Persistence Gold Group Ltd — Capital/Financing Update 2016

Jul 18, 2016

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.

APAC RESOURCES LIMITED

亞 太 資 源 有 限 公 司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

DISCLOSEABLE TRANSACTION

The Board announces that APAC Resources Capital Limited, a wholly-owned subsidiary of the Company, has disposed in aggregate 21,500,000 shares in Metals X through on-market transactions conducted on the ASX for an aggregate consideration of approximately A$31,820,000 (equivalent to approximately HK$188,569,000) on 15 July 2016.

As the applicable percentage ratio(s) for the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

The Board announces that APAC Resources Capital Limited, a wholly-owned subsidiary of the Company, has disposed in aggregate 21,500,000 shares in Metals X through on-market transactions conducted on the ASX for an aggregate consideration of approximately A$31,820,000 (equivalent to approximately HK$188,569,000) on 15 July 2016, representing approximately 4.48% of the total issued share capital of Metals X as at the date of this announcement. After the Disposal, the Group holds 77,907,571 shares in Metals X, representing approximately 16.24% of the total issued share capital of Metals X as at the date of this announcement.

As the Disposal was conducted through the open market, the identity of the counterparty(ies) of the Disposal cannot be ascertained by the Group. However, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Directors believe that the counterparty(ies) and its/their ultimate beneficial owner(s), is/are Independent Third Parties.

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CONSIDERATION

The aggregate consideration for the Disposal is A$31,820,000 (equivalent to approximately HK$188,569,000) and shall be fully settled in cash. The consideration was determined by reference to the prevailing trading prices of the shares of Metals X on the ASX at the time of the Disposal.

INFORMATION ON THE COMPANY AND THE GROUP

The Company is a company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange. The Group is an established natural resource investment fund and commodity trading house which owns strategic interests in natural resource companies with the main business lines comprising of primary strategic investment; resource investment; and commodity trading business, focused primarily on metals and energy.

INFORMATION ON METALS X

Metals X is a company limited by shares incorporated in Australia, the shares of which are listed on the ASX (Stock Code: MLX). Metals X is a diversified group exploring and developing minerals and metals in Australia. It is Australia’s largest tin producer, a top ten gold producer and holds a pipeline of assets from exploration to development including the Wingellina Nickel-Cobalt Project.

Based on the audited consolidated financial statements of Metals X for the year ended 30 June 2015, the consolidated net profits before and after taxation for the two financial years ended 30 June 2014 and 2015 and the consolidated net assets of Metals X as at 30 June 2014 and 2015 are as follows:

					For	the year ended 30 June	the year ended 30 June
				2015			2014
				A$’000		HK$’000	A$’000	HK$’000
Consolidated	net	profit	before taxation	40,949		244,146	37,452	273,561
Consolidated	net	profit	after taxation	40,949		244,146	37,452	273,561
						As at 30 June
				2015			2014
				A$’000		HK$’000	A$’000	HK$’000
Consolidated	net	assets		346,267	2,064,513		311,659	2,276,451

Note: The translation of A$ into HK$ is based on the exchange rate of 7.3043 and 5.9622 as at 30 June 2014 and 30 June 2015 respectively.

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FINANCIAL EFFECT OF AND USE OF PROCEEDS FROM THE DISPOSAL

Following the Disposal, the Group’s investment in Metals X dropped below 20%. In March 2016, Mr. Andrew Ferguson, executive Director and chief executive officer of the Company, resigned from the board of directors of Metals X and the Group does not have the right to appoint director to the board of directors of Metals X. Thus, the Group lost the significant influence over Metals X and the Group will no longer be equity accounting for Metals X. Upon the Disposal, the Company will derecognize entire interest in Metals X as an associate of the Group and the remaining interests in Metals X will be initially recognized as available-for-sale investments, which are measured at fair market value at date of Disposal (the ‘‘Fair Market Value Revaluation’’).

