Persistence Gold Group Ltd — Capital/Financing Update 2019

Mar 11, 2019

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.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

PROPOSED RIGHTS ISSUE OF RIGHTS SHARES ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY TWO EXISTING SHARES HELD ON THE RECORD DATE AND CLOSURE OF REGISTER OF MEMBERS

Underwriter to the Rights Issue

PROPOSED RIGHTS ISSUE

The Company proposes to raise approximately HK$447 million before expenses by way of the Rights Issue on the basis of one Rights Share for every two Existing Shares held by each Qualifying Shareholder on the Record Date at the Subscription Price of HK$1.1 per Rights Share.

406,297,971 nil-paid Rights Shares are proposed to be provisionally allotted, representing approximately 50.00% of the Company’s existing issued share capital and approximately 33.33% of the Company’s enlarged issued share capital as enlarged by the allotment and issue of the Rights Shares.

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UNDERWRITING AGREEMENT AND IRREVOCABLE UNDERTAKING

Pursuant to the Underwriting Agreement dated 11 March 2019, the Underwriter has conditionally agreed to fully underwrite all the Rights Shares on the terms and conditions set out in the Underwriting Agreement, other than the Rights Shares agreed to be taken up by Allied Properties Investments pursuant to the Irrevocable Undertaking.

As at the date of this announcement, Allied Properties Investments is interested in 291,114,676 Shares, representing approximately 35.82% of the total number of Shares in issue. Pursuant to the Irrevocable Undertaking, subject to fulfilment of the conditions of the Rights Issue and the Underwriting Agreement not having been terminated or rescinded in accordance with its terms, Allied Properties Investments has irrevocably undertaken to the Company, among other things, that (i) it will remain as the beneficial owner of all the Shares held by it up to and including the Record Date; (ii) it will subscribe for all the Rights Shares to be provisionally allotted to it under the Rights Issue; and (iii) it will not, during the period from the date of the Irrevocable Undertaking up to and including the Record Date, transfer or otherwise dispose of, or create any encumbrances over or in respect of, any Shares held by it. Save for those Rights Shares which Allied Properties Investments has irrevocably undertaken to take up, the Rights Issue is fully underwritten by the Underwriter.

The Underwriter and its ultimate beneficial owners are independent third parties and not connected with the Company and its connected persons.

TRADING ARRANGEMENTS

The last day of dealings in the Shares on a cum-rights basis is expected to be on Tuesday, 19 March 2019. The Shares are expected to be dealt in on an ex-rights basis from Wednesday, 20 March 2019.

To qualify for the Rights Issue, a Shareholder must be registered as a member of the Company as at the Record Date (currently Thursday, 28 March 2019) and be a Qualifying Shareholder. The register of members of the Company will be closed from Friday, 22 March 2019 to Thursday, 28 March 2019 (both dates inclusive) during which period no transfer of Shares will be registered. In order to be registered as a member of the Company as at the Record Date, all transfer documents of the Shares (together with the relevant share certificate(s)) must be lodged with the Registrar for registration by 4:30 p.m. (Hong Kong time) on Thursday, 21 March 2019. For further details, please refer to the section headed “Expected Timetable” in this announcement.

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GENERAL

As the proposed Rights Issue will not increase the issued share capital or the market capitalisation of the Company by more than 50%, the Rights Issue is not subject to the approval of the Shareholders in a general meeting under the Listing Rules. It is expected that the Prospectus Documents setting out details of the Rights Issue will be despatched to the Qualifying Shareholders on Friday, 29 March 2019 and the Prospectus will be despatched to the Non-Qualifying Shareholder(s) (if any) for information only.

WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL-PAID RIGHTS SHARES

The Rights Issue is conditional upon, details of which are set out in the section headed “Underwriting Agreement — Conditions of the Rights Issue” in the full text of this announcement. The obligation of the Underwriter to underwrite the relevant Rights Shares is conditional on (i) the satisfaction (or waiver, where applicable) of, among other things, the conditions referred to in the section headed “Underwriting Agreement — Conditions of the Rights Issue” in this announcement; and (ii) the Underwriting Agreement not being terminated or rescinded by the Underwriter in accordance with its terms. If the conditions are not fulfilled (or waived, where applicable) or the Underwriting Agreement is terminated or rescinded pursuant to its terms, the Rights Issue will not proceed.

Any Shareholder or other person dealing in Shares up to the date on which all the conditions to which the Rights Issue is subject are fulfilled (and the date on which the Underwriter’s right of termination or rescission of the Underwriting Agreement ceases) and any person dealing in the nil-paid Rights Shares during the period from Tuesday, 2 April 2019 to Wednesday, 10 April 2019 (both dates inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed. If in any doubt, Shareholders and potential investors are recommended to consult their professional advisers. Shareholders and potential investors should exercise caution in dealing in the securities of the Company.

