Persistence Gold Group Ltd — Capital/Financing Update 2007

Oct 8, 2007

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

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APAC RESOURCES LIMITED

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*

(Incorporated in Bermuda with limited liability)

(Stock code: 1104)

(1) PLACING OF EXISTING SHARES, AND SUBSCRIPTION FOR NEW SHARES, IN APAC RESOURCES LIMITED AND

(2) RESUMPTION OF TRADING

Placing Agent

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The Vendor is currently beneficially interested in approximately 14.88 per cent. of the issued share capital of the Company as at the date of this announcement. On 5th October, 2007, the Agreement was executed, pursuant to which the Vendor has agreed to place, through the Placing Agent and on a best efforts basis, 400,000,000 Shares to independent investors at a price of HK$1.48 per Share. On completion of the Placing, the Vendor will subscribe for such number of new Shares as is equivalent to the number of Shares actually placed by it pursuant to the Agreement, at the same price.

The Placing Shares represent up to approximately 9.92 per cent. of the issued share capital of the Company as at the date of this announcement and approximately 9.03 per cent. of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

The Subscription is conditional and may or may not proceed. Accordingly, shareholders and prospective investors are reminded to exercise extreme caution when trading in the Shares and Warrants.

On the basis that all the 400,000,000 Shares are placed and 400,000,000 new Shares are accordingly subscribed pursuant to the Agreement, net proceeds and gross proceeds from the Subscription of up to approximately HK$583,120,000 and HK$592,000,000 respectively (being a net placing price of approximately HK$1.4578 per Share) will be applied for further investments in the resources industry and acquisition in shares in listed companies. The Company had not identified any investments in the resources industry in relation to the use of such proceeds as at the date of this announcement.

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On the basis that all the 400,000,000 Shares are placed and 400,000,000 new Shares are accordingly subscribed pursuant to the Agreement, the beneficial interest of Shougang in the issued share capital of the Company will be reduced from approximately 19.84 per cent. to approximately 9.92 per cent. immediately following completion of the Placing, but will increase to approximately 18.05 per cent. immediately following completion of the Subscription.

Trading in the Shares and Warrants on the Stock Exchange was suspended at the request of the Company with effect from 9:30 a.m. on 5th October, 2007 pending the release of this announcement. The Company has applied for the resumption of trading in the Shares and Warrants with effect from 9:30 a.m. on 9th October, 2007.

PLACING OF UP TO 400,000,000 EXISTING SHARES AND SUBSCRIPTION OF UP TO 400,000,000 NEW SHARES

Agreement dated 5th October, 2007 made between the Company, the Vendor, the Warrantor and the Placing Agent

The Placing

Vendor: The Vendor, a substantial shareholder of the Company Number of Placing Shares: 400,000,000 Shares to be placed, representing approximately 9.92 per cent. of the issued share capital of the Company as at the date of this announcement and approximately 9.03 per cent. of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

Under the Agreement, the Placing Agent has agreed to be appointed as placing agent to procure, on a best efforts basis, purchasers for the Placing Shares.

As at the date of this announcement, the Placing Agent confirms that all the Placing Shares will be taken up.

• Placing price: HK$1.48 per Placing Share, which was agreed after arm’s length negotiations by reference to historical performance of the prices of the Shares and the closing price on the last trading day and the average closing price for the last five trading days before the Placing and represents:-

• (i) a discount of approximately 5.73 per cent. to the closing price of HK$1.57 per Share as quoted on the Stock Exchange on the last trading day of the Shares immediately before the date of this announcement;

• (ii) a premium of approximately 25.42 per cent. to the average closing price of HK$1.18 per Share as quoted on the Stock Exchange for the last five trading days of the Shares immediately before the date of this announcement;

• (iii) a premium of approximately 37.04 per cent. to the average

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closing price of HK$1.08 per Share as quoted on the Stock Exchange for the last ten trading days of the Shares immediately before the date of this announcement; and

• (iv) a premium of approximately 1,380 per cent. over the net asset value of HK$0.10 per Share as stated in the audited consolidated accounts of the Company for the year ended 31st December, 2006.

Placing Agent:

Placing commission:

Placees:

The Placing Agent is an independent third party and is not a connected person of each of the Company and the Vendor.

The Placing Agent will receive a placing commission of 1.5 per cent. on the gross proceeds of the Placing. The placing commission is arrived at after arm’s length negotiations between the Vendor and the Placing Agent.

