Persistence Gold Group Ltd - Interim / Quarterly Report 2011

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)

ANNOUNCEMENT OF THE RESULTS FOR THE EIGHTEEN MONTHS ENDED 30 JUNE 2011

The board of directors (the “ Board ”) of APAC Resources Limited (the “ Company ” or “ APAC ”) is pleased to announce the audited fi nal results of the Company and its subsidiaries (collectively the “ Group ”) for the eighteen months ended 30 June 2011 (the “ 2010/2011 Period ”). This results announcement which covers an eighteen month period is prepared due to the change of fi nancial year end date of the Company from 31 December to 30 June to align with that of the Company’s listed Primary Strategic Investments, details of which were disclosed in the announcement of the Company dated 11 February 2011.

RESULTS HIGHLIGHTS

While 2010 favoured the resources market enabling APAC to produce record profi ts in all business groups, the market took a downturn in 2011. The continued debt issues in the western countries and infl ation issues faced by China have affected investment confi dence thus slowed down global economy growth. Nevertheless, APAC delivered solid performance for the eighteen month period ended 30 June 2011.

For the eighteen month period ended 30 June 2011

(compared to the twelve month period ended 31 December 2009)

Attributable profi ts from Primary Strategic Investment at HK$866 million (2009: HK$115 million)
Resource Investment posted profi t of HK$150 million (2009: HK$97 million)
Commodity Business reported revenue at HK$1,147 million (2009: HK$301 million), with a profi t of HK$138 million (2009: HK$46 million)
Net profi t attributable to owners at HK$1,462 million (2009: HK$373 million), with earnings per share at HK21.89 cents (2009: HK7.15 cents)

OTHER HIGHLIGHTS

By way of a placement of 1,100,000,000 shares in April 2010, APAC successfully raised gross proceeds of HK$550 million to provide additional working capital
In 2010, APAC’s initial investment to AIM listed Kalahari was purchased from market. APAC’s interest in Kalahari now represents 14.79%
Mount Gibson, one of APAC’s Primary Strategic Investments, announced maiden franked dividend at A$0.04 per share

MANAGEMENT DISCUSSION AND ANALYSIS

The current set of fi nancial accounts have been prepared to a 30 June year end to align with the reporting of our Primary Strategic Investments, and relate to an 18 month period. Therefore, the fi gures will not be directly comparable with the previous 12 months. For reference, there is a comparison of the twelve months ended 31 December 2010 (“ 2010 Period ”) against the twelve months ended 31 December 2009 (“ 2009 Period ”). This is followed by a more in-depth comparison of the results for the six months ended 30 June 2011 (“ 2011 1H ”) against the six months ended 30 June 2010 (“ 2010 1H ”).

2010 Period vs. 2009 Period

With improved profi tability in all business segments, our net profi t attributable to owners at HK$1,104,447,000 (2009: HK$372,603,000), translating to a 196% increase. Our Primary Strategic Investments reported solid operational performances while commodity prices strengthened in the second half. This led to attributable profi ts from our Primary Strategic Investments of HK$536,379,000 (2009: HK$118,028,000), representing a 354% increase. The fragile global economic environment which had adversely affected the equity markets in the fi rst half of 2010, had improved in the second half of 2010, underpinning strong results in our Resource Investment portfolio which posted a net gain of HK$350,025,000 (2009: HK$124,702,000), representing an increase of 181%. With greater shipments of iron ore, our Commodity Business achieved a net profi t of HK$125,772,000 (2009: HK$46,092,000) representing an increase of 173% over 2009. (As detailed in the Second Interim Report 2010)

2011 1H vs. 2010 1H

FINANCIAL RESULTS

The resources sector continued to be volatile in 2011 1H. Early investor optimism was based on signs of economic recovery in the developed world and QE2-induced infl ows into the space. However, following the Fukushima disaster in March, risk tolerance levels were rapidly reigned in on increasing infl ation concerns in emerging markets and a refocus on Eurozone and US sovereign debt issues. Nevertheless, 2011 1H net profi t after tax was HK$357,622,000 (2010 1H: HK$143,382,000) mainly driven by the attributable profi ts from our Primary Strategic Investments of HK$333,403,000 (2010 1H: HK$172,407,000), up 93% from 2010 1H. However, this was offset by the underperformance in Resource Investment of HK$199,626,000 loss (2010 1H: loss of HK$106,334,000), up 88% from 2010 1H.

PRIMARY STRATEGIC INVESTMENT

Our two Primary Strategic Investments are Mount Gibson Iron Limited (“ Mount Gibson ”) and Metals X Limited (“ Metals X ”), both located in Australia. The attributable profi ts from our Primary Strategic Investments for the fi rst half of 2011 were HK$333,403,000 (2010 1H: HK$172,407,000), representing a 93% rise.

Mount Gibson

Mount Gibson is an Australian listed iron ore mining company. Current production capacity is 7 million tonnes per year from its Koolan Island and Tallering Peak mines, increasing to 10 million tonnes later this year when the new Extension Hill mine starts production. All three projects are located in Western Australia and are Direct Ship Operations, which is a large cost advantage on mines that need to benefi ciate ore prior to selling. Company reserves are 56.4 million tonnes at a grade of 62.0% Fe with a total resource of 108.6 million tonnes as of 30 June 2010 and will be updated in September 2011.