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PROPOSED RIGHTS ISSUE

The Company proposes to raise equity capital by way of the Rights Issue on the principal terms set out below.

Issue Statistics

Basis of the Rights Issue: One Rights Share for every two Existing Shares

Number of Shares in issue as at 812,595,943 Shares the date of this announcement:

Number of outstanding options:

The Company has no outstanding options, warrants or other securities convertible into or giving rights to subscribe for Shares as at the date of this announcement

Number of Rights Shares to be 406,297,971 Rights Shares (assuming no Shares are issued under the Rights Issue: allotted and issued or repurchased on or before the Record Date)

Aggregate nominal value of HK$406,297,971 the Rights Shares:

Subscription price: HK$1.1 per Rights Share

Amount to be raised: Approximately HK$447 million before expenses

Right of excess applications: Qualifying Shareholders may apply for the Rights Shares in excess of their provisional allotments

The number of 406,297,971 nil-paid Rights Shares proposed to be provisionally allotted pursuant to the terms of the Rights Issue represent approximately 50.00% of the Company’s issued share capital as at the date of this announcement and approximately 33.33% of the issued share capital of the Company as enlarged by the allotment and issue of the Rights Shares, assuming no Shares (other than the Rights Shares) are allotted and issued or repurchased on or before the Record Date.

The theoretical dilution effect of the Rights Issue calculated pursuant to Rule 7.27B of the Listing Rules was approximately 4.91%.

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As the proposed Rights Issue will not increase the issued share capital or the market capitalisation of the Company by more than 50%, the Rights Issue is not subject to the approval of the Shareholders in a general meeting under the Listing Rules.

Qualifying Shareholders

The Company expects to send the Prospectus Documents to the Qualifying Shareholders on or before Friday, 29 March 2019. To the extent reasonably practicable, the Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL or EAF to them.

The Rights Issue is only available to the Qualifying Shareholders. To qualify for the Rights Issue, a Shareholder or an investor must: (i) be registered as a member of the Company at the close of business on the Record Date; and (ii) not be a Non-Qualifying Shareholder.

The last day for dealing in the Shares on a cum-rights basis is Tuesday, 19 March 2019. The Shares will be dealt with on an ex-rights basis from Wednesday, 20 March 2019.

In order to be registered as a member of the Company on the Record Date so as to qualify for the Rights Issue, any transfers of Shares (together with the relevant share certificate(s)) must be lodged with the Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Thursday, 21 March 2019.

The latest time for acceptance is expected to be 4:00 p.m. on Monday, 15 April 2019.

Qualifying Shareholders who take up their pro rata entitlement in full will not suffer any dilution to their interests in the Company (except in relation to any dilution resulting from the taking up by third parties of any Rights Shares arising from the aggregation of fractional entitlements). If a Qualifying Shareholder does not take up any of his/her/its entitlement in full under the Rights Issue, his/her/its proportionate shareholding in the Company will be diluted.

Closure of Register of Members

For the purpose of determining entitlements to the Rights Issue, the register of members of the Company will be closed from Friday, 22 March 2019 to Thursday, 28 March 2019, both dates inclusive. No transfer of Shares will be registered during this period.

Non-Qualifying Shareholders

The Prospectus Documents are not intended to be registered or filed under the applicable securities legislation or equivalent legislation of any jurisdictions other than Hong Kong.

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As at the date of this announcement, the Company has certain Overseas Shareholders whose addresses on the register of members of the Company are outside Hong Kong, including one in Australia, two in Germany, one in Switzerland and one in the United Kingdom.

In compliance with Rule 13.36(2)(a) of the Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue to the Overseas Shareholders (if any). If, based on the legal advice, the Directors consider that it is necessary or expedient not to offer the Rights Shares to the Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Rights Issue will not be available to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue to be despatched to the Qualifying Shareholders on the Prospectus Posting Date. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL or EAF to them.

Arrangements will be made for the Rights Shares, which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders, to be provisionally allotted to a nominee of the Company in nil-paid form. The Company shall procure that such nominee to sell the Rights Shares in the market in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence and in any event on or before the last day for dealings in the nil-paid Rights Shares at a net premium. If and to the extent that such rights can be so sold, the nominee shall account to the Company for the net proceeds of sale (after deducting the expenses of sale, if any), on the basis that the net proceeds after deducting the expenses of sale (if any) attributable to the sale of the Rights Shares that would otherwise have been allotted to the Non-Qualifying Shareholders shall be distributed pro rata to their shareholdings as at the Record Date (but rounded down to the nearest cent) in Hong Kong dollars provided that the individual amounts of HK$100 or less shall be retained by the Company for its own benefit. Any unsold entitlements of the Non-Qualifying Shareholders will be taken up by excess application or by the Underwriter pursuant to the terms of the Underwriting Agreement.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue subject to the results of the enquiries made by the Board pursuant to Rule 13.36(2)(a) of the Listing Rules. The Company reserves the right to treat as invalid any acceptance of or applications for Rights Shares where it believes that such acceptance or application would violate the applicable securities or other laws or regulations of any territory or jurisdiction. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

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Subscription Price

The subscription price for the Rights Shares is HK$1.1 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares or, where applicable, upon application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for Rights Shares.