The Placing Shares will be placed to not less than six placees.

The Placing Agent agreed to procure that Placees and their respective ultimate owners are all:-

• (i) independent of, and not acting in concert with, the Vendor and parties acting in concert with it; and

• (ii) independent third parties not connected with the Company or its subsidiaries or any of their respective associates, or any of the connected persons of the Company or its subsidiaries or any of their respective associates.

None of such placees is expected to become a substantial shareholder (within the meaning of the Listing Rules and Securities and Future Ordinance) of the Company as a result of the Placing.

Termination events:

Completion:

The Agreement contains provision granting the Placing Agent the right to terminate the Agreement on the occurrence of certain events including force majeure occurring prior to completion of the Placing. For this purpose, force majeure includes any event, development or change resulting in a material adverse change in political, economic, fiscal, financial, regulatory or stock market conditions and which in the Placing Agent’s reasonable opinion would materially adversely affect the success of the Placing. If the Placing Agent exercises such right (i.e. at any time prior to 9:30 a.m. on the Placing Completion Date which is expected to be on 11th October, 2007), the Placing will not proceed.

Completion of the Placing is expected to take place on or before 11th October, 2007 or such other date as may be agreed between the Vendor, the Placing Agent and the Company.

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The Subscription

Subscriber: The Vendor Number of Subscription Such number of new Shares, being no more than 400,000,000 Shares: Shares, as is equivalent to the number of Placing Shares. Subscription Price: HK$1.48 per Subscription Share, which is the same as the placing price of the Placing Shares. General Mandate: The Subscription Shares will be issued pursuant to the general mandate to allot, issue and deal with Shares granted to the Directors by resolution of its shareholders passed at the special general meeting held on 15th August, 2007, which authorised the Directors to allot and issue a maximum of 806,260,232 Shares. The Company has not utilised the general mandate prior to entering into the Agreement. Ranking of Subscription The Subscription Shares will rank equally with Shares in issue at the Shares: time of allotment and issue of the Subscription Shares. Use of Proceeds: On the basis that all the 400,000,000 Shares are placed and 400,000,000 new Shares are accordingly subscribed pursuant to the Agreement, net proceeds and gross proceeds from the Subscription of up to approximately HK$583,120,000 and HK$592,000,000 respectively (being a net placing price of approximately HK$1.4578 per Share) will be applied for further investments in the resources industry and acquisition in shares in listed companies. The Company had not identified any investments in the resources industry in relation to the use of such proceeds as at the date of this announcement.

Condition: The Subscription is conditional upon:-

• (i) the Listing Committee of the Stock Exchange agreeing to grant a listing of and permission to deal in the Subscription Shares;

• (ii) completion of the Placing pursuant to the Agreement; and

• (iii) the obtaining by the Company of all other necessary consents, approvals, authorisations and/or waivers to effect the execution, completion and performance of the obligations and other terms of the Agreement.

Application will be made to the Stock Exchange to grant the listing of and permission to deal in the Subscription Shares.

The above condition cannot be waived. If the condition sets out above is not fulfilled on or before 19th October, 2007 (or such later date as may be agreed by the Vendor and the Company), all rights, obligations and liabilities under the Agreement in relation to the

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Subscription will cease and determine, upon which the parties shall not have any claim against the other in respect of the Subscription.

The Subscription is conditional and may or may not proceed. Accordingly, shareholders and prospective investors of the Company are reminded to exercise extreme caution when trading in the Shares and Warrants.

Completion:

Pursuant to the Agreement and in accordance with Rule 14A.31(3)(d) of the Listing Rules, the Subscription must be completed within 14 days after the date of the Agreement, that is, on or before 19th October, 2007 (or such later as may be agreed by the Vendor and the Company), failing which the Subscription will cease and determine.