Mount Gibson reported a disappointing 2011 1H result due to an extreme tropical wet season in the fi rst quarter, causing widespread fl ooding at its two mines, plus a number of operational issues which have since been mostly remedied. Production of 2.3 million tonnes and sales of 2.1 million tonnes were down 36% and 32% respectively from 2010 1H. Audited net profi t after tax, however, increased marginally from A$93 million to A$100 million on higher received iron ore prices. Mount Gibson is well position for the current fi nancial year with A$386 million in cash on hand and their new mine at Extension Hill to start later this year and mentioned a maiden dividend of A$0.04 per share in August.

Iron ore prices were strong during the period, with the Platts IODEX 62% CFR China index hitting all time highs and averaging US$177 per dry metric tonne. Chinese steel production is exceeding expectations and could top 700 million tonnes this year, while supply remains constrained by export bans in India and delays to major expansions in Australia and Brazil, underpinning a fi rm medium term outlook.

Metals X

Metals X is an Australian-based emerging diversified resource group with a primary focus on tin via its 50% interest in the producing Renison mine in Tasmania and nickel via its world scale Wingellina nickel development. Metals X also has a portfolio of strategic investments, namely Independence Group NL (“ IGO ”) (3.2%), Westgold Resources Limited (“ Westgold ”) (25.0%), Mongolian Resource Corporation (formerly Alamar Resources Limited) (17.0%) and Aziana Limited (25.0%) giving it signifi cant exposure to copper, gold, nickel, zinc and bauxite.

During 2011 1H, Renison produced 2,577 tonnes of tin in concentrate (all 100% basis), which was down 25% from 2010 1H on delays in accessing higher grade stopes in the northern part of the mine. However, mine EBITDA increased to A$31 million on higher tin prices and Area 4 exploration results continue to impress. Progress continued at Wingellina, with a Native Title Agreement signed and plans to cancel Jinchuan Group’s 12.9% interest in Metals X in return for a 20% direct interest in the project, subject to Chinese regulatory approvals. Other items of note include the sale of its 19.9% stake in Jabiru Metals Limited for cash of A$48 million plus shares in IGO, the merger of Westgold and Aragon Resources Ltd, and the announcement of an on-market buyback up to 10% of issued capital. Metals X fi nished the period in excellent fi nancial shape with A$97m cash and working capital, and minimal debt.

Despite a pullback during May and June, tin prices averaged US$29,300 per tonne over the period, up 26% from the second half of 2010. Tin prices should remain supported by the tight market fundamentals, with continuing issues with Indonesian supply and ongoing demand growth from the electronics sector. Industry expert ITRI predicts global stockpiles will fall to historically very low levels of 2 to 3 weeks’ supply over the next few years in its “most likely” scenario.

RESOURCE INVESTMENT

Resource Investment posted a loss in 2011 1H of HK$199,626,000 (2010 1H loss: HK$106,334,000) up 88%.

Our Resource Investment portfolio is dominated by a 14.79% interest in Kalahari Minerals plc (“ Kalahari ”) which represents nearly three-quarters of the portfolio. This was impacted by negative sentiment surrounding the uranium sector following the tragic events at Fukushima in March. The remaining investments comprise mostly minor holdings in various emerging natural resource companies listed on major stock exchanges including Australia, Canada, Hong Kong, the United Kingdom and the United States of America. Many of these positions are in exploration or development stage companies, and this sector of the market has been negatively impacted by increased risk aversion in the second quarter. Investors have become increasingly concerned with rising infl ation in China and an escalating sovereign debt crisis in the Eurozone region. Our uranium holdings were additionally affected by the Fukushima incident.

Kalahari

Kalahari’s key asset remains its 42.7% holding in ASX-listed Extract Resources Limited (“ Extract ”) which is developing the Husab Uranium Project in Namibia. The project advanced considerably during the half, including an increase in resources to over 500 million pounds of uranium and initial JORC reserves of 225 million pounds. Environmental permits were received and a Defi nitive Feasibility Study confi rmed positive economics on a 15 million pounds per annum operation, which would be one of the three largest uranium mines globally. Discussions are continuing with prospective investors and off-take partners with regard to the standalone fi nancing of project construction, and signifi cant progress with the Mine Optimisation and Resource Programme was made subsequent to the period end including an increase in ore reserves to 280 million pounds and a reduction in the mining strip ratio.

At the corporate level, Extract confi rmed in February that it was in discussions with Rio Tinto for a potential combination of Husab with the neighbouring Rossing Uranium Mine. The following month, China Guangdong Nuclear Power Corporation (“ CGNPC ”) made an indicative cash bid for Kalahari at GBP2.90 per share, prior to the Fukushima incident. After a ruling from the UK Takeover Panel that CGNPC was not allowed to reduce its takeover offer, CGNPC withdrew the proposed offer but reserved its rights to rebid for Kalahari in certain circumstances.

Uranium prices performed well up until March, peaking at US$73 per pound on a spot basis before the Fukushima incident signifi cantly dented near-term Japanese demand and sentiment, and closed the half at US$54 per pound. Long-term prices remain relatively stable at US$68 per pound, underpinned by expectations that China’s nuclear expansion programme from 11GW in 2010 to 80-90GW by 2020 remain mostly intact, albeit with a small delay.

