Qiniu Limited — Proxy Solicitation & Information Statement 2012

Oct 3, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Siberian Mining Group Company Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) take no responsibility for the contents of this circular, 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 circular.

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

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) PLACING OF CONVERTIBLE BONDS, SUPPLEMENTAL AGREEMENT AND SECOND SUPPLEMENTAL AGREEMENT

TO PLACING AGREEMENT, ISSUE OF SHARES UNDER NEW PLACING SPECIFIC MANDATE AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening an extraordinary general meeting of Siberian Mining Group Company Limited to be held at 3:00 p.m. on Friday, 19 October 2012 at The Jasmine Room of Ramada Hong Kong Hotel at 3rd Floor, 308 Des Voeux Road West, Hong Kong is set out on pages 22 to 23 of this circular. Whether or not you intend to attend the meeting, you are advised to complete the form of proxy enclosed in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event no less than 48 hours before the time appointed for holding such meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) should you so wish.

This circular 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 the Company’s website at http://siberian.todayir.com.

4 October 2012

* For identification purpose only

CONTENTS

	Page
Definitions......................................................................................................................................	1
Letter from the Board..................................................................................................................	5
Notice of Second EGM.................................................................................................................	22

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “associate(s)” has the meaning ascribed to it under the Listing Rules

• “Board”

the board of Directors

• “Bondholder(s)” holder(s) of the Convertible Bonds

• “Business Day”

• a day (excluding Saturday, 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 licensed banks are generally open for business in Hong Kong

• “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

• “connected person(s)”

• has the meaning ascribed to it in the Listing Rules, and “connected” shall be construed accordingly

• “Convertible Bonds”

• convertible bonds of up to an aggregate principal amount of US$30,000,000 (approximately HK$234,000,000), to be issued in one tranche, by the Company, in the denomination and integral amounts of US$100,000 (approximately HK$780,000), as requested by the Placees, pursuant to the Placing Agreement as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement

• “Conversion Price”

• conversion price of HK$0.52 per Conversion Share

• “Conversion Right”

• the conversion right attached to the Convertible Bonds as stated in the Instrument

• “Conversion Shares”

• the new Shares which may fall to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds

• “Cordia”

• Cordia Global Limited, a company wholly and beneficially owned by Mr. Choi Sungmin, a director of a wholly-owned subsidiary of the Company, SMG Development Limited (formerly known as “Trenaco Holdings Ltd”)

– 1 –

DEFINITIONS

• “Director(s)” director(s) of the Company “First Announcement” the announcement of the Company dated 6 March 2012 in relation to, inter alia, the Placing of Convertible Bonds and issue of Shares under Placing Specific Mandate

• “First Circular” The circular of the Company dated 26 April 2012 in relation to, inter alia, the Placing of Convertible Bonds and issue of Shares under Placing Specific Mandate

• “Grandvest” Grandvest International Limited, a 100% wholly-owned subsidiary of the Company

• “Group” the Company and its subsidiaries

• “HANI” Hani Securities (H.K.) Limited, a corporation licensed to carry out type 1 (dealing in securities) and type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

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

• “Instrument” the convertible bond instrument to be executed by the Company by way of a deed poll

• “Langfeld” Langfeld Enterprises Limited is an indirect subsidiary of the Company and owned as to 90% by Grandvest and as to 10% by Cordia

• “Last Trading Day” 6 March 2012, being the last trading day immediately prior to the entering into of the Placing Agreement

• “Latest Practicable Date”

• 28 September 2012, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

• “Listing Rules”

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

• “New Placing Specific Mandate”

• a specific mandate to be sought from the Shareholders at 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

– 2 –

DEFINITIONS

• “Placee(s)” any independent institutional or private investor(s) procured by HANI, on a best-effort basis, to subscribe for the Convertible Bonds pursuant to the Placing Agreement as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement

• “Placing” the placing of the Convertible Bonds pursuant to the terms of the Placing Agreement as amended and supplemented by the Supplemental Agreement and Second Supplemental Agreement

• “Placing Agreement” the conditional placing agreement, as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement, entered into between the Company and HANI dated 6 March 2012 in relation to the Placing

• “Placing Period” the period from the date of the Placing Agreement to 6 December 2012;

