JX Energy Ltd. — Capital/Financing Update 2021

Jun 9, 2021

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

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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Persta Resources Inc.

(incorporated under the laws of Alberta with limited liability)

(Stock code: 3395)

CONNECTED TRANSACTION PROPOSED ISSUE OF NEW SHARES TO CONNECTED PERSONS UNDER SPECIFIC MANDATE

THE SUBSCRIPTION

The Board is pleased to announce that, on 8 June 2021 (after trading hours), the Company and Jixing entered into the Jixing Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue, and Jixing has conditionally agreed to subscribe for, 30,000,000 Shares at the Subscription Price of HK$0.80 per Share and 20,000,000 Shares at the higher of (i) HK$0.80, and (ii) the volume weighted average price per Share as quoted on the Stock Exchange for the 30 Trading Days immediately preceding the date on which the Company receives the Payment Notice from Jixing. On the same day (after trading hours), the Company and Dalian Yongli entered into the Dalian Yongli Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue, and Dalian Yongli has conditionally agreed to subscribe for, 20,000,000 Shares at the Subscription Price of HK$0.80 per Share.

The Subscription Shares represent approximately 19.34% of the issued share capital of the Company as at the date of this announcement, and approximately 16.21% of the issued share capital of the Company as enlarged by the issue of the Subscription Shares. The Subscription Shares will be allotted and issued under the Specific Mandate to be sought at the SGM.

An application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares on the Stock Exchange.

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LISTING RULES IMPLICATION

As Jixing and Dalian Yongli are both connected persons (as defined in the Listing Rules) of the Company, the entry into of the Subscription Agreements and the transactions contemplated thereunder (including the Subscriptions and the issue of the Subscription Shares under the Specific Mandate) constitute connected transactions of the Company under Chapter 14A of the Listing Rules and are subject to reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

GENERAL

The SGM will be held to consider and, if thought fit, pass the resolution(s) to approve the Subscription Agreements, the transactions contemplated thereunder and the grant of the Specific Mandate for the allotment and issue of the Subscription Shares. The voting at the SGM will be conducted by way of a poll whereby the Subscribers and their respective associates shall abstain from voting on the relevant resolution(s) to be proposed at the SGM to approve the Subscription Agreements, the transactions contemplated thereunder and the grant of the Specific Mandate for the allotment and issue of the Subscription Shares.

The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Shareholders on the terms of the Subscription. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among other things, (i) details of the Subscription Agreements; (ii) a letter of advice from the Independent Board Committee to the Independent Shareholders in relation to the Subscription Agreements; (iii) a letter of advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Subscription Agreements, is expected to be despatched by the Company to the Shareholders on or before 30 June 2021.

Shareholders and potential investors should note that the Subscriptions are subject to fulfilment of the conditions under the Subscription Agreements and accordingly, the Subscriptions may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company.

INTRODUCTION

The Board is pleased to announce that, on 8 June 2021 (after trading hours), the Company and Jixing entered into the Jixing Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue, and Jixing has conditionally agreed to subscribe for, 30,000,000 Shares at the Subscription Price of HK$0.80 per Share and 20,000,000 Shares at the higher of (i) HK$0.80, and (ii) the volume weighted average price per Share as quoted on the Stock Exchange for the 30 Trading Days

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immediately preceding the date on which the Company receives the Payment Notice from Jixing. On the same day (after trading hours), the Company and Dalian Yongli entered into the Dalian Yongli Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue, and Dalian Yongli has conditionally agreed to subscribe for, 20,000,000 Shares at the Subscription Price of HK$0.80 per Share.

THE SUBSCRIPTION AGREEMENTS

Date

8 June 2021

Parties to the Jixing Subscription Agreement

• (1) the Company;

• (2) Jixing;

• (3) Changchun City Jixing Gas Service for Auto Co. Ltd.; and

• (4) Mr. Liu.