COMMODITY BUSINESS

For the period, Commodity Business turnover fell by 21% to HK$298,795,000 (2010 1H: HK$378,219,000) as a result of lower shipments, arising from weather-related issues at Mount Gibson’s mining operations. Net profi t fell to HK$12,239,000 (2010 1H: HK$75,837,000), largely due to new long term purchase agreements with Mount Gibson that we entered in November 2010 as a result of the end of the Benchmark Pricing System. Under the old contracts, we were able to arbitrage the divergence between benchmark pricing and spot Chinese pricing to deliver outsized returns in 2009 and 2010. However, with the breakdown of the Benchmark Pricing System, these returns are no longer available as the new agreements are based on the Platts IODEX 62% CFR China index and provide closer to industry-standard margins for this type of off-take agreement.

Tighter credit conditions in China, particularly for the smaller and midtier steelmills that are our main customer base, also impacted profi tability.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

As at 30 June 2011, our non-current assets amounted to HK$3,889,336,000 (2009: HK$2,454,951,000) and net current assets amounted to HK$1,509,264,000 (2009: HK$507,063,000) with a current ratio of 3.13 times (2009: 16.96 times) calculated on the basis of its current assets over current liabilities.

As at 30 June 2011, we had borrowings of HK$689,530,000 (2009: nil) and had undrawn banking and loan facilities amounting to HK$567,482,000 secured against certain of our investments in listed associates and available-for-sale investments, term deposits and corporate guarantee of the Company. As at 30 June 2011, we had a gearing ratio of 0.13 (2009: Nil), calculated on the basis of total borrowings over equity attributable to owners of the Company.

For the 2010/2011 Period, we successfully placed 1,100,000,000 shares at HK$0.50 per share to new investors, raising gross proceeds of HK$550,000,000 and thereby increasing our working capital base to enable us to take advantage of market opportunities as they arise. As a result of this placement, the exercise of warrants and cancellation of the buy-back shares by the Company, the issued share capital of the Company increased from 5,690,343,455 to 6,863,287,990 during the 2010/2011 Period.

FOREIGN EXCHANGE EXPOSURE

For the 2010/2011 Period, the Group’s assets were mainly denominated in Australian Dollars, British Pounds and Hong Kong Dollars while the liabilities were mainly denominated in Hong Kong Dollars. As a substantial portion of the assets is held as long-term investments, there would be no material immediate effect on the cash fl ows of the Group from adverse movements in foreign exchange. In light of this, the Group did not actively hedge for the risks arising from the Australian Dollars and British Pounds denominated assets.

PLEDGE OF ASSETS

As at 30 June 2011, certain of the Group’s investment in listed associates and available-for-sale investments of HK$2,744,285,000 (2009: HK$1,929,666,000) were pledged to a stock-broking fi rm to secure margin loan facilities made available to the Group. The Group’s bank deposits of HK$339,158,000 (2009: HK$89,324,000) were pledged to banks to secure various trade and other banking facilities granted to the Group.

EMPLOYEES AND REMUNERATION POLICY

The Group ensured that its employees are remunerated according to the prevailing manpower market conditions and individual performance with its remuneration policies reviewed on a regular basis. All employees are entitled to participate in the Company’s benefi t plans including medical insurance, share options scheme and Mandatory Provident Fund Scheme (subject to the applicable laws and regulations of the PRC for its employees in the PRC).

FORWARD LOOKING OBSERVATIONS

The macro environment is now at a critical juncture, with a number of dark clouds on the investment horizon, including the ongoing sovereign debt issues in the Eurozone and the United States of America, infl ation concerns still prevalent in many emerging economies, and weakening economic data in the developed world. In the absence of QE3, resources could be impacted by investment outfl ows as speculators generally remain long commodities and commodity currencies like the Australian Dollar against short United States Dollar positions. This is a risk given our Primary Strategic Investments are denominated to Australian Dollars.

In this diffi cult investment climate, we believe our Primary Strategic Investments are well positioned. Both Mount Gibson and Metals X have strong net cash balances and are current producers, while Kalahari controls a world class uranium development asset, which remains highly strategic as evidenced by previous corporate interest. In terms of our Resource Investments, we will continue to be selective in adding positions and are focused on commodities where China is short, like iron ore, uranium and copper.

We continue to look for opportunities to grow the Commodity Business. We remain in negotiations with Mount Gibson regarding an iron ore off-take agreement at their new Extension Hill mine and expect to receive a greater share of Koolan Island off-take after Mount Gibson cancelled agreements with CITIC and Marubeni.

With the ongoing support from our shareholders, we look forward to continuing to evaluate emerging opportunities that have the potential to signifi cantly enhance the three key planks of our company - our Primary Strategic Investment, our Resource Investment and our Commodity Business.

