group has become the flagship of Jinchuan Group for undertaking overseas operations in mineral resources exploitation and related trading. The annual caps for the years ending 31 December 2016, 2017 and 2018 in respect of the Continuing Connected Transactions are mainly driven by the future demand of the cobalt hydroxide of Lanzhou Jinchuan and the actual output of Ruashi Mining in the future, which can be reasonably estimated with reference to the historical purchase volume of Lanzhou Jinchuan and the future outlook of Ruashi Mining. On an annualised basis, the historical trading amounts and volumes under the Cobalt Offtake Agreement have been generally steady and with a slight increase from the year of 2014 to the year of 2015. In arriving at the monetary value of the such annual caps, the Board has also taken into account the existing trading businesses of the Company, the historical prices of the cobalt hydroxide and the possible fluctuations in prices of the cobalt hydroxide in the future. Historically, cobalt prices have been characterised by strong volatility. Based on the Metal Bulletin quotations between 2011 and 2015, we noted that the highest and lowest prices of each year have fluctuated between 20% to 50% during the period under review and the highest Metal Bulletin quotation was equivalent to approximately US$40,300 per tonne and the lowest Metal Bulletin Quotation was equivalent to approximately US$20,000 per tonne recorded. The prevailing market norm of coefficient figures ranging between 70.0% and 73.0%.

Under the Supplemental Agreement, the decrease in basis coefficient from 73.0% to 69.5% is due to the shortening of the overall delivery distance from Ruashi Mining to Johannesburg, South Africa, instead of to Tianjin, the PRC, hence resulting in a reduction in transportation costs and making the shipping costs no longer applicable. In addition, the impact of the proposed amendments contemplated under the Supplemental Agreement on the annual caps would be the decrease cobalt price per tonne. For illustrative purpose only, if the five-year average cobalt price is used, which was used to calculate the annual caps under the Agreement, the decrease in cobalt price per tonne would be approximately US$1,015.0. Multiplying this decrease in cobalt price by the volume for determining the annual caps for the Continuing Connected Transactions under the Agreement, the difference in the monetary amounts for the annual caps would be approximately 4.7%, which we consider is within the buffer included in determining the annual caps under the Agreement.

LETTER FROM THE BOARD

Overall, the Board has taken a conservative approach in determining the annual caps and considers that the steady amounts of the such annual caps are in line with the overall activities expected under the Agreement, to be supplemented by the Supplemental Agreement. Shareholders should note that such annual caps represent an estimate based on information currently available and that the actual utilisation and sufficiency of the such annual caps would depend on a number of factors, including but not limited to, the annual supply and demand volume under the Agreement (to be supplemented and potentially affected by the Supplemental Agreement) and the cobalt basis price published by the Metal Bulletin from time to time.

As at the Latest Practicable Date, the actual transacted amount pursuant to the Continuing Connected Transactions under the Agreement for the six months ended 30 June 2016 is approximately US$10.2 million (which has been determined based on the existing terms of the Agreement, and has not yet taken into account the changes proposed under the Supplemental Agreement).

CONDITIONS PRECEDENT TO THE SUPPLEMENTAL AGREEMENT

The proposed amendments provided in the Supplemental Agreement are conditional upon (i) Golden Harbour and Lanzhou Jinchuan having respectively obtained all necessary internal authorizations, consents and approvals for entering into the Supplemental Agreement; and (ii) the Company having obtained the Independent Shareholders’ approval at the EGM for the Supplemental Agreement.

REASONS FOR AND BENEFITS OF THE SUPPLEMENTAL AGREEMENT

Although under the previous arrangements under the Agreement, the basis coefficient was set at a higher level of 73.0%, Golden Harbour was subject to greater burden and risk in terms of (i) the bearing of all of the transportation costs for transporting the Products from the mine site of Ruashi Mine, DRC to the Tianjin Port, PRC; (ii) the longer time lag in the receipt of payments from Lanzhou Jinchuan of four to eight weeks as the Products were being delivered to Lanzhou Jinchuan later in time; and (iii) the bearing of the risk of loss, damages and/or destruction to the Products during their transportation from Ruashi Mine, DRC to the ocean port of loading in Durban, South Africa. According to the proposed new arrangements under the Supplemental Agreement, despite of the decrease in the price of cobalt, the transportation costs mentioned in (i) above to be borne by Golden Harbour will be lower as approximately one third of the transportation costs will be borne by Lanzhou Jinchuan and the time lag in the receipt of payments from Lanzhou Jinchuan mentioned in (ii) above will be shortened as payment would be settled approximately four to eight weeks earlier when compared with the arrangements under the Agreement due to the earlier delivery of the Products. The earlier settlement in payments would also help the Company in (i) the earlier recognition of sales revenue and thus profits; and (ii) making cash flow available in a more advanced stage. In addition, the burden and risks highlighted in (iii) above would also be passed to Lanzhou Jinchuan earlier in time at Ruashi Mine, DRC.

For illustration purpose only to demonstrate the possible impact on the gross profit and the net profit of the Company after the proposed revision of the terms under the Supplemental Agreement, using the average price of cobalt for the past three years, the decrease in cobalt price per tonne attributable to the change in the basis coefficient from 73.0% to 69.5% would be approximately US$975.9, while the transportation cost saved per tonne from the proposed amendments would be approximately US$800.0. Accordingly, the gross profit per tonne will reduce by US$975.9. After netting off the expected

LETTER FROM THE BOARD

transportation cost, the decrease in net profit per tonne by using the average cobalt price for the past three years would only be a minimal amount of US$175.9. If the latest cobalt price as at 12 July 2016 (being the latest practicable date for this purpose) is used, the decrease in the net profit per tonne would only be approximately US$29.5 As illustrated by these examples, the Company does not consider that the proposed changes under the Supplemental Agreement would have any material adverse impact on the overall profitability of the Company.

Due to the reasons above, the Directors consider the proposed amendments under the Supplemental Agreement will be consistent with the business and commercial objectives of the Group. The Board also believes that the Supplemental Agreement will enhance the competitiveness of the Group in the future. In light of the above, there should be no manifest financial disadvantage to the Group for entering into the Supplemental Agreement.

On this basis, the Directors (including the independent non-executive Directors) consider that the revised terms under the Supplemental Agreement are negotiated between the parties on an arm’s length basis and are on normal commercial terms that are fair and reasonable; in the ordinary and usual course of business of the Company and its subsidiaries and are in the interest of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION

Pursuant to Rule 14A.54 of the Listing Rules, since the Company proposes to amend certain terms of the Agreement which constitutes a material change to its terms by way of a Supplemental Agreement, the Company is required to re-comply with the relevant requirements of Chapter 14A of the Listing Rules. Accordingly, the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement are subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will seek approval from the Independent Shareholders for the Supplemental Agreement at the EGM.

Jinchuan Group and its close associates will abstain from voting on the resolution concerning the Supplemental Agreement at the EGM.

None of the Directors have any material interest in the Supplemental Agreement for which they would be required to abstain from voting on the board resolutions approving the terms of the Supplemental Agreement pursuant to the articles of association of the Company. However, for good corporate governance, Mr. Yang Zhiqiang, Mr. Zhang Sanlin, Mr. Chen Dexin and Mr. Zhang Zhong voluntarily abstained from voting in the meeting of the Board in which the Supplemental Agreement was approved, as they also serve as directors and/or senior management of Jinchuan Group (which indirectly holds approximately 99% interest in Lanzhou Jinchuan) and/or Jinchuan HK.