Parties to the Dalian Yongli Subscription Agreement

• (1) the Company; and

• (2) Dalian Yongli.

The Subscription

Pursuant to the Jixing Subscription Agreement, the Company has conditionally agreed to allot and issue, and Jixing has conditionally agreed to subscribe for, (i) the first tranche of 30,000,000 Shares at the Subscription Price of HK$0.80 per Share, and (ii) the second tranche of 20,000,000 Shares at the higher of (i) HK$0.80, and (ii) the volume weighted average price per Share as quoted on the Stock Exchange for the 30 Trading Days immediately preceding the date on which the Company receives the Payment Notice from Jixing notifying the Company that Jixing will make payment for the second tranche of 20,000,000 Shares in full. The Company and Jixing have agreed that Jixing will pay for the subscription for any new Shares in C$ using the exchange rate of the higher of (i) HK$0.16 to C$1, and (ii) the HK$ to C$ exchange rate as quoted by the Bank of Canada for the 5 days preceding the payment for each tranche of new Shares.

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Pursuant to the Dalian Yongli Subscription Agreement, the Company has conditionally agreed to allot and issue, and Dalian Yongli has conditionally agreed to subscribe for, 20,000,000 Shares at the Subscription Price of HK$0.80 per Share. The Company and Dalian Yongli have agreed that Dalian Yongli will pay for the subscription for any new Shares in C$ using the exchange rate of the higher of (i) HK$0.16 to C$1, and (ii) the HK$ to C$ exchange rate as quoted by the Bank of Canada for the 5 days preceding the payment for the new Shares.

The subscription of Shares by Jixing under the Jixing Subscription Agreement is not inter-conditional with the subscription of Shares by Dalian Yongli under the Dalian Yongli Subscription Agreement.

The Subscription Shares

The 70,000,000 Subscription Shares represents approximately 19.34% of the issued share capital of the Company as at the date of this announcement, and approximately 16.21% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there is no change in the issued share capital of the Company between the date of this announcement and completion of the subscription of new Shares by both Jixing and Dalian Yongli save for the allotment and issue of the Subscription Shares).

The Subscription Price

The Subscription Price of HK$0.80 (assuming the subscription price per Share of the second tranche of 20,000,000 Shares to be allotted and issued to Jixing will be HK$0.80) per Subscription Share represents:

• (1) a premium of approximately 120% to the closing price of HK$0.365 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (2) a premium of approximately 90% to the average closing price of HK$0.424 per Share as for the last 5 consecutive trading days up to and including the Last Trading Day;

• (3) a premium of approximately 109% to the average closing price of HK$0.385 per Share as for the last 10 consecutive trading days up to and including the Last Trading Day;

• (4) a premium of approximately 39% to the average closing price of HK$0.578 per Share as for the last 30 consecutive trading days up to and including the Last Trading Day;

• (5) a premium of approximately 56% to the average closing price of HK$0.498 per Share as for the last 45 consecutive trading days up to and including the Last Trading Day; and

• (6) a premium of approximately 20% to the average closing price of HK$0.67 per Share as at 18 February 2021, the last trading day when the total trade volume exceeded 1 million Shares.

The Subscription Price was determined after arm’s length negotiations between the Company and the Subscribers after considering, among other things, the Company’s past performance and future prospects and in particular, the market performance and liquidity of the Shares. Year-to-date from 1

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January 2021 to the Last Trading Day, the Stock Exchange has been opened for trading for a total of 105 days. Over this period, a total of 8.33 million shares were traded on 42 days and no trades were executed on 63 days. This low level of liquidity is reflected in the 18% Bid-Ask Spread on the Last Trading Day (bid price of HK$0.390 per Share, ask price of HK$0.325 per Share, and HK$0.365 per Share on the Last Trading Day).