CONSOLIDATED INCOME STATEMENT

For the eighteen months ended 30 June 2011

Notes Revenue from sales of goods 2 Cost of sales Other gains and losses 4 Other income Administrative expenses – General administrative expenses – Equity-settled share option expenses Finance costs 5 Share of results of associates Prof t before taxation 6 Income tax expense 7 Prof t for the period/year attributable to owners of the Company Earnings per share (expressed in HK cents) – basic 9 – diluted 9	1.1.2010 to 30.6.2011 *HK$’000* 1,147,494 (1,005,459) 142,035 571,118 10,492 (54,572) (61,530) (12,373) 870,007 1,465,177 (3,108) 1,462,069 21.89 21.89	1.1.2009 to 31.12.2009 HK$’000 301,420 (262,822) 38,598 275,552 22,785 (32,333) (14,783) (13,468) 118,028 394,379 (21,776) 372,603 7.15 7.07

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the eighteen months ended 30 June 2011

Prof t for the period/year Other comprehensive income, net of tax Exchange difference arising from translation of associates Exchange difference arising from translation of other foreign operations Fair value change of available-for-sale investments Impairments loss on available-for-sale investments Reclassif cation adjustment of cumulative gain upon partial disposal of investment in an associate Share of other comprehensive income of associates Total comprehensive income for the period/year attributable to owners of the Company	1.1.2010 to 30.6.2011 *HK$’000* 1,462,069 456,388 15,115 (48,858) 17,738 (24,675) (50,673) 365,035 1,827,104	1.1.2009 to 31.12.2009 HK$’000 (Restated) (Note) 372,603 306,501 2,319 2,946 28,174 – 144,692 484,632 857,235

Notes: The comparative fi gures have been adjusted to present directly in the consolidated statement of changes in equity.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2011

Notes ASSETS Non-current assets Property, plant and equipment Interests in associates 10 Available-for-sale investments Current assets Trade and other receivables and loan receivable 11 Investments held for trading 12 Pledged bank deposits Bank balances and cash Total assets EQUITY AND LIABILITIES Capital and reserves Share capital 13 Reserves Accumulated prof ts (losses) Current liabilities Trade and other payables 14 Borrowings Tax payable Total equity and liabilities Net current assets Total assets less current liabilities	30.6.2011 *HK$’000* 1,370 3,835,439 52,527 3,889,336 54,641 1,440,946 339,158 384,090 2,218,835 6,108,171 686,329 3,554,350 1,157,921 5,398,600 6,773 689,530 13,268 709,571 6,108,171 1,509,264 5,398,600	31.12.2009 HK$’000 992 2,357,583 96,376 2,454,951 59,415 71,899 89,324 318,203 538,841 2,993,792 569,034 2,885,162 (492,182) 2,962,014 10,020 – 21,758 31,778 2,993,792 507,063 2,962,014

Notes:

1. Basis of Preparation and Accounting Policies

During the current fi nancial period, the reporting period end date of the Group was changed from 31 December to 30 June as a result of the decision of the directors of the Company to bring the annual reporting period end date of the Group in line with that of the Company’s principal overseas listed associates which are the Group’s substantial investments. Accordingly, the consolidated fi nancial statements for the current period cover eighteen months from 1 January 2010 to 30 June 2011. The corresponding comparative amounts shown for the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash fl ows and related notes cover a twelve months period from 1 January 2009 to 31 December 2009 and therefore may not be comparable with amounts shown for the current period.

The consolidated fi nancial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) issued by the Hong Kong Institute of Certifi ed Public Accountants (the “ HKICPA ”). In addition, the consolidated fi nancial statements include applicable disclosures required by the Rules Governing the Listing of Securities on the Stock Exchange and by the Hong Kong Companies Ordinance.

Except as described below, the accounting policies applied are consistent with those of the annual fi nancial statements for the year ended 31 December 2009, as disclosed in those fi nancial statements.

In the current period, the Group has applied the following new and revised standards, amendments and interpretations issued by the HKICPA.

HKAS 27 (Revised 2008)	Consolidated and separate f nancial statements
HKAS 39 (Amendments)	Eligible hedged items
HKFRSs (Amendments)	Amendment to HKFRS 5 as part of Improvements to HKFRSs issued in 2008
HKFRSs (Amendments)	Improvements to HKFRSs issued in 2009
HKFRS 2 (Amendments)	Group cash-settled share-based payment transactions
HKFRS 3 (Revised 2008)	Business combinations
HK(IFRIC) - INT 17	Distributions of non-cash assets to owners
HK - INT 5	Presentation of f nancial statements - Classif cation by borrower of a term
	loan that contains a repayment on demand clause

The application of the new and revised HKFRSs in the current period has had no material effect on the amounts reported in these consolidated fi nancial statements of the Group and/or disclosures set out in these consolidated fi nancial statements.

The Group has not early applied the following new or revised standards, amendments and interpretations that have been issued but are not yet effective.

HKAS 1 (Amendments) Presentation of items of other comprehensive income[7] HKAS 12 (Amendments) Deferred tax: Recovery of underlying assets[6] HKAS 19 (Revised 2011) Employee benefi ts[8] HKAS 24 (Revised 2009) Related party disclosures[4] HKAS 27(Revised 2011) Separate fi nancial statements[8] HKAS 28 (Revised 2011) Investments in associates and joint ventures[8] HKAS 32 (Amendments) Classifi cation of rights issues[1] HKFRSs (Amendments) Improvements to HKFRSs 2010[3] HKFRS 7 (Amendments) Disclosures - Transfers of fi nancial assets[5] HKFRS 9 Financial instruments[8] HKFRS 10 Consolidated fi nancial statements[8] HKFRS 11 Joint arrangements[8] HKFRS 12 Disclosure of interests in other entities[8] HKFRS 13 Fair value measurement[8] HK(IFRIC) - INT 14 (Amendments) Prepayments of a minimum funding requirement[4] HK(IFRIC) - INT 19 Extinguishing fi nancial liabilities with equity instruments[2]

1 Effective for annual periods beginning on or after 1 February 2010. 2 Effective for annual periods beginning on or after 1 July 2010. 3 Effective for annual periods beginning on or after 1 July 2010 and 1 January 2011, as appropriate. 4 Effective for annual periods beginning on or after 1 January 2011. 5 Effective for annual periods beginning on or after 1 July 2011. 6 Effective for annual periods beginning on or after 1 January 2012. 7 Effective for annual periods beginning on or after 1 July 2012. 8 Effective for annual periods beginning on or after 1 January 2013.

