Qiniu Limited — Capital/Financing Update 2011

Sep 9, 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.

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

SIBERIAN MINING GROUP COMPANY LIMITED 西伯利亞礦業集團有限公司 [*]

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1142)

(1) CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION FOR NEW SHARES

TO BE ISSUED BY WAY OF SPECIFIC MANDATE;

(2) ENTERING INTO OF SUPPLEMENTAL AGREEMENT IN RELATION TO SOFOCO DEVELOPMENT LIMITED; AND (3) DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 70% OF THE ISSUED SHARE CAPITAL OF SOFOCO DEVELOPMENT LIMITED

Reference is made to the announcement of the Company dated 1 September 2011.

SUBSCRIPTION FOR NEW SHARES

After trading hours of the Stock Exchange on 8 September 2011, the Company entered into the Subscription Agreement with Cordia pursuant to which the Company agrees to allot and issue, and Cordia agrees to subscribe for, 1,150,000,000 new Shares at the Subscription Price of HK$0.04 per Share, which shall be satisfied by the discharge of the Discharged Amount of the Promissory Notes.

The 1,150,000,000 Subscription Shares represent:

• (a) approximately 38.6% of the existing issued share capital of the Company as at the date of the announcement; and

• (b) approximately 27.8% of the issued share capital of the Company as at the date of the announcement as enlarged by the allotment and issue of the Subscription Shares,

assuming that there will be no other change in the issued share capital of the Company between the date of this announcement and the Subscription Completion Date.

* For identification purposes only

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Contemporaneous with the issue and allotment of the Subscription Shares on the Subscription Completion Date, Cordia will surrender the Promissory Notes to the Company in exchange for a new certificate of promissory notes representing the remaining balance of the Promissory Notes after deducting the Discharged Amount. Upon the issue and allotment of the Subscription Shares by the Company to Cordia, all the liabilities and obligations of the Company relating to the Discharged Amount under the Promissory Notes shall be fully satisfied and discharged.

Completion of the Subscription Agreement is conditional upon, among others, approval by the Independent Shareholders of the Subscription and the grant of the Specific Mandate. The allotment and issue of the Subscription Shares will also be subject to, amongst others, the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Subscription Shares.

ENTERING INTO OF SUPPLEMENTAL AGREEMENT IN RELATION TO SOFOCO

As announced by the Company on 3 March 2010, Grandvest had, on 3 March 2010, entered into an investment and shareholders agreement with, among others, Grand Farm and SOFOCO, pursuant to which Grandvest had agreed to subscribe for 23,334 new ordinary shares in SOFOCO (representing 70% interest in SOFOCO) for a total consideration of HK$50 million, payable by Grandvest in three instalments in accordance with the funding requirements of SOFOCO and subject to fulfillment of certain conditions. Grandvest has paid the first two instalments in the aggregate amount of HK$16 million to date.

On 8 September 2011, Grandvest, Grand Farm and SOFOCO entered into a supplemental investment and shareholders agreement, pursuant to which the parties agree that the total sum invested by Grandvest for its 70% shareholdings in SOFOCO shall be reduced from HK$50 million to HK$16 million, which has already been paid by Grandvest. As such, Grandvest has ceased to have any obligation with regard to the payment of the HK$34 million to SOFOCO.

THE DISPOSAL AGREEMENT

After trading hours of the Stock Exchange on 8 September 2011, Grandvest, a direct wholly-owned subsidiary of the Company, entered into the Disposal Agreement with Cordia and Mr. Choi Sungmin, pursuant to which Grandvest has agreed to sell and Cordia has agreed to purchase the Sale Shares and the Sale Loans for the Consideration of HK$16,000,000 (equivalent to approximately US$2,051,282). The Consideration shall be paid by Cordia to Grandvest by the set off of the equivalent outstanding amount (taken as US$2,051,282) under the Promissory Notes. Upon Completion, all the liabilities and obligations of the Company under the Promissory Notes relating to the amount equivalent to the Consideration (taken as US$2,051,282) shall be fully satisfied and discharged.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Cordia is interested in approximately 2.5% of the existing issued share capital of the Company. Cordia is a substantial shareholder of Langfeld Enterprises Limited, a non-wholly owned subsidiary of the Company, and Mr. Choi Sungmin, the sole shareholder of Cordia, is also a director of SOFOCO, a non-wholly owned subsidiary of the Company. As such, Cordia and Mr. Choi Sungmin are connected persons of the Company. The Subscription constitutes a non-exempted connected transaction for the Company under the Listing Rules by virtue of Rule 14A.31(3) and is subject to reporting and announcement requirements, and approval by the Independent Shareholders at the EGM.

