Qiniu Limited — Capital/Financing Update 2018

Aug 13, 2018

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.

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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)

PROPOSED CAPITAL REORGANISATION AND PROPOSED CHANGE IN BOARD LOT SIZE

PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which will involve the Share Consolidation, the Capital Reduction and the Share Sub-division, details of which are as follows:

(1) Share Consolidation

Every 20 issued and unissued Existing Shares of nominal value of HK$0.20 each in the share capital of the Company will be consolidated into 1 Consolidated Share of nominal value of HK$4.00 each and the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be rounded down to a whole number by cancelling any fraction in the issued share capital of the Company which may arise from the Share Consolidation.

(2) Capital Reduction

The Capital Reduction will be effected immediately upon the Share Consolidation becoming effective, pursuant to which the nominal value of each of the then issued Consolidated Shares will be reduced from HK$4.00 to HK$0.40 by cancelling the paid-up capital of the Company to the extent of HK$3.60 on each of the then issued Consolidated Shares, the credits arising from (a) such reduction of the paid up capital; and (b) the cancellation of any fractional Consolidated Share in the issued share capital of the Company arising from the Share Consolidation, which together, amount to approximately HK$217,525,594, will be applied towards cancelling the accumulated losses of the Company as at the effective date of the Capital Reduction.

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(3) Share Sub-division

Immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of nominal value of HK$4.00 each will be sub-divided into 10 New Shares of nominal value of HK$0.40 each.

WARNING

Shareholders should take note that the Capital Reorganisation is conditional upon satisfaction of conditions set out in the paragraph headed “Conditions of the Capital Reorganisation”. Therefore, the Capital Reorganisation may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Existing Shares, and if they are in any doubt about their position, they should consult their professional advisers.

PROPOSED CHANGE IN BOARD LOT SIZE

The Board also proposes to change the board lot size for trading in the Shares from 10,000 Existing Shares to 2,000 New Shares subject to and upon the Capital Reorganisation becoming effective.

GENERAL

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Capital Reorganisation. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholders are required to abstain from voting on the resolutions to be proposed at the EGM. A circular containing, among other things, details of the Capital Reorganisation and a notice convening the EGM will be despatched to the Shareholders as soon as practicable.

PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which will involve the Share Consolidation, the Capital Reduction and the Share Sub-division, details of which are as follows:

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(1) Share Consolidation

Every 20 issued and unissued Existing Shares of nominal value of HK$0.20 each in the share capital of the Company will be consolidated into 1 Consolidated Share of nominal value of HK$4.00 each and the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be rounded down to a whole number by cancelling any fraction in the issued share capital of the Company which may arise from the Share Consolidation.

(2) Capital Reduction

The Capital Reduction will be effected immediately upon the Share Consolidation becoming effective, pursuant to which the nominal value of each of the then issued Consolidated Shares will be reduced from HK$4.00 to HK$0.40 by cancelling the paid-up capital of the Company to the extent of HK$3.60 on each of the then issued Consolidated Shares, the credits arising from (a) such reduction of the paid up capital; and (b) the cancellation of any fractional Consolidated Share in the issued share capital of the Company arising from the Share Consolidation, which together, amount to approximately HK$217,525,594, will be applied towards cancelling the accumulated losses of the Company as at the effective date of the Capital Reduction.

(3) Share Sub-division

Immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of nominal value of HK$4.00 each will be sub-divided into 10 New Shares of nominal value of HK$0.40 each.

Effects of the Capital Reorganisation

As at the date of this announcement, the authorised share capital of the Company is HK$1,000,000,000 divided into 5,000,000,000 Existing Shares of nominal value of HK$0.20 each, of which 1,208,475,523 Existing Shares have been issued and fully paid or credited as fully paid. Assuming there will be no change in the issued share capital of the Company from the date of this announcement until the effective date of the Capital Reorganisation, upon the Capital Reorganisation becoming effective, the authorised share capital of the Company will be HK$1,000,000,000 divided into 2,500,000,000 New Shares of nominal value of HK$0.40 each, of which 60,423,776 New Shares will be in issue and the aggregate nominal value of the issued share capital of the Company will be HK$24,169,510.40.