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

• “Placing Specific Mandate” a specific mandate sought from the Shareholders at the extraordinary general meeting held on 14 May 2012 for (i) issue the Convertible Bonds 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

• “Second Announcement” the announcement of the Company dated 26 June 2012 in relation to the placing of convertible bonds, the Supplemental Agreement to placing agreement and issue of shares under New Placing Specific Mandate

• “Second Supplemental Agreement” the conditional supplemental agreement to the Placing Agreement entered into between the Company and HANI dated 17 August 2012 in relation to the Placing

• “Second EGM” the extraordinary general meeting of the Company to be convened and held at 3:00 p.m. on Friday, 19 October 2012 at The Jasmine Room of Ramada Hong Kong Hotel at 3rd Floor, 308 Des Voeux Road West, Hong Kong for considering and, if thought fit, to approve and ratify the execution of the Supplemental Agreement, the Second Supplemental Agreement and the transactions contemplated thereunder, together with the granting of the New Placing Specific Mandate

– 3 –

DEFINITIONS

“SFO”	Securities and Futures Ordinance (Chapter 571 of Laws of Hong
	Kong)
“Share(s)”	ordinary share(s) of par value of HK$0.2 each (or HK$0.01 each
	before the share consolidation came into effect from 3 October
	2011, as the case may be) in the issued share capital of the
	Company
“Shareholder(s)”	person(s) whose name(s) appear in the register of members of
	the Company as the holder(s) of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subsidiary”	any subsidiary (from time to time) of the Company
“Supplemental Agreement”	the conditional supplemental agreement to the Placing
	Agreement entered into between the Company and HANI dated
	26 June 2012 in relation to the Placing
“Takeovers Code”	The Code on Takeovers and Mergers
“Third Announcement “	the announcement of the Company dated 17 August 2012 in
	relation to the placing of Convertible Bonds, the Supplemental
	Agreement and the Second Supplemental Agreement to the
	Placing Agreement and issue of shares under the New Placing
	Specific Mandate
“HK$” or “HK dollars”	Hong Kong dollars, the lawful currency of Hong Kong
“US$” or “US dollars”	the United States of America dollars, the lawful currency of the
	United States of America
“%”	per cent.

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

This circular has been prepared in both English and Chinese. In case of any discrepancy, the English text shall prevail.

– 4 –

LETTER FROM THE BOARD

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)

Executive Directors: Mr. LIM Ho Sok (Chairman) Mr. CHOI Jun Ho

Non-executive Director: Mr. PANG Ngoi Wah Edward

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent non-executive Directors: Mr. CHO Min Je Mr. LIEW Swee Yean Mr. TAM Tak Wah Mr. YOUNG Yue Wing Alvin

Head office and principal place of business in Hong Kong: 16/F No. 8 Queen’s Road Central Central Hong Kong 4 October 2012

To the Shareholders and, for information only, the holders of the share options of the Company

Dear Sir/Madam,

(1) PLACING OF CONVERTIBLE BONDS, SUPPLEMENTAL AGREEMENT AND SECOND SUPPLEMENTAL AGREEMENT

TO PLACING AGREEMENT, ISSUE OF SHARES UNDER NEW PLACING SPECIFIC MANDATE AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to (A) the First Announcement of the Company in relation to, inter alia, the Placing of Convertible Bonds and issue of Shares under Placing Specific Mandate; (B) the First Circular; (C) the Second Announcement; and (D) the Third Announcement. The purpose of this circular is to provide you with, among other things, containing: (i) further details of the Placing (ii) further details of the Placing Agreement which was amended by the Supplemental Agreement and the Second Supplemental Agreement and the issue of shares under the New Placing Specific Mandate; and (iii) a notice of the Second EGM.

* For identification purpose only

– 5 –

LETTER FROM THE BOARD

(1) THE SUPPLEMENTAL AGREEMENT

On 26 June 2012 (after trading hours), the Company and HANI have entered into the Supplemental Agreement to the Placing Agreement. For details of the Supplemental Agreement, please refer to the Second Announcement.

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.

The Supplemental Agreement and the Second Supplemental Agreement are conditional upon the Shareholders passing at an extraordinary general meeting of the Company the resolutions approving and ratifying the execution of the Supplemental Agreement and the Second Supplemental Agreement.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, HANI and its ultimate beneficial owner(s) are Independent Third Parties of the Company and its connected persons.