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Further, as the applicable percentage ratios (other than the profits ratio and the equity capital ratio) (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Disposal are more than 5% but less than 25% and the Consideration exceeds HK$10,000,000, the Disposal constitutes a discloseable and nonexempted connected transaction on the part of the Company under Rule 14.06 of the Listing Rules and is subject to reporting and announcement requirements, and approval by the Independent Shareholders at the EGM.

The EGM will be held to consider, and if thought fit, pass the resolutions to approve (i) the Subscription Agreement and the transactions contemplated thereunder, together with the grant of the Specific Mandate; and (ii) the Disposal Agreement and the transactions contemplated thereunder. Cordia, its associates and any Shareholder who is involved in or has an interest in the Subscription and Disposal will abstain from voting in respect of the resolutions to be proposed at the EGM.

A circular of the Company containing, amongst others, details of the Subscription Agreement and the Disposal Agreement, a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Subscription Agreement and the Disposal Agreement, a letter of advice from the independent financial adviser to the Independent Board Committee in respect of the Subscription Agreement and the Disposal Agreement, together with a notice convening the EGM, will be despatched to the Shareholders within 15 business days from the date of this announcement, that is, on or before 30 September 2011 in accordance with Rule 14A.56(10) of the Listing Rules.

If any of the conditions precedent to the completion under the Subscription Agreement and/or the Disposal Agreement is not satisfied, the Subscription and/or the Disposal will lapse and will not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares or any other securities of the Company.

Reference is made to the announcement of the Company dated 1 September 2011.

SUBSCRIPTION FOR NEW SHARES

After trading hours of the Stock Exchange on 8 September 2011, the Company and Cordia entered into the Subscription Agreement pursuant to which the Company agrees to allot and issue, and Cordia agrees to subscribe for, 1,150,000,000 new Shares at the Subscription Price of HK$0.04 per Share, which shall be satisfied by the discharge of the Discharged Amount of the Promissory Notes. Contemporaneous with the issue and allotment of the Subscription Shares on the Subscription Completion Date, Cordia will surrender the Promissory Notes to the Company in exchange for a new certificate of promissory notes representing the remaining balance of the Promissory Notes after deducting the Discharged Amount. Upon the issue and allotment of the Subscription Shares by the Company to Cordia, all the liabilities and obligations of the Company relating to the Discharged Amount under the Promissory Notes shall be fully satisfied and discharged.

THE SUBSCRIPTION AGREEMENT

Date: 8 September 2011 (entered into after trading hours of the Stock Exchange)

Parties:

• (a) The Company, as the issuer of the Subscription Shares; and

• (b) Cordia Global Limited, as the subscriber

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The Subscription Shares

Pursuant to the Subscription Agreement, the Company agrees to allot and issue, and Cordia agrees to subscribe for, 1,150,000,000 new Shares (the aggregate nominal value of which amounts to HK$11.5 million) at the Subscription Price of HK$0.04 per Share, which shall be satisfied by the discharge of the Discharged Amount of the Promissory Notes.

In the event that the Share Consolidation becomes effective before the Subscription Completion Date, 57,500,000 new Consolidated Shares will be allotted and issued to Cordia at the Subscription Price of HK$0.80 per Share under the Subscription Agreement.

The Subscription Shares represent:

• (a) approximately 38.6% of the existing issued share capital of the Company as at the date of the announcement; and

• (b) approximately 27.8% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares,

assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the Subscription Completion Date.

Ranking of the Subscription Shares

The Subscription Shares, when allotted and issued, will rank pari passu in all respects among themselves and with all other Shares in issue as at the date of allotment and issue of the Subscription Shares, including the right to receive all future dividends and distributions which may be declared, made or paid by the Company in respect of the Shares, the record date for which falls on or after the Subscription Completion Date, on which the Subscription Shares will be allotted and issued.

Specific Mandate to issue the Subscription Shares

The Subscription Shares will be issued under a specific mandate proposed to be sought from the Independent Shareholders at the EGM.