LETTER FROM THE BOARD

INFORMATION ABOUT THE PARTIES

The Group is principally engaged in the mining operation and the trading of mineral and metal products. Golden Harbour is a mineral and metal products trading arm of the Group that helps with the distribution of the Products produced by Ruashi Mine.

Jinchuan Group is a large scale non-ferrous metals mining conglomerate, specialising in mining, concentrating, metallurgy, chemical engineering and further downstream processing. The principal business activities of Lanzhou Jinchuan are new materials development, production and sales, reutilisation, processing and related technical services of mineral and metal products.

VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the EGM will be taken by poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee set out on page 12 of this circular which contains its recommendation to the Independent Shareholders in relation to the Supplemental Agreement. Your attention is also drawn to the letter from Altus set out on pages 13 to 25 of this circular which contains its recommendations to the Independent Board Committee and the Independent Shareholders in relation to the Supplemental Agreement, and the principal factors and reasons taken into account in arriving at its recommendations.

ADDITIONAL INFORMATION

Your attention is also drawn to a summary of the original key terms of the Agreement (prior to it being supplemented by the Supplemental Agreement) set out in Appendix I and the general information set out in the Appendix II to this circular.

Yours faithfully,

For and on behalf of the Board

Jinchuan Group International Resources Co. Ltd Mr. Yang Zhiqiang

Chairman

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 2362)

15 July 2016

To the Independent Shareholders

Dear Sir or Madam,

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

We refer to the circular issued by the Company to its Shareholders and dated 15 July 2016 (the “ Circular ”) of which this letter forms a part. Terms defined in the Circular have the same meanings when used in this letter unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise you on (i) whether the terms and conditions of the Supplemental Agreement are on normal commercial terms that are fair and reasonable; and (ii) whether the Supplemental Agreement for the Continuing Connected Transactions is conducted in the ordinary and usual course of business of the Company and its subsidiaries and is in the interests of the Company and the Shareholders as a whole, and to advise you on how to vote at the EGM, taking into account the recommendations of Altus.

Altus has been appointed to advise the Independent Board Committee and the Independent Shareholders on (i) whether the terms and conditions of the Supplemental Agreement are on normal commercial terms that are fair and reasonable; and (ii) whether the Supplemental Agreement for the Continuing Connected Transactions is conducted in the ordinary and usual course of business of the Company and its subsidiaries and is in the interests of the Company and the Shareholders as a whole, and to advise you on how to vote at the EGM.

Having taken into account the principal factors and reasons considered by, and the recommendations of, Altus contained in its letter set out on pages 13 to 25 of the Circular, we consider that the terms and conditions of the Supplemental Agreement are fair and reasonable, are on normal commercial terms, in the ordinary and usual course of business of the Company and its subsidiaries and in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Supplemental Agreement.

Yours faithfully, For and on behalf of the Independent Board Committee

Mr. Wu Chi Keung, Mr. Yen Yuen Ho, Tony and Mr. Neil Thacker Maclachlan Independent Non-executive Directors

LETTER FROM ALTUS

The following is the text of a letter of advice from Altus Capital Limited to the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Agreement, which has been prepared for the purpose of incorporation in this circular.

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21 Wing Wo Street Central Hong Kong

15 July 2016

To the Independent Board Committee and

the Independent Shareholders

Jinchuan Group International Resources Co. Ltd Unit 3101, 31/F United Centre 95 Queensway Admiralty Hong Kong

Dear Sirs,

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Agreement for the Continuing Connected Transactions. Details are set out in the “Letter from the Board” contained in the circular dated 15 July 2016 (the “ Circular ”) to the Shareholders, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless otherwise defined herein or required by the context.

The Agreement

On 2 December 2015, Golden Harbour entered into the Agreement with Lanzhou Jinchuan, a company indirectly held as to approximately 99% by Jinchuan Group, pursuant to which Golden Harbour has agreed to sell and Lanzhou Jinchuan has agreed to purchase the cobalt hydroxide (the “ Products ”) produced by the Ruashi Mining, a company indirectly held as to 75% by the Company, and further sold to Golden Harbour under the purchase and sales contract entered into between Golden Harbour and Ruashi Mining dated 2 December 2015.

LETTER FROM ALTUS

As at the Latest Practicable Date, Jinchuan Group is the ultimate controlling shareholder of the Company. It indirectly owns through its subsidiaries 3,263,022,857 Shares, representing approximately 75% of the issued share capital of the Company. Since Lanzhou Jinchuan is indirectly held as to approximately 99% by Jinchuan Group, the ultimate controlling shareholder of the Company, it is a connected person of the Company under the Listing Rules. Accordingly, the transactions contemplated under the Agreement would constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. In addition, based on the proposed annual caps, the Continuing Connected Transactions under the Agreement were subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. As a result, the Company sought approval from the then independent shareholders of the Company for the Agreement and the Continuing Connected Transactions (including the proposed annual caps) at an extraordinary general meeting of the Company held on 7 January 2016. Jinchuan Group and its close associates abstained from voting on the resolution concerning the Agreement and the Continuing Connected Transactions (including the proposed annual caps) at such extraordinary general meeting of the Company. Approval from the then independent shareholders of the Company was obtained at such extraordinary general meeting of the Company for the Agreement and the Continuing Connected Transactions contemplated thereunder (including the proposed annual caps).

The Supplemental Agreement

On 15 June 2016 (after trading hours), Golden Harbour and Lanzhou Jinchuan entered into a supplemental agreement to amend certain terms of the Agreement (the “ Supplemental Agreement ”). The principal amendments contemplated under the Supplemental Agreement are set out in the “Letter from the Board” of the Circular.

Save for the amendments to be described below, according to the Management, there is no material change in all other terms and conditions of the Agreement and hence the Continuing Connected Transactions will remain unchanged and continue in full force and effect. The annual caps for the years ending 31 December 2016, 2017 and 2018 in respect of the Continuing Connected Transactions, as approved by the then independent shareholders of the Company at the extraordinary general meeting of the Company held on 7 January 2016, will also remain unchanged. It is noted that the Directors consider that such annual caps should remain unchanged as the difference in the monetary amounts for the annual caps would be approximately 4.7%, which the Directors consider is within the buffer included in determining the annual caps under the Agreement.

LETTER FROM ALTUS

LISTING RULES IMPLICATION

As at the Latest Practicable Date, Golden Harbour is an indirect wholly-owned subsidiary of the Company. Lanzhou Jinchuan is indirectly held as to approximately 99% by Jinchuan Group, a controlling shareholder of the Company. Through its wholly-owned subsidiaries, Jinchuan Group indirectly owns 3,263,022,857 Shares, representing approximately 75% of the issued share capital of the Company. Accordingly, Lanzhou Jinchuan is a connected person (as defined under the Listing Rules) of the Company under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.54 of the Listing Rules, since the Company proposes to amend certain terms of the Agreement which constitutes a material change to its terms by way of a Supplemental Agreement, the Company is required to re-comply with the relevant requirements of Chapter 14A of the Listing Rules. Accordingly, proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement are subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will seek approval from the Independent Shareholders for the Supplemental Agreement at the EGM.

