Qiniu Limited — Capital/Financing Update 2012

Aug 17, 2012

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.

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)

PLACING OF CONVERTIBLE BONDS, SECOND SUPPLEMENTAL AGREEMENT TO PLACING AGREEMENT AND ISSUE OF SHARES UNDER NEW PLACING SPECIFIC MANDATE

(1) Second Supplemental Agreement

The Board announces that on 17 August 2012 (after trading hours), the Company and HANI have entered into the Second Supplemental Agreement, which amending and supplementing the Placing Agreement, pursuant to which the Company and HANI conditionally agreed to, inter alia, (i) reduce the aggregate principal amount of the Convertible Bonds to be issued from up to US$70,000,000 (approximately HK$546,000,000) to up to US$30,000,000 (approximately HK$234,000,000); (ii) change the issue of the Convertible Bonds by one tranche only; (iii) extend the Placing Period to 6 December 2012; and (iv) extend the date for fulfillment of conditions precedent to 29 November 2012.

Pursuant to the Second Supplemental Agreement, the Company has appointed the Placing Agent to procure Placees to subscribe for the Convertible Bonds to be issued up to an aggregate principal amount of US$30,000,000 (approximately HK$234,000,000) on a best-effort basis.

The Conversion Shares falling to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds will be allotted and issued under the New Placing Specific Mandate to be sought at the Second EGM. The Convertible Bonds carry the right to convert into Conversion Shares at the conversion price of HK$0.52 per Conversion Share (subject to adjustment). Assuming all the Convertible Bonds are successfully placed by the Placing Agent and full conversion of the Convertible Bonds at the conversion price of HK$0.52 per Conversion Share, 450,000,000 Conversion Shares will fall to be issued to the Bondholders, representing approximately 127.68% of the issued capital of the Company as at the date of this announcement and approximately 56.08% of the issued share capital of the Company as enlarged by the issue and allotment of all the relevant Conversion Shares.

(2) General

Second EGM will be convened for the Shareholders to consider and, if thought fit, to pass the resolutions to approve the grant of the New Placing Specific Mandate and the execution of the Supplemental Agreement and Second Supplemental Agreement. A circular will be despatched by the Company to the Shareholders on or before 30 August 2012, containing further details of the Supplemental Agreement, the Second Supplemental Agreement and a notice of the Second EGM.

As the Placing Agreement as amended and supplemented by the Supplemental Agreement and Second Supplemental Agreement may or may not complete, Shareholders and potential investors of the Company should exercise caution when dealing in the Shares or any other securities of the Company.

* For identification purpose only

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(1) THE SECOND SUPPLEMENTAL AGREEMENT

Reference is made to (A) the announcement dated 6 March 2012 (the “ Announcement ”) of Siberian Mining Group Company Limited (the “ Company ”) in relation to, inter alia, the Placing of Convertible Bonds and issue of Shares under Placing Specific Mandate; (B) the circular of the Company dated 26 April 2012 (the “ Circular ”); and (C) the announcement dated 26 June 2012 (the “ Second Announcement ”) of the Company in relation to the Placing of Convertible Bonds, Supplemental Agreement to Placing Agreement and issue of Shares under New Placing Specific Mandate. Terms used in this announcement shall have the same meanings as those defined in the Announcement, the Circular and the Second Announcement unless otherwise stated herein.

The Board announces that on 17 August 2012 (after trading hours), the Company and HANI have entered into a second supplemental agreement (the “ Second Supplemental Agreement ”), which amending and supplementing the Placing Agreement, to the Placing Agreement pursuant to which the Company and HANI conditionally agreed to, inter alia, (i) reduce the aggregate principal amount of the Convertible Bonds to be issued from up to US$70,000,000 (approximately HK$546,000,000) to up to US$30,000,000 (approximately HK$234,000,000); (ii) change the issue of the Convertible Bonds by one tranche only; (iii) extend the Placing Period to 6 December 2012; and (iv) extend the date for fulfillment of conditions precedent to 29 November 2012. The Second Supplemental Agreement is conditional upon the Shareholders passing at an extraordinary general meeting of the Company the resolutions approving and ratifying the execution of the Second Supplemental Agreement.

Pursuant to the Second Supplemental Agreement, the Company has appointed the Placing Agent to procure Placees to subscribe for the Convertible Bonds to be issued up to an aggregate principal amount of US$30,000,000 (approximately HK$234,000,000) on a best-effort basis.

Conditions of the Placing

The obligations of HANI under the Placing Agreement as supplemented by the Supplemental Agreement and Second Supplemental Agreement in respect of the placing of Convertible Bonds shall be conditional upon the following:

• (a) the granting of the listing of and permission to deal in, up to 450,000,000 Shares falling to be issued on the exercise of the Conversion Rights attached to the Convertible Bonds by the Listing Committee of the Stock Exchange; and

• (b) the Shareholders passing at an extraordinary general meeting of the Company the resolutions approving the issue of the Convertible Bonds and the allotment and issue of up to 450,000,000 Shares falling to be issued on the exercise of the Conversion Rights attached to the Convertible Bonds.