The Subscription Price represents:

• (i) a discount of approximately 14.73% to the closing price of HK$1.29 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a discount of approximately 10.35% to the theoretical ex-rights price of approximately HK$1.227 per Share, which is calculated on the basis of the closing price of HK$1.29 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (iii) a discount of approximately 13.25% to the average of the closing prices per Share for the five consecutive trading days ended on the Last Trading Day of approximately HK$1.268; and

• (iv) a discount of approximately 16.98% to the average of the closing prices per Share for the ten consecutive trading days ended on the Last Trading Day of approximately HK$1.325.

The Subscription Price was determined with reference to, among other things, the recent market prices of the Shares, the current market conditions, and the amount of funds the Company intends to raise under the Rights Issue. After taking into consideration of the reasons for the Rights Issue as stated in the section headed “Reasons for the Rights Issue and Use of Proceeds” below, the Directors consider the terms of the Rights Issue, including the Subscription Price (and the discounts to the relative values as indicated above) and in the context of the Company’s long-term business strategy, to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. The net price per Rights Share (i.e. Subscription Price less cost and expenses incurred in the Rights Issue) upon full acceptance of the relevant provisional allotment of Rights Shares will be approximately HK$1.078.

Basis of Provisional Allotment

The basis of the provisional allotment shall be one Rights Share for every two Existing Shares. Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a cheque or a banker’s cashier order for the sum payable for the Rights Shares being applied for with the Registrar on or before the Latest Time for Acceptance.

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Fractional Entitlements to the Rights Shares

The Company will not provisionally allot and issue and will not accept application for any fraction of the Rights Shares and the entitlements of the Qualifying Shareholders will be rounded down to the nearest whole number. All fractions of Rights Shares will be aggregated (rounded down to the nearest whole number). All nil-paid Rights Shares arising from such aggregation will be made available for excess application by the Qualifying Shareholders under the EAFs. No odd lot matching services will be provided.

Stamp duty and other applicable fees

Dealings in the Rights Shares in both their nil-paid and fully-paid forms which are registered in the Registrar will be subject to the payment of stamp duty, Stock Exchange trading fee, SFC transaction levy or any other applicable fees and charges in Hong Kong.

Share Certificates and Refund Cheques for the Rights Issue

Subject to the fulfillment of the conditions of the Rights Issue, share certificates for all fully-paid Rights Shares are expected to be posted on Thursday, 25 April 2019 to those who have accepted and (where applicable) applied for, and paid for, the Rights Shares by ordinary post at their own risk.

Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on Thursday, 25 April 2019 by ordinary post to the applicants at their own risk.

Status of the Rights Shares

The Rights Shares, when allotted, issued and fully paid, will rank pari passu in all respects with the Shares then in issue such that holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions the record dates of which are on or after the date of allotment and issue of the fully-paid Rights Shares.

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Application for Excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for Rights Shares representing:

• (i) unsold entitlements of the Non-Qualifying Shareholders (if any);

• (ii) entitlements provisionally allotted but not validly accepted by the Qualifying Shareholders or otherwise subscribed for by renouncees or transferees of nil-paid Rights Shares; and

(iii) aggregate fractional entitlements of nil-paid Rights Shares.

Applications for excess Rights Shares should be made only by completing an EAF and lodging the same with a separate cheque or banker’s cashier order for the sum payable for the excess Rights Shares being applied for. If a Qualifying Shareholder wishes to apply for any Rights Shares in addition to his/her/its provisional allotment, he/she/it must complete and sign an EAF and lodge it, together with a separate remittance for the amount payable on application in respect of the excess Rights Shares applied for, with the Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong by a time which is currently expected to be 4:00 p.m. on Monday, 15 April 2019, or such later time and/or date as may be agreed between the Company and the Underwriter.

The Board will allocate the excess Rights Shares at its discretion on a fair and equitable basis in proportion to the number of excess Rights Shares being applied for under each application. However, no preference will be given to topping-up odd lots to whole board lots. Shareholders who have been offered odd lots of the Rights Shares should note that there is no guarantee that such odd lots of the Rights Shares will be topped up to create whole board lots pursuant to applications for excess Rights Shares. Further, pursuant to Rule 7.21(3)(b) of the Listing Rules, the Company will also take steps to identify the applications for excess Rights Shares made by any controlling shareholder or its associates (together, the “ Relevant Shareholders ”), whether in their own names or through nominees. The Company shall disregard the Relevant Shareholders’ applications for excess Rights Shares to the extent that the total number of excess Rights Shares they have applied for exceeds a maximum number equivalent to the total number of Rights Shares offered under the Rights Issue minus the number of Rights Shares taken up by the Relevant Shareholders under their assured entitlement to the Rights Shares. Save for those Rights Shares which Allied Properties Investments has irrevocably undertaken to take up, any Rights Shares not applied for by the Qualifying Shareholders will be taken up by the Underwriter.