Jinchuan Group and its close associates will abstain from voting on the resolution concerning the Supplemental Agreement at the EGM.

None of the Directors have any material interest in the Supplemental Agreement for which they shall be required to abstain from voting on the board resolutions approving the terms of the Supplemental Agreement pursuant to the articles of association of the Company. However, for good corporate governance, Mr. Yang Zhiqiang, Mr. Zhang Sanlin, Mr. Chen Dexin and Mr. Zhang Zhong voluntarily abstained from voting in the meeting of the Board in which the Supplemental Agreement was approved, as they also serve as directors and/or senior management of Jinchuan Group (which indirectly holds approximately 99% interest in Lanzhou Jinchuan) and/or Jinchuan HK.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee consisting of Mr. Wu Chi Keung, Mr. Yen Yuen Ho, Tony and Mr. Neil Thacker Maclachlan, being all the independent non-executive Directors, has been established to advise the Independent Shareholders on (i) whether the terms and conditions of the Supplemental Agreement are on normal commercial terms and are fair and reasonable; (ii) whether the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement will be conducted in the ordinary and usual course of business of the Company and its subsidiaries and are in the interests of the Company and the Shareholders as a whole; and (iii) how to vote at the EGM, taking into account the recommendations of the Independent Financial Adviser.

THE INDEPENDENT FINANCIAL ADVISER

As the independent financial adviser to the Independent Board Committee, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to (i) whether the terms and conditions of the Supplemental Agreement are on normal commercial terms and are fair and reasonable; (ii) whether the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement will be conducted in the ordinary and usual course of business of the Company and its subsidiaries and are in the interests of the Company and the Shareholders as a whole, and (iii) how the Independent Shareholders should vote in respect of the resolution relating thereto to be proposed at the EGM.

LETTER FROM ALTUS

We acted as independent financial adviser for the Company in relation to the transactions as laid out in the Company’s circular dated 21 December 2015. Save for the aforesaid engagement, we have not acted as independent financial adviser for the Company’s other transactions in the last two years prior to the date of the Circular. Pursuant to Rule 13.84 of the Listing Rules, and given that remuneration for our engagement to opine on this transaction is at a market level and is not conditional upon successful passing of the resolutions, and that our engagement is on normal commercial terms, we are independent of the Company.

BASIS OF OUR ADVICE

In formulating our opinion, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and/or provided to us by the Company, the Directors and the management of the Company (the “ Management ”). We have assumed that all statements, information, opinions and representations contained or referred to in the Circular and/or provided to us were true, accurate and complete at the time they were made and continued to be so as at the date of the Circular.

We have no reason to believe that any statements, information, opinions or representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material facts the omission of which would render the statements, information, opinions or representations provided to us untrue, inaccurate or misleading.

We have assumed that all the statements, information, opinions and representations for matters relating to the Group contained or referred to in the Circular and/or provided to us by the Company, the Directors and the Management have been reasonably made after due and careful enquiry. We have relied on such statements, information, opinions and representations and have not conducted any independent investigation into the business, financial conditions and affairs or the future prospects of the Group.

LETTER FROM ALTUS

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of the Company and its subsidiaries and its relationship with Jinchuan Group

1.1 Principal activities of each of the Group, Jinchuan Group and Lanzhou Jinchuan

The Company is an investment holding company. The principal activities of the Group have been trading of mineral and metal products and mining operations, primarily copper and cobalt production. Golden Harbour is a trading arm of the Group that helps with the distribution of cobalt hydroxide produced by Ruashi Mine.

Jinchuan Group is a state-owned enterprise with its majority interest held by the People’s Government of Gansu Province. Jinchuan Group is a large scale non-ferrous metals mining conglomerate, specialising in mining, concentrating, metallurgy, chemical engineering and further downstream processing.

Lanzhou Jinchuan is a company incorporated in the PRC, approximately 99% interest of which is indirectly held by Jinchuan Group. The principal business activities of Lanzhou Jinchuan are new materials development, production and sales, re-utilisation, processing and related technical services of mineral and metal products.

1.2 Operating results of the Group

Set out below is a summary of the operating results of the Group for each of the year ended 31 December 2014 and 2015, as extracted from the annual report of the Company for the year ended 31 December 2015 (the “ 2015 Annual Report ”).

	For the year ended 31 December	For the year ended 31 December
	2014	2015
	US$’000	US$’000
	(audited)	(audited)
Revenue	652,475	470,691
– Copper sales	574,170	394,866
– Cobalt sales_(Note)_	78,305	75,825
Loss for the year attributable to
owners of the Company	(230,512)	(291,767)

Note: all cobalt sales were made to Jinchuan Group for the respective review period.

Source: The 2015 Annual Report

LETTER FROM ALTUS

Revenue for the year ended 31 December 2015 was approximately US$470.7 million, representing a decrease of approximately 27.9% from approximately US$652.5 million for the year ended 31 December 2014. The decrease in revenue was mainly attributable to a worldwide downturn in commodity prices including copper, which was the main driving factor for the decrease in the Group’s overall sales revenue. The copper mining revenue dropped by approximately 29.5% from the year ended 31 December 2014 to the year ended 31 December 2015 due to the lower copper prices and lower output of copper. On the other hand, despite the increase in output of cobalt for the year ended 31 December 2015, the cobalt mining revenue decreased by approximately 4.1% from the year ended 31 December 2014 to the year ended 31 December 2015, mainly due to the decrease in received prices of cobalt.

The trading segment of the Group recorded a significant decrease in revenue on sales of copper related raw materials by approximately 34.0% from approximately US$208.0 million for the year ended 31 December 2014 to approximately US$137.2 million for the year ended 31 December 2015. The decrease was mainly attributable to the less favorable market conditions, new product development impacted by the changing conditions in the inventory financing trade, as well as the delay or suspension of production start-ups due to depressed copper and nickel prices.

The total cost of sales for the year ended 31 December 2015 was at a lower level compared to the total cost of sales for the year ended 31 December 2014. The decrease was mainly attributable to the lower production and the implementation of successful cost savings measures during the year ended 31 December 2015. The mining cost also decreased mainly due to a concerted effort to reduce cost especially at Ruashi Mine. However, during the year ended 31 December 2015, the Group recorded a substantial non-cash impairment loss of approximately US$129.4 million and US$182.9 million on the mineral rights, and exploration and evaluation assets respectively. Coupled with the further decline in copper price during the year ended 31 December 2015 compared to the corresponding year in 2014, the Group reassessed the valuation of its mines on the basis of each cash generating unit. Revisions to some principal parameters such as copper price and discount rates resulted in a substantial impairment loss on the mineral rights, and exploration and evaluation assets of the operating units.

As a result of the above, the Group’s loss for the year attributable to owners of the Company amounted to approximately US$291.8 million for the year ended 31 December 2015 as compared to a loss of approximately US$230.5 million recorded for the year ended 31 December 2014. Although the Group’s performance was impacted by the significant non-cash impairment on the mineral rights and its related operating assets, the impairment assessment was a periodic exercise where the consequential loss recorded during the year ended 31 December 2015 was an accounting related adjustment, and its non-cash nature had no impact on the cash flow of the Group.