The Subscription Price

The Subscription Price of HK$0.04 per Share represents:

• (a) a premium of approximately 37.9% to the closing price of HK$0.0290 per Share on the Stock Exchange on the Last Trading Day of the Shares;

• (b) a premium of approximately 22.7% to the average closing price of approximately HK$0.0326 per Share for the last 5 consecutive trading days immediately prior to the Last Trading Day;

• (c) a premium of approximately 31.6% to the average closing price of approximately HK$0.0304 per Share for the last 10 consecutive trading days immediately prior to the Last Trading Day;

• (d) a premium of approximately 1.3% to the average closing price of approximately HK$0.0395 per Share for the last 20 consecutive trading days immediately prior to the Last Trading Day; and

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• (e) a discount of approximately 92.0% to the audited consolidated net assets value of the Company attributable to the Shareholders of approximately HK$0.50 per Share as at 31 March 2011 (based on the audited consolidated net assets of the Company attributable to the Shareholders of approximately HK$1,358,683,000 and 2,712,413,060 Shares in issue as at 31 March 2011).

The Subscription Price was determined after arm’s length negotiations between the Company and Cordia with reference to the share price prevailing at the time of the negotiation and the financial position of the Group. The Directors (other than members of the Independent Board Committee, who will express their opinion after considering the advice of the independent financial adviser) consider that the Subscription Agreement is entered into upon normal commercial terms and the terms of the Subscription Agreement (including, without limitation the Subscription Price) are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Conditions Precedent

Completion of the Subscription Agreement is conditional upon the satisfaction of the following conditions:

• (a) the Independent Shareholders having approved the Subscription and the grant of the Specific Mandate in accordance with the requirements of the Listing Rules;

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

None of the above conditions precedent can be waived by any of the parties to the Subscription Agreement. In the event that the above conditions precedent have not been fulfilled by 31 December 2011, or such later date as may be agreed between the Company and Cordia in writing, the obligations of the Company and Cordia under the Subscription Agreement shall terminate and neither of the parties shall have any claim against the other for costs, damages, compensation or otherwise in respect of the Subscription.

Subject to the fulfillment of all the conditions, the Share Subscription Agreement shall be completed on the Subscription Completion Date.

ENTERING INTO OF SUPPLEMENTAL AGREEMENT IN RELATION TO SOFOCO

As announced by the Company on 3 March 2010, Grandvest had, on 3 March 2010, entered into an investment and shareholders agreement with, among others, Grand Farm and SOFOCO, pursuant to which Grandvest had agreed to subscribe for 23,334 new ordinary shares in SOFOCO (representing 70% interest in SOFOCO) for a total consideration of HK$50 million, payable by Grandvest in three instalments in accordance with the funding requirements of SOFOCO and subject to fulfillment of certain conditions. The subscription under the investment and shareholders agreement was completed in 2010 and Grandvest has paid the first two instalments in the aggregate amount of HK$16 million to date in the following manner: —

• (a) HK$2.5 million had been paid on 4 March 2010 after signing of the investment and shareholders agreement; and

• (b) HK$13.5 million had been paid on 15 March 2010 after (i) Grandvest was satisfied, in its absolute opinion, with the business, assets, operation, financial position and prospect, the internal control system and corporate governance framework of the SOFOCO Group; and (ii) a valuation report issued by an independent valuer acceptable to the Company on the SOFOCO Group in form and substance satisfactory to the Company was obtained.

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Pursuant to the investment and shareholders agreement, Grandvest was obliged to pay the remaining HK$34 million subject to the funding requirements of the SOFOCO Group and upon Grandvest being satisfied, in its absolute opinion notwithstanding payment under paragraph (b) above, with the business, assets, operation, financial position and prospect, and the internal control system and corporate governance framework of the SOFOCO Group. Given the stagnant developments in vertical farming projects of the SOFOCO Group, Grandvest considered that the condition precedent for the payment of the remaining HK$34 million has not been satisfied and hence has not fulfilled such payment obligation.

On 8 September 2011, Grandvest, Grand Farm and SOFOCO entered into a supplemental investment and shareholders agreement, pursuant to which the parties agree that the total sum invested by Grandvest for its 70% shareholdings in SOFOCO shall be reduced from HK$50 million to HK$16 million, which has already been paid by Grandvest. As such, Grandvest has ceased to have any obligation in respect of the payment of the HK$34 million to SOFOCO.