EFFECT OF THE PLACING AND THE SUBSCRIPTION

The shareholding structure of the Company immediately before completion of the Placing and immediately after completion of the Placing and Subscription are and will be as follows:-

		Approximate shareholding percentage in the Company(Note 1)	Approximate shareholding percentage in the Company(Note 1)	Approximate shareholding percentage in the Company(Note 1)
		Immediately before the	Immediately after the	Immediately after
		Placing and the	Placing but before the	the Placing and the
Name		Subscription	Subscription	Subscription
Profit Harbour Investments Limited (“Profit		12.24	12.24	11.13
Harbour”) (Note 2)
Shougang Holding (Hong Kong)	Limited	19.84	9.92	18.05
(“Shougang”) (Note 3)
Ms. Chong Sok Un (“Ms. Chong”) (Note 4)		17.32	17.32	15.75
Placees		3.07	12.99	11.82
Public		47.53	47.53	43.25
		______	______	______
	Total	100.00	100.00	100.00

Notes:

1. The figures assume that other than the Subscription Shares, no new Shares are issued or purchased by the Company and that other than the Placing Shares, no Shares are sold or purchased by the Vendor, in each case, after the date of this announcement up to the date of completion of the Subscription.

2. The entire issued share capital of Profit Harbour is owned by Mr. Yue Jialin.

3. This represented an interest in 600,000,000 and 200,000,000 Shares held by Benefit Rich Limited and Easymade Investments Limited respectively, both of which are wholly-owned subsidiaries of Shougang.

4. This represented an interest in 698,120,000 Shares held by Sparkling Summer Limited, which is an indirectly owned subsidiary of COL Capital Limited (“COL”). COL is 38.56 per cent. owned by Vigor Online Offshore Limited which in turn is a wholly-owned subsidiary of China Spirit Limited in which Ms. Chong maintains 100% beneficial interest.

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Immediately following completion of the Placing and Subscription, the beneficial interest of Shougang in the issued share capital of the Company will be reduced from approximately 19.84 per cent. to approximately 18.05 per cent.

INFORMATION ABOUT THE GROUP

The Company is a company incorporated in Bermuda with limited liability. Its securities are listed on the Main Board of the Stock Exchange.

The Group is principally engaged in (i) trading in base metals and commodities trading portfolio primarily focused on natural resources and related sectors; and (ii) trading in fabric products and other merchandises with investment in the resources and related industries and listed securities as trading portfolio.

REASONS FOR AND BENEFITS OF THE PLACING

In view of current market conditions, the Directors consider that the Placing represents a good opportunity to raise further capital for the Company while at the same time broadening its shareholders base to include corporate institutional investors and capital base.

On the basis that all the 400,000,000 Shares are placed and 400,000,000 new Shares are accordingly subscribed pursuant to the Agreement, net proceeds and gross proceeds from the Subscription of up to approximately HK$583,120,000 and HK$592,000,000 respectively (being a net placing price of approximately HK$1.4578 per Share) will be applied for further investments in the resources industry and acquisition in shares in listed companies. The Company had not identified any investments in the resources industry in relation to the use of such proceeds as at the date of this announcement.

The price of the Placing Shares is arrived at after arm’s length negotiation between the Vendor and the Placing Agent. The Directors believe that the terms of the Agreement are fair and reasonable and are in the interests of the shareholders of the Company taken as a whole.

FUND RAISING ACTIVITIES IN THE PAST 12 MONTHS PRIOR TO THE DATE OF THIS ANNOUNCEMENT

The following table summaries the fund raising activities of the Company for the 12 months prior to the date of this announcement:-

					Net proceeds not
					yet used as at the
Date of	Fund raising	Net proceeds	Proposed use of	Actual use of net	date of this
announcement	event	raised	net proceeds	proceeds	announcement
9 November 2006	Rights issue	Approximately	Approximately	Approximately
		HK$375,526,000	HK$224,475,000	HK$224,475,000 has
			will be used to pay	been used to pay for
			for the balance of	the balance of
			consideration of	consideration of
			acquiring 48,373,197	acquiring 48,373,197
			ordinary shares	MG Shares
			(“MG Shares”) in the
			issued share capital
			of Mount Gibson
			Iron Limited