LETTER FROM ALTUS

1.3 Relationship between the Group and Jinchuan Group

We refer to the circular of the Company dated 30 August 2013 and understand therefrom that Jinchuan Group had entered into the Cobalt Off-take Agreement with Ruashi Mining for the purpose of securing a long term, steady and exclusive supply of cobalt carbonate and/or cobalt hydroxide from a quality mine. We also refer to the circular of the Company dated 29 October 2010 in relation to, among other things, the subscription through which Jinchuan Group became the controlling shareholder of the Company. Pursuant to the business strategy of the Group disclosed therein, and the business prospects as set out in the 2015 Annual Report, the Company serves as the flagship of Jinchuan Group for undertaking overseas operations in the exploration and exploitation of mining assets and related trading, while it continues to leverage on the background and expertise of Jinchuan Group to pursue mining investment opportunities.

Given that the Agreement adheres to the business strategy of the Company and represents a continuation of the long-term relationship between the Group and Jinchuan Group, we consider that the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement are in line with the Company’s business strategy and continue to complement the Group’s long-term relationship with Jinchuan Group.

1.4 Prospects of the Group

Given the downward pressure on copper prices in the medium term and its negative impact on the mining industry, the Company had initiated a number of activities to address the current difficulties presented by the market conditions, such as senior management change (namely the appointment of Mr. Chen Dexin, a person having extensive operation and management experience in the mining industry, as the Chief Executive Officer of the Company with effect from 15 June 2016 (as described in an announcement of the Company on the same date), the appointment of Mr. Qiao Fugui as the deputy chief executive officer of Metorex (Proprietary) Limited (an indirect wholly-owned subsidiary of the Company) (“ Metorex ”) in April 2015, and subsequently as the chief executive officer of Metorex in June 2016, the appointment of Mr. Yang Jinshan as the chief financial officer of Metorex in September 2015, and other three Chinese management were appointed as the general managers for our operating and exploration mines in Africa, who all contributed to the cost control measures of the Company) to ensure the right focus and drive to achieve not only an improved production profile but also to contain operating and capital costs. Such senior management had more experience in the operation level of the Group’s mining operations, and also had experience in managing the Group at a corporate level, which would allow the senior management to establish a closer link between the Group’s management and operations and assess the operations more closely with better coordination. The new senior management also contributed to cost reduction measures of the Group, which would help the Group to better cope with the difficulties in the market by containing operating and capital costs. The Group also rationalises mine design in a timely manner in order to generate the highest return to combat the prevailing weak copper price sentiment.

In addition, we noted that the Group intends to strengthen its mineral and metal products trading business, including its trading operations with Jinchuan Group, among other customers. Leveraging on the strong technical expertise and capital strength of Jinchuan Group in the metal and mining sector, the Company will continue to seek suitable mining investment opportunities to expand its international presence in various resource regions. We also noted that the Group is seeking growth potential through undertaking acquisition opportunities so as to fulfil its role as an overseas mining investment flagship platform for Jinchuan Group.

LETTER FROM ALTUS

2. Proposed amendments provided under the Supplemental Agreement

Below are the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreement. Details of which are set out in the “Letter from the Board” of the Circular.

2.1 Passing of risks associated with the Products

As disclosed in the “Letter from the Board” of the Circular, pursuant to the Agreement, all risks of loss, damages and/or destruction to the Products would pass from Golden Harbour to Lanzhou Jinchuan when the Products have passed the ship’s rail at the ocean port of loading in South Africa. Under the Supplemental Agreement, it is proposed such risks of loss, damages and/or destruction to the Products would pass from Golden Harbour to Lanzhou Jinchuan at the mine site of Ruashi Mine, DRC when the Products are loaded onto Lanzhou Jinchuan or its agent’s means of transport. Accordingly, the burden of risks associated with the Products will be shifted to Lanzhou Jinchuan at a much earlier stage of a transaction pursuant to the Supplemental Agreement, as compared with the previous arrangement under the Agreement.

We have reviewed sample contracts entered into between the Group and Jinchuan Group in respect of trading of cobalt contained in cobalt hydroxide, and noted that the early passing of risks to the buyer was the original arrangement contemplated under the Cobalt Off-take Agreement and set out in the circular of the Company dated 30 August 2013, before the change of shipping terms under the Agreement.

All cobalt sales of the Group for the years ended 31 December 2014 and 2015 were made to the Jinchuan Group, and there is only a cobalt sales contract entered into between the Group and an Independent Third Party in 2016 (which we believe to be the exhaustive list). We have reviewed this only contract entered into between the Group and the Independent Third Party buyer in respect of trading of cobalt, and noted that the same arrangement of the early passing of risks to the buyer, in accordance with FCA Incoterms 2010 (as defined in the Circular) where all risks shall pass from the seller to the buyer at the mine site, was also found therein. The terms found in the contract entered into between the Group and the Independent Third Party were comparable to the proposed amendments in the Supplemental Agreement in relation to the early passing of risks.

While there is only one cobalt sales contract entered into between the Group and the Independent Third Party buyer, we also reviewed a sample of the Group’s contracts on the sales of other non-ferrous metal, such as copper. We have reviewed three contracts entered into between Ruashi Mining and other Independent Third Party buyers in respect of trading of copper since 2014 (which are all the contracts provided by the Management and we have no reason to believe it is not an exhaustive list), and noted that similar arrangement of the early passing of risks to the buyer, in accordance with FCA Incoterms 2010 where all risks shall pass from seller to buyer at the mine site, was also found the contracts. The terms found in the contracts entered into between the Group and the Independent Third Party buyers were comparable to the proposed amendments in the Supplemental Agreement in relation to the early passing of risks.

LETTER FROM ALTUS

We also noted that under this proposed amendment to the terms of the Continuing Connected Transactions under the Supplemental Agreement, the bearing of the risk of loss, damages and/or destruction to the Products during their transportation from Ruashi Mine, DRC to the ocean port of loading in Durban, South Africa would be passed to the buyer at a much earlier time when compared to the terms contemplated under the Agreement, thus reducing the burden and risk borne by the Company and pass them onto the buyer at an earlier stage. It is also noted that under this proposed amendment, there will be a shorter time lag in the receipt of payments from Lanzhou Jinchuan. As described in the section headed “Settlement of payment for the Products” in the “Letter from the Board” of the Circular, the Company would be able to receive payments approximately four to eight weeks earlier as compared to terms originally contemplated under the Agreement.

Based on our review of the abovementioned sample contracts and reasons regarding this proposed amendment under the Supplemental Agreement, we consider that such amendment is fair and reasonable, and is in the interests of the Company and its Shareholders as a whole.

As described in the “Letter from the Board” of the Circular, both parties also agreed that the allocation of risks associated with the Products in all uncompleted transactions that have been entered into prior to the date of the EGM will be retrospectively adjusted in accordance with the proposed amendments under the Supplemental Agreement, subject to the Independent Shareholders’ approval for such proposed amendments being obtained at the EGM.