THE DISPOSAL AGREEMENT

Date: 8 September 2011 (entered into after trading hours of the Stock Exchange)

Parties

• (1) Cordia Global Limited, as the purchaser;

• (2) Grandvest International Limited, as the vendor; and

• (3) Choi Sungmin, as the guarantor

Grandvest is a direct wholly-owned subsidiary of the Company incorporated in the British Virgin Islands and is principally engaged in investment holding. It holds 70% of the issued share capital of SOFOCO.

Subject matter and the Consideration

Under the Disposal Agreement, Grandvest shall sell and Cordia shall acquire the Sale Shares and the Sale Loans at the Consideration of HK$16,000,000 (equivalent to approximately US$2,051,282) which is to be satisfied by the set off of the equivalent outstanding amount (taken as US$2,051,282) under the Promissory Notes upon Completion. Mr. Choi Sungmin as the guarantor shall guarantee the performance by Cordia of its obligations under the Disposal Agreement.

The Consideration was determined after arm’s length negotiations between Grandvest and Cordia and is equivalent to consideration that has been paid by Grandvest to date for its 70% interest in SOFOCO.

Grand Farm, being the owner of the remaining 30% of the issued share capital in SOFOCO, has given an unconditional and irrevocable confirmation to Grandvest that it has no objection to, and will not object to, the Disposal.

Conditions precedent

Completion shall be conditional upon: —

• (a) the Independent Shareholders having approved the Disposal Agreement and the transactions contemplated thereunder in accordance with the requirements of the Listing Rules; and

• (b) Grandvest having fully repaid the debts payable by it to SOFOCO (if any).

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Condition (a) cannot be waived by any of the parties to the Disposal Agreement. In the event that the above conditions precedent have not been fulfilled by 31 December 2011, or such later date as may be agreed between Grandvest and Cordia in writing, the obligations of Grandvest and Cordia under the Disposal Agreement shall terminate and neither of the parties shall have any claim against the other for costs, damages, compensation or otherwise in respect of the Disposal.

Subject to the fulfillment of all the conditions, the Disposal Agreement shall be completed on the Completion Date. Upon the Completion, both SOFOCO and SOFOCO (Zhenjiang) will cease to be subsidiaries of the Company.

CHANGES IN THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the date of this announcement, the Company has 2,981,413,060 Shares in issue. The shareholding structure of the Company (a) as at the date of this announcement; (b) immediately after the completion of the Subscription Agreement; and (c) immediately upon the Share Consolidation becoming effective, assuming that there is no other change in the issued share capital of the Company between completion of the Subscription Agreement and the Share Consolidation are as follows:

Shareholders of the Company Goldwyn Management Limited Co An Cordia DTV China Holdings Limited Pang Ngoi Wah Edward, a non-executive Director Other public Shareholders Total	As at the date of the this announcement Shares % (approx.) 228,000,000 7.7% 147,610,000 5.0% 75,000,000 2.5% 16,000,000 0.5% 3,500,000 0.1% 2,511,303,060 84.2% 2,981,413,060 100.00%	Immediately after the completion of the Subscription Agreement Shares % (approx.) 228,000,000 5.5% 147,610,000 3.6% 1,225,000,000 29.7% 16,000,000 0.3% 3,500,000 0.1% 2,511,303,060 60.8% 4,131,413,060 100.0%	Immediately upon the Share Consolidation becoming effective Consolidated Shares % (approx.) 11,400,000 5.5% 7,380,500 3.6% 61,250,000 29.7% 800,000 0.3% 175,000 0.1% 125,565,153 60.8% 206,570,653 100.0%	Immediately upon the Share Consolidation becoming effective Consolidated Shares % (approx.) 11,400,000 5.5% 7,380,500 3.6% 61,250,000 29.7% 800,000 0.3% 175,000 0.1% 125,565,153 60.8% 206,570,653 100.0%
				100.0%

INFORMATION ON CORDIA

Cordia is a company incorporated in the British Virgin Islands with limited liability and is wholly owned by Mr. Choi Sungmin, who is also the sole director of Cordia. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Cordia is an investment holding company.

INFORMATION ON THE GROUP

The principal activity of the Company is investment holding and the principal activities of the Group include (i) coal mining in Russia and coal trading business; (ii) digital television broadcasting industry including provision of equipment and software of cable video-on-demand system, information broadcasting system, embedded television systems and value-added services in the PRC; and (iii) vertical farming in the PRC.

