Persistence Gold Group Ltd — Capital/Financing Update 2010

Mar 25, 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your securities in APAC Resources Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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

APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

PLACING OF NEW SHARES UNDER SPECIFIC MANDATE AND

NOTICE OF SPECIAL GENERAL MEETING

PLACING AGENT

A letter from the Board (as defined in this circular) is set out on pages 3 to 9 of this circular and a notice convening the SGM (as defined in this circular) of the Company to be held at Falcon Room II, Basement of Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Wednesday, 14 April 2010 at 2:30 p.m. is set out on pages 10 to 12 of this circular. Whether or not you are able to attend the SGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

25 March 2010

• For identification purpose only

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
NOTICE OF SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following words and expressions have the following meanings:

“Announcement”	the announcement of the Company dated 12 March 2010 in
	respect of the Placing
“associates”	has the meaning given to that term in the Listing Rules;
“Board”	the board of Directors
“Company”	APAC Resources Limited, a company incorporated in
	Bermuda with limited liability and the shares of which are
	listed on the main board of the Stock Exchange
“connected person(s)”	has the meaning given to that term in the Listing Rules
“Director(s)”	director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administrative Region of the PRC
“Last Trading Day”	12 March 2010, being the last trading day for the Shares
	before the date of the Placing Agreement
“Latest Practicable Date”	22 March 2010, being the latest practicable date prior to
	the printing of this circular for the purpose of ascertaining
	certain information contained in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Placee(s)”	any individual(s), institutional or other professional
	investor(s) or any of their respective subsidiaries or
	associates procured by the Placing Agent to subscribe for
	any of the Placing Shares pursuant to the Placing Agent’s
	obligations under the Placing Agreement
“Placing”	placing of 1,100,000,000 new Shares pursuant to the terms
	of the Placing Agreement
“Placing Agent”	Sun Hung Kai Investment Services Limited, a licensed
	corporation to carry on type 1 (dealing in securities) and
	type 4 (advising on securities) regulated activities under the
	Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)

– 1 –

DEFINITIONS

“Placing Agreement”	the conditional placing agreement dated 12 March 2010 and
	entered into between the Company and the Placing Agent in
	relation to the Placing
“Placing Price”	HK$0.5 per Placing Share
“Placing Shares”	1,100,000,000 new Shares to be placed under the Placing
“PRC”	the People’s Republic of China
“SGM”	the special general meeting to be convened and held by the
	Company for the Shareholders to consider and, if thought
	fit, approve the Placing and the grant of Specific Mandate
“Share(s)”	ordinary share(s) of HK$0.10 in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s)
“Specific Mandate”	a specific mandate to be sought from the Shareholders at the
	SGM for the Directors to allot and issue the Placing Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

– 2 –

LETTER FROM THE BOARD

APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

Executive Directors:

Ms. Chong Sok Un (Chairman) Mr. Andrew Charles Ferguson (Chief Executive Officer) Mr. Peter Anthony Curry (Chief Financial Officer) Mr. Liu Yongshun Mr. Yue Jialin Mr. Kong Muk Yin

Non-Executive Directors: Mr. Lee Seng Hui Mr. So Kwok Hoo

Independent Non-Executive Directors: Mr. Wong Wing Kuen, Albert Mr. Chang Chu Fai, Johnson Francis Mr. Robert Moyse Willcocks

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head office and principal place of business: 32nd Floor China Online Centre 333 Lockhart Road Wanchai Hong Kong

25 March 2010

To the Shareholders

Dear Sir or Madam,

PLACING OF NEW SHARES UNDER SPECIFIC MANDATE AND NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement.

On 12 March 2010 (after trading hours), the Company and the Placing Agent entered into the Placing Agreement whereby the Company has conditionally agreed to place, through the Placing Agent and on a fully underwritten basis, 1,100,000,000 Placing Shares to independent investors at a price of HK$0.5 per Placing Share.

The purpose of this circular is to provide Shareholders with, amongst other things, details of the Placing and notice of the SGM.