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Based on the 1,208,475,523 Existing Shares in issue as at the date of this announcement, a credit of approximately HK$217,525,594 will arise as a result of the Capital Reorganisation. It is proposed that the total credit arising in the accounts of the Company from the Capital Reorganisation will be applied towards cancelling the accumulated losses of the Company upon the Capital Reorganisation becoming effective. Such credits will be transferred to the capital reduction reserve account of the Company or other reserve account of the Company which may be utilised by the Board in any manner as the Board may deem fit and as may be permitted under the applicable laws.

Shareholders and potential investors should note that the credits arising in the books from the Capital Reorganisation will be subject to changes depending on the number of the Existing Shares in issue immediately prior to the Capital Reorganisation becoming effective.

Assuming no further Existing Shares will be issued or repurchased prior to the effective date of the Capital Reorganisation, the effect of the Capital Reorganisation and the share capital structure of the Company is summarised below:

	As at the date of this	Immediately after the
	announcement	Capital Reorganisation
Nominal value	HK$0.20	HK$0.40
	per Existing Share	per New Share
Authorised share capital	HK$1,000,000,000.00	HK$1,000,000,000.00
Number of authorised shares	5,000,000,000	2,500,000,000
	Existing Shares	New Shares
Number of issued shares	1,208,475,523	60,423,776
	Existing Shares	New Shares
Issued share capital	HK$241,695,104.60	HK$24,169,510.40

Other than the relevant expenses, including but not limited to professional fees and printing charges to be incurred, the implementation of the Capital Reorganisation will have no material effect on the consolidated net asset value of the Group, nor will it alter the underlying assets, business, operations, management or financial position of the Company or the proportionate interests of the Shareholders, save for any fractional New Shares to which Shareholders may be entitled. The Board believes that the Capital Reorganisation will not have any material adverse effect on the financial position of the Group.

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Status of the New Shares

All New Shares in issue immediately following the Capital Reorganisation becoming effective will rank pari passu in all respects with each other and the Capital Reorganisation will not result in any change in the relative rights of the Shareholders.

Fractional entitlement to New Shares

Any fractional Shares arising from the Share Consolidation will not be allocated to the Shareholders. Any fractional entitlement to the Consolidated Shares will be aggregated, sold and retained for the benefit of the Company.

Conditions of the Capital Reorganisation

The Capital Reorganisation is conditional upon:

• (1) the passing of the necessary resolution(s) by the Shareholders to approve the Capital Reorganisation at the EGM;

• (2) an order being made by the Court confirming the Capital Reorganisation;

• (3) the registration by the Registrar of Companies in the Cayman Islands of a copy of the Court order and the minutes approved by the Court pursuant to the Companies Law;

• (4) compliance with any conditions which the Court may impose;

• (5) where applicable, the obtaining of necessary consent from majority of the creditors of the Company;

• (6) the Stock Exchange granting the listing of, and the permission to deal in, the New Shares arising from the Capital Reorganisation and the New Shares which may fall to be allotted and issued upon exercise of the share options to be granted under the Existing Share Option Scheme and upon the exercise of the conversion rights under the Convertible Note;

• (7) compliance with the relevant procedures and requirements under the laws of Cayman Islands and the Listing Rules to effect the Capital Reorganisation; and

• (8) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required in respect of the Capital Reorganisation.

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Assuming the above conditions are fulfilled, the Capital Reorganisation is expected to become effective on the next Business Day after the date of passing of the relevant resolution(s) approving the Capital Reorganisation at the EGM.

Listing and dealings

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the New Shares arising from the Capital Reorganisation and the New Shares which may fall to be allotted and issued upon the exercise of the share options to be granted under the Existing Share Option Scheme and upon the exercise of the conversion rights under the Convertible Note.

Subject to the granting of listing of, and permission to deal in, the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

The New Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. All necessary arrangements will be made for the New Shares to be admitted into CCASS.

Reasons for the Capital Reorganisation

The main purpose of the Capital Reorganisation is to prepare for subsequent potential capital fund raising. Given the high gearing position of the Group, coupled with the audited net liabilities of the Group amounting to approximately HK$909.0 million as at 31 March 2018, the Group has a pressing need of capital fund raising, which will help improve the adverse financial position of the Group without further deteriorating the gearing of the Group.