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 Placing Agent will, on a best-effort basis, place the Convertible Bonds to not less than six placees who are and whose ultimate beneficial owners are Independent Third Parties of and not connected with the Company and connected persons (as defined in the Listing Rules) of the Company and not acting in concert (as such term is defined in Takeovers Code) with connected persons of the Company. If the number of Placees procured by HANI to subscribe for the Convertible Bonds is less than six, the Company will make a further announcement specifying the names of those Placees, as required by Rule 13.28 of the Listing Rules. If the number of Placees is six or more, the names of the Placees are not required to be disclosed.

Conditions of the Placing

The obligations of HANI under the Placing Agreement as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement in respect of the placing of the 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

– 6 –

LETTER FROM THE BOARD

• (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 is not 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, as amended and supplemented by the Supplemental Agreement and the Second Supplemental 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 Supplemental Agreement and 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.

Completion

Completion of the Placing shall take place on the fifth Business Day after all the conditions precedent have been fulfilled for the Convertible Bonds.

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 the New Placing Specific Mandate, to be sought from the Shareholders at the Second EGM, to (i) issue the Convertible Bonds in 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 Latest Practicable Date 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.

Save and except the aggregate principal amount of the Convertible Bonds to be issued is reduced from up to US$70,000,000 (approximately HK$546,000,000) to up to US$30,000,000 (approximately HK$234,000,000), the Conversion Price and the Principal Terms of the Convertible Bonds remain the same as disclosed in the First Circular.

– 7 –

LETTER FROM THE BOARD

Principal Terms of the Convertible Bonds

• Principal amount : up to an aggregate principal amount of US$30,000,000 (approximately HK$234,000,000)

• Maturity Date : the date falling on the expiry of a three years’ period which shall commencing from the date of issue of the Convertible Bonds

• Conversion Price : HK$0.52 per Conversion Share (subject to adjustment)

• Interests : 3% per annum payable annually, for each anniversary year of issue, in arrear

• Conversion Period : the period commencing from the date of issue of the Convertible Bonds and ending on the date which falls on the fifth (5th) Business Day before Maturity Date, both dates inclusive

• Conversion Restriction : No conversion shall be made by the Bondholders if such conversion shall trigger off a mandatory offer under Rule 26 of the Takeovers Code on the part of the Bondholders who exercise the conversion right or shall cause the public float of the Company unable to meet the minimum requirement under the Listing Rules

• Conversion Rights : Each Bondholder shall have the right, exercisable during the Conversion Period, to convert the whole or any part (in multiples of US$100,000 (approximately HK$780,000)) of the outstanding principal amount of a Convertible Bond(s) held by such Bondholder into such number of Conversion Shares as will be determined by dividing the principal amount of the Conversion Bonds to be converted by the Conversion Price in effect on the date of conversion.

No fraction of a Conversion Share shall be issued on conversion of the Convertible Bonds.

– 8 –

LETTER FROM THE BOARD

Mandatory Conversion

Ranking

Transferability

• : If, during the Conversion Period, the closing market prices of the Share, at the Stock Exchange, for any 20 consecutive trading days are equal to or more than 200% of the Conversion Price, the Company shall have the right, at any time, to issue a notice of conversion to any of the Bondholder to convert the whole or any part of the outstanding principal amount of the Convertible Bonds, as determined by the Company, held by such Bondholder, as selected by the Company, with effect from a date (the “ Trigger Date ”) to be specified by the Company in the said notice of conversion. Upon issue of such conversion notice by the Company, the respective outstanding principal amount of the Convertible Bonds shall automatically be converted to Conversion Shares with effect from the Trigger Date. In such case, the Conversion Rights are deemed to be exercised with effect from Trigger Date. The Company shall have the sole and absolute discretion on whether to exercise such right, selection of Convertible Bonds and the amount to be converted.

• : Shares converted upon exercise of the Conversion Rights shall rank pari passu in all respects with all other existing Shares at the date of conversion and all Conversion Shares shall include rights to participate in all dividends and other distributions.