Year-to-date from 1 January 2021 to the Last Trading Day, the total daily trading volume of the Company’s shares exceeded 1 million shares only 1 day on 18 February 2021, when 3.85 million Shares were traded. The increase in volume was further reflected in the price of the Shares, which increased from HK$0.28 at market open to HK$0.67 at market closing on the same day, an increase of 139%. Subsequent to 18 February 2021 and up to the Last Trading Day, daily trading volumes averaged approximately 35,000 Shares per day, and the market price of the Shares declined on lower trading volumes to the Last Trading Day, establishing a positive correlation between prevailing trading volume and price, where the market price of the Shares increased as volume increased. The Company and the Subscribers acknowledged that the conditional placing of 70 million Subscription Shares would significantly exceed the number of Shares traded in the prevailing market, and determined that the Subscription Price should incorporate the positive correlation between the prevailing trading volume and the Share price.

Ranking

The Subscription Shares, when issued and fully paid, will rank pari passu in all respects among themselves and with all the Shares in issue at the time of allotment and issue of the Subscription Shares.

Conditions of the Subscription Agreements

Completion is conditional upon satisfaction (or where applicable, the waiver) of the following conditions:

• (1) the passing of the resolutions of the Board approving the allotment and issue of the Subscription Shares under the Subscription Agreements;

• (2) the passing by the Independent Shareholders at the SGM of resolutions approving the Subscription Agreements and the grant of the Specific Mandate for the allotment and issue of the Subscription Shares;

• (3) the Company having obtained all necessary approvals and consents (if any) in relation to the Subscriptions and the transactions contemplated thereunder;

• (4) the Listing Committee granting the listing of, and permission to deal in, the Subscription Shares (and such approval not subsequently revoked prior to the date of Completion); and

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• (5) delivery by the Subscribers to the Company of evidence satisfactory to the Company, in its sole discretion, that the Subscribers have sufficient funds available to subscribe the Subscription Shares.

In the event that any of the above conditions under a Subscription Agreement has not been fulfilled on or before 31 August 2021 (or such other date as may be determined by the Company in its sole discretion), such Subscription Agreement shall terminate with immediate effect pursuant to its terms, and the parties thereto shall be released and discharged from their respective obligations under such Subscription Agreement (except for their accrued right or obligation at the date of termination and the respective surviving clauses).

Completion of the Jixing Subscription Agreement

Subject to fulfillment of the conditions of the Jixing Subscription Agreement, completion of the subscription of Shares by Jixing will be in two tranches as follows:

• (1) the first tranche of 30,000,000 Shares will be allotted and issued to Jixing on the date upon which all of the conditions has been satisfied or, where applicable, waived; and

• (2) the second tranche of 20,000,000 Shares will be allotted and issued to Jixing within 1 day after the Company receives the Payment Notice from Jixing notifying the Company that Jixing will make payment for the second tranche of 20,000,000 Shares in full, provided that it shall be a date on or before 30 September 2021.

If Jixing fails to deliver the Payment Notice to the Company on or before 30 September 2021, the Jixing Subscription Agreement shall automatically terminate with immediate effect pursuant to its terms and the parties thereto shall be released from all liabilities and obligations under the Jixing Subscription Agreement (except for their accrued right or obligations at the date of termination and the respective accruing clauses).

Jixing shall pay to the Company the subscription price corresponding to each tranche of Subscription Shares allotted and issued at each completion in immediately available funds by wire transfer.

Completion of the Dalian Yongli Subscription Agreement

Subject to fulfillment of the conditions of the Dalian Yongli Subscription Agreement, completion of the subscription of Shares by Dalian Yongli shall take place on or before 30 September 2021.

Dalian Yongli shall pay to the Company the subscription amount of HK$16 million in full in immediately available funds by wire transfer for the subscription of the 20,000,000 Shares upon Completion.

SPECIFIC MANDATE

The Subscription Shares will be allotted and issued pursuant to the Specific Mandate proposed to be obtained from the Independent Shareholders at the SGM.