The Board found it extremely difficult to negotiate with any potential investors given that the current market price of the shares of the Company is substantially lower than the nominal value and the fact that the Company is not able to issue new shares below nominal value. In light of the above-mentioned circumstances, the Company is continuously exploring fund raising opportunities. The Company has been in discussion with potential investors, including private equities, fund partnership and financial institutions, whom are Korean based which were introduced by a Director who had previous business relationship with them and to the best knowledge of the Company, are independent third parties.

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Having considered (i) the expected funds to be received from its operation, which mainly included revenue from trading of mineral resources, commodities and other trading of approximately HK$3.0 million; (ii) the expected funds to be used for its operation, including but not limited to payments of salaries and directors fees, office rentals, legal and professional fees, other office administrative expenses of approximately HK$23.6 million; (iii) the expected capital expenditures on pre-production development for Russia coal mines of the Lot 2 open pit mining for the coming twelve months of approximately HK$17.7 million, which included design and surveying of mines, preparation of construction site, environmental review work; and that for Lot 2 underground mining of approximately HK$0.5 million which involves mainly the TEO condition preparation; and (iv) repayment of liabilities, debts and borrowings, related interests and exposure of potential repayment obligation of approximately HK$493.9 million; it is expected that the Company will need at least HK$532.7 million to satisfy the abovementioned capital requirement in the coming twelve months. The Company intends to raise such funds by way of open offer and/or share placement, which depends on the then market situation and the commercial negotiations with potential investors. It is expected that the issue of the new Shares under the fund raising exercise will be at a discount to the prevailing market price of the Shares which may result in dilution to the shareholding interests of the Shareholders in the Company. No concrete plan has been contemplated as of the date of this announcement.

Based on and with reference to (i) the TEO report of 2014 (the “ 2014 Report ”) prepared by a Russian mining expert company for development of Lot 2 open pit mining; and (ii) the technical report prepared by a mining consultancy firm of August 2016 (the “ 2016 Report ”), after the coming twelve months and up to the projected commencement of the coal production by open pit mining in certain area of Lot 2 of Russia coal mines in around July 2020, it is expected that the additional capital expenditure will amount to approximately HK$684.4 million (approximately RUB5,481.8 million), which will involve land purchase and completion for open pit area of approximately HK$24.8 million, mine infrastructure facilities construction and railway connection and loading point of approximately HK$15.7 million, preparation of the construction site, which includes motor road diversion and top soil stripping and basic infrastructure for mining operations, such as power facilities, external networks, temporary buildings and mining and transport equipment purchase costs of approximately HK$581.5 million, and construction of washing plant of approximately HK$62.4 million. The remaining estimated capital expenditures of the open pit mining in Lot 2 of Russia coal mines after commencement of the coal production from around August 2020 to 2029 will amount to approximately HK$627.7 million (approximately RUB 5,027 million), which will involve motor road diversion and people relocation, purchase and replacement of equipment, other various works and costs and contingencies. The 2014 Report, which included the various details such as production model and schedules, capital expenditure plan, estimated costs, pre-feasibility study, was approved by the Federal Agency for Subsoil Usage of Russia

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Federation (called “ ROSNEDRA ”) in 2016. Moreover, coal reserves of 14.3 million tonnes as mentioned in the 2014 Report was officially registered in GKZ (which is the State Committee of Reserves under the Russian Federation Ministry of National Resources) according to the protocol of approval obtained in August 2015. Thus, the Company made references to the 2016 Report, and has taken into account of the recommendation as stated in the 2016 Report of excluding the development coal (oxidized coal) from the total production in the modelling (which was adopted in recent valuation model), and also the development coal was reclassified as waste dump bearing the cost (which was also adopted in the model). It is the preliminary plan of the Company to finance the estimated capital expenditures of the Lot 2 open pit mining by contemplating various fund raising plans, including but not limited to project financing and/or open offer with share placement, which will depend on the then market situation and the commercial negotiations with potential investors. It is expected by the Group that the commencement of coal production of underground mining (i.e. Lot 1, Lot 1 Extension and part of Lot 2 on an integrated basis) will be after the commencement of coal production of Lot 2 open pit mining in 2020. The Company is in course of finalizing the detailed development plan of underground mining. Further announcement(s) will be made as and when appropriate in relation to any material new development.