• : None of the Convertible Bonds (nor any part of the Convertible Bonds) can be transferred without the prior written consent of the Company.

Subject to the abovementioned, any transfer of the Convertible Bonds shall be in respect of the whole or any part (in an amount not less than US$100,000 (approximately HK$780,000)) of the outstanding principal amount of the Convertible Bonds.

• Adjustment of the conversion price

• : The Conversion Price shall from time to time be adjusted upon the occurrence of the followings:

• (i) consolidation and subdivision;

• (ii) capitalisation of profits or reserves; and

• (iii) capital distribution.

– 9 –

LETTER FROM THE BOARD

The capital distribution includes any cash dividend or distribution,

unless:—

• (aa) such cash dividend (together with any distribution made or paid in respect of any financial period after 31 March 2012) does not exceed an amount equal to the consolidated cumulative net profits less any consolidated net losses after taxation (if a disposal is made, this includes any net realised gains less any losses); or

• (bb) (to the extent that (aa) above does not apply) the rate of such cash dividend (together with all other dividends or distributions on the class of capital in question charged or provided for in the accounts of the Company for that period) does not exceed that of the immediately preceding financial period;

then the Conversion Price will not be adjusted.

Listing

Redemption

• : No application will be made by the Company for listing of the Convertible Bonds. Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

• : Redemption of the Convertible Bonds at Maturity

All outstanding principal amount of the Convertible Bonds which have not been redeemed or converted in accordance with the conditions of the Instrument by the Maturity Date, shall be automatically redeemed by the Company on the Maturity Date at a redemption amount equal to 100% of the outstanding principal amount of the Convertible Bonds, unless the Bondholders request for full conversion of their Convertible Bonds.

Kicker at Maturity

In addition to the redemption amount payable to the Bondholder at the Maturity Date, the Company will pay a sum which is equal to 6% (“ Kicker ”) of the outstanding principal amount of the Bond at the Maturity Date to the Bondholders. For avoidance of doubt, any amount which has been redeemed, repaid or converted on or before Maturity will not be entitled for such Kicker.

– 10 –

LETTER FROM THE BOARD

Redemption on default

If any of the events (“ Events of Default ”) specified below occur, the Company shall give a notice to the Bondholders in respect of the Convertible Bonds and each Bondholder may, at its option, opt to convert its Convertible Bonds in its entirety or, alternatively, give a notice of redemption to the Company in respect of part or all of the outstanding principal amount of the Convertible Bonds held by it, whereupon such Convertible Bonds shall become immediately due and payable at a redemption amount equal to 100% of the principal amount of such Convertible Bonds.

The Events of Default are as follows:—

• (i) any failure to pay the principal of the Convertible Bonds when due and such failure continues for a period of 28 Business Days;

• (ii) any default made by the Company in the performance or observance of any undertaking, warranty or representation given by it under the terms of the Instrument (other than the covenant to pay the principal and interest in respect of the Convertible Bonds) and such default is incapable of remedy (in which event no such notice as is referred to below shall be required), or if capable of remedy is not remedied within thirty Business Days of service by any Bondholder on the Company of notice requiring such default to be remedied;

• (iii) a resolution is passed or an order of a court of competent jurisdiction is made that the Company be wound up or dissolved otherwise than for the purposes of or pursuant to and followed by a consolidation, amalgamation, merger or reconstruction the terms of which shall have previously been approved in writing by a resolution of the Bondholders;

• (iv) it is or becomes unlawful for the Company to perform or comply with any of its obligations under the Instrument or any Convertible Bonds, or due to no fault on the part of any Bondholder any such obligation is not or ceases to be enforceable or is claimed by the Company not to be enforceable;

– 11 –

LETTER FROM THE BOARD

• (v) any step is taken by any person with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or substantially all or (other than on arm’s length terms or with respect to a part of the relevant entity’s business or operations which has not materially contributed to the consolidated operating profit of the Company and its subsidiaries for at least three years prior to the day on which this paragraph operates) a material part of the assets of the Company;

• (vi) any action, condition or thing (including the obtaining or effecting of any necessary consent, approval, authorisation, exemption, filing, licence, order, recording or registration) at any time required to be taken, fulfilled or done in order (a) to enable the Company lawfully to enter into, exercise its rights and perform and comply with its obligations under the Convertible Bonds or the Instrument, (b) to ensure that those obligations are legally binding and enforceable, and (c) to make the Convertible Bonds or the Instrument admissible in evidence in the courts of Hong Kong, is not taken, fulfilled or done by the requisite time; and

• (vii) any breach of the representations, warranties and undertakings made by the Company to the Bondholder(s) in reliance of which the Bondholder(s) subscribes to a Convertible Bond.