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Application for listing

The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Subscription Shares on the Main Board of the Stock Exchange.

INFORMATION ON THE SUBSCRIBERS

Jixing is a company incorporated under the laws of the British Virgin Islands. Jixing is principally engaged in the investment of clean energy worldwide. It is directly wholly-owned by Changchun City Jixing Gas Service for Auto Co. Ltd, which is owned as to 66.70% and 33.30% by Mr. Liu, an executive Director, and Ms. Zhang Lijun, Mr. Liu’s spouse, respectively.

Dalian Yongli is a company incorporated under the laws of the PRC with limited liability whose ultimate beneficial owner is Mr. Zhang Zhong (張鐘). Dalian Yongli is principally engaged in the sales and trading of petroleum and natural gas products. Other than being a substantial shareholder of the Company, to the best knowledge, information and belief of the Board and after making all reasonable enquiries, Dalian Yongli and its ultimate beneficial owner are third parties independent of and not connected with the Company and its connected persons.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Jixing is interested in 23,600,000 Shares, representing approximately 6.52% of the issued share capital of the Company, and Dalian Yongli is interested in 60,000,000 Shares, representing approximately 16.68% of the issued share capital of the Company. As (i) Jixing is directly wholly-owned by Changchun City Jixing Gas Service for Auto Co. Ltd, which is owned as to 66.70% by Mr. Liu, an executive Director, and (ii) Dalian Yongli is a substantial shareholder, they are connected persons of the Company. Accordingly, the entry into of the Subscription Agreements and the transactions contemplated thereunder (including the Subscriptions and the issue of the Subscription Shares under the Specific Mandate) constitute connected transactions of the Company under Chapter 14A of the Listing Rules and are subject to reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Mr. Liu, an executive Director, has a material interest in the transactions contemplated under the Jixing Subscription Agreement and has abstained from voting on the relevant Board resolutions approving the Subscriptions and the Jixing Subscription Agreement. Other than the aforesaid Directors, no other Directors have or may be perceived to have a material interest in the Subscriptions or are required to abstain from voting on the relevant Board resolutions under the requirements of the Listing Rules.

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As of the date of this announcement, 92,254,507 Shares are held by the public (within the meanings of the Listing Rules), representing approximately 25.49% of the issued share capital of the Company. Immediately upon Completion, approximately 21.36% of the issued share capital of Company will be held by the public and accordingly, the Company will be unable to satisfy the minimum public float requirement of 25% as set out in Rule 8.08(1)(a) of the Listing Rules. Application will be made to the Stock Exchange for a temporary waiver from strict compliance with Rule 8.08(1)(a) of the Listing Rules for a six-month period commencing on the day the total issued Shares held by the public falls below 25% as a result of any subscription of new Shares by the Subscribers.

REASONS FOR AND BENEFIT OF THE ISSUE OF THE SUBSCRIPTION SHARES

The Company is principally engaged in natural gas and crude oil exploration and production, with a focus on natural gas resources. The Company focuses on long-term growth through acquisition, exploration, development and production in the Western Canadian Sedimentary Basin of its significant holdings of natural gas leases in the Western Canadian Sedimentary Basin region.

Assuming the subscription price per Share of the second tranche of 20,000,000 Shares to be allotted and issued to Jixing will be HK$0.80, the gross proceeds from the Subscriptions are expected to be HK$56 million (approximately C$8.96 million). The Company intends to apply the net proceeds of the Subscription, after the deduction of the estimated related expenses to be incurred in the Subscription, as follows:

• (1) approximately 35% of the net proceeds for financing the drilling of new wells at the Basing area;

• (2) approximately 45% of the net proceeds for partial repayment of the Company’s subordinated debt; and

• (3) approximately 20% of the net proceeds for additional working capital of the Company and other general corporate purposes.