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Investors with their Shares held by a nominee company (or which are deposited in CCASS) should note that the Board will regard the nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, the Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually. Investors with their Shares held by a nominee company (or which are deposited in CCASS) are advised to consider whether they would like to arrange for the registration of the relevant Shares in their own names as the beneficial owner(s) on or prior to the Record Date.

Investors whose Shares are held by their nominee(s) (or which are deposited in CCASS) and who would like to have their names registered on the register of members of the Company on the Record Date, must lodge all necessary documents with the Registrar for completion of the relevant registration by 4:30 p.m. on Thursday, 21 March 2019.

Application for Listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Rights Shares in both nil-paid and fully-paid forms. The nil-paid Rights Shares shall have the board lot size as the existing board lot size of the Shares, namely, 20,000 in one board lot. Dealings in the Rights Shares in their nil-paid and fully-paid forms will be subject to the payment of stamp duty and any other applicable fees and charges in Hong Kong.

Rights Shares will be Eligible for Admission into CCASS

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day after the date of the transaction. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Shareholders should seek advice from their stockbrokers or other professional advisers for details of those settlement arrangements and how such arrangements will affect their rights and interests.

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IRREVOCABLE UNDERTAKING

As at the date of this announcement, Allied Properties Investments is interested in 291,114,676 Shares, representing approximately 35.82% of the total number of Shares in issue. Pursuant to the Irrevocable Undertaking, subject to the fulfilment of the conditions of the Rights Issue and the Underwriting Agreement not having been terminated or rescinded in accordance with its terms, Allied Properties Investments has irrevocably undertaken to the Company, among other things:

• (i) to remain as the beneficial owner of all the Shares held by it up to and including the Record Date;

• (ii) to subscribe for a maximum of 145,557,338 Rights Shares to be provisionally allotted to it under the Rights Issue, representing its full entitlement under the Rights Issue; and

• (iii) not to, during the period from the date of the Irrevocable Undertaking up to and including the Record Date, transfer or otherwise dispose of, or create any encumbrances over or in respect of, any Shares held by it.

Save for the Rights Shares which Allied Properties Investments has irrevocably undertaken to take up, the Rights Issue is fully underwritten by the Underwriter.

Other than Allied Properties Investments, the Company has not received any undertakings from any other Shareholders to subscribe for all or any of the Rights Shares to be provisionally allotted to them.

UNDERWRITING AGREEMENT

The Rights Issue (excluding the Rights Shares subject to the Irrevocable Undertaking) is fully underwritten by the Underwriter. On 11 March 2019 (after trading hours), the Company entered into the Underwriting Agreement with the Underwriter in respect of the Rights Issue. Details of the Underwriting Agreement are set out below:

Date:

11 March 2019 (after trading hours)

Parties:

• (a) the Company

• (b) the Underwriter

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The Underwriter is a licensed corporation to carry on Type 1 (dealing in securities) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

To the best knowledge and information of the Directors, after reasonable enquiries, the Underwriter is a third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with, the Directors, chief executive or substantial shareholders of the Company or any of its subsidiaries and their respective associates and is not a connected person of the Company.

• Number of underwritten Rights Shares:

• The Underwriter agreed to underwrite not more than 260,740,633 Rights Shares, representing all the Rights Shares (i.e. 406,297,971 Rights Shares) less the number of Rights Shares undertaken to be taken up by Allied Properties Investments pursuant to the Irrevocable Undertaking (i.e. 145,557,338 Rights Shares), and assuming no other Shares are otherwise allotted and issued or repurchased before the Record Date.

• Underwriter’s commission:

• The Company will pay to the Underwriter an underwriting commission of 2.5% of the Subscription Price in respect of the Underwritten Shares (for avoidance of doubt, it shall mean the maximum amount of the Underwritten Shares) committed to be underwritten by the Underwriter.

The terms of the Underwriting Agreement (including the commission rate) were determined after arm’s length negotiation between the Company and the Underwriter by reference to, amongst other things, the size of the Rights Issue, the existing financial position of the Group, and the current and expected market condition. The Directors (including the independent non-executive Directors) consider the terms of the Underwriting Agreement, including the commission payable by the Company, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The Underwriter may enter into sub-underwriting agreements with sub-underwriter(s) or appoint person to be sub-agent(s) on its behalf for the purpose of arranging for the subscription of the Underwritten Shares with selected subscribers for any Underwritten Shares with such authority and rights as the Underwriter has pursuant to its appointment under the Underwriting Agreement.