The Conversion Price

The conversion price of HK$0.52 per Conversion Share represents:

• (i) no premium or discount to the closing price of HK$0.52 per Share as quoted on the Stock Exchange on the Last Trading Day of the Shares;

• (ii) a premium of approximately 12.55% to the average closing price of approximately HK$0.462 per Share for the last 5 consecutive trading days immediately prior to the Last Trading Day; and

• (iii) a premium of approximately 12.8% to the average closing price of approximately HK$0.4610 per Share for the last 10 consecutive trading days immediately prior to the Last Trading Day.

– 12 –

LETTER FROM THE BOARD

The Conversion Price was arrived at after arm’s length negotiations between the Company and HANI with reference to the then prevailing market prices of the Shares as shown above. The Directors consider the Conversion Price and the terms and conditions of the Placing Agreement, which were amended and supplemented by the Supplemental Agreement and 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.

Reasons for entering into the Supplemental Agreement and the Second Supplemental Agreement

The reasons for entering into the Supplemental Agreement and 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), and since the aggregate principal amount of the Convertible Bonds is reduced to up to US$30,000,000 (approximately HK$234,000,000), the issue of the Convertible Bonds by only one tranche instead of two tranches is more appropriate.

Use of Proceeds

Assuming that the Supplemental Agreement and the Second Supplemental Agreement are 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 drilling and geological and hydrological surveys and the development of Lot 2 of the coal mines in Russia.

2. Approximately US$2,435,900 (approximately HK$19,000,000) for repayment of two existing loans 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. Out of these US$2,000,000 (approximately HK$15,600,000) loans, approximately US$650,000 (approximately HK$5,070,000) bears an interest rate of 8% per annum, and the remaining approximately US$1,350,000 (approximately HK$10,530,000) is interest free. The due date of payment of the shareholder’s loans is December 2014;

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LETTER FROM THE BOARD

• (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 circular. The promissory notes are non-interest bearing. The due date of payment of the promissory notes is May 2015; and

• (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. The loans bear an interest rate of 6% per annum. The due date of payment of the loans is December 2014.

• Approximately US$3,866,000 (approximately HK$30,154,800), representing the balancing amount, for general working capital purposes. The basis for determining the said amount for general working capital purposes is taken as approximately US$3,846,200 (approximately HK$30,000,000) for the Group’s operating expenses.

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 First 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 First 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. Any remaining amount was to be applied to items 3 to 5 of the original use of proceeds as listed in the First Circular, proportionately. 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 of the date of this circular, to secure two unsecured loans of HK$19,000,000 (approximately US$2,435,900) in total to the Company by an independent third party (the “ Lender ”) (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). Pursuant to the first loan agreement signed between the Company and the Lender dated 31 July 2012, the loan of HK$15 million (approximately US$1,923,100), being drawdown by the Company on 31 July 2012, shall be repaid at the expiry of 12 months on 31 July 2013 and bears an interest rate of 10% per annum. Interest is payable in arrears on the expiry of every 6 months after the drawdown of the loan. The Lender has the right at any time by serving written notice to the Company to demand