The Company has also considered other forms of fund-raising methods, namely other means of equity financing (such as a rights issue or an open offer). These other means of equity financing, including but not limited to, underwriting commission and documentation and other professional fees, which the Company considers would, (i) incur additional costs; and (ii) take a relatively longer timeframe when compared to the subscription of new Shares. In relation to debt financing, further borrowings would create additional interest burden for the Company and the due diligence and negotiation process with the relevant banks may be lengthy, and debt financing would also increase the debt-to-equity ratio of the Company. While the Company has considered placing new shares to Independent Third Parties, the Directors are of the view that placings with Jixing and Dalian Yongli would reinforce the Company’s strategic alliances with both shareholders, providing an efficient means of raising capital for the Company’s present needs. Accordingly, the Company has entered into the Subscription Agreements with the Subscribers to provide the Company with further capital.

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The Board is of the view that the allotment and issue of the Subscription Shares is an appropriate means of raising additional capital for the business operations of the Company since it will provide the Company with immediate funding and could broaden the capital base of the Company. The Board considers that (i) the Subscription Agreements are entered into upon normal commercial terms following arm’s length negotiations between the Company and the Subscribers; (ii) the terms of the Subscription Agreements (including the Subscription Price) are on normal commercial terms and are fair and reasonable; and (iii) the Subscriptions are in the interests of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has conducted the following equity fund raising activities in the past twelve months before the date of this announcement:

• Intended use of Actual use of proceeds as at the date

• Date of announcement Event Net proceeds proceeds of this announcement 27 October 2020, Issue of new Shares The gross proceeds The net proceeds from Approximately HK$6 million used for 30 November 2020, under general from the issuance the issue of the new facility optimisation and production 16 December 2020 and mandate. of the new Shares Shares was de-bottlenecking to enhance natural 23 December 2020 amounted to intended to be gas production from the Company’s (Hong Kong time). HK$18 million. applied towards the Basing area. expansion of the Company’s existing Approximately HK$12 million applied business and as towards the Company’s working general working capital deficit. capital of the Company.

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EFFECT OF THE SUBSCRIPTIONS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the date of this announcement, the Company has 361,886,520 Shares in issue. The following table illustrates the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the completion of the subscription of new Shares by both Jixing and Dalian Yongli (assuming there is no change in the issued share capital of the Company between the date of this announcement and the completion of the subscription of new Shares by both Jixing and Dalian Yongli save for the allotment and issue of the Subscription Shares):

					Immediately upon	Immediately upon	Immediately upon
	Capacity/Nature of	As at the date of this			completion of the
Shareholders	interest	announcement			Subscription
			Approximate			Approximate
			percentage of			percentage of
			total	issued		total	issued
		No. of Shares		Shares	No. of Shares		Shares
		(Shares)	(%) (Note 11)		(Shares)	(%) (Note 11)
Aspen Investment Holdings Ltd.	Beneficial owner and	185,438,846		51.24	185,438,846		42.94
(Note 1)	parties acting in concert
Ji Lin Hong Yuan Trade Group	Interest in controlled	185,438,846		51.24	185,438,846		42.94
Limited (Note 1)	corporation and parties
	acting in concert
1648557 Alberta Ltd. (Note 1)	Interest in controlled	185,438,846		51.24	185,438,846		42.94
	corporation and parties
	acting in concert
Changchun Liyuan Investment	Interest in controlled	185,438,846		51.24	185,438,846		42.94
Co. Ltd. (Note 3)	corporation and parties
	acting in concert
Mr. Yuan Jing (Notes 1 & 4)	Interest in controlled	185,438,846		51.24	185,438,846		42.94
	corporation and parties
	acting in concert
Mr. Guang Jing (Note 5)	Interest in controlled	185,438,846		51.24	185,438,846		42.94
	corporation and parties
	acting in concert
Mr. Le Bo (Note 6)	Interest in controlled	185,438,846		51.24	185,438,846		42.94
	corporation and parties
	acting in concert
Ms. Jing Hou (Note 7)	Beneficial owner, interest	185,438,846		51.24	185,438,846		42.94
	of spouse and parties
	acting in concert
Jixing Gas Holdings Limited	Beneficial owner	23,600,000		6.52	73,600,000		17.04
(Note 8)
Changchun City Jixing Gas	Security interest	181,194,306		50.07	181,194,306		41.96
Service for Auto Co. Ltd.	Interest in controlled	23,600,000		6.52	73,600,000		17.04
(Note 8)	corporation

