Newton Resources Ltd — Capital/Financing Update 2014

Mar 26, 2014

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

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1231)

CHANGE IN USE OF PROCEEDS

Reference is made to the Prospectus.

The Board hereby announces that the intended use of the Net Proceeds would be changed in the manner as set out in this announcement.

Reference is made to the prospectus of Newton Resources Ltd (the “ Company ” and together with its subsidiaries, the “ Group ”) dated 21 June 2011 (the “ Prospectus ”) relating to the listing of the Company’s shares on the Main Board of The Stock Exchange of Hong Kong Limited by way of an initial global offering in Hong Kong and an international placing (the “ Global Offering ”). Unless otherwise defined, capitalized terms used in this announcement shall have the same meanings as defined in the Prospectus.

CHANGE IN USE OF PROCEEDS FROM THE GLOBAL OFFERING

The board of directors of the Company (the “ Board ”) hereby announces the change in application of the unutilised net proceeds from the Global Offering (the “ Net Proceeds ”) in the revised manner set out below:

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Intended Use of the Net Proceeds (Note i)

Revised Use of the Net Proceeds

• (1) approximately RMB222 million for three-phase expansion plan of the Yanjiazhuang Mine

  • (1) there is no change to this intended use

• (2) approximately RMB95 million for payment of resource fees

  • (2) there is no change to this intended use

• (3) approximately RMB179 million for exploration and acquisition activities to expand the resources, including further exploration work at the Yanjiazhuang Mine, the acquisition of exploration rights to expand the northern boundary of the permitted mining area of the Yanjiazhuang Mine by an additional 0.75 km[2 ] and two iron ore mines in Hebei Province, namely, the Gangxi Mine and the Shangzhengxi Mine

  • (3) approximately RMB179 million as general working capital, payment for future capital expenditure, exploration, investment and acquisition activities in the mining and/or resources sector, financial management and repayment of bank borrowings (Note ii)

• (4) approximately RMB208 million for development of gabbro-diabase business

• (4) approximately RMB108 million for the purpose originally designated and approximately RMB100 million as general working capital, payment for future capital expenditure, exploration, investment and acquisition activities in the mining and/or resources sector, financial management and repayment of bank borrowings (Note ii)

Notes:

• (i) For details of the historical use and allocation of the Net Proceeds as at 31 December 2013, please refer to the section headed “Use of Net Proceeds and Change in Use of Net Proceeds from the Listing” in the results announcement of the Company for the year ended 31 December 2013 of the even date and the section headed “Future Plans and Use of Proceeds” in the Prospectus.

• (ii) As a result of the above re-allocation of the Net Proceeds, a total sum of approximately RMB279 million will be used as general working capital, payment for future capital expenditure, exploration, investment and acquisition activities in the mining and/or resources sector, financial management and repayment of bank borrowings of the Group.

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As the interest rates offered by licensed commercial banks and authorized financial institutions in Hong Kong or the PRC are relatively low, it is also determined that for the Net Proceeds that are not immediately applied to the above revised purposes or if the Group is unable to effect any part of its future development plans as intended, the Group may hold such funds in treasury products, apart from deposits in the interest-bearing and non-interest-bearing bank accounts, with licensed commercial banks and/or authorized financial institutions in Hong Kong or the PRC until they are expedited for the intended purposes. The Board believes that the Net Proceeds will be better utilised in this new manner before they are applied to the above revised purposes.

REASONS FOR CHANGE IN USE OF PROCEEDS

In view of the business development of the Group, the Company considers that the re-allocation of part of the Net Proceeds from the original purposes to the revised purposes set out above would facilitate the efficient allocation of the Group’s financial resources. Furthermore, the Group will continue to identify and evaluate opportunities for investment and acquisition of quality mining resources. In this regard, the re-allocation of part of the Net Proceeds to future exploration, investment and acquisition activities in the mining and/ or resources sector is expected to provide flexibility to the Group, thereby enabling it to act on any future business opportunities in these business sectors with attractive valuations. Given the anticipated volatility in interest rates, the Company considers that the broadening use of the Net Proceeds will also provide flexibility in the Group’s financial and treasury management.

The Board is of the view that the above re-allocation and change in use of the Net Proceeds are in the interests of the Company and its shareholders as a whole.

By Order of the Board Newton Resources Ltd Cheng Kar Shun Chairman and Non-Executive Director

Hong Kong, 26 March 2014

As at the date of this announcement, the executive directors of the Company are Mr. Li Changfa and Mr. Jiao Ying; the non-executive directors of the Company are Dr. Cheng Kar Shun, Mr. Lam Wai Hon, Patrick and Mr. Cheng Chi Ming, Brian; and the independent non-executive directors of the Company are Mr. Tsui King Fai, Mr. Lee Kwan Hung and Mr. Wu Wai Leung, Danny.

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