Kinetic Development Group Limited — Capital/Financing Update 2012

Jun 29, 2012

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

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Kinetic Mines and Energy Limited 力量礦業能源有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1277)

CHANGE OF THE USE OF THE NET PROCEEDS FROM THE GLOBAL OFFERING

The board of directors (the “ Board ”) of Kinetic Mines and Energy Limited (the “ Company ” and together with its subsidiaries, the “ Group ”) announces that in order to better utilise the Group’s funds and reduce its financing costs, on 30 May 2012, the Group repaid a short term bank loan in the amount of approximately HK$740.1 million provided by China Minsheng Banking Corp., Ltd (“ China Minsheng Loan ”). The China Minsheng Loan was a six-month short term bank loan with interest rate of 7.93% per annum and which was due in September 2012. In addition, the Group also repaid on 26 June 2012 another short term bank loan of RMB229.0 million (approximately HK$281.3 million) (such loan, together with the China Minsheng Loan, being the “ Repaid Loans ”).

As part of the Group’s treasury initiatives to improve the efficiency of its funds, on 26 June 2012, the Group entered into a new loan facility with China Minsheng Banking Corp., Ltd (“ New Loan Facility ”) of RMB350.0 million (approximately HK$429.9 million) with interest rate of 7.57% per annum and a term of one year.

As a result of the changes to the Group’s funding arrangements as mentioned above, and taking into account the New Loan Facility and utilising approximately HK$325.4 million of the net proceeds from the global offering of the Company’s shares on The Stock Exchange of Hong Kong Limited on 23 March 2012 (the “ Global Offering ”) as stipulated in the Company’s prospectus dated 13 March 2012 (the “ Prospectus ”),

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approximately HK$266.1 million from the net proceeds from the Global Offering originally allocated for the finding of new acquisition targets and acquiring coal reserves was redeployed for the repayment of the Repaid Loans. This represents a change in the use of net proceeds as stated in the Prospectus.

The Group is currently negotiating with certain banks for new loan facilities with better repayment terms and interest rates. The Company expects to have agreed terms for new loan facilities or funding by the time funds are required for the finding of new acquisition targets and acquiring coal reserves. As such, the Board considers that the above change in the use of the Global Offering proceeds to be in the interests of both the Company and its shareholders, and will not have an adverse impact to the Group’s operations and plans in the future and is in line with the Group’s development strategy.

By Order of the Board Kinetic Mines and Energy Limited Zhang Li Chairman and Executive Director

Hong Kong, 29 June 2012

As at the date of this announcement, the board of directors of the Company comprises seven directors, of which three are executive directors, namely Mr. Zhang Li (Chairman), Mr. Wang Changchun (Chief Executive Officer), Mr. Zhang Liang, Johnson; one is a non-executive director, namely Ms. Zhang Lin, and three are independent non-executive directors, namely Mr. Shi Xiaoyu, Ms. Liu Peilian and Mr. Dai Feng.

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