In view of the above reasons and the time span to complete a transaction as mentioned above, we consider that subject to the Independent Shareholders approval at the EGM, the uncompleted continuing connected transactions entered into prior to the date of the EGM can enjoy the benefits of the early passing of risks from Golden Harbour to Lanzhou Jinchuan on a retrospective basis is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

2.2 Transportation costs of the Products

As described in the “Letter from the Board” of the Circular, pursuant to the Agreement, Golden Harbour shall bear all of the transportation costs for transporting the Products from the mine site of Ruashi Mine, DRC to the Tianjin Port, the PRC. Under the Supplemental Agreement, Golden Harbour has agreed to deliver the Products from the mine site of Ruashi Mine, DRC to Johannesburg, South Africa (bearing approximately two third of the total transportation costs) and Lanzhou Jinchuan has agreed to bear the transportation costs to be incurred for the delivery of the Products therefrom to the Tianjin Port, the PRC (bearing approximately one third of the total transportation costs).

We have reviewed sample contracts entered into between the Group and Jinchuan Group in respect of trading of cobalt contained in cobalt hydroxide and noted that Lanzhou Jinchuan bearing a portion of the transportation cost was the original arrangement contemplated under the Cobalt Off-take Agreement and set out in the circular of the Company dated 30 August 2013, before the change of shipping terms under the Agreement.

LETTER FROM ALTUS

All cobalt sales of the Group for the years ended 31 December 2014 and 2015 were made to the Jinchuan Group, and there is only a cobalt sales contract entered into between the Group and an Independent Third Party in 2016 (which we believe to be the exhaustive list). We have reviewed this only contract entered into between the Group and the Independent Third Party buyer in respect of trading of cobalt, and noted that similar arrangements of the buyer bearing a portion of the transportation cost in accordance with FCA Incoterms 2010 where the seller is only responsible for the transportation cost up to the buyer’s warehouse at Johannesburg or Durban, South Africa. The terms found in the contract entered into between the Group and the Independent Third Party were comparable to the proposed amendments in the Supplemental Agreement in relation to the transportation costs of the Products.

While there is only one cobalt sales contract entered into between the Group and the Independent Third Party buyer, we also reviewed a sample of the Group’s contracts on the sales of other non-ferrous metal, such as copper. We have reviewed three contracts entered into between Ruashi Mining and other Independent Third Party buyers in respect of trading of copper since 2014 (which are all the contracts provided by the Management and we have no reason to believe it is not an exhaustive list), and noted all three contracts have similar arrangements where the seller bears portion of the transportation cost up to a point (either plant or the DRC/Zambian border or the port of origin) and the buyer bears portion of the transportation cost from the aforesaid point to the destination in accordance with FCA Incoterms 2010. The terms found in the contracts entered into between the Group and the Independent Third Party buyers were comparable to the proposed amendments in the Supplemental Agreement in relation to the buyer bearing a portion of the transportation costs.

It is also noted that under this proposed amendment under the Supplemental Agreement, Golden Harbour no longer needs to bear all the transportation costs for transporting the Products from the mine site of Ruashi Mine, DRC to the Tianjin Port, the PRC, as approximately one third of it will be borne by Lanzhou Jinchuan.

Taking into account of the above, we consider that such amendment is fair and reasonable, and in the interests of the Company and its Shareholders as a whole.

2.3 Basis of the selling prices of the Products

As disclosed in the “Letter from the Board” of the Circular, under the Supplemental Agreement, for the purpose of calculating the basis of the selling prices of the cobalt contained in cobalt hydroxide delivered by Golden Harbour (as determined by a basis price multiplied by a basis coefficient as detailed in the announcement of the Company dated 2 December 2015), it is proposed that:

(i) the quotation of the basis price to be amended and tied to the low quotation for lowgrade cobalt in the free market as published on the Metal Bulletin during the quotation period (which is a specified pricing period being the month following the month of dispatch from the mine site of Ruashi Mine, DRC), with reference to FCA Incoterms 2010 (instead of adopting the low quotation for such low-grade cobalt with reference to the “cost, insurance and freight” trade term under Incoterms 2010 under the Agreement); and
(ii) the basis coefficient to be amended from 73.0% to 69.5%, subject to an adjustment based on the cobalt content and impurity element content in the metals, the further details of which are disclosed in Appendix I to the Circular.

LETTER FROM ALTUS

Based on our review of the sample contracts, we note that the basis coefficient applied by Jinchuan Group on other sellers (which are Independent Third Parties) for trading of cobalt contained in cobalt hydroxide (the location of supplies were also from DRC) and with delivery to Tianjin Port, the PRC range between 70.0% and 73.0%. According to the Management that the change of the basis coefficient set out in the Cobalt Off-take Agreement of 69.5% to 73.0% set out in the Agreement is primarily due to different port destination with additional shipping costs and the prevailing market practice. Taken into account of the above factors, the basis coefficient of 73.0% contemplated under the Agreement was considered to be fair and reasonable, and in the interests of the Company and its Shareholders as a whole.

One of the main reasons to change the basis coefficient from the 69.5% under the Cobalt Off-take Agreement to 73.0% in the Agreement was due to different port destination incurring additional shipping costs. Given the proposed amendments in the Supplemental Agreement are proposing to pass the risks at Ruashi Mine, DRC instead of Tianjin, the PRC, coupled with Lanzhou Jinchuan agreed to bear approximately one third of the transportation costs, we are of the view that such amendment is essentially reverting to the previous arrangement contemplated under the Cobalt Off-take Agreement.

According to the Management, the cost saved due to Lanzhou Jinchuan bearing approximately one third of the transportation cost would partially offset the decrease in cobalt sales price due to the decrease in basis coefficient from 73.0% to 69.5%. For illustration purpose, using the average price of cobalt for the past three years, the decrease in cobalt price per tonne attributable to the change in the basis coefficient from 73.0% to 69.5% would be approximately US$975.9. While the transportation cost saved per tonne from the proposed amendments would be approximately US$800.0. After netting off the transportation cost, the decrease in cobalt price per tonne (using the average cobalt price for the past three years) would be approximately US$175.9. While the cost saved due to Lanzhou Jinchuan bearing a one third of the transportation cost remains constant in relation to the market cobalt price, the change in cobalt sales price depends on the prevailing market cobalt price since it is calculated by applying the basis coefficient onto the market price of cobalt. The lower the cobalt price, the smaller the impact of the change in coefficient would be. For illustration purpose, we have also done a sensitivity analysis due to a cobalt price change under the proposed amendments in the Supplemental Agreement using the latest cobalt price used by the Company as at 12 July 2016, being the latest practicable date for this purpose. Using the same calculation before by netting of the transportation cost saved per tonne off the decrease in cobalt price per tonne, the decrease in cobalt price per tonne would be approximately US$29.5.

Despite the decrease in price of cobalt under the Supplemental Agreement, the risks of the Products would be passed early on to Lanzhou Jinchuan at Ruashi Mine, DRC, and payments would be settled approximately four to eight weeks earlier when compared to the terms originally contemplated under the Agreement. Such payments would also help the Company to (i) recognize the sales and thus the profits; and (ii) bring in cash flow for the Continuing Connected Transactions much earlier than before. After considering the above factors, notwithstanding the decrease in the price of cobalt, we are of the view that such proposed amendments are arrived at a fair and reasonable basis, no less favourable to Jinchuan Group than to other sellers (which are Independent Third Parties), and are in the interests of the Company and its Shareholders as a whole.