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INFORMATION ON THE SOFOCO GROUP

SOFOCO is a company established in Hong Kong and a direct 70% non-wholly owned subsidiary of Grandvest. The principal activity of SOFOCO is investment holding.

SOFOCO (Zhenjiang) is a company established in the PRC and a direct wholly owned subsidiary of SOFOCO. SOFOCO (Zhenjiang) is principally engaged in vertical farming projects in the PRC.

Based on the unaudited consolidated accounts of the SOFOCO Group, the net assets of the SOFOCO Group were approximately HK$52.0 million as at 31 March 2011, and for the year ended 31 March 2011, the net loss before and after taxation and extraordinary items of SOFOCO Group amounted to approximately HK$19.1 million and HK$19.1 million respectively. Based on the unaudited management accounts of the SOFOCO Group prepared according to Hong Kong Financial Reporting Standards, the net loss before and after taxation and extraordinary items of SOFOCO Group for the period from 17 December 2009 (date of incorporation) to 31 March 2010 amounted to approximately HK$1.5 million and HK$1.5 million respectively.

THE PROMISSORY NOTES

The Promissory Notes were issued by the Company in favour of Cordia on 23 February 2010 to amend certain terms of the First Convertible Note. The principal terms of the Promissory Notes are as follows: —

Outstanding principal amount: US$26.2 million (approximately HK$204.4 million) Interest: Nil Maturity: 25 May 2015 Early repayment: The Company may in its sole discretion elect to repay all or any part of the amount outstanding under the Promissory Note at any time prior to the maturity date of the Promissory Note and the principal amount of the Promissory Note will then be reduced by the amount repaid. Security: Unsecured Assignment: Allowed

After the completion of the Subscription and the Disposal, the total outstanding principal amount of the Promissory Notes will be US$18,251,282 (approximately HK$142.4 million).

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

As at the date of this announcement, the interest of Cordia in the issued share capital of the Company is approximately 2.5%. Immediately upon completion of the Subscription, the interest of Cordia in the issued share capital of the Company (assuming no other change in the issued share capital of the Company from the date of this announcement up to and including the Subscription Completion Date) is expected to increase to approximately 29.7%. The Directors (other than members of the Independent Board Committee, who will express their opinion after considering the advice of the independent financial adviser) are of the view that the increase in Cordia’s interest in the Company as a result of the Subscription will encourage the co-operation between Cordia and the Company which, with the experience of Cordia and Mr. Choi Sungmin in the energy and natural resources sectors, will be beneficial to the Company. The Directors (other than members of the Independent Board Committee, who will express their opinion after considering the advice of the independent financial adviser) consider that the satisfaction of the consideration for the Subscription Shares by way of discharge of the Discharged Amount under the Promissory Notes will enable the Group to reduce its liabilities and actual cash outflow for fulfilling its repayment obligation under the Promissory Notes when they fall due in 2015, and strengthen its capital base. They also consider that the issue of the Subscription Shares at a premium to the recent closing price of the Shares is fair and reasonable and hence, the Subscription as a whole is in the interests of the Company and the Shareholders.

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The proceeds from the Subscription in the amount of HK$46.0 million (approximately US$5.9 million) will be used to offset an equivalent outstanding principal amount of the Promissory Notes at completion of the Subscription Agreement. The expenses of the Company in connection with the implementation of the Subscription Agreement is estimated to be approximately HK$0.8 million and thus the net price per Subscription Share is approximately HK$0.04.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Since the SOFOCO Group has been making losses for the year ended 31 March 2011 and the period from 17 December 2009 (date of incorporation) to 31 March 2010, the Disposal provides an opportunity to the Company to realize the investment in the SOFOCO Group at a consideration equivalent to the consideration that has been paid by the Company to date for its 70% interest in SOFOCO. The Disposal enables the Group to focus its resources in coal mining in Russia and in its coal trading business. The satisfaction of the Consideration by way of set-off of an equivalent outstanding amount of the Promissory Notes at Completion will enable the Group to reduce its liabilities and actual cash outflow for fulfilling its repayment obligation under the Promissory Notes when they fall due in 2015, and strengthen its capital base.