As stated in the annual results announcement of the Group for the year ended 31 March 2018, the Group entered into various loan facilities agreements with certain independent third parties. The Company was introduced to these parties when exploring for funding supports as they had previous business relationship with certain executive Directors of the Company. The loan facilities will provide facilities to the Group of up to US$105,860,683 (approximately HK$825,713,000) for the 18 months period commencing on 5 June 2018 and 29 June 2018 (as the case may be). These lenders include investment partnership companies in Korea and a listed company on Korea Exchange, which is engaging in IT businesses, and having interest in investment in development and trading of natural resources. Such loan facilities were for the purpose of providing financial backup in case the Company is in urgent need for funds in meeting working capital requirement or payment obligation. Given the high gearing position of the Company and the substantial financial costs, it is considered that equity financing will be a reasonable alternative for improvement of the financial position of the Group. Thus, it is the intention of the Company to satisfy the abovementioned capital requirement in the coming 12 months by utilising the proposed fund to be raised by way of open offer and/or share placement instead of drawing down borrowings from the said loan facilities unless there will be delays in the proposed Capital Reorganisation and fund raising exercise.

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The Board believes that the Capital Reorganisation will provide greater flexibility to the Company in pricing any future capital raising exercise. The Share Consolidation will increase the trading price per board lot of the New Shares and reduce the overall transaction and handling costs of dealings in the New Shares, which in turn enhance the attractiveness of the New Shares. The Capital Reduction and the Share Sub-division will keep the nominal value of the Shares at a lower level that can facilitate the Company’s future fund raising activities by issuance of new Shares. Accordingly, the Board is of the view that the Capital Reorganisation is beneficial to and in the interests of the Company and its Shareholders as a whole.

In addition, the credit arising from the Capital Reduction will enable the Company to partially offset the accumulated losses of the Company. As a result of such offset of accumulated losses, the Company’s capital and reserves will more closely reflect the available net assets of the Company and would give the Company a capital structure that should, subject to performance and availability of distributable reserves, permit the payment of dividends as and when the Directors consider it appropriate in the future.

Based on the foregoing and barring unforeseen circumstances, the Company will not conduct corporate actions, i.e. share consolidation, share sub-division, capital reduction, change in board lot size and change in authorised share capital in the 12 months immediately after the completion of the Capital Reorganisation.

Exchange of share certificates

Subject to the Capital Reorganisation becoming effective, Shareholders may, on or after Thursday, 27 September 2018 until Tuesday, 6 November 2018 (both dates inclusive), submit share certificates for the Existing Shares to the Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong at the expense of the Company, for new share certificates of the New Shares (on the basis of 20 Existing Shares for 1 New Share). Thereafter, certificates of Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Existing Shares submitted for cancellation or each new share certificate issued for the New Shares, whichever the number of certificates cancelled/issued is higher. After 4:00 p.m. on Friday, 2 November 2018, existing share certificates for the Existing Shares will only remain effective as documents of title and may be exchanged for certificates for New Shares at any time but will not be accepted for delivery, trading and settlement purposes.

The colour of the new share certificates for the New Shares will be announced by the Company in due course.

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PROPOSED CHANGE IN BOARD LOT SIZE

At as the date of this announcement, the Existing Shares are traded in board lots of 10,000 Shares. The Board also proposes to change the board lot size for trading in the Shares from 10,000 Existing Shares to 2,000 New Shares subject to and upon the Capital Reorganisation becoming effective. Based on the closing price of HK$0.100 per Share on the date of this announcement and assuming that the Capital Reorganisation and the Change in Board Lot Size have become effective, the value of each board lot of New Shares would be HK$4,000. The Board also considers that the proposed change in board lot size from 10,000 Existing Shares to 2,000 New Shares will reduce value per board lot of the New Shares after the Capital Reorganisation and therefore may enhance the liquidity of the New Shares.

ARRANGEMENT FOR MATCHING SERVICE FOR ODD LOTS

In order to alleviate the difficulties arising from the existence of odd lots of New Shares as a result of the Capital Reorganisation, the Company will appoint an agent to arrange for matching service on a best efforts basis regarding the sale and purchase of odd lots of New Shares from Friday, 12 October 2018 to Friday, 2 November 2018 (both dates inclusive). Shareholders should note that matching of the sale and purchase of odd lots of New Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lots arrangement is recommended to consult his/her/its own professional advisers. Further details in respect of the odd lots trading arrangement will be set out in the circular to be despatched to the Shareholders.