If any of the conditions precedent has not been fulfilled (and none of the conditions can be waived) at or before 5:00 p.m. (Hong Kong time) on 29 November 2012 or such later time or date as may be agreed between HANI and the Company in writing, the Company may at any time thereafter, terminate HANI’s obligations in respect of the Convertible Bonds under the Placing Agreement by notice in writing to HANI whereupon the Placing Agreement shall lapse and the Company and HANI shall not be bound to proceed with the Placing except for any antecedent breaches of the Placing Agreement.

The Directors consider the terms and conditions of the Second Supplemental Agreement are fair and reasonable based on the current market conditions and in the interests of the Company and Shareholders as a whole.

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New Placing Specific Mandate to issue the Conversion Shares

The Conversion Shares falling to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds will be allotted and issued under a specific mandate (the “ New Placing Specific Mandate ”), to be sought from the Shareholders at the second extraordinary general meeting (the “ Second EGM ”), to (i) issue the Convertible Bonds by one tranche only and (ii) allot and issue the new Shares which may fall to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds. The Convertible Bonds carry the right to convert into Conversion Shares at the conversion price of HK$0.52 per Conversion Share (subject to adjustment).

Assuming all the Convertible Bonds are successfully placed by the Placing Agent and full conversion of the Convertible Bonds at the conversion price of HK$0.52 per Conversion Share, 450,000,000 Conversion Shares will fall to be issued to the Bondholders, representing approximately 127.68% of the issued capital of the Company as at the date of this announcement and approximately 56.08% of the issued share capital of the Company as enlarged by the issue and allotment of all the relevant Conversion Shares.

The Principal Terms of the Convertible Bonds remain the same as disclosed in the Circular.

Reasons for entering into the Second Supplemental Agreement and use of proceeds

The reasons for entering into the Second Supplemental Agreement are as follows:

• (i) the global market sentiments have been changing and fluctuating and HANI requests more time for it to solicit good quality investors; and

• (ii) as no specific mining asset has been identified yet, there is no immediate need for the Company to raise the full amount of up to US$70,000,000 (approximately HK$546,000,000).

Use of Proceeds

Assuming that the Second Supplemental Agreement is approved by the Shareholders and the entire aggregate principal amount of US$30,000,000 (approximately HK$234,000,000) of the Convertible Bonds are successfully placed by HANI, the total gross proceeds will amount to US$30,000,000 (approximately HK$234,000,000). The net proceeds (after deducting the fees and expenses involved in the Placing) will be approximately US$29,801,900 (approximately HK$232,454,820).

The Group intends to apply the aforesaid net proceeds of the Convertible Bonds as follows:

1. Approximately US$10,000,000 (approximately HK$78,000,000) for financing the exploration drillings and geological and hydrological surveys of Lot 2 of the coal mines in Russia.

2. Approximately US$1,923,000 (approximately HK$15,000,000) for repayment of an existing loan of the Company due to an independent third party.

3. Approximately US$13,500,000 (approximately HK$105,300,000) for repayment of existing liabilities of the Group owed to Cordia, namely:

4. (a) shareholder’s loans owed to Cordia in the sum of approximately US$2,000,000 (approximately HK$15,600,000) owed by Langfeld, which represented the advances to Langfeld from Cordia that presently holds 10% equity interest in Langfeld;

5. (b) promissory notes in the principal amount of US$9,251,000 (approximately HK$72,157,800) to be settled at US$8,000,000 (approximately HK$62,400,000) issued by the Company in favour of Cordia, the entire principal amount is outstanding as at the date of this announcement; and

6. (c) loans owed to Cordia of total amount of approximately US$3,500,000 (approximately HK$27,300,000) owed by the Company, which represented advances by Cordia to the Company for the purposes of working capital financing.

7. Approximately US$4,378,900 (approximately HK$34,155,420), representing the balancing amount, for general working capital purposes.

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Since the Placing will be on a best-effort basis, there is no guarantee that the proposed total of US$30,000,000 (approximately HK$234,000,000) of the Convertible Bonds can be fully subscribed. If the final amount of the Convertible Bonds falls short of the proposed US$30,000,000 (approximately HK$234,000,000), the aforesaid net proceeds of the Convertible Bonds will first be applied to item 1 and then to item 2 above. Any remaining amount will be applied to items 3 and 4 above proportionately.

In page 23 of the Circular, the Company has stated that it will allocate approximately US$1,500,000 (approximately HK$11,700,000) out of the use of proceeds of the Convertible Bonds for payment of settlement of Russian legal cases with two former shareholders of a Russian subsidiary of the Group. It has also stated in the Circular that the net proceeds will first be applied to payment of settlement of Russian legal cases with two former shareholders of a Russian subsidiary of the Group as aforesaid and then item 1 above. As the time for completion of the Conversion Bonds is not certain for the time being, the Company has already used internal finance to make the payment of settlement of Russian legal cases instead of fund from the use of proceeds. As there is no specific mining asset identified by the Company, the use of proceeds will not be provided for item 5 as stated in the Circular.