LETTER FROM ALTUS

2.4 Section conclusion

Having considered the above, we are of the view that the terms of the Supplemental Agreement are normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. Reasons for and benefits of the Supplemental Agreement

According to the proposed amendments under the Supplemental Agreement, the transportation costs mentioned in (i) above to be borne by Golden Harbour will be lower as approximately one third of the transportation costs will be borne by Lanzhou Jinchuan, the time lag in the receipt of payments from Lanzhou Jinchuan mentioned in (ii) above will be shortened as payment would be settled approximately four to eight weeks earlier when compared with the arrangements under the Agreement due to the earlier delivery of the Products, and the burden and risks highlighted in (iii) above would also be passed to Lanzhou Jinchuan earlier in time at Ruashi Mine, DRC; while at the same time, this is balanced by the adjustment of the basis coefficient from 73.0% to 69.5%. In addition, the earlier of the quotation period for the basis price would facilitate an earlier billing and invoicing date by Golden Harbour, as well as accelerating the settlement of the transactions amongst the parties.

Moreover, such proposed amendments are essentially reverting the arrangements to those contemplated in the Cobalt Off-take Agreement as disclosed in the circular of the Company dated 30 August 2013, which was negotiated between Ruashi Mining and the Jinchuan Group on arm’s length basis before Ruashi Mining became a connected person of Jinchuan Group and such transactions rendered as connected transactions.

As disclosed in the “Letter from the Board” of the Circular, the annual caps for the years ending 31 December 2016, 2017 and 2018 in respect of the Continuing Connected Transactions, as approved by the then Independent Shareholders at the extraordinary general meeting of the Company held on 7 January 2016, will also remain unchanged. We note that the impact of the proposed amendments contemplated under the Supplemental Agreement on the proposed caps would be the decrease cobalt price per tonne. Using the five-year average cobalt price, which was used to calculate the annual caps under the Agreement, the decrease in cobalt price per tonne is approximately US$1,015.0. Multiplying the decrease in cobalt price to the volume under the annual caps in the Agreement, the difference in the amounts under the annual caps would be approximately 4.7%, which the Directors consider is within the buffer included in the annual caps under the Agreement. Taking into account of the impact on the annual caps under the Agreement which is within the buffer, we concur with the Management that the annual caps approved by the then Independent Shareholders at the extraordinary general meeting of the Company on 7 January 2016 should remain unchanged.

LETTER FROM ALTUS

Having considered the above and the reasons and factors set out in the sections headed “1.3 Relationship between the Group and Jinchuan Group”, “1.4 Prospects of the Group”, “2.1 Passing of the risks associated with the Products” and “2.3 Basis of the selling prices of the Products” above, we concur with the Directors that the proposed amendments to the terms of the Continuing Connected Transactions under the Supplemental Agreements are in the ordinary and usual course of business of the Company and in the interests of the Company and the Shareholders as a whole.

RECOMMENDATION

Having considered the above principal factors, we are of the view that (i) the terms of the Supplemental Agreement are on normal commercial terms and are fair and reasonable; and (ii) the proposed amendments to the Continuing Connected Transactions under the Supplemental Agreement will be conducted in the ordinary and usual course of business of the Company and its subsidiaries and are in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders, as well as the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution approving the Supplemental Agreement for the Continuing Connected Transactions at the EGM.

Yours faithfully, For and on behalf of Altus Capital Limited Jeanny Leung Executive Director

Ms. Jeanny Leung (“ Ms. Leung ”) is a Responsible Officer of Altus Capital Limited licensed to carry on Type 6 (advising on corporate finance) regulated activity under the SFO. She is also a Responsible Officer of Altus Investments Limited licensed to carry on Type 1 (dealing in securities) regulated activity under the SFO. Ms. Leung has over 25 years of experience in corporate finance advisory and commercial field in Greater China.

SUMMARY OF KEY ORIGINAL TERMS OF THE AGREEMENT

APPENDIX I

SUMMARY OF KEY ORIGINAL TERMS OF THE AGREEMENT

Date:

2 December 2015

Parties:

Golden Harbour (as seller); and

Lanzhou Jinchuan (as buyer)

Subject Matter:

Golden Harbour agreed to sell to Lanzhou Jinchuan, and Lanzhou Jinchuan agreed to purchase from Golden Harbour, the Products that produced by Ruashi Mine and further sold to Golden Harbour under the Purchase and Sales Contract.

Basis of the selling prices of the cobalt contained in cobalt hydroxide:

The selling price of the cobalt contained in cobalt hydroxide delivered by Golden Harbour was determined by multiplying a basis price with a basis coefficient:

(i) the basis price was tied to the low quotation for low-grade cobalt in the free market as published on the Metal Bulletin during the quotation period which was a specific pricing period, being the month following the month of loading pursuant to the Agreement; and
(ii) the basis coefficient was 73% subject to an adjustment based on the cobalt content and impurity element content in the metals.

If the cobalt content is below 25% but above 20%, the basis coefficient will be reduced depending on the actual cobalt content. If the cobalt content is below 20%, Lanzhou Jinchuan has the right to reject the delivery. Such right of rejection is in line with the prevailing market practice as the custom authority of the PRC imposes relatively heavier tax on importing cobalt products with cobalt content below 20%.

If the impurity element content in the metals exceeds certain percentages according to the terms of the Agreement, the basis coefficient will also be reduced depending on the actual impurity element content.

The delivery destination was in Tianjin, the PRC. Golden Harbour had taken into account the purchasing costs of the Products from Ruashi Mining and the shipping costs to determine the selling price to Lanzhou Jinchuan.

SUMMARY OF KEY ORIGINAL TERMS OF THE AGREEMENT

APPENDIX I

Quantity of cobalt hydroxide:

An annual minimum purchase of 2,000 tonnes to an annual maximum purchase of 5,000 tonnes of cobalt hydroxide produced by the Ruashi Mine for each of the three calendar years from 1 January 2016 to 31 December 2018, the exact amount of which will be subject to the amount of cobalt hydroxide that is produced by Ruashi Mine and further sold to Golden Harbour on a ‘‘on demand’’ basis under the Purchase and Sales Contract. Ruashi Mining is not obliged to sell all its cobalt hydroxide produced in Ruashi Mine to Golden Harbour until it reaches the maximum purchase amount of 5,000 tonnes. Pursuant to the Agreement, if Golden Harbour fails to deliver the Products produced by Ruashi Mining in accordance with the annual minimum amount due to reasons other than force majeure, a grace period of 30 calendar days will be allowed to rectify this failure. In the event that Golden Harbour is unable to maintain deliveries, Golden Harbour and Lanzhou Jinchuan will negotiate in good faith to determine how quickly the situation may be resolved and what deliveries may be forthcoming. Should the parties fail to reach a solution within a specified period of time under the Agreement, Lanzhou Jinchuan has the right to claim compensation from Golden Harbour based on the damages caused by the failure in the delivery and the incremental direct costs incurred by Lanzhou Jinchuan in procuring an alternative supply of the Products.

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the 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 in this circular misleading.