2. Revenue

		1.1.2010		1.1.2009
	to	30.6.2011	to	31.12.2009
		*HK$’000*		HK$’000
Revenue from trading of commodities		1,147,494		301,420

3. Segmental Information

Segmental information is presented based on the internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, represented by the board of directors of the Company, for the purpose of allocating resources to segments and assessing their performance. The Group’s reportable segments under HKFRS 8 are therefore as follows:

(i) trading of commodities; and
(ii) trading of and investment in listed securities

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 1. Segment profi t represents the profi t earned by each segment without allocation of central administration costs, directors’ salaries, share of results of associates, reversal of impairment loss on interests in associates, deemed loss on partial disposal of interest in an associate, gain on partial disposal of interest in an associate and fi nance costs. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and performance assessment.

Information regarding the Group’s reportable segments is presented below.

Segment revenue and result

The following is an analysis of the Group’s revenue and results by reportable segment.

For eighteen months ended 30 June 2011

Revenue Gross sales proceeds from trading of and investment in listed securities Segment prof t Share of results of associates Reversal of impairment loss on interest in an associate Deemed loss on partial disposal of interest in an associate Gain on partial disposal of interest in an associate Unallocated corporate income Unallocated corporate expenses Finance costs Prof t before taxation Income tax expense Prof t for the period	Trading of commodities *HK$’000* 1,147,494 – 138,011	Trading of and investment in listed securities *HK$’000* – 252,069 150,399	Total *HK$’000* 1,147,494 252,069 288,410 870,007 304,024 (1,727) 118,284 4,280 (105,728) (12,373) 1,465,177 (3,108) 1,462,069

For twelve months ended 31 December 2009

Revenue Gross sales proceeds from trading of and investment in listed securities Segment prof t Share of results of associates Excess of the Group’s interest in the net fair value of an associates identif able assets, liabilities and contingent liabilities over cost of investment Reversal of impairment loss on interest in an associate Impairment loss on interest in an associate Unallocated corporate income Unallocated corporate expenses Finance costs Prof t before taxation Income tax expense Prof t for the year	Trading of commodities HK$’000 301,420 – 46,092	Trading of and investment in listed securities HK$’000 – 268,671 96,528	Total HK$’000 301,420 268,671 142,620 118,028 21,244 466,553 (304,024) 2,079 (38,653) (13,468) 394,379 (21,776) 372,603

Revenue reported above represents revenue generated from external customers. There were no intersegment sales during the current period and prior year.

Other segment information

Other segment information included in the consolidated income statement for the eighteen months ended 30 June 2011 are as follows:

		Trading of and
		investments
	Trading of	in listed
	commodities	securities	Unallocated	Total
	*HK$’000*	*HK$’000*	*HK$’000*	*HK$’000*
Depreciation of property, plant
and equipment	4	–	999	1,003
Interest income	4,995	1,196	1,446	7,637
Change in fair value of investments
held for trading	–	165,462	–	165,462
Addition to non-current assets
excluding f nancial instruments	–	–	19,599	19,599

Amounts regularly provided to the chief operating decision maker but not included in the measure of segment profi t or loss or segment assets:

Interests in associates Share of results of associates	– –	– –	3,835,439 870,007	3,835,439 870,007

Other segment information included in the consolidated income statement for the twelve months ended 31 December 2009 are as follows:

		Trading of and
		investments
	Trading of	in listed
	commodities	securities	Unallocated	Total
	HK$’000	HK$’000	HK$’000	HK$’000
Depreciation of property, plant and
equipment	3	–	655	658
Interest income	6,962	762	115	7,839
Change in fair value of investments
held for trading	–	118,522	–	118,522
Addition to non-current assets
excluding f nancial instruments	–	–	441,310	441,310

Amounts regularly provided to the chief operating decision maker but not included in the measure of segment profi t or loss or segment assets:

Interests in associates Share of results of associates	– –	– –	2,357,583 118,028	2,357,583 118,028

Segment assets and liabilities

An analysis of the Group’s assets and liabilities by reportable segment is set out below:

Trading of commodities Trading of and investment in listed securities Total segment assets Interest in associates Unallocated Consolidated assets Trading of commodities Trading of and investment in listed securities Total segment liabilities Unallocated Consolidated liabilities	30.6.2011 *HK$’000* 656,271 1,553,930 2,210,201 3,835,439 62,531 6,108,171 246,873 447,275 694,148 15,423 709,571	31.12.2009 HK$’000 424,729 168,631
		593,360
		2,357,583 42,849
		2,993,792

		6,212 329
		6,541 25,237
		31,778

For the purposes of monitoring segment performance and allocating resources between segments:

all assets are allocated to reportable segments other than interests in associates, property, plant and equipment, other receivables and certain bank balances and cash.
all liabilities are allocated to reportable segments other than certain other payables and tax payable.

Geographical information

The Group’s revenue from external customers and information about non-current assets (excluding available-for-sale investments) by geographical location of the customers and assets respectively are detailed below.