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				HK$20,000,000 will	HK$2,000,000 has	HK$18,000,000 has
				be returned to the	been used for the	been reserved as
				Company’s account,	operational expenses	base metal trading
				previously used as	of the Company	deposited in the bank
				the deposit paid in
				respect of acquiring
				48,373,197 MG
				Shares, to recover
				the same amount of
				money which has
				been previously
				reserved for base
				metal trading in the
				rights issue of the
				Company announced
				on 11th May, 2006
				Approximately	Approximately
				HK$1,526,000 will	HK$781,000 has
				be spent for the	been used to pay
				professional fees and	professional fee and
				expenses in relation	expenses in relation
				to the rights issue	to the rights issue
				Approximately	Approximately
				HK$129,525,000	HK$40,971,000 has
				will be used by the	been used to pay
				Company to acquire	deposit for the
				further investment	acquisition (the
				interests in the	“Acquisition”) of the
				resources industry	19,754,646 MG
					Shares and
					approximately
					HK$89,299,000 was
					used to reduce
					margin financing of
					the Company in
					acquiring MG Shares
9	November 2006	Placing of new	Approximately	Approximately	Approximately
		Shares	HK$230,400,000	HK$900,000 will be	HK$592,000 has
				used to pay	been used to pay the
				professional fees and	professional fee and
				expenses in relation	expenses in relation
				to placing of new	to placing of new
				Shares	Shares
				Approximately	Approximately
				HK$229,500,000	HK$61,457,000 has
				will be applied by	been used to pay the
				the Group to fund	balance of the
				new investments and	Acquisition and
				acquisitions in the	HK$168,351,000 has
				future as and when	been used to acquire
				opportunities arise	shares in
				and for general	Australasian
				working capital	Resources Limited as
				purposes	long term investment
6	July 2007	Placing of new	Approximately	Approximately	Approximately	Approximately
		Shares	HK$831,250,000	HK$781,250,000	HK$214,278,000 has	HK$527,785,000 has
				will be used for	been temporarily	been deposited in the
				further investments	used to reduce	bank
				in the resources	margin financing of
				industry and	the Company and
				acquisition in shares	approximately
				in listed companies	HK$86,933,000 has
					been used to acquire

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shares in listed companies Approximately Approximately HK$50,000,000 will HK$$2,254,000 has be used for general been used to for working capital general working purposes purposes

RESUMPTION OF TRADING

Trading in the Shares and Warrants on the Stock Exchange was suspended at the request of the Company with effect from 9:30 a.m. on 5th October, 2007 pending the release of this announcement. The Company has applied for the resumption of trading in the Shares and Warrants with effect from 9:30 a.m. on 9th October, 2007.

DIRECTORS

As at the date of this announcement, the Directors are:-

Executive Directors:

Mr. Cao Zhong ( Chairman ), Mr. Liu Yongshun (Chief Executive Officer), Mr. Zhou Luyong (Deputy Chief Executive Officer), Ms. Chong Sok Un, Mr. Lau Yau Cheung, Mr. Chen Zhaoqiang and Mr. Yue Jialin

Independent non-executive Directors:

Mr. Wong Wing Kuen, Albert, Mr. Tsui Robert Che Kwong, Mr. Chang Chu Fai, Johnson Francis, Mr. Alan Stephen Jones and Mr. Robert Moyse Willcocks

DEFINITIONS

“Agreement” the placing and subscription agreement dated 5th October, 2007 made between the Company, the Vendor, the Warrantor and the Placing Agent in relation to the Placing and the Subscription

“associates” having the meaning ascribed to it under the Listing Rules

“Company” APAC Resources Limited, a company incorporated in Bermuda with limited liability, with its shares listed on the Main Board of the Stock Exchange “Directors” directors of the Company “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Listing Rules” Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

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“Placing” the placing of the Placing Shares pursuant to the Agreement “Placing Agent” CITIC Securities Corporate Finance (HK) Limited “Placing Shares” the 400,000,000 Shares to be placed by the Placing Agent pursuant to the Agreement “Shares” ordinary shares of nominal value of HK$0.10 each in the issued share capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription” the subscription for the Subscription Shares pursuant to the Agreement “Subscription Shares” the 400,000,000 Shares to be subscribed for by the Vendor pursuant to the Agreement “Vendor” Benefit Rich Limited, a company incorporated in Samoa with limited liability and a direct wholly-owned subsidiary of the Warrantor “Warrantor” Shougang Holding (Hong Kong) Limited, the beneficial owner of the entire issued share capital of the Vendor “Warrants” warrants of the Company entitle the holders thereof to subscribe at any time during the period from 5th February, 2007 to 4th February, 2010 (both days inclusive) for fully paid Shares at an initial subscription price of HK$0.30 per Share (subject to adjustments)

By Order of the Board APAC RESOURCES LIMITED Cao Zhong Chairman

Hong Kong, 8th October, 2007

* For identification purpose only

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