• For identification purpose only

– 3 –

LETTER FROM THE BOARD

THE PLACING AGREEMENT

Date

12 March 2010 (after trading hours)

Issuer

The Company

Placing Agent

The Placing Agent has conditionally agreed to place 1,100,000,000 Placing Shares on a fully underwritten basis and will receive a placing commission of 2.5% on the aggregate Placing Prices of such Placing Shares placed by the Placing Agent under the Placing Agreement. The placing commission was determined by reference to the range of market norms for commissions for this type of transaction. The Directors are of the view that the placing commission is fair and reasonable. The Placing Agent and its ultimate beneficial owners are independent of and not connected persons (as defined in the Listing Rules) of the Company and its connected persons (as defined in the Listing Rules).

Placees

The Placing Agent agreed to place the Placing Shares on a fully underwritten basis, to not fewer than six Placees who and whose ultimate beneficial owners will not be connected persons (as defined in the Listing Rules) of the Company and will be independent of and will not be connected with the Company and its connected persons (as defined in the Listing Rules).

Placing Shares

The 1,100,000,000 Placing Shares under the Placing represent (i) approximately 18.89% of the existing issued share capital of the Company of 5,822,127,990 Shares; and (ii) approximately 15.89% of the Company’s issued share capital of 6,922,127,990 Shares as enlarged by the Placing.

Ranking of Placing Shares

The Placing Shares under the Placing will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Price of HK$0.5 represents:

• (i) a discount of approximately 3.85% to the closing price of HK$0.52 per Share as quoted on the Stock Exchange on the Last Trading Day;

– 4 –

LETTER FROM THE BOARD

• (ii) a discount of approximately 7.75% to the average closing price per Share of HK$0.542 in the last five consecutive trading days up to and including the Last Trading Day;

• (iii) a discount of approximately 5.66% to the average closing price per Share of HK$0.53 in the last ten consecutive trading days up to and including the Last Trading Day;

• (iv) a discount of approximately 5.66% to the closing price per Share of HK$0.53 as at the Latest Practicable Date; and

• (v) a premium of approximately 28.21% over the latest unaudited net asset value per Share of HK$0.39 as at 30 June 2009.

The Placing Price was determined with reference to the prevailing market price of the Share and was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors (including the independent non-executive Directors) consider that the terms of the Placing are on normal commercial terms and are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

Specific Mandate

The Company will seek the grant of Specific Mandate from Shareholders at the SGM for the issue and allotment of the Placing Shares.

Conditions of the Placing

Completion of the Placing is conditional upon:

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

• (b) the passing of resolutions by the Shareholders to approve the Placing and the grant of Specific Mandate at the SGM; and

• (c) the Bermuda Monetary Authority granting permission (if necessary) for the issue of, inter alia, the Placing Shares and the subsequent transfer of the same to and between persons regarded as non-residents of Bermuda for exchange control purposes for so long as the Placing Shares are listed on the Stock Exchange.

Termination

The Placing Agent shall be entitled by notice to the Company given prior to 12:00 noon on the day immediately preceding the date of completion of the Placing Agreement to terminate the Placing Agreement if :-

• (i) any of the undertakings, warranties or representations contained in the Placing Agreement becomes untrue or incorrect in any material respect; or

– 5 –

LETTER FROM THE BOARD

• (ii) if in the reasonable opinion of the Placing Agent would be materially and adversely affected by:

• (a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the reasonable opinion of the Placing Agent materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (b) the occurrence of any local, national or international event or change, whether or not forming part of series of events or changes occurring or continuing before, and/or after the date hereof of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (c) there is any material adverse change in the business or in the financial or trading position of the Group as a whole; or

• (d) any suspension in the trading of the Company’s shares on the Stock Exchange for more than seven (7) consecutive trading days other than in relation to the Placing; or

• (iii) any change in market conditions (including without limitation suspension or material restriction of trading in securities) occurs which in the reasonable opinion of the Placing Agent makes it inexpedient or inadvisable to proceed with the Placing.

If notice is given by the Placing Agent to terminate the Placing Agreement, the Placing Agreement shall terminate and be of no further effect and no party shall be under any liability to any other in respect of the Placing Agreement, except that the Company shall remain liable for the payment of all costs and expenses already incurred or incurred in consequence of such termination.