Taking into account the above factors, the Directors (other than members of the Independent Board Committee, who will express their opinion after considering the advice of the independent financial adviser) consider that the terms of the Disposal Agreement (including the Consideration) are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

The Consideration in the amount of HK$16.0 million (approximately US$2.1 million) will be used to set off against the equivalent outstanding amount (taken as US$2,051,282) under the Promissory Notes at Completion. The expenses of the Company in connection with the implementation of the Disposal Agreement is estimated to be approximately HK$0.7 million.

FINANCIAL EFFECTS

It is expected that the Group will recognize a gain from the Disposal of approximately HK$4.5 million, which is calculated with reference to the difference between the expected net proceeds from the Disposal and the unaudited net asset value of SOFOCO Group attributable to the Group, taking into account the release of Grandvest’s HK$34 million payment obligation (which was recorded as an accounts receivable in the management accounts of the SOFOCO Group) pursuant to the supplemental investment and shareholders agreement dated 8 September 2011. The exact amount of gain from the Disposal would be calculated on the basis of the relevant figures as at Completion and therefore would be different from the above amount. It is expected that the gain from the Disposal would be reflected in the consolidated accounts of the Group for the year ending 31 March 2012.

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FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

			Intended use of
Date of			proceeds as stated in	Actual use of
announcement	Event	Net proceeds	the announcement	proceeds/Remarks
4 October 2010	Placing of	Approximately	General working	All proceeds had been
	60,000,000	HK$13.5	capital, repayment	used as intended for
	new Shares	million	of liabilities and	repayment of
			future business	liabilities of the
			development	Company
9 October 2010	Placing of	Approximately	General working	All proceeds had been
	120,000,000	HK$22.3	capital, repayment	used as intended for
	new Shares	million	of liabilities and	repayment of
			future business	liabilities of the
			development	Company
14 October 2010	Placing of	Approximately	General working	All proceeds had been
	100,000,000	HK$16	capital, repayment	used as intended as
	new Shares	million	of liabilities and	general working
			future business	capital and for
			development	repayment of
				liabilities of the
				Company
27 October 2010	Subscription of	Approximately	General working	All proceeds had been
	200,000,000	HK$37.5	capital, repayment	used as intended as
	new Shares	million	of liabilities and	general working
			future business	capital and for
			development and	repayment of
			investment	liabilities of the
				Company
16 February 2011	Placing of	Approximately	Future investment	All proceeds had been
	260,000,000	HK$34.9	purpose, general	used as intended as
	new Shares	million	working capital and	general working
			repayment of	capital and for
			liabilities	repayment of
				liabilities of the
				Company
11 May 2011	Subscription of	Approximately	General working	All proceeds had been
	128,000,000	HK$14,236,000	capital of the	used as intended as
	new Shares		Group, repayment	general working
			of liabilities and for	capital and for
			future investment	repayment of
			purpose	liabilities of the
				Company

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			Intended use of
Date of			proceeds as stated in	Actual use of
announcement	Event	Net proceeds	the announcement	proceeds/Remarks
17 June 2011	Grant of the	Approximately	Reimbursing the costs	Not applicable, as no
	equity line of	HK$50	and expenses	option Shares had
	credit for up to	million	incidental to the	been allotted and
	subscription of		potential acquisition	issued up to the
	568,000,000		as referred to in the	date of this
	option Shares		announcement of	announcement
			the Company dated
			17 April 2011
			should such
			potential acquisition
			proceed. If such
			potential acquisition
			does not proceed,
			the net proceeds
			will be applied for
			general working
			capital of the
			Group, repayment
			of liabilities and for
			future investment
			purpose
23 August 2011	Subscription of	Approximately	General working	All proceeds had been
	141,000,000	HK$5.6	capital of the Group	used as intended as
	new Shares	million	and repayment of	general working
			liabilities	capital and for
				repayment of
				liabilities of the
				Company

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IMPLICATIONS UNDER LISTING RULES

As at the date of this announcement, Cordia is interested in approximately 2.5% of the existing issued share capital of the Company. Cordia is a substantial shareholder of Langfeld Enterprises Limited, a non-wholly owned subsidiary of the Company, and Mr. Choi Sungmin, the sole shareholder of Cordia, is a director of SOFOCO, a non-wholly owned subsidiary of the Company. As such, Cordia and Mr. Choi Sungmin are connected persons of the Company. The Subscription constitutes a non-exempted connected transaction for the Company under the Listing Rules by virtue of Rule 14A.31(3) and is subject to reporting and announcement requirements, and approval by the Independent Shareholders at the EGM.