Hong Kong The PRC Australia	Revenue from external customers 1.1.2010 to 30.6.2011 1.1.2009 to 31.12.2009 *HK$’000* HK$’000 1,127,338 301,420 20,156 – – – 1,147,494 301,420	Non-current assets 30.6.2011 31.12.2009 *HK$’000* HK$’000 1,048 375 31,251 26,215 3,804,510 2,331,985 3,836,809 2,358,575	Non-current assets 30.6.2011 31.12.2009 *HK$’000* HK$’000 1,048 375 31,251 26,215 3,804,510 2,331,985 3,836,809 2,358,575
			2,358,575

Information about major customers

Revenue from customers of the corresponding years contributing over 10% of the total sales of the Group are under segment of trading of commodities and as follows:

		1.1.2010		1.1.2009
	to	30.6.2011	to	31.12.2009
		*HK$’000*		HK$’000
Customer A		414,038		N/A1
Customer B		227,113		45,749
Customer C		152,326		45,950
Customer D		N/A2		163,967
Customer E		N/A2		45,754

1 There was no transaction with Customer A during the year ended 31 December 2009.

2 The transactions with Customer D and Customer E did not contribute over 10% of the total sales of the Group during the current period.

4. Other Gains and Losses

Change in fair value of investments held for trading_(Note)_ Deemed loss on partial disposal of interest in an associate Excess of the Group’s interest in the net asset value of an associate’s identif able assets, liabilities and contingent liabilities over cost of investment Gain on partial disposal of interest in an associate Impairment loss on interest in an associate Impairment losses on available-for-sale investments Reversal of impairment loss on interest in an associate Net foreign exchange gain	1.1.2010 to 30.6.2011 *HK$’000* 165,462 (1,727) – 118,284 – (17,738) 304,024 2,813 571,118	1.1.2009 to 31.12.2009 HK$’000 118,522 – 21,244 – (304,024) (28,174) 466,553 1,431
		275,552

Note:

Net realised gain of approximately HK$41,826,000 (2009: Net realised gain of HK$112,133,000) on disposal of investments held for trading are included in change in fair value of investments held for trading.

5. Finance Costs

Interest on borrowings wholly repayable within f ve years: Bank borrowings Securities margin f nancing	1.1.2010 to 30.6.2011 *HK$’000* 2,317 10,056 12,373	1.1.2009 to 31.12.2009 HK$’000 5,202 8,266
		13,468

6.

Prof t before taxation has been arrived at after charging: Staff costs, including directors’ emoluments – salaries and allowances – equity-settled share option expenses (included in administrative expenses) – staff quarter – retirement benef ts schemes contributions Total staff costs Auditor’s remuneration Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment Income Tax expense Current tax Hong Kong Prof ts Tax PRC Enterprise Income Tax Overprovision in prior years Total income tax expense	1.1.2010 to 30.6.2011 *HK$’000* 21,506 61,530 1,678 316 85,030 1,148 1,003 – 1.1.2010 to 30.6.2011 *HK$’000* 18,346 426 18,772 (15,664) 3,108	1.1.2009 to 31.12.2009 HK$’000 15,221 14,783 220 181
		30,405 340 658 1

		1.1.2009 to 31.12.2009 HK$’000 20,543 1,233
		21,776 –
		21,776

7. Income Tax expense

Hong Kong Profi ts Tax is calculated at 16.5% on the estimated assessable profi t for current period and prior year.

Under the Law of the People’s Republic of China on Enterprise Income Tax (the “ EIT Law ”) and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% for current period and prior year.

Taxation arising from other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The tax charge for the period/year can be reconciled to the profi t before taxation per the consolidated income statement as follow:

Prof t before taxation Tax at Hong Kong prof ts tax rate of 16.5% Tax effect of expenses not deductible for tax purpose Tax effect of income not taxable for tax purpose Tax effect of tax losses not recognised Tax effect of share of prof ts of associates Overprovision in prior years Utilisation of tax losses previously not recognised Effect of different tax rate of subsidiaries and associates operating in other jurisdictions Others Tax charge for the period/year in respect of Hong Kong and the PRC	1.1.2010 to 30.6.2011 *HK$’000* 1,465,177 241,754 14,170 (99,108) 4,850 (143,551) (15,664) – 657 – 3,108	1.1.2009 to 31.12.2009 HK$’000 394,379 65,072 60,318 (82,455) – (19,475) – (2,170) 419 67 21,776

At 30 June 2011, the Group had unused tax losses of approximately HK$35,928,000 (31.12.2009: HK$6,534,000) available for offset against future profi ts. No deferred tax asset has been recognised in respect of such losses due to the unpredictability of future profi t streams. The tax losses may be carried forward indefi nitely.

8. Dividend

No dividends had been paid or declared by the Company during the 2010/2011 Period (2009: nil).

9. Earnings Per Share

Diluted earnings per share

The earnings used in the calculation of diluted earnings per share are the same as those for the basic earnings per share, as set out above.

The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows.

Weighted average number of ordinary shares used in the calculation of basic earnings per share Effect of dilutive potential ordinary share in respect of: – warrants Weighted average number of ordinary shares for the purpose of diluted earnings per share	1.1.2010 to 30.6.2011 6,679,962,107 – 6,679,962,107	1.1.2009 to 31.12.2009 5,212,630,859 55,272,054
		5,267,902,913

The calculation of the diluted earnings per share did not assume the exercise of the Company’s outstanding share options as their exercise prices were higher than the average market price of the Company’s shares for the period.