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LETTER FROM THE BOARD

immediate repayment of the loan and all interests accrued. No penalty on early repayment is noted. The loan is for general working capital purpose and repayment of liabilities. Pursuant to the second loan agreement signed between the Company and the Lender dated 4 September 2012, the loan of HK$4 million (approximately US$512,800), being drawdown by the Company for HK$3 million (approximately US$384,600) on 4 September 2012 and the remaining HK$1 million (approximately US$128,200) on 14 September 2012, shall be repaid at the expiry of 12 months on 4 September 2013 as to HK$3 million (approximately US$384,600) and on 14 September 2013 as to HK$1 million (approximately US$128,200) and bears an interest rate of 10% per annum. Interest is payable in arrears on the expiry of every 6 months after the drawdown of the loan. The Lender has the right at any time by serving written notice to the Company to demand immediate repayment of the loan and all interests accrued. No penalty on early repayment is noted. The loan is for general working capital purpose and repayment of liabilities. The Company considers that it will be in the interests of the Shareholders of the Company as a whole to use the proceeds of the Convertible Bonds to earlier repay the existing loans to the Lender, because reduction in interest expenses will be achieved by repaying loans of HK$19 million (approximately US$2,435,900) bearing interest at 10% per annum with proceeds from the Convertible Bonds bearing interest at just 3% per annum. Upon full repayment of these two loans totaling HK$19 million (approximately US$2,435,900), the Lender shall reassign back the promissory notes (item 3(b) above) and the loans due by the Company (item 3(c) above) to Cordia.

Although the earliest due date of payment of the liabilities to Cordia is December 2014, earlier repayments will enable the Company to obtain a discount on the settlement of the promissory notes and enjoy reduction in interest expenses.

Currently, the Company is in the process of negotiating to settle the promissory notes due to Cordia at a discount. The basis of discount is set at least approximately 13.5%, which is product of commercial negotiation between the Company and Cordia. As of the date of this circular, no definite agreement has been reached between the Company and Cordia on the settlement of the outstanding principal amount of the promissory notes.

The Company considers that it will be in the interests of the Shareholders of the Company as a whole to use the proceeds of the Convertible Bonds to earlier repay the existing liabilities of the Group owed to Cordia for the following reasons:-

• (a) in respect of the approximately US$2,000,000 (approximately HK$15,600,000) loans owed by Langfeld, reduction in interest expenses will be achieved by repaying loans of US$650,000 (approximately HK$5,070,000) bearing interest at 8% per annum with proceeds from the Convertible Bonds bearing interest at just 3% per annum, and although the remaining US$1,350,000 (approximately HK$10,530,000) loans are non-interest bearing, the repayment of them by means of proceeds from the Convertible Bonds will let the Company have the chance to turn such liabilities into equity capital when the Bondholders exercise their Conversion Right to subscribe for new shares of the Company, which in turn will help improving the gearing ratio and further expanding the shareholders base;

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LETTER FROM THE BOARD

• (b) in respect of the promissory notes in the principal amount of US$9,251,000 (approximately HK$72,157,800), although the promissory notes are non-interest bearing and due in May 2015, their earlier repayment will instantly enable the Company to enjoy a discount of approximately 13.5%; and

• (c) in respect of the approximately US$3,500,000 (approximately HK$27,300,000) loans owed by the Company, reduction in interest expenses will be achieved by repaying such loans now bearing interest at 6% per annum with proceeds from the Convertible Bonds bearing interest at just 3% per annum.

The Company is of the view that it would be beneficial to the Company to repay the liabilities owed to Cordia instead of other liabilities now because the Company would in turn pay less for early repayment and achieve reduction in interest expenses. Whereas the other creditors have not considered to let the Company have such capital and interest saving.

The Company has been exploring the possibilities and opportunities of the possible acquisition of the mining assets. As no specific mining asset has been identified by the Company for the time being, the use of proceeds will not be provided for possible acquisition of mining assets, namely item 5 of the original use of proceeds as stated in the First Circular. The Company will make further announcement as and when needed, and comply with the Listing Rules when proceeding with the proposed acquisition of coal mines.

In view of the uncertainties in world economy recovery, and based on the current management’s best estimated production plan, Lot 1 of the Russian coal mines (“ Lot 1 ”) will be scheduled for starting production in 2015. Since Lot 1 Extension of the Russian coal mines (“ Lot 1 Extension ”) is vertically below Lot 1, its production plan will be thus put to a later stage after that of Lot 1.

Based on the current Company’s best estimation, the expected capital expenditure of Lot 1 and Lot 1 Extension for the coming 12 to 18 months is approximately US$2,950,000 (approximately HK$23,010,000).