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Conditions of the Rights Issue

The obligations of the Underwriter are conditional upon the satisfaction of the following conditions:

• (i) the filing and registration of all the Prospectus Documents (together with any other documents required by applicable law or regulation to be annexed thereto) with the Registrar of Companies in Hong Kong by no later than the Prospectus Posting Date;

• (ii) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus to the Non-Qualifying Shareholders, if any, for information purpose only, by no later than the Prospectus Posting Date;

• (iii) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the approval for the listing of, and permission to deal in, the Rights Shares (in their nil-paid and fully-paid forms) by no later than the Prospectus Posting Date;

• (iv) compliance with and performance of all the undertakings and obligations of the Company under terms of the Underwriting Agreement;

• (v) the Underwriting Agreement not being terminated by the Underwriter pursuant to the terms of the Underwriting Agreement on or before the Latest Time for Termination; and

• (vi) Allied Properties Investments having duly executed the Irrevocable Undertaking and compliance by Allied Properties Investments with its obligations under the Irrevocable Undertaking.

The conditions precedent set out in paragraphs (i) to (iii) above are incapable of being waived by the Underwriter or the Company.

If the conditions precedent set out in the above paragraphs are not satisfied in whole or in part at the respective time and dates specified therein (or such other date and time as the Underwriter may agree with the Company in writing (as permitted under the relevant legal and regulatory requirements)), the Underwriting Agreement shall terminate (save for certain provisions which would survive after termination of the Underwriting Agreement and any rights or obligations which have accrued under the Underwriting Agreement prior to such termination) and no party will have any claim against any other party for cost, damages, compensation or otherwise, and the Rights Issue will not proceed.

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Termination and rescission of the Underwriting Agreement

If prior to the Latest Time for Termination:

• (i) in the reasonable opinion of the Underwriter, the success of the Rights Issue would be materially and adversely affected by:

• (a) the introduction of any new 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 Underwriter, materially and adversely affect the business or the financial or trading position of the Group as a whole or is materially adverse in the context of the Rights Issue after the signing of the Underwriting Agreement;

• (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring after the signing of the Underwriting Agreement or continuing after the signing of the Underwriting Agreement), of a political, military, financial, economic or other nature, 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 Underwriter, materially and adversely affect the business or the financial or trading position of the Group as a whole;

• (c) any materially adverse change after the signing of the Underwriting Agreement in the business or in the financial or trading position of the Group as a whole;

• (d) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out occurred after the signing of the Underwriting Agreement which would, in the reasonable opinion of the Underwriter, materially and adversely affect the business or the financial or trading position of the Group as a whole;

• (e) the commencement by any third party of any litigation or claim against any member of the Group after the signing of the Underwriting Agreement which, in the reasonable opinion of the Underwriter, is or might be material to the Group taken as a whole; or

• (f) there occurs or comes into effect the imposition of any moratorium, suspension or material restriction on trading in the Shares generally on the Stock Exchange due to exceptional financial circumstances or otherwise; or

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• (ii) there is any material adverse change in market conditions (including, without limitation, a change in fiscal or monetary policy or foreign exchange or currency markets, suspension or restriction of trading in securities, imposition of economic sanctions, on Hong Kong, the PRC or other jurisdiction relevant to the Group or any member of the Group and a change in currency conditions includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which, in the reasonable opinion of the Underwriter, makes it inexpedient or inadvisable to proceed with the Rights Issue; or

• (iii) the Prospectus and all amendments and supplements thereto when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or the Takeovers Code or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may, in the reasonable opinion of the Underwriter, is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue,

the Underwriter shall be entitled, by notice in writing to the Company served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

The Underwriter shall be entitled by notice in writing to rescind the Underwriting Agreement if prior to the Latest Time for Termination:

• (i) any material breach of any of the warranties or undertakings contained in the Underwriting Agreement comes to the knowledge of the Underwriter; or

• (ii) any Specified Event comes to the knowledge of the Underwriter.

If the Underwriter terminates or rescinds the Underwriting Agreement, the Rights Issue will not proceed. A further announcement would be made if the Underwriting Agreement is terminated or rescinded.

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WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL-PAID RIGHTS SHARES

The Rights Issue is conditional upon, details of which are set out in the section headed “Underwriting Agreement — Conditions of the Rights Issue” in the full text of this announcement. The obligation of the Underwriter to underwrite the relevant Rights Shares is conditional on (i) the satisfaction (or waiver, where applicable) of, among other things, the conditions referred to in the section headed “Underwriting Agreement — Conditions of the Rights Issue” in this announcement; and (ii) the Underwriting Agreement not being terminated or rescinded by the Underwriter in accordance with its terms. If the conditions are not fulfilled (or waived, where applicable) or the Underwriting Agreement is terminated or rescinded pursuant to its terms, the Rights Issue will not proceed.