EXPECTED TIMETABLE

The expected timetable for the implementation of the Capital Reorganisation and the Change in Board Lot Size is set out below:

Event

Time and date

Expected date of despatch of circular with

notice of the EGM and form of proxy

Monday, 3 September 2018

Latest time for lodging completed transfer

• forms accompanied by the relevant Share

certificates with the Hong Kong branch

• share registrar of the Company, Tricor Tengis

• Limited to be qualified for attendance

at the EGM

4:30 p.m. on Wednesday, 19 September 2018

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Latest time and date for lodging forms of proxy for the EGM

11:00 a.m. on Monday, 24 September 2018

Closure of the register of members of the Company to determine the qualification for attendance and voting at the EGM (both dates inclusive)

Thursday, 20 September 2018 to Wednesday, 26 September 2018

Expected time and date of the EGM

11:00 a.m. on Wednesday, 26 September 2018

Publication of announcement of poll results of the EGM

Wednesday, 26 September 2018

The following events are conditional on the fulfilment of the conditions for the implementation of the Capital Reorganisation:

Expected effective date of the Capital Reorganisation

Thursday, 27 September 2018

First day for free exchange of existing share certificates for share certificates of the New Shares

Thursday, 27 September 2018

Commencement of dealings in the New Shares

9:00 a.m. on Thursday, 27 September 2018

Original counter for trading in the Existing Shares in board lots of 10,000 Existing Shares (in the form of existing share certificates) temporarily closes

9:00 a.m. on Thursday, 27 September 2018

Temporary counter for trading in the New Shares in board lots of 500 New Shares (in the form of existing share certificates) opens

9:00 a.m. on Thursday, 27 September 2018

Original counter for trading in the New Shares in board lots of 2,000 New Shares (in the form of new share certificates) re-opens

9:00 a.m. on Friday, 12 October 2018

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Parallel trading in the New Shares (in the form of
new share certifcates in new board lots of 2,000
New Shares and existing share certifcates in
board lots of 500 New Shares) commences	9:00 a.m. on Friday,
	12 October 2018
Designated broker starts to stand in the market to provide
matching services for odd lots of the New Shares	9:00 a.m. on Friday,
	12 October 2018
Temporary counter for trading in the New Shares in
board lots of 500 New Shares (in the form of existing
share certifcates) closes	4:00 p.m. on Friday,
	2 November 2018
Parallel trading in the New Shares (in the form of new
share certifcates in new board lots of 2,000 New Shares
and existing share certifcates in board lots of
500 New Shares) ends	4:00 p.m. on Friday,
	2 November 2018
Designated broker ceases to provide matching services
for odd lots of the New Shares	4:00 p.m. on Friday,
	2 November 2018
Last day for free exchange of existing share certifcates for
the share certifcates of the New Shares	4:00 p.m. on Tuesday,
	6 November 2018

All times and dates specified in the timetable above refer to Hong Kong times and dates.

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This timetable is indicative only and any subsequent changes to the expected timetable will be announced by the Company.

WARNING

Shareholders should take note that the Capital Reorganisation is conditional upon satisfaction of conditions set out in the paragraph headed “Conditions of the Capital Reorganisation”. Therefore, the Capital Reorganisation may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Existing Shares, and if they are in any doubt about their position, they should consult their professional advisers.

ADJUSTMENTS IN RELATION TO OTHER SECURITIES OF THE COMPANY

As at the date of this announcement, Convertible Note in an aggregate principal amount of US$400,390,000 (equivalent to approximately HK$3,123,042,000) remained outstanding which entitles the holder(s) thereof to convert to an aggregate of 65,063,375 Conversion Shares upon exercise of the conversion rights attaching to the Convertible Note at an initial conversion price of HK$48.00 per Conversion Share (subject to adjustment(s)).

Upon the Capital Reorganisation becoming effective, adjustments may need to be made to the conversion price and other rights (if any) pursuant to the terms of the Convertible Note if necessary. The Company will make further announcement(s) about the adjustment(s) in due course if and when appropriate.