Further, as the applicable percentage ratios (other than the profits ratio and the equity capital ratio) (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Disposal are more than 5% but less than 25% and the Consideration exceeds HK$10,000,000, the Disposal constitutes a discloseable and non-exempted connected transaction on the part of the Company under Rule 14.06 of the Listing Rules and is subject to reporting and announcement requirements, and approval by the Independent Shareholders at the EGM.

An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

EGM AND SHAREHOLDERS’ CIRCULAR

The EGM will be held to consider, and if thought fit, pass the resolutions to approve (i) the Subscription Agreement and the transactions contemplated thereunder, together with the granting of the Specific Mandate; and (ii) the Disposal Agreement and the transactions contemplated thereunder. Voting at the EGM will be conducted by way of poll. Cordia, which holds approximately 2.5% of the existing issued share capital of the Company as at the date of this announcement, and its associates and any other Shareholder who has an interest in the Subscription and/or the Disposal will abstain from voting in respect of the relevant resolutions to be proposed at the EGM.

The Independent Board Committee, comprising all the independent non-executive Directors who have no interest in the Subscription, namely Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Young Yue Wing Alvin, will be formed to advise the Independent Shareholders in respect of the Subscription and the Disposal. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders in this connection.

A circular of the Company containing, among other things, (i) details of the Subscription Agreement and the Disposal Agreement; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Subscription Agreement and the Disposal Agreement; (iii) a letter of advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the Disposal Agreement; and (iv) a notice convening the EGM will be despatched to the Shareholders within 15 business days from the date of this announcement, that is, on or before 30 September 2011, in accordance with Rule 14A.56(10) of the Listing Rules.

If any of the conditions precedent to the completion of the Subscription Agreement and/or the Disposal Agreement is not satisfied, the Subscription and/or the Disposal will lapse and will not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares or any other securities of the Company.

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DEFINITIONS

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

“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Company”	Siberian Mining Group Company Limited (Stock code: 1142), a company
	incorporated in the Cayman Islands with limited liability, the issued shares
	of which are listed on the Main Board of the Stock Exchange
“Completion”	completion of the Disposal Agreement
“Completion Date”	the date on which Completion takes place
“connected person(s)”	has the meaning ascribed to it in the Listing Rules, and “connected” shall be
	construed accordingly
“Consideration”	the consideration of HK$16,000,000 (equivalent to approximately
	US$2,051,282) to be satisfied by Cordia for the acquisition of the Sale Shares
	and the Sale Loans
“Consolidated Share(s)”	ordinary share(s) of par value of HK$0.2 each in the share capital of the
	Company upon the Share Consolidation becoming effective
“Cordia”	Cordia Global Limited, a company incorporated in the British Virgin Islands
	with limited liability, being a Shareholder interested in approximately 2.5%
	of the existing issued share capital of the Company as at the date of this
	announcement, and being the Noteholder and a substantial shareholder of
	Langfeld Enterprises Limited, a non-wholly owned subsidiary of the
	Company
“Discharged Amount”	the outstanding principal amount of US$5,897,436 (equivalent to
	approximately HK$46 million) under the Promissory Notes to be discharged
	upon completion of the Subscription
“Disposal”	the disposal by Grandvest of the Sale Shares and the Sale Loans subject to
	and upon the terms and conditions of the Disposal Agreement
“Disposal Agreement”	a sale and purchase agreement entered into between, among others, Grandvest
	and Cordia on 8 September 2011 in connection with the sale and purchase
	of the Sale Shares and the Sale Loans
“Director(s)”	director(s) of the Company
“EGM”	the extraordinary general meeting of the Company to be convened to approve
	(i) the Subscription Agreement and transactions contemplated thereunder,
	together with the granting of the Specific Mandate; and (ii) the Disposal
	Agreement and the transactions contemplated thereunder

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“First Convertible Note”

• the convertible notes in the principal amount of US$253 million (equivalent to approximately HK$1,973.4 million) issued by the Company to Cordia on 25 May 2009, which had subsequently been replaced by the Promissory Notes and the Restated First Convertible Note, as announced by the Company on 14 December 2009