2. SHARE CAPITAL

Number of Shares

Nominal value HK$

Authorised

20,000,000,000 Shares 200,000,000.00

Issued, to be issued and fully paid

4,350,753,051 Shares in issue as at the Latest Practicable Date 43,507,530.51 8,466,120,000 Shares to be issued as conversion shares upon 84,661,200.00 full conversion of the perpetual subordinated convertible securities (Note 1) 12,816,873,051 128,168,730.51

Note 1: The perpetual subordinated convertible securities (“PSCS”) were issued by the Company to Jinchuan (BVI) Limited, the nominee of Jintai Mining Investment Limited, pursuant to the sale and purchase agreement dated 27 August 2013 entered into by, among others, the aforesaid parties for the acquisition of the entire issued share capital of Jin Rui Mining Investment Limited. Upon full conversion of the PSCS and based on the initial conversion price of HK$1.00, the Company shall allot and issue 8,466,120,000 new Shares credited as fully paid, subject to terms of the PSCS, details of which are set out in the circular of the Company dated 30 August 2013.

3. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, none of the Directors and the chief executives of the Company had any interest or short position in the shares, underlying shares and debentures of the Company or its 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 which he is taken or deemed to have under such provisions of the SFO); (b) pursuant to Section 352 of the SFO, to be entered into the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules.

GENERAL INFORMATION

APPENDIX II

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and 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 had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company (being 5% or more of the Company’s issued share capital) under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register of substantial shareholders maintained under section 336 of the SFO. These interests are in addition to those disclosed above in respect of the Directors and the chief executive of the Company.

				Number of	Percentage of
				Shares which	the total
				may be	number of
		Capacity/		converted	Shares in
		nature of	Number of	from PSCS	issue (%)
Name of Shareholder	Note	interest	Shares held	(Note 3)	(Note 2)
Jinchuan Group	(1)	Interest of a	3,263,022,857	8,466,120,000	269.59%
		controlled
		corporation
Jinchuan HK	(1)	Interest of a	3,263,022,857	8,466,120,000	269.59%
		controlled
		corporation
Jinchuan (BVI) Limited	(1) & (3)	Interest of a	3,263,022,857	8,466,120,000	269.59%
		controlled
		corporation/
		Beneficial owner
Jinchuan (BVI) 1 Limited		Beneficial owner	1,872,226,377	N/A	43.03%
Jinchuan (BVI) 2 Limited		Beneficial owner	855,874,372	N/A	19.67%
Jinchuan (BVI) 3 Limited		Beneficial owner	534,922,108	N/A	12.29%

Notes:

Jinchuan Group directly owns 100% of the issued share capital of Jinchuan HK which in turn owns 100% of the issued share capital of Jinchuan (BVI) Limited which owns 100% of the issued share capital of Jinchuan (BVI) 1 Limited, Jinchuan (BVI) 2 Limited and Jinchuan (BVI) 3 Limited. Therefore, Jinchuan Group, Jinchuan HK and Jinchuan (BVI) Limited are deemed to have an interest in 11,729,142,857 shares under the SFO.
The calculation is based on the number of Shares as a percentage of the total number of issued Shares (i.e. 4,350,753,051) as at the Latest Practicable Date.

GENERAL INFORMATION

APPENDIX II

Jinchuan (BVI) Limited directly holds PSCS in the amount of US$1,085.4 million (equivalent to approximately HK$8,466.1 million) which may be converted into 8,466,120,000 Shares of the Company at an initial conversion price of HK$1.00. Under the SFO, Jinchuan (BVI) Limited is deemed to be interested in the 8,466,120,000 Shares of the Company underlying the PSCS.
Save as disclosed below, none of the Directors is a director or employee of a company which had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Division 2 and 3 Part XV of the SFO.

Name of Director Posts held in Jinchuan Group Mr. Yang Zhiqiang Chairman and director Mr. Zhang Sanlin Vice President and director Mr. Chen Dexin Vice President Name of Director Posts held in Jinchuan HK Mr. Yang Zhiqiang Chairman and director Mr. Zhang Sanlin Director Mr. Zhang Zhong General manager and director Name of Director Posts held in each of Jinchuan (BVI) Limited, Jinchuan (BVI) 1 Limited, Jinchuan (BVI) 2 Limited and Jinchuan (BVI) 3 Limited Mr. Yang Zhiqiang Director Mr. Zhang Sanlin Director Mr. Zhang Zhong Director

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any person who had any interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under Divisions 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.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has any existing service contract or proposed service contract or proposed service contract with any member of the Company and its subsidiaries which will not expire or be determinable by the Company or its subsidiaries (as the case may be) within one year without payment of compensation.

5. QUALIFICATION AND CONSENT OF EXPERT

(a) Qualification of expert

The following are the qualifications of the expert who has given opinions or advice which are contained in this circular:

Name		Qualification
Altus	Capital Limited	a corporation licensed to carry on Type 4 (advising on securities),
		Type 6 (advising on corporate finance) and Type 9 (asset
		management) regulated activities under the SFO

GENERAL INFORMATION

APPENDIX II

(b) Consent of expert

As at the Latest Practicable Date, Altus has given and has not withdrawn consent to the issue of this circular with the inclusion therein of its letter and references to is name in the form and context in which it appears.

(c) Interests of expert

As at the Latest Practicable Date, Altus was not directly or indirectly interested in any securities of any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group nor did it have any direct or indirect interest in any assets which had been, since 31 December 2015 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by, or leased to, any member of the Group.

6. LITIGATION

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

7. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial position or trading position of the Company and its subsidiaries since 31 December 2015 (being the date to which the latest published audited financial statements of the Group were made up) and up to the Latest Practicable Date.

8. COMPETING INTERESTS

As at the Latest Practicable Date, the following Directors were considered to have interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Company and its subsidiaries pursuant to the Listing Rules.

Mr. Yang Zhiqiang, Mr. Zhang Sanlin and Mr. Chen Dexin held directorship and/or position as senior management in Jinchuan Group which principally engages in businesses of production of nickel, copper, cobalt, platinum group metals, nonferrous metal plates, chemical products and chemicals of nonferrous metals.

Mr. Yang Zhiqiang, Mr. Zhang Sanlin and Mr. Zhang Zhong held directorship and/or position as senior management in Jinchuan HK, which indirectly holds 100% issued share capital of the Company, and is principally engaged in investment holding and trading of mineral and metal products.

GENERAL INFORMATION

APPENDIX II

9. INTEREST IN ASSETS ACQUIRED

As at the Latest Practicable Date, the Directors did not have any interest, direct or indirect, in any assets which have been, since 31 December 2015 (the date to which the latest published audited accounts of the Company were made up), 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.

As at the date of this circular, there is no contract or arrangement in which a Director is materially interested and which is significant in relation to the business of the Group.

10. DIRECTORS’ INTEREST IN THE SUPPLEMENTAL AGREEMENT

None of the Directors have any material interest in the Supplemental Agreement for which they would be required to abstain from voting on the board resolutions approving the terms of the Supplemental Agreement pursuant to the articles of association of the Company. However, for good corporate governance, Mr. Yang Zhiqiang, Mr. Zhang Sanlin, Mr. Chen Dexin and Mr. Zhang Zhong voluntarily abstained from voting in the meeting of the Board in which the Supplemental Agreement was approved, as they also serve as directors and/or senior management of Jinchuan Group (which indirectly holds 99% interest in Lanzhou Jinchuan) and/or Jinchuan HK.