The last day of dealings in the Shares on a cum-rights basis is expected to be on Tuesday, 19 March 2019. The Shares are expected to be dealt in on an ex-rights basis from Wednesday, 20 March 2019. If the conditions of the Rights Issue are not fulfilled (or waived, where applicable), the Underwriting Agreement will terminate and the Rights Issue will not proceed. If the Underwriting Agreement is terminated or rescinded by the Underwriter, the Rights Issue will also not proceed.

Any Shareholder or other person dealing in Shares up to the date on which all the conditions to which the Rights Issue is subject are fulfilled (and the date on which the Underwriter’s right of termination or rescission of the Underwriting Agreement ceases) and any person dealing in the nil-paid Rights Shares during the period from Tuesday, 2 April 2019 to Wednesday, 10 April 2019 (both dates inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed. If in any doubt, Shareholders and potential investors are recommended to consult their professional advisers. Shareholders and potential investors should exercise caution in dealing in the securities of the Company.

EXPECTED TIMETABLE

The expected timetable in respect of the Rights Issue is set out below:

Last day of dealings in Shares on a cum-rights basis . . . . . . . . . . . Tuesday, 19 March 2019

First day of dealings in Shares on an ex-rights basis . . . . . . . . . Wednesday, 20 March 2019

Latest time for lodging transfers of Shares

in order to qualify for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Thursday,

21 March 2019

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Closure of the register of members
(both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 22 March 2019 to
Thursday, 28 March 2019
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 28 March 2019
Register of members re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 29 March 2019
Prospectus Documents expected to be despatched on . . . . . . . . . . . . Friday, 29 March 2019
First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . Tuesday, 2 April 2019
Latest time for splitting of nil-paid Rights Shares . . . . . . . . . . . . . . . 4:30 p.m. on Thursday,
4 April 2019
Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . Wednesday, 10 April 2019
Latest time for acceptance of and payment for
Rights Shares and application and
payment for excess Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday,
15 April 2019
Latest time for termination of the Underwriting Agreement . . . . . . . . 4:00 p.m. on Tuesday,
16 April 2019
Publication of the announcement of results of acceptance
and excess application of Rights Issue . . . . . . . . . . . . . . . . . . . . Wednesday, 24 April 2019
Refund cheques in respect of wholly or partially
unsuccessful application for excess Rights Shares
expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . Thursday, 25 April 2019
Share certificates for Rights Shares
expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . Thursday, 25 April 2019
Expected commencement of
dealings in fully-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday,
26 April 2019

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Notes:

1. All dates and times referred to in this announcement are Hong Kong dates and times. Dates or deadlines specified in this announcement for events in the timetable for (or otherwise in relation to) the Rights Issue are indicative only and may be extended or varied by agreement between the Company and the Underwriter. Further announcement will be made in the event that there is any change to the expected timetable for the Rights Issue.

2. Effect of bad weather on the latest time for acceptance and payment for the Rights Shares and for application and payment for the excess Rights Shares:

The latest time for acceptance and payment for the Rights Shares and for application and payment for the excess Rights Shares will not take effect if there is a tropical cyclone warning signal number 8 or above or a “black” rainstorm warning. If such circumstance is:

• (a) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on Monday, 15 April 2019, the latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Shares will be extended to 5:00 p.m. on the same business day; or

• (b) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on Monday, 15 April 2019, the latest time for acceptance and payment for the Rights Shares and for application and payment for the excess Rights Shares will be rescheduled to 4:00 p.m. on the following business day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m..

If the latest time for acceptance and payment for the Rights Shares and for application and payment for the excess Rights Shares does not take effect on Monday, 15 April 2019, the dates mentioned above may be affected. An announcement will be made by the Company in such event.

SHAREHOLDING STRUCTURE

Set out below is the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after completion of the Rights Issue assuming full acceptance by the Qualifying Shareholders; and (iii) immediately after completion of the Rights Issue assuming nil acceptance by the Qualifying Shareholders other than Allied Properties Investments who will take up the Rights Shares in accordance with the terms of the Irrevocable Undertaking, assuming there is no other change in the shareholding structure of the Company since the date of this announcement:

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Shareholder Allied Properties Investments_(Note 1) Shougang Fushan(Note 2) Other public Shareholders The Underwriter(Note3)_ Total	Existing shareholding as at the date of this announcement Number of Shares % 291,114,676 35.82 143,400,000 17.64 378,081,267 46.54 – – 812,595,943 100.00	Immediately after completion of the Rights Issue (assuming full acceptance by the Qualifying Shareholders) Number of Shares % 436,672,014 35.82 215,100,000 17.64 567,121,900 46.54 – – 1,218,893,914 100.00	Immediately after completion of the Rights Issue (assuming nil acceptance by the Qualifying Shareholders other than Allied Properties Investments who will take up the Rights Shares in accordance with the terms of the Irrevocable Undertaking) Number of Shares % 436,672,014 35.82 143,400,000 11.76 378,081,267 31.03 260,740,633 21.39 1,218,893,914 100.00	Immediately after completion of the Rights Issue (assuming nil acceptance by the Qualifying Shareholders other than Allied Properties Investments who will take up the Rights Shares in accordance with the terms of the Irrevocable Undertaking) Number of Shares % 436,672,014 35.82 143,400,000 11.76 378,081,267 31.03 260,740,633 21.39 1,218,893,914 100.00
				100.00

Notes:

1. Allied Properties Investments is beneficially interested in 291,114,676 Shares, representing approximately 35.82% of the total issued share capital of the Company. Mr. Lee Seng Hui (being a non-executive Director) is one of the trustees of Lee and Lee Trust, being a discretionary trust which, together with his personal interests, controls approximately 74.95% of the total number of issued shares of Allied Group Limited, which in turn owns approximately 74.99% of the total number of issued shares of Allied Properties (H.K.) Limited, and which in turn indirectly owns approximately 35.82% of the total issued share capital of the Company.

2. These shares are held by Benefit Rich Limited, a wholly-owned subsidiary of Shougang Fushan.

3. Pursuant to the Underwriting Agreement, in the event that the Underwriter is required to take up the Underwritten Shares pursuant to its underwriting obligations, the Underwriter shall:

4. (i) procure that each of the relevant subscribers of the Underwritten Shares shall be third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with, the Directors, chief executive or substantial shareholders of the Company or any of its subsidiaries and their respective associates and shall not be a connected person of the Company;

5. (ii) procure each of the subscribers of the Underwritten Shares and their respective associates shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it or its associates, hold 10.0% or more of the voting rights of the Company immediately upon completion of the Rights Issue; and

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• (iii) not, and shall procure each of the subscribers of the Underwritten Shares shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it or its associates, hold 30.0% or more of the voting rights of the Company immediately upon completion of the Rights Issue.

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

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 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, mining and energy and investment in financial assets.

The Directors consider that the Rights Issue will provide an opportunity to raise capital for the Company whilst strengthening the capital base and the financial position of the Company. Accordingly, the Directors consider that the Rights Issue is in the interests of the Company and the Shareholders as a whole. The gross proceeds and net proceeds from the Rights Issue will be approximately HK$447 million and HK$438 million respectively (assuming no Shares are allotted and issued or repurchased on or before the Record Date). The net proceeds of the Rights Issue are intended to be applied in the following manner:

• (i) approximately HK$244 million (representing 56% of the estimated net proceeds from the Rights Issue) will be used for enhancing the Group’s capacity to further invest in companies involved in the resources sector or more particularly in the production of certain minerals.

The Group has considered the potential availability and consumption possibilities and has formed the view that the market for certain commodities may be positive. The Group has also considered the improving yields of certain resource companies and considers that certain resource companies have positive prospects and that further investment in the sector should yield enhanced returns for the Company and its shareholders and is positive for the long term development of the Group;

• (ii) approximately HK$150 million (representing 34% of the estimated net proceeds from the Rights Issue) will be used for the repayment of the Group’s existing outstanding loans and other related expenses owed to a bank and a related company to improve the gearing of the Group; and

• (iii) approximately HK$44 million (representing 10% of the estimated net proceeds from the Rights Issue) for general working capital for the Group.

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FUND RAISING ACTIVITIES IN THE PAST 12 MONTHS

The Company has not conducted any equity fund raising activities in the 12 months immediately prior to the date of this announcement.

LISTING RULES IMPLICATIONS

The Rights Issue is not subject to Shareholders’ approval under the Listing Rules and will be carried out in compliance with Rule 7.21(1) of the Listing Rules.

GENERAL

The Prospectus Documents setting out details of the Rights Issue will be despatched to the Qualifying Shareholders on Friday, 29 March 2019 and the Prospectus will be despatched to the Non-Qualifying Shareholder(s) (if any) for information only.