As of the date of this announcement, to facilitate an unsecured loan of HK$15 million to the Company by an independent third party (item 2 above), Cordia has pledged as security to the lender its promissory notes issued by the Company (item 3(b) above) for an amount of approximately US$7,251,000 (approximately HK$56,558,000) and its loans due by the Company (item 3(c) above) for an amount of US$2,000,000 (approximately HK$15,600,000).

Shareholding Structure of the Company

As at the date of this announcement, the Company has 352,442,763 Shares in issue. The shareholding structure of the Company immediately before completion of the issue of the Conversion Shares and immediately after completion of the issue of the Conversion Shares will be as follows:

Shareholders Goldwyn Management Limited (Note 1) Pang Ngoi Wah Edward, a non-executive Director Sub-total Public Shareholders: The Placees Income Plus Investment Limited Master Impact Inc. Skyline Merit Limited Other public Shareholders Total	Existing shareholding (as at the date of this announcement) Number of Approximate Shares % 11,400,000 3.24% 175,000 0.05% 11,575,000 3.29% — — 20,678,685 5.87% 62,036,055 17.60% 41,357,370 11.73% 216,795,653 61.51% 352,442,763 100.00%	Shareholding immediately after the Placing, the issue of Conversion Shares, assuming the conversion rights attaching to the Convertible Bonds are exercised in full at the Conversion Price Number of Approximate Shares % 11,400,000 1.42% 175,000 0.02% 11,575,000 1.44% 450,000,000 56.08% 20,678,685 2.58% 62,036,055 7.73% 41,357,370 5.15% 216,795,653 27.02% 802,442,763 100.00%

Note:

1. Goldwyn Management Limited is wholly and beneficially owned by Mr. Lim Ho Sok, an executive Director and the Chairman of the Company.

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FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE-MONTH PERIOD

The Company has conducted the following fund raising activities in the past 12 months immediately preceding the date of this announcement:

			Intended use
			of proceeds
Date of			as stated in the	Actual use of
announcement	Event	Net proceeds	announcement	Proceeds/Remark
23 August 2011	Subscription of	Approximately	General working	All proceeds had
	141,000,000 new	HK$5.6 million	capital of the	been used as
	Shares		Group and	intended as
			repayment of	general working
			liabilities	capital in the
				amount of
				approximately
				HK$2.1 million
				and for
				repayment of
				liabilities of the
				Company in the
				amount of
				approximately
				HK$3.5 million
8 September 2011	Subscription of	Approximately	Setting off an	All proceeds had
	1,150,000,000	HK$45.2 million	equivalent	been used as
	new Shares		outstanding	intended for
			principal amount	setting off an
			of the promissory	equivalent
			notes due by the	outstanding
			Company	principal amount
				of approximately
				HK$46.0 million
				of the promissory
				notes due by the
				Company
11 January 2012	Subscription of	Approximately	General working	All proceeds had
	21,300,000 new	HK$4.9 million	capital of the	been used as
	Shares under		Group and	intended as
	general mandate		repayment of	general working
			liabilities	capital of the
				Group in the
				amount of
				approximately
				HK$2 million
				and for
				repayment of
				liabilities of the
				Company in the
				amount of
				approximately
				HK$2.9 million.
6 March 2012	Subscription of	Approximately	Full and final	Full and final
	124,072,110	US$8.95 million	discharge of	discharge of
	new Shares	(approximately	the Promissory	the Promissory
		HK$69.81 million)	Notes	Notes

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(2) GENERAL

The Second EGM will be convened for the Shareholders to consider and, if thought fit, to pass the resolutions to approve and confirm the grant of the New Placing Specific Mandate and the execution of Supplemental Agreement and the Second Supplemental Agreement. A circular will be despatched by the Company to the Shareholders on or before 30 August 2012, containing further details of the Supplemental Agreement, the Second Supplemental Agreement and a notice of the Second EGM.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, save as aforesaid, no Director or Shareholder has a material interest in the Placing and the issue of Convertible Bonds. Accordingly, no Shareholder is required to abstain from voting at the Second EGM in respect of the resolutions relating to the Placing and the issue of Convertible Bonds. Voting at the Second EGM will be conducted by way of poll.

As the Placing Agreement may or may not complete, Shareholders and potential investors of the Company should exercise caution when dealing in the Shares or any other securities of the Company.

By order of the Board Siberian Mining Group Company Limited Lim Ho Sok Chairman

Hong Kong, 17 August 2012

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

This announcement will remain on the website of the Stock Exchange at www.hkexnews.hk on the “Latest Listed Company Information” page for at least 7 days from the date of its posting and on the Company’s website at www.ilinkfin.net/siberian_mining.

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