10. Interests in Associates

Cost of investments in associates Listed in Australia Unlisted Share of post-acquisition prof ts and other comprehensive income, net of dividends received Less: Impairment loss Fair value of listed investments	30.6.2011 *HK$’000* 2,082,850 22,716 1,729,873 3,835,439 – 3,835,439 5,102,095	31.12.2009 HK$’000 2,141,346 22,716 497,545
		2,661,607 (304,024)
		2,357,583

		3,573,413

Details of the Group’s associates at 30 June 2011 and 31 December 2009 are as follow:

	Place of	Class of	Proportion of	Proportion of
	incorporation	shares	ownership interest		and
Name of entity	and operation	held	voting power held			Principal activities
			30.6.2011	31.12.2009
平港（上海）貿易	PRC	N/A	40%		40%	Wholesales, import and export,
有限公司						agency service and relevant
（“平港貿易”）						service for coal, coke, material
						for metallurgy, mineral products,
						chemical engineering products,
						mechanical and electrical
						equipment and spare parts,
						steel and steel products,
						construction material and
						related products and technology
Mount Gibson Iron	Australia	Ordinary	25.46%		26.75%	Mining of hematite deposits at
Limited (“MGX”)						Tallering Peak and Koolan
						Island; development of hematite
						mining operations at Extension
						Hill; and exploration of hematite
						deposits in Western Australia
Metals X Limited	Australia	Ordinary	29.08%		29.08%	Exploration for and the mining,
(“MLX”)						treatment and marketing of tin
						concentrate and nickel in
						Australia; exploration for
						phosphate in Australia; the
						development and construction of
						tin mine projects and exploration
						for precious and base metals
						through signif cant shareholding
						in other companies

11. Trade and other receivables and loan receivable

Trade receivables Interest receivables Loan receivable Other deposits and prepayment	30.6.2011 *HK$’000* 1,828 – 42,296 10,517 54,641	31.12.2009 HK$’000 48,660 5,685 – 5,070
		59,415

The Group allows an average credit period of 90 days to its trade customers. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by senior management.

The following is an aged analysis of trade receivables presented based on the invoice date at the end of the reporting period:

				30.6.2011	31.12.2009
				*HK$’000*	HK$’000
0	to	90	days	1,828	48,660

The trade receivables disclosed above are neither past due nor impaired at the end of the reporting period.

During the 2010/2011 Period, the Group has paid a lump sum of HK$42,296,000 in form of shareholder’s loan to an unlisted company (“ Borrower ”), which is one of its available-for-sale investments. The loan receivable has no fi xed repayment terms and is expected to be repaid within the twelve months from the end of the reporting period and interest bearing. Taking into consideration of the fi nancial information of the Borrower, the management is of the view that the loan is recoverable and no impairment loss is recognised.

12. Investments held for trading

Listed securities: – Equity securities listed in Hong Kong – Equity securities listed in United Kingdom – Equity securities listed in United States of America – Equity securities listed in Australia – Equity securities listed in Canada	30.6.2011 *HK$’000* – 1,082,368 4,967 260,167 93,444 1,440,946	31.12.2009 HK$’000 7,839 – – 64,060 –
		71,899

As at 30 June 2011, particulars of the Group’s investments included in investments held for trading which exceed 10% of the assets of the Group disclosed pursuant to Section 129(2) of the Hong Kong Companies Ordinance are as follows:

				Percentage of
			Number of	issued share
		Class of	shares held	capital held
Name of company	Place of incorporation	shares	by the Group	by the Group
Kalahari Minerals plc	United Kingdom	Ordinary	36,296,059	14.79%

13. Share Capital

Authorised and issued share capital

Ordinary shares of HK$0.10 each Authorised Issued and fully paid: At beginning of the period/year Issue of shares upon placement (a) Issue of shares upon exercise of warrants (b) Shares repurchased and cancelled At end of the reporting period	30.6.2011 Number of shares Amount *HK$’000* 20,000,000,000 2,000,000 5,690,343,455 569,034 1,100,000,000 110,000 131,784,535 13,179 (58,840,000) (5,884) 6,863,287,990 686,329	31.12.2009 Number of shares Amount HK$’000 8,000,000,000 800,000 4,728,659,055 472,866 900,000,000 90,000 61,684,400 6,168 – – 5,690,343,455 569,034	31.12.2009 Number of shares Amount HK$’000 8,000,000,000 800,000 4,728,659,055 472,866 900,000,000 90,000 61,684,400 6,168 – – 5,690,343,455 569,034

			472,866 90,000 6,168 –

			569,034

(a) For reduction of borrowings and for general working capital of the Group, on 12 March 2010, the Company and the placing agent entered into a placing arrangement to place a total of 1,100,000,000 shares to independent investors at a price of HK$0.5 per placing share. The new shares rank pari passu with the existing shares in all respects.
(b) On 5 February 2007, the Company issued a total of 251,800,000 bonus warrants (the “ Warrants ”), as a result of the rights issue completed on 1 February 2007, with an aggregate subscription amount of HK$75,540,000. Each of the Warrants entitled the warrant-holder to subscribe for one ordinary share of the Company of HK$0.10 each at the initial subscription price of HK$0.30.