Since the expected capital expenditure of Lot 1 and Lot 1 Extension for the coming 12 to 18 months is relatively manageable and at the date of this circular, the Directors to their best knowledge consider such expenditure would be covered by the internal resources, loan facilities and other funding arrangements. As at the date of this circular, the Company does not have concrete fund raising plans to finance the expected capital expenditure of Lot 1 and Lot 1 Extension. The Company has the flexibility to consider any funding plans, whether are of equity in nature, or pure debt financing, or a combination of both, which could be most beneficial to the shareholders of the Company as a whole under the prevailing market environment. Accordingly, the Directors have not allocated the use of proceeds of the Convertible Bonds for the expected capital expenditure of the Lot 1 and Lot 1 Extension.

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LETTER FROM THE BOARD

The Company has reviewed the progress of development of Lot 2 of the Russian coal mines (“ Lot 2 ”), and as planned, the Group will soon enter into the next phase of geological and hydrogeological surveys with full completion targeted in September 2014. The expected amount of funds required for the next phase of geological and hydrogeological surveys is approximately US$3,100,000 (approximately HK$24,180,000). The basis of allocating US$3.1 million (approximately HK$24,180,000) to exploration drilling and geological and hydrological surveys is with reference to the quotation dated 20 June 2012 submitted by the contractor. The balancing amount of US$6.9 million (approximately HK$53,820,000) allocated to mine development is based on the capital expenditure budget of the mine development plan of Lot 2. The Directors consider that US$10,000,000 (approximately HK$78,000,000) would be more than sufficient for the next 12 to 18 months during which exploration surveys and mine development are being conducted, and do not anticipate any imminent needs of funding on further capital expenditure for Lot 2 beyond the proposed US$10,000,000 (approximately HK$78,000,000). In accordance with the requirements of the New Mining License, after the completion of the surveys, the Group will have to submit the feasibility study of deposit development conditions and geological statement, and then obtain the approval of the development technical design. Only after all these procedures have been completed, the Group will then in a position to commence the construction of Lot 2 coal mine infrastructure facilities, which is expected to be materialized after a few years from now.

Although the issue of the Convertible Bonds may cause dilution in the Shares, the Directors to their best knowledge consider the allocation of the use of proceeds of the Convertible Bonds is fair and reasonable to the Shareholders as a whole as the Directors have taken into account of the following factors:

• (a) The Convertible Bonds will bear a lower interest rate and thus it will be beneficial to use the proceeds to repay higher interest rate loans;

• (b) Promissory notes can be earlier redeemed with a discount; and

• (c) The financial position of the Company will be strengthened during the time the Company has not committed or acquired any mining assets.

The Directors consider that the Placing can provide additional funding for the Company for strengthening its working capital position of the Group and to facilitate the ongoing development of Lot 2. In addition, the shareholder base of the Company would be broadened.

In the event the Company wishes to change the allocation of the net proceeds due to changes in the market environment, the Company will come up with a new plan and make the announcement accordingly.

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LETTER FROM THE BOARD

(2) SHAREHOLDING STRUCTURE OF THE COMPANY

As at the Latest Practicable Date, 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:

Existing Shareholding Shareholders (as at the Latest Practicable Date) Number of Approximate Shares % Goldwyn Management Limited_(Note 1)_ 11,400,000 3.24% Pang Ngoi Wah Edward, a non-executive Director 175,000 0.05% Sub-total 11,575,000 3.29% Public Shareholders: The Placees — — Income Plus Investment Limited 20,678,685 5.87% Master Impact Inc. 62,036,055 17.60% Skyline Merit Limited 41,357,370 11.73% Other public Shareholders 216,795,653 61.51% Total 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%	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%
		1.44%
		56.08% 2.58% 7.73% 5.15% 27.02%
		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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LETTER FROM THE BOARD

(3) 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 circular:

			Intended use
			of proceeds
Date of			as stated in the	Actual use of
announcement	Event	Net proceeds	announcement	Proceeds/Remark
11 January 2012	Subscription of	Approximately	General working	All proceeds had been
	21,300,000 new	HK$4.9 million	capital of the Group	used as intended as
	Shares under		and repayment of	general working
	general mandate		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 new	US$8.95 million	discharge of	discharge of
	Shares	(approximately	the promissory	the promissory
		HK$69.81	notes with total	notes with total
		million)	principal amount of	principal amount of
			US$9 million	US$9 million
			(approximately	(approximately
			HK$70.2 million)	HK$70.2 million)

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LETTER FROM THE BOARD

(4) SECOND EGM

The Second EGM will be held for considering and, if thought fit, passing the ordinary resolutions to approve the execution of the Supplemental Agreement, the Second Supplemental Agreement and the transactions contemplated thereunder, together with the granting of the New Placing Specific Mandate.