11. MISCELLANEOUS

(i) The registered office of the Company is located at P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands.
(ii) The head office and principal place of business in Hong Kong of the Company is located at Unit 3101, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong.
(iii) The branch share registrar of the Company in Hong Kong is Boardroom Share Registrars (HK) Limited at 31/F., 148 Electric Road, North Point, Hong Kong.
(iv) The company secretary of the Company is Mr. Wong Tak Chuen. Mr. Wong is a fellow member of both the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants in the United Kingdom, as well as a member of the Institute of Chartered Accountants in England and Wales. Mr. Wong has over 20 years of experience in auditing, financial management, mergers and acquisitions gained from certain senior finance related positions in an international accounting firm in Hong Kong, companies listed in Hong Kong and a company listed in the United States.

GENERAL INFORMATION

APPENDIX II

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection during normal business hours on Business Days at the office of the Company at Unit 3101, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong from the date of this circular up to and including 1 August 2016, and at the EGM:

(a) the Agreement;
(b) the Supplemental Agreement;
(c) the letter from the Independent Board Committee, the text of which is set out in this circular;
(d) the letter from Altus, the text of which is set out in this circular;
(e) the written consent of Altus referred to in the paragraph headed “Qualification and Consent of Expert” in this Appendix II; and
(f) a copy of this circular.

NOTICE OF EGM

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JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2362)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of the shareholders of Jinchuan Group International Resources Co. Ltd (the “ Company ”) will be held at Unit 3101, 31/F, United Centre, 95 Queensway, Admiralty, Hong Kong at 3:00 p.m. on Monday, 1 August 2016 for the purpose of considering, and if thought fit, passing the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT the supplemental agreement dated 15 June 2016 (the “ Supplemental Agreement ”) entered into between Golden Harbour International Trading Limited, a wholly owned subsidiary of the Company (“ Golden Harbour ”), and Lanzhou Jinchuan Advanced Materials Technology Co., Ltd. (蘭州金川新材料科技股份有限公司) (“ Lanzhou Jinchuan ”), a subsidiary held by Jinchuan Group Co., Ltd. (金川集團股份有限公司), the controlling shareholder of the Company (“ Jinchuan Group ”) holding approximately 99% of its interest, pursuant to which Golden Harbour and Lanzhou Jinchuan have agreed to amend certain terms of the agreement dated 2 December 2015 entered into between the aforesaid parties for the sale and purchase of cobalt hydroxide that are produced by Ruashi Mining SAS be and is hereby approved, confirmed and ratified, and any one director of the Company be and is hereby authorised to take such actions and execute such documents as he may consider necessary or desirable to carry out and complete the transactions contemplated under the Supplemental Agreement and the agreement (entered into between the aforesaid parties dated 2 December 2015 which was supplemented by the Supplemental Agreement).”

By order of the Board

Jinchuan Group International Resources Co. Ltd

Wong Tak Chuen Company Secretary

Hong Kong, 15 July 2016

For identification purpose only

NOTICE OF EGM

Notes:

A member entitled to attend and vote at the EGM is entitled to appoint more than one proxy to attend and, on poll, vote on his behalf. A proxy need not be a member of the Company.
A form of proxy for use at the EGM is enclosed. Whether or not you intend to attend the EGM in person, you are urged to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned EGM thereof if you so wish. In the event that you attend the EGM after having returned the completed form of proxy, your form of proxy will be deemed to have been revoked.
To be valid, the form of proxy, together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power of attorney, must be deposited at Boardroom Share Registrars (HK) Limited at 31/F, 148 Electric Road, North Point, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof.
In the case of joint registered holders of any shares of the Company, any one of such joint registered holders may vote at the EGM, either in person or by proxy, in respect of such shares as if he/she/it were solely entitled thereto; but if more than one of such joint registered holders are present at the EGM, either in person or by proxy, the vote of that one of them so present, either in person or by proxy, whose name stands first on the register of members in respect of such shares shall be accepted to the exclusion of the votes of the other joint registered holder(s).

As at the date of this circular, the Board comprises four executive Directors, namely Mr. Yang Zhiqiang, Mr. Zhang Sanlin, Mr. Chen Dexin and Mr. Zhang Zhong, and three independent non-executive Directors, namely Mr. Wu Chi Keung, Mr. Yen Yuen Ho, Tony and Mr. Neil Thacker Maclachlan.

AI assistant

Jinchuan Group International Resources Co. Ltd — Proxy Solicitation & Information Statement 2016

50551_rns_2016-07-14_d744385d-c467-44c1-b4cb-41d2548f1db3.pdf

JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

PROPOSED AMENDMENTS PROVIDED IN THE SUPPLEMENTAL AGREEMENT

Passing of risks associated with the Products

Transportation costs of the Products

Basis of the selling prices of the Products

Settlement of payment for the Products

THE ANNUAL CAPS FOR THE CONTINUING CONNECTED TRANSACTIONS

LETTER FROM THE BOARD

CONDITIONS PRECEDENT TO THE SUPPLEMENTAL AGREEMENT

REASONS FOR AND BENEFITS OF THE SUPPLEMENTAL AGREEMENT

LETTER FROM THE BOARD

LISTING RULES IMPLICATION

INFORMATION ABOUT THE PARTIES

VOTING BY WAY OF POLL

RECOMMENDATION

ADDITIONAL INFORMATION

JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

Jinchuan Group International Resources Co. Ltd

SUPPLEMENTAL AGREEMENT FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

The Agreement

LETTER FROM ALTUS

The Supplemental Agreement

LISTING RULES IMPLICATION

THE INDEPENDENT BOARD COMMITTEE

THE INDEPENDENT FINANCIAL ADVISER

LETTER FROM ALTUS

BASIS OF OUR ADVICE

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of the Company and its subsidiaries and its relationship with Jinchuan Group

1.2 Operating results of the Group

LETTER FROM ALTUS

1.3 Relationship between the Group and Jinchuan Group

1.4 Prospects of the Group

2. Proposed amendments provided under the Supplemental Agreement

2.1 Passing of risks associated with the Products

LETTER FROM ALTUS

2.2 Transportation costs of the Products

2.4 Section conclusion

3. Reasons for and benefits of the Supplemental Agreement

LETTER FROM ALTUS

RECOMMENDATION

APPENDIX I

SUMMARY OF KEY ORIGINAL TERMS OF THE AGREEMENT

1. RESPONSIBILITY STATEMENT

2. SHARE CAPITAL

Number of Shares

Authorised

3. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

4. DIRECTORS’ SERVICE CONTRACTS

5. QUALIFICATION AND CONSENT OF EXPERT

(a) Qualification of expert

(b) Consent of expert

(c) Interests of expert

6. LITIGATION

7. MATERIAL ADVERSE CHANGE

8. COMPETING INTERESTS

9. INTEREST IN ASSETS ACQUIRED

10. DIRECTORS’ INTEREST IN THE SUPPLEMENTAL AGREEMENT

11. MISCELLANEOUS

12. DOCUMENTS AVAILABLE FOR INSPECTION

NOTICE OF EGM

JINCHUAN GROUP INTERNATIONAL RESOURCES CO. LTD 金川集團國際資源有限公司

ORDINARY RESOLUTION

Jinchuan Group International Resources Co. Ltd

NOTICE OF EGM

Jinchuan Group International Resources Co. Ltd Proxy Solicitation & Information Statement 2016