Based on the accounting treatment as stated above, it is expected that the Company will record an estimated gain from the Disposal (after consideration of the Fair Market Value Revaluation) of approximately HK$147 million, being the consideration received and the initial recognition of remaining interests in Metals X less (i) the carrying amount of interests in Metals X disposed of with reference to the unaudited interim consolidated financial statements of the Company as at 31 December 2015; (ii) estimated tax payable attributable to the gain on Disposal; and (iii) the recycling of exchange losses of HK$177 million and investment revaluation reserve of HK$11 million (by reference to the latest published unaudited condensed consolidated financial statements of the Group for the six months ended 31 December 2015 dated 22 February 2016) previously recognized through other comprehensive income on Metals X to the profit or loss of the Group. As the fair market value of the shares of Metals X at the date of this announcement is higher than the carrying amount of interest in Metals X as an associate as at 31 December 2015, an upward fair value adjustment of approximately HK$297 million on the remaining interests in Metals X upon initial recognition as available-for-sale investments is recognised. The estimated gain from Disposal and initial recognition on the remaining interests in Metals X as available-for-sale investments are subject to finalization and audit.

The Company intends to apply the net proceeds from the Disposal to further enhance the Group’s readily available internal financial resources to allow the Group to take advantage of investment opportunities on a timely basis as and when such opportunities are identified.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Reference is made to the announcement (the ‘‘Previous Announcement’’) of the Company dated 1 June 2016 in relation to the placement of the Company’s investment in Metals X under strategic review.

Subsequent to the Previous Announcement, in view of the recent increase in share price of Metals X driven by the increase in gold prices, the Directors decided to take advantage of the price increase and proceeded with the Disposal.

The Directors believe that the terms of the Disposal are fair and reasonable and in the interests of the shareholders of the Company as a whole.

The strategic review of the remaining investment in Metals X is still in progress. Pending the outcome of the strategic review, further announcement(s), if any, will be made as appropriate.

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LISTING RULES IMPLICATIONS

As the applicable percentage ratio(s) for the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

‘‘A$’’	Australian dollar(s), the lawful currency of Australia;
‘‘ASX’’	the Australian Securities Exchange;
‘‘Board’’	the board of Directors;
‘‘Company’’	APAC Resources Limited (亞太資源有限公司), a company
	incorporated in Bermuda with limited liability, the shares of which are
	listed on the Main Board of the Stock Exchange (Stock Code: 1104);
‘‘Directors’’	the directors of the Company;
‘‘Disposal’’	the disposal of an aggregate of 21,500,000 shares in Metals X by
	APAC Resources Capital Limited through on-market transactions
	conducted on the ASX on 15 July 2016, representing approximately
	4.48% of the total issued share capital of Metals X as at the date of
	this announcement;
‘‘Group’’	the Company and its subsidiaries;
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong;
‘‘Hong Kong’’	Hong Kong Special Administrative Region of the People’s Republic of
	China;
‘‘Independent Third Parties’’	third party(ies) independent of the Company and its connected persons
	(as defined in the Listing Rules);
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock Exchange;
‘‘Metals X’’	Metals X Limited, a company limited by shares incorporated in
	Australia, the shares of which are listed on the ASX (Stock Code:
	MLX) and was an associate of the Group before the Disposal;

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‘‘Stock Exchange’’

The Stock Exchange of Hong Kong Limited;

‘‘%’’

per cent.

Unless otherwise stated, amount in A$ have been translated into HK$ at the exchange rate on the relevant date of the Disposal is of HK$5.9261 to A$1 for illustration purpose only. No representation has been made that any amount in A$ or HK$ can be or could have been converted at the relevant date at the above rate or any other rates at all.

By Order of the Board APAC Resources Limited Arthur George Dew Chairman

Hong Kong, 15 July 2016

As at the date of this announcement, the directors of the Company are:

Executive Directors

Mr. Brett Robert Smith (Deputy Chairman) and Mr. Andrew Ferguson (Chief Executive Officer)

Non-executive Directors

Mr. Arthur George Dew (Chairman) (Mr. Wong Tai Chun, Mark as his alternate), Mr. Lee Seng Hui and Mr. So Kwok Hoo

Independent Non-Executive Directors

Dr. Wong Wing Kuen, Albert, Mr. Chang Chu Fai, Johnson Francis and Mr. Robert Moyse Willcocks

• For identification purpose only

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