Completion of the Placing

Subject to satisfaction of the conditions precedent in the Placing Agreement, completion of the Placing will take place on or before 30 June 2010.

Completion of the Placing is subject to the satisfaction of the conditions precedent in the Placing Agreement.

As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

– 6 –

LETTER FROM THE BOARD

OTHER INFORMATION ON THE PLACING

Reasons for the Placing

In view of the current market conditions, the Directors consider that the Placing represents an opportunity to raise long term funding for the Company to strengthen its capital base. The Directors consider that the Placing is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Use of proceeds

The gross proceeds from the Placing will be approximately HK$550 million and the estimated net proceeds (after deducting the placing commission, legal fees and publication fees payable by the Company) will be approximately HK$535.75 million which is intended to be used for general working capital of the Group. The net Placing Price will be approximately HK$0.49 per Placing Share. The aggregate nominal Placing Price for Placing Share is HK$0.5.

Fund raising activities in the past twelve months

Save as disclosed below, the Company has not conducted any fund raising activities in the past twelve months before the date of the Announcement and up to the Latest Practicable Date.

Date of		Net proceeds	Intended use of	Actual use of
announcement	Event	(approximately)	proceeds	proceeds
15 June 2009	Placing of	HK$440.5 million	For reduction of	Approximately
	900,000,000		borrowings and for	HK$365.5 million
	Shares		general working	has been used for
			capital of the	reduction of
			Group and/or	borrowings with
			for investment	balance of
			when opportunities	approximately
			arise	HK$75 million
				has been used for
				general working
				capital of the
				Group

– 7 –

LETTER FROM THE BOARD

Effects on shareholding structure

The changes of the shareholding structure of the Company immediately before and after completion of the Placing (assuming that there are no other changes in the issued share capital of the Company) are set out below:

Fushan International Energy Group Limited (Note 1) COL Capital Limited (Note 2) Public Shareholders Placees (Note 3) Total:	As at the date of this circular No. of Shares % 956,000,000 16.42 685,840,000 11.78 4,180,287,990 71.80 – – 5,822,127,990 100.00	Upon completion of the Placing No. of Shares % 956,000,000 13.81 685,840,000 9.91 4,180,287,990 60.39 1,100,000,000 15.89 6,922,127,990 100.00	Upon completion of the Placing No. of Shares % 956,000,000 13.81 685,840,000 9.91 4,180,287,990 60.39 1,100,000,000 15.89 6,922,127,990 100.00
			100.00

Notes:

1. These Shares are held by Benefit Rich Limited, a wholly owned subsidiary of Fushan International Energy Group Limited, the shares of which are listed on the main board of the Stock Exchange.

2. These Shares are held by: (i) Sparkling Summer Limited as to 87,720,000 shares, and (ii) Rise Cheer Investments Limited as to 598,120,000 shares, both of which are wholly-owned subsidiaries of COL Capital Limited (“ COL ”), the shares of which are listed on the main board of the Stock Exchange. COL is 64.36% owned by Vigor Online Offshore Limited which in turn is a wholly-owned subsidiary of China Spirit Limited in which Ms. Chong Sok Un maintains 100% beneficial interest.

3. If any Placee will become a substantial Shareholder upon completion of the Placing, the Company will use its reasonable endeavours to procure the relevant disclosure requirements under the provisions of Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance be made by the relevant Placee.

GENERAL

The Company is a company incorporated in Bermuda with limited liability. Its Shares are listed on the main board of the Stock Exchange.

The Group is principally engaged in (a) trading in base metals and commodities, and (b) trading and investment of listed securities with a portfolio primarily focused on natural resources and related sector and industries.

Application has been made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

– 8 –

LETTER FROM THE BOARD

SGM

A notice convening the SGM is set out on pages 10 to 12 of this circular. Ordinary resolutions in respect of the Placing and the grant of Specific Mandate will be proposed at the SGM accordingly.

A form of proxy for the SGM is enclosed with this circular. Whether or not you are able to attend the SGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed on it and return it to the branch share registrar of the Company, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as practicable and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment of the meeting. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so desire.