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Shareholders Capacity/Nature of interest Ms. Zhang Lijun (Notes 8 & 9) Interest in controlled corporation and interest of spouse Interest in controlled corporation and interest of spouse Directors Mr. Liu Yongtan (Note 8) Security interest Interest in controlled corporation and interest of spouse Mr. Pingzai Wang (Note 10) Beneficial owner Other Shareholders Dalian Yongli Petrochemical Ltd. Beneficial owner Public Shareholders Beneficial owner Total	As at the date of this announcement No. of Shares (Shares) Approximate percentage of total issued Shares (%) (Note 11) 181,194,306 50.07 23,600,000 6.52 181,194,306 50.07 23,600,000 6.52 593,167 0.16 60,000,000 16.58 92,254,507 25.49 361,886,520 100.00	Immediately upon completion of the Subscription No. of Shares (Shares) Approximate percentage of total issued Shares (%) (Note 11) 181,194,306 41.96 73,600,000 17.04 181,194,306 41.95 73,600,000 17.04 593,167 0.14 80,000,000 18.52 92,254,507 21.36 431,886,520 100.00	Immediately upon completion of the Subscription No. of Shares (Shares) Approximate percentage of total issued Shares (%) (Note 11) 181,194,306 41.96 73,600,000 17.04 181,194,306 41.95 73,600,000 17.04 593,167 0.14 80,000,000 18.52 92,254,507 21.36 431,886,520 100.00
			100.00

Notes:

1. Aspen Investment Holdings Ltd. (‘‘Aspen’’) holds 181,194,306 Shares and is owned as to approximately 41.09% by Ji Lin Hong Yuan Trade Group Limited (‘‘JLHY’’), 39.69% by 1648557 Alberta Ltd. (‘‘164 Co’’), and 19.22% by Changchun Liyuan Investment Co. Ltd. (‘‘Liyuan’’). Pursuant to the unanimous shareholders agreement dated December 18, 2015 (the ‘‘Unanimous Shareholders Agreement’’) and the first supplemental unanimous shareholders agreement dated April 29, 2016 (the ‘‘First Supplemental Unanimous Shareholders Agreement’’), Aspen, Mr. Yuan Jing (‘‘Mr. Jing’’), JLHY, Mr. Le Bo (‘‘Mr. Bo’’), 164 Co, Liyuan and Ms. Jing Hou (‘‘Ms. Hou’’) (being spouse of Mr. Bo) became a group of Controlling Shareholders (as defined in the Listing Rules) acting in concert and therefore Aspen is deemed to be interested in all the Shares in which Mr. Jing and Mr. Bo are interested in under the SFO, which in aggregate represent approximately 51.24% of the total issued Shares of the Company.

2. JLHY is held as to 60% by Mr. Jing and 40% by Mr. Guang Jing, Mr. Jing’s brother. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, JLHY is deemed to be interested in all the Shares in which Aspen, Mr. Jing, Mr. Bo, 164 Co and Liyuan are interested in under the SFO.

3. Liyuan is owned as to approximately 98%, 1% and 1% by JLHY, Zhou Li Mei and Jing Yue Li, respectively. In addition, pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, Liyuan is deemed to be interested in all the Shares in which Aspen, Mr. Jing, JLHY, Mr. Bo and 164 Co are interested in under the SFO.