Save as disclosed above, as at the date of this announcement, the Company has no other outstanding options, warrants or other securities in issue which are convertible into or giving rights to subscribe for, convert or exchange into, any Existing Shares or New Shares, as the case may be.

GENERAL

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Capital Reorganisation. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, no Shareholders are required to abstain from voting on the resolutions to be proposed at the EGM. A circular containing, among other things, details of the Capital Reorganisation, the Change in Board Lot Size and a notice convening the EGM will be despatched to the Shareholders as soon as practicable.

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DEFINITIONS

Terms or expressions used in this announcement shall, unless the context otherwise requires, have the meanings ascribed to them as below:

“Board” the board of Directors “Business Day” a day (other than public holiday, a Saturday or Sunday and any day on which a tropical cyclone warning no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a “black” rainstorm warning signal is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which banks in Hong Kong are generally open for business

• “Capital Reduction” the proposed reduction of the nominal value of each of the then issued Consolidated Shares from HK$4.00 to HK$0.40 by cancelling the paid-up capital to the extent of HK$3.60 on each of the then issued Consolidated Shares

• “Capital Reorganisation” the proposed reorganisation of the share capital of the Company involving the Share Consolidation, the Capital Reduction and the Share Sub-division

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

• “Change in Board Lot Size” the proposed change in board lot size for trading in the Shares from 10,000 Existing Shares to 2,000 New Shares upon the Capital Reorganisation becoming effective

• “Companies Law” the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands as modified from time to time

• “Company”

• Siberian Mining Group Company Limited, a company incorporated in the Cayman Islands with limited liability and whose shares are listed on the Main Board of the Stock Exchange

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“Court”

The Grand Court of the Cayman Islands

• “Consolidated Share(s)” ordinary share(s) of nominal value of HK$4.00 each in the share capital of the Company immediately after the Share Consolidation but before the Capital Reduction and the Share Sub-division becoming effective

• “Convertible Note” the zero coupon convertible note in an aggregate outstanding principal amount of US$400,390,000 (equivalent to approximately HK$3,123,042,000) issued by the Company on 3 April 2013

• “Conversion Share(s)” the number of Share(s) which may fall to be allotted and issued upon the exercise of the conversion rights attached to the Convertible Note

• “Director(s)” the director(s) of the Company “EGM” the extraordinary general meeting of the Company to be convened and held for the Shareholders to consider and, if thought fit, approve the Capital Reorganisation

• “Existing Share(s)” ordinary share(s) of nominal value of HK$0.20 each in the share capital of the Company prior to the Capital Reorganisation becoming effective

• “Existing Share Option Scheme” the share option scheme of the Company adopted on 31 August 2012

• “Group” the Company and its subsidiaries, from time to time

• “HKSCC” Hong Kong Securities Clearing Company Limited

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

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

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“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange “New Share(s)” the ordinary share(s) of nominal value of HK$0.40 each in the share capital of the Company immediately upon the Capital Reorganisation becoming effective “Registrar” the branch share registrar and transfer office of the Company in Hong Kong, being Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong “RUB” Russia Rubles, the lawful currency of the Russian Federation “Share(s)” the Existing Share(s), the Consolidated Share(s) and/or the New Share(s), as the case may be “Share Consolidation” the proposed consolidation of every 20 issued and unissued Existing Shares of nominal value of HK$0.20 each in the share capital of the Company into 1 Consolidated Share of nominal value of HK$4.00 each “Share Sub-division” the proposed sub-division of each of the authorised but unissued Consolidated Shares of nominal value of HK$4.00 each into 10 New Shares of nominal value of HK$0.40 each “Shareholder(s)” the holder(s) of the Existing Shares, the Consolidated Shares or the New Shares, as the case may be

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“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“US$”

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

“%”

per cent

By Order of the Board Siberian Mining Group Company Limited Jo Sang Hee Chairman

Hong Kong, 13 August 2018

As at the date of this announcement, the Board consists of Mr. Jo Sang Hee and Mr. Ahn Kibaek as executive directors, and Ms. Chen Dai, Mr. Kwok Kim Hung Eddie and Mr. Lee Sungwoo 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 http://siberian.todayir.com.

* For identification purpose only

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