To the best of the Director’s knowledge, information and belief having made all reasonable enquiries, no Shareholder has any material interest in the transactions contemplated under the Placing Agreement. Accordingly, no Shareholder will be required to abstain from voting at the SGM in respect of the resolutions relating to the Specific Mandate.

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules or the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquires, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

RECOMMENDATIONS

The Directors consider that the term and conditions of the Placing Agreement and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolutions approving the Placing and the grant of the Specific Mandate to be proposed at the SGM.

Yours faithfully, By Order of the Board APAC RESOURCES LIMITED Chong Sok Un Chairman

– 9 –

NOTICE OF SPECIAL GENERAL MEETING

APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

NOTICE IS HEREBY GIVEN that a special general meeting (the “ Meeting ”) of APAC Resources Limited (the “ Company ”) will be held at Falcon Room II, Basement of Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Wednesday, 14 April 2010 at 2:30 p.m. for the purpose of considering and if though fit, passing with or without amendments, the following resolutions as ordinary resolutions of the Company and no shareholder of the Company (the “ Shareholder ”) shall abstain from voting:

ORDINARY RESOLUTIONS

“ THAT

• (a) the conditional placing agreement dated 12 March 2010 entered into between the Company and Sun Hung Kai Investment Services Limited as placing agent (the “ Placing Agent ”), pursuant to which the Company has conditionally agreed to place, through the Placing Agent and on a fully-underwritten basis, 1,100,000,000 new ordinary shares of HK$0.10 each in the share capital of the Company (the “ Placing Shares ”) at HK$0.50 per Placing Share, on the terms and subject to the conditions therein (the “ Placing Agreement ”, a copy of which has been produced at this Meeting and marked “A” and initialled by the chairman of this Meeting for the purpose of identification), the transactions contemplated thereunder or incidental to the Placing Agreement, and all actions taken or to be taken by the Company pursuant to it as described in the circular to the Shareholders of the Company dated 25 March 2010 (the “ Circular ”, a copy of which has been produced to this Meeting and marked “B” and initialled by the chairman of this Meeting for the purpose of identification), be and are hereby generally and unconditionally approved, ratified and confirmed; and

• For identification purpose only

– 10 –

NOTICE OF SPECIAL GENERAL MEETING

• (b) conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the Placing Shares, the directors of the Company be and are hereby specifically authorised to allot and issue up to 1,100,000,000 Placing Shares at HK$0.50 per Placing Share (the “ Specific Mandate ”), in accordance with the terms and conditions of the Placing Agreement, and that the Placing Shares shall, when allotted and issued, be credited as fully paid and rank pari passu in all respects with all other shares of the Company in issue on the date of such allotments and issues”.

By Order of the Board APAC RESOURCES LIMITED Chong Sok Un Chairman

Hong Kong, 25 March 2010

Registered office: Head office and principal place of Clarendon House business in Hong Kong: 2 Church Street 32nd Floor Hamilton HM11 China Online Centre Bermuda 333 Lockhart Road Wanchai Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the Meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A proxy need not be a member of the Company. A member who is the holder of two or more shares of the Company may appoint more than one proxy to represent him to attend and vote on his behalf.

2. A form of proxy for use in connection with the Meeting is enclosed with this notice. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority must be deposited at the branch share registrar of the Company, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof.

3. Where there are joint registered holders of any share, any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such shares as if he was solely entitled thereto; but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote and will be accepted to the exclusion of other joint registered holders in respect hereof.

– 11 –

NOTICE OF SPECIAL GENERAL MEETING

As at the date of this notice, the Directors are as follows:

Executive Directors:

Ms. Chong Sok Un (Chairman) Mr. Andrew Charles Ferguson (Chief Executive Officer) Mr. Peter Anthony Curry (Chief Financial Officer) Mr. Liu Yongshun Mr. Yue Jialin Mr. Kong Muk Yin

Non-Executive Directors:

Mr. Lee Seng Hui Mr. So Kwok Hoo

Independent Non-Executive Directors: Mr. Wong Wing Kuen, Albert Mr. Chang Chu Fai, Johnson Francis Mr. Robert Moyse Willcocks

– 12 –