• “Grand Farm” Grand Farm Development Limited, which is interested in 30% of the issued share capital of SOFOCO

• “Grandvest” Grandvest International Limited, a direct wholly-owned subsidiary of the Company

• “Group” the Company and its subsidiaries

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

• “Independent Board Committee” the independent committee of the Board comprising Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Young Yue Wing Alvin, being all the independent non-executive Directors, which will be formed to consider (i) the terms of the Subscription Agreement and the transactions contemplated thereunder; and (ii) the terms of the Disposal Agreement and the transactions contemplated thereunder

• “Independent Shareholders” Shareholders other than (i) Cordia and its associates; and (ii) any other Shareholders who has an interest in the Subscription and/or the Disposal (as the case may be)

• “Last Trading Day” 8 September 2011, being the last trading day immediately prior to the entering into of the Subscription Agreement

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Noteholder” holder of the Promissory Notes “PRC” the People’s Republic of China, which for the purpose of this announcement, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Promissory Notes” the promissory notes in the principal amount of US$35 million (approximately HK$273.0 million) issued by the Company in favour of Cordia on 23 February 2010, the outstanding principal amount of which is US$26.2 million (approximately HK$204.4 million) as at the date of this announcement

• “Restated First Convertible Note” the convertible note in the principal amount of US$107 million (approximately HK$834.6 million) issued by the Company to Cordia on 23 February 2010, which had been wholly converted into Shares as at the date of this announcement

• “Sale Loans” all amounts owing by the SOFOCO Group to Grandvest as at the Completion Date

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“Sale Shares”

• “Share(s)”

23,334 shares of par value of HK$1.00 each in the capital of SOFOCO, representing 70% of the issued share capital of SOFOCO ordinary share(s) of par value of HK$0.01 each in the issued share capital of the Company

• “Share Consolidation” the proposed consolidation of every 20 Shares into one Consolidated Share as announced by the Company on 19 August 2011

• “Shareholder(s)” person(s) whose name(s) appear in the register of members of the Company as the holder(s) of Share(s)

• “SOFOCO” SOFOCO Development Limited, a company established in Hong Kong and a direct 70% owned subsidiary of Grandvest

• “SOFOCO Group” SOFOCO and SOFOCO (Zhenjiang)

• “SOFOCO (Zhenjiang)” SOFOCO (Zhenjiang) Development Company Limited, a company established in the PRC and a direct wholly owned subsidiary of SOFOCO

• “Specific Mandate” the specific mandate for the allotment and issue of the Subscription Shares, which is subject to approval by the Independent Shareholders voting by way of poll at the EGM

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription” the subscription for the Subscription Shares by Cordia as contemplated under the Subscription Agreement

• “Subscription Agreement” the subscription agreement dated 8 September 2011 and made between the Company and Cordia in connection with the Subscription

• “Subscription Completion Date” the day on which the completion of Subscription takes place, which shall be the immediately next business day after the date on which the last condition precedent to the Subscription Agreement as specified in the section headed “THE SUBSCRIPTION AGREEMENT — Conditions Precedent” in this announcement is fulfilled or such other date as the parties may agree in writing

• “Subscription Shares” 1,150,000,000 Shares (or such equivalent number of new Shares as adjusted after any capital reorganisation of the Company, being 57,500,000 Consolidated Shares upon the Share Consolidation becoming effective) to be subscribed by Cordia according to the Subscription Agreement

• “Subscription Price” the subscription price of HK$0.04 per Subscription Share under the Subscription Agreement (or HK$0.80 per Subscription Share upon the Share Consolidation becoming effective)

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“HK$” or “HK dollars”

Hong Kong dollars, the lawful currency of Hong Kong

“US$” or “US dollars”

United States dollars, the lawful currency of the United States of America

“%”

per cent.

In this announcement, for illustration purposes only, the conversion of US dollars into HK dollars is based on the approximate exchange rate of US$1.00 to HK$7.80.

By Order of the Board SIBERIAN MINING GROUP COMPANY LIMITED Lim Ho Sok Chairman

Hong Kong, 8 September 2011

As at the date of this announcement, the Board consists of two executive Directors, namely Mr. Lim Ho Sok and Mr. Shin Min Chul, one non-executive Director, namely Mr. Pang Ngoi Wah Edward, and three independent non-executive Directors, namely Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Young Yue Wing Alvin.

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