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1. Mr. Jing is interested in 60% of the equity interest in JLHY. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, Mr. Jing is deemed to be interested in the Shares in which Aspen, JLHY, Mr. Bo, 164 Co and Liyuan are interested in under the SFO.

2. Mr. Guang Jing holds 40% of the equity interest in JLHY and is therefore deemed to be interested in all the Shares in which JLHY is interested in under the SFO.

3. Mr. Bo holds 1,000 class D voting preferred shares in 164 Co, representing approximately 99.01% voting rights of 164 Co. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, 164 Co is deemed to be interested in all the Shares in which Aspen, Mr. Jing, JLHY, Mr. Bo and Liyuan are interested in under the SFO, which in aggregate represent approximately 61.90% of the total number of the issued common shares of the Company.

4. Ms. Hou holds 3,804,540 Shares and is one of the trustees of The Bo Family Trust. She is the spouse of Mr. Bo and is therefore deemed to be interested in all the Shares in which Mr. Bo is interested in under the SFO.

5. Jixing Gas Holdings Limited is owned as to 100% by Changchun City Jixing Gas Service for Auto Co. Ltd. which is owned as to 66.70% and 33.30% by Mr. Liu Yongyan (‘‘Mr. Liu’’) and Ms. Zhang Lijun (‘‘Ms. Zhang’’). Changchun City Jixing Gas Service for Auto Co. Ltd. also has an interest in 181,194,306 Shares as security interests.

6. Ms. Zhang is the spouse of Mr. Liu. Accordingly, Ms. Zhang is deemed, or taken to be, interested in the Shares which Mr. Liu is interested in for the purposes of the SFO.

7. Mr. Pingzai Wang (‘‘Mr. Wang’’) holds 440,000 Shares. Ms. Wang Li (‘‘Ms. Li’’), the spouse of Mr. Wang, holds 153,167 Shares. Accordingly, Mr. Wang is deemed, or taken to be, interested in the Shares which Ms. Li is interested in for the purposes of the SFO.

8. Certain percentage figures in this table have been subject to rounding adjustments to the nearest 2 decimal places. Accordingly, the aggregate of the percentage figures in the above table may not add up to 100%.

GENERAL

The SGM will be held to consider and, if thought fit, pass the resolution(s) to approve the Subscription Agreements, the transactions contemplated thereunder and the grant of the Specific Mandate for the allotment and issue of the Subscription Shares. The voting at the SGM will be conducted by way of a poll whereby the Subscribers and their respective associates shall abstain from voting on the relevant resolution(s) to be proposed at the SGM to approve the Subscription Agreements, the transactions contemplated thereunder and the grant of the Specific Mandate for the allotment and issue of the Subscription Shares.

The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Shareholders on the terms of the Subscription. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

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A circular containing, among other things, (i) details of the Subscription Agreements; (ii) a letter of advice from the Independent Board Committee to the Independent Shareholders in relation to the Subscription Agreements; (iii) a letter of advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Subscription Agreements, is expected to be despatched by the Company to the Shareholders on or before 30 June 2021.

Shareholders and potential investors should note that the Subscriptions are subject to fulfilment of the conditions under the Subscription Agreements and accordingly, the Subscriptions may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company.

DEFINITIONS

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

‘‘Board’’	the board of the Directors
‘‘Bid-Ask Spread’’	the difference between the simultaneous bid and ask price of the Shares
	as quoted on the Stock Exchange divided by the last trading price of
	the Shares
‘‘C$’’	Canadian dollars, the lawful currency of Canada
‘‘Company’’	Persta Resources Inc., a company incorporated with limited liability
	under the laws of Alberta on March 11, 2005 and whose shares are
	listed on the Main Board of the Stock Exchange
‘‘Completion’’	completion of the subscription of new Shares under the Jixing
	Subscription Agreement and/or the Dalian Yongli Subscription
	Agreement (as the case may be)
‘‘connected person(s)’’	has the meaning ascribed to it under the Listing Rules
‘‘Dalian’’	Dalian Yongli Petrochemical Ltd. (大連永力石油化工有限公司),
	a company incorporated under the laws of PRC with limited liability
‘‘Dalian Yongli Subscription	the subscription agreement dated 8 June 2021 entered into between the
Agreement’’	Company and Dalian Yongli in relation to the subscription of
	20,000,000 new Shares
‘‘Director(s)’’	the director(s) of the Company
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong

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• ‘‘Hong Kong’’ The Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Board the independent committee of the Board, comprising Mr. Richard Dale Committee’’ Orman, Mr. Peter David Robertson and Mr. Larry Grant Smith, being the independent non-executive Directors, established to advise the Independent Shareholders in respect of the Subscription Agreements and the transactions contemplated thereunder (including the grant of the Specific Mandate)

• ‘‘Independent Shareholders’’ the Shareholders of the Company, other than the Subscribers and their respective associates who are required to abstain from voting at the SGM to be convened to approve the Subscription Agreements and the transactions contemplated thereunder

• ‘‘Independent Third person(s) who or company(ies) together with its/their ultimate Party(ies)’’ beneficial owner(s) which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, is/are third party(ies) independent of the Company and its connected person(s) in accordance with the Listing Rules

• ‘‘Jixing’’ Jixing Gas Holdings Limited, a company incorporated under the laws of the British Virgin Islands

• ‘‘Jixing Subscription the subscription agreement dated 8 June 2021 entered into between the Agreement’’ Company and Jixing in relation to the subscription of a total of 50,000,000 new Shares

• ‘‘Last Trading Day’’ 7 June 2021, being the last full trading day for the Shares immediately prior to the entering into of the Subscription Agreements

• ‘‘Listing Committee’’ has the meaning ascribed to it under the Listing Rules

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or as otherwise modified from time to time

• ‘‘Mr. Liu’’ Mr. Liu Yongtan, an executive Director and chairman of the Board

• ‘‘Payment Notice’’ an irrevocable notice from Jixing notifying the Company that it will make payment for the second tranche of 20,000,000 Shares in full

• ‘‘PRC’’ the Peoples’ Republic of China, for the purpose of this announcement, not including Hong Kong, the Macau Special Administrative Region of the PRC, and Taiwan

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• ‘‘SGM’’ the special meeting of the Shareholders to be held and convened to consider and approve the Subscriptions and the Specific Mandate

• ‘‘Share(s)’’ the common share(s) of no par value in the capital of the Company ‘‘Shareholder(s)’’ the holder(s) of the Shares of the Company ‘‘Specific Mandate’’ the specific mandate to be sought at the SGM to allot and issue the Subscription Shares to the Subscribers as contemplated under the Subscription Agreements

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Subscribers’’ Dalian Yongli and Jixing ‘‘Subscriptions’’ the subscription for the Subscription Shares by the Subscribers pursuant to the Subscription Agreements

• ‘‘Subscription Agreements’’ the Dalian Yongli Subscription Agreement and the Jixing Subscription Agreement

• ‘‘Subscription Price’’ the subscription price of HK$0.80 per Subscription Share ‘‘Subscription Shares’’ a total of 70,000,000 new Shares to be allotted and issued by the Company to the Subscribers pursuant to the terms and conditions of the Subscription Agreements

• ‘‘Trading Day(s)’’ the day(s) on which the Stock Exchange is open for business and the common shares of the Corporation have traded

• ‘‘%’’ per cent.

By Order of the Board Persta Resources Inc. Yongtan Liu Chairman

Calgary, 8 June 2021 Hong Kong, 9 June 2021

As at the date of this announcement, the Board comprises of two executive Directors, being Mr. Yongtan Liu and Mr. Pingzai Wang; and three independent non-executive Directors, namely Mr. Richard Dale Orman, Mr. Peter David Robertson and Mr. Larry Grant Smith.

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