DEFINITIONS

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

• “Allied Properties Allied Properties Investments (1) Company Limited, a Investments ” company incorporated in the British Virgin Islands with limited liability and is a substantial shareholder of the Company;

• “Board” the board of Directors;

• “business day” a day (other than a Saturday or Sunday) on which commercial banks in Hong Kong are generally open for business;

• “CCASS” the Central Clearing and Settlement System established and operated by HKSCC;

“Company” APAC Resources Limited, 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);

• “connected person” has the meaning ascribed to it under the Listing Rules;

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“controlling shareholder” has the meaning ascribed to it under the Listing Rules;

“Director(s)” the director(s) of the Company;

• “EAF(s)” the excess application form(s) for additional Rights Shares proposed to be issued to the Qualifying Shareholders;

• “Existing Shares” the Shares which are in issue on the Record Date;

• “Group” the Company and its subsidiaries;

• “HKSCC” Hong Kong Securities Clearing Company Limited;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC;

• “Irrevocable Undertaking” the irrevocable undertaking given by Allied Properties Investments in favour of the Company to take up 145,557,338 Rights Shares as described in the section headed “Irrevocable Undertaking”;

• “Last Trading Day”

• Monday, 11 March 2019, being the last trading day of the Shares on the Stock Exchange immediately preceding the release of this announcement;

• “Latest Time for Acceptance”

• 4:00 p.m. on Monday, 15 April 2019 (or such later time/date as may be agreed in writing between the Company and the Underwriter), being the latest time for acceptance of the Rights Shares and application for the excess Rights Shares;

• “Latest Time for Termination”

• 4:00 p.m. on Tuesday, 16 April 2019 (or such later time/date as may be agreed in writing between the Company and the Underwriter), being the latest time for terminating the Underwriting Agreement which is the next business day after the Latest Time for Acceptance;

• “Listing Committee”

has the meaning ascribed to it under the Listing Rules;

– 22 –

“Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange;

• “Non-Qualifying Shareholder(s)”

• those Overseas Shareholder(s) in respect of whom the Directors, based on legal opinions obtained by the Company, consider it necessary or expedient not to offer Rights Shares on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place;

• “Overseas Shareholder(s)”

• Shareholder(s) whose name(s) appear(s) on the register of members of the Company at the close of business on the Record Date and whose registered address(es) as shown on such register is/are outside Hong Kong;

• “PAL(s)”

• the renounceable provisional allotment letter(s) representing the Rights Shares proposed to be issued to the Qualifying Shareholders under the Rights Issue;

• “PRC”

• the People’s Republic of China, which for the purpose of this announcement excludes Hong Kong, Macau and Taiwan;

• “Prospectus” the prospectus relating to the issue of the Rights Shares to be despatched on the Prospectus Posting Date to the Qualifying Shareholders and, for information only, to the Non-Qualifying Shareholders, under the Rights Issue;

• “Prospectus Documents” the Prospectus, PAL and EAF;

• “Prospectus Posting Date”

• the business day on which the Prospectus Documents will be despatched to Shareholders, which is now expected to be Friday, 29 March 2019 (or such other date to be agreed in writing between the Company and the Underwriter);

• “Qualifying Shareholder(s)”

• Shareholder(s), other than the Non-Qualifying Shareholders, whose name(s) appear(s) on the register of members of the Company at the close of business on the Record Date;

– 23 –

“Record Date”

the record date by reference to which entitlements to the Rights Issue will be determined, which is now expected to be Thursday, 28 March 2019 (or such other date to be agreed in writing between the Company and the Underwriter);

• “Registrar”

• Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, the Hong Kong branch share registrar and transfer office of the Company;

• “Rights Issue”

• the proposed issue by way of rights of one Rights Share for every two Existing Shares at the Subscription Price, payable in full on acceptance on the terms to be set out in the Prospectus Documents and summarised herein;

• “Rights Share(s)”

• 406,297,971 Shares, being the new Share(s) to be allotted and issued by way of rights to the Qualifying Shareholders under the Rights Issue;

• “SFC”

• the Securities and Futures Commission of Hong Kong;

• “Share(s)”

• ordinary share(s) of HK$1.00 each in the share capital of the Company;

• “Shareholder(s)”

• holder(s) of Share(s);

• “Shougang Fushan”

• Shougang Fushan Resources Group Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 639) and is a substantial shareholder of the Company;

• “Specified Event” an event occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which render any of the warranties contained in the relevant provisions in the Underwriting Agreement untrue or incorrect in any material respect;

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited;

• “Subscription Price” HK$1.1 per Rights Share;

– 24 –

“subsidiary(ies)”

has the meaning ascribed to it under the Listing Rules;

• “substantial shareholder”

has the meaning ascribed to it under the Listing Rules;

• “Takeovers Code”

The Code on Takeovers and Mergers of Hong Kong;

• “Underwriter”

Morton Securities Limited, a licensed corporation to carry on Type 1 (dealing in securities) regulated activity as defined under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

• “Underwriting Agreement”

• the Underwriting Agreement dated 11 March 2019 entered into between the Company and the Underwriter in relation to the underwriting and certain other arrangements in respect of the Rights Issue;

• “Underwritten Shares”

• not more than 260,740,633 Rights Shares underwritten by the Underwriter pursuant to the terms of the Underwriting Agreement; and

• “%”

per cent.

By Order of the Board APAC Resources Limited Andrew Ferguson Executive Director

Hong Kong, 11 March 2019

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

– 25 –