During the 2010/2011 Period, 131,784,535 Warrants were exercised for 131,784,535 ordinary shares (year ended 31 December 2009: 61,684,400 Warrants were exercised for 61,684,400 ordinary shares) at a price of HK$0.30 each. The rights attaching to the outstanding 309,515 Warrants expired on 4 February 2010.

14. Trade and other payables

Trade payables Other payables	30.6.2011 *HK$’000* 4,144 2,629 6,773	31.12.2009 HK$’000 6,716 3,304
		10,020

The following is an aged analysis of trade payables presented based on the invoice date at the end of reporting period:

				30.6.2011	31.12.2009
				*HK$’000*	HK$’000
0	to	90	days	4,144	6,716

DIVIDEND

The Board has resolved not to declare the payment of a dividend for the 2010/2011 Period (2009: nil) as the Company has the intention to repurchase shares of the Company as and when the market conditions are considered appropriate and the available cash fl ow and/or working capital facilities will be retained for such purpose.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the 2010/2011 Period, the Company repurchased 61,840,000 shares of HK$0.10 each in the capital of the Company at prices ranging from HK$0.39 to HK$0.53 per share on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).

Particulars of the purchase of shares are as follows:

Date of repurchase 16/11/2010 29/11/2010 30/11/2010 02/12/2010 03/12/2010 11/04/2011 12/04/2011 13/04/2011 15/04/2011 21/04/2011 28/04/2011 03/05/2011 04/05/2011 11/05/2011 12/05/2011 13/05/2011 19/05/2011 13/06/2011 14/06/2011 27/06/2011 29/06/2011 TOTAL	No. of Shares Price per share Highest Lowest HK$ HK$ 1,800,000 0.530 0.530 6,240,000 0.510 0.510 1,800,000 0.485 0.480 540,000 0.495 0.495 1,180,000 0.495 0.490 1,340,000 0.490 0.490 5,000,000 0.490 0.490 3,580,000 0.480 0.480 8,080,000 0.480 0.475 5,000,000 0.480 0.480 7,500,000 0.470 0.465 1,000,000 0.450 0.450 4,000,000 0.440 0.435 1,000,000 0.450 0.450 40,000 0.445 0.445 1,340,000 0.450 0.445 1,900,000 0.445 0.445 7,000,000 0.415 0.410 500,000 0.390 0.390 1,000,000 0.400 0.400 2,000,000 0.400 0.400 61,840,000	Aggregate Price HK$ 954,000 3,182,400 869,000 267,300 583,200 656,600 2,450,000 1,718,400 3,863,000 2,400,000 3,512,250 450,000 1,750,000 450,000 17,800 601,300 845,500 2,880,000 195,000 400,000 800,000
		28,845,750

CORPORATE GOVERNANCE

The Company has complied with the applicable code provisions of the Code on Corporate Governance Practices as set out in Appendix 14 of the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”) for the 2010/2011 Period except that all the independent non-executive directors of the Company were not appointed for a specifi c term since they are subject to retirement by rotation and re-election at least once every three years at the annual general meetings of the Company in accordance with the relevant provisions of the Company’s Bye-laws.

COMPLIANCE WITH THE MODEL CODE

The Company has adopted the “Model Code for Securities Transactions by Directors of Listed Issuers” as set out in Appendix 10 of the Listing Rules as the code (the “ Code ”) for dealing in securities of the Company by the Directors and supervisors. Having made specifi c enquiry, the Company confi rmed that all Directors and supervisors had complied with the required standard as set out in the Code for the 2010/2011 Period.

EXTRACT OF THE INDEPENDENT AUDITOR’S REPORT

Opinion

In our opinion, the consolidated fi nancial statements give a true and fair view of the state of affairs of the Group as at 30 June 2011, and of the Group’s profi t and cash fl ows for the eighteen months ended 30 June 2011 in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance.

Other Matter

The consolidated fi nancial statements of the Group for the year ended 31 December 2009 were audited by another auditor who expressed an unmodifi ed opinion on these statements on 23 April 2010.

REVIEW OF RESULTS BY AUDIT COMMITTEE

The Group’s fi nal results for the 2010/2011 Period have been reviewed by the Audit Committee of the Company.

SCOPE OF WORK OF MESSRS. DELOITTE TOUCHE TOHMATSU

The fi gures in respect of the Group’s consolidated fi nancial position, consolidated income statement, consolidated statement of comprehensive income and the related notes thereto for the 2010/2011 Period as set out in this announcement have been agreed by the Group’s auditor, Messrs. Deloitte Touche Tohmatsu, to the amounts set out in the Group’s audited consolidated fi nancial statements for the 2010/2011 Period. The work performed by Messrs. Deloitte Touche Tohmatsu in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certifi ed Public Accountants and consequently no assurance has been expressed by Messrs. Deloitte Touche Tohmatsu on this announcement.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to express my sincere appreciation to our shareholders for their continued support and to my fellow directors, the management and staff for their continuing contributions and effort.

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

Hong Kong, 23 August 2011

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

Executive Directors

Ms. Chong Sok Un (Chairman) , Mr. Andrew Ferguson (Chief Executive Offi cer) , Mr. Yue Jialin and Mr. Kong Muk Yin

Non-Executive Directors

Mr. Lee Seng Hui, Mr. So Kwok Hoo, Mr. Liu Yongshun and Mr. Peter Anthony Curry

Independent Non-Executive Directors

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

For identifi cation purpose only