As at the date of this circular, 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 of Convertible Bonds, the Supplemental Agreement and the Second Supplemental Agreement. Accordingly, no Shareholder is required to abstain from voting at the Second EGM in respect of the resolutions relating to the Placing of Convertible Bonds, the Supplemental Agreement and the Second Supplemental Agreement.

A notice convening the Second EGM to be held at 3:00 p.m. on Friday, 19 October 2012 at The Jasmine Room of Ramada Hong Kong Hotel at 3rd Floor, 308 Des Voeux Road West, Hong Kong is set out on pages 22 and 23 of this circular. A form of proxy for use at the Second EGM is enclosed with this circular. Whether or not you intend to attend and vote at such meeting, you are advised to complete the form of proxy enclosed in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event no less than 48 hours before the time appointed for holding such meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) should you so wish.

In accordance with Rule 13.39(4) of the Listing Rules, all votes of the Shareholders to be taken at the Second EGM must be taken by poll, and an announcement of the results of which will be published on the date of the Second EGM or not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following the Second EGM as prescribed under Rule 13.39(5) of the Listing Rules.

(5) RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

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LETTER FROM THE BOARD

(6) RECOMMENDATION

The Board considers that the terms and conditions of the Placing Agreement as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement are fair and reasonable and the Placing is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolutions as set out in the notice of the Second EGM.

As the Placing Agreement, as amended and supplemented by the Supplemental Agreement and the 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.

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

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NOTICE OF SECOND EGM

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)

NOTICE IS HEREBY GIVEN that the second extraordinary general meeting of Siberian Mining Group Company Limited (the “ Company ”) will be held at 3:00 p.m. on Friday, 19 October 2012 at The Jasmine Room of Ramada Hong Kong Hotel at 3rd Floor, 308 Des Voeux Road West, Hong Kong for the purpose of considering and, if thought fit, passing, with or without amendments, the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT :—

• (A) the supplemental agreement to the Placing Agreement (the “ Supplemental Agreement ”) (a copy of which has been produced to the meeting marked “ A ” and initialed by the chairman of the meeting for identification purpose), and the second supplemental agreement to the Placing Agreement (the “ Second Supplemental Agreement ”) (a copy of which has been produced to the meeting marked “ B ” and initialed by the chairman of the meeting for identification purpose) entered into between the Company as issuer and Hani Securities (H.K.) Limited as placing agent 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, and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed;

• (B) (i) the creation and issue of the convertible bonds by the Company of up to an aggregate principal amount of US$30,000,000 (approximately HK$234,000,000) (the “ Convertible Bonds ”) pursuant to the terms of the Placing Agreement as amended and supplemented by the Supplemental Agreement and the Second Supplemental Agreement be and are hereby approved; and

• (ii) the allotment and issue of new shares (the “ Conversion Shares ”) (subject to adjustment) in the capital of the Company upon the exercise of the conversion rights attached to the Convertible Bonds be and are hereby approved; and the directors of the Company be and are hereby authorized to allot and issue the Convertible Bonds and the Conversion Shares accordingly; and

* For identification purpose only

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NOTICE OF SECOND EGM

• (C) any one director of the Company (“ Director ”) be and is hereby generally and unconditionally authorized to do all such acts and things, to sign and execute all such documents for and on behalf of the Company by hand, or in the case of execution of documents under seal, to do so jointly with any one of a second Director, a duly authorized representative of the Director or the secretary of the Company, and to take such steps as he may in his absolute discretion considers necessary, appropriate, desirable or expedient to give effect to or in connection with the Placing and the transactions contemplated thereunder, including but not limited to further amend and/or modify the Placing Agreement, including but not limited to reduce the aggregate principal amount of the Convertible Bonds to be issued, extend the Placing Period, extend the date for fulfillment of conditions precedent, the allotment and issue of the Convertible Bonds and the Conversion Shares.”

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

Hong Kong, 4 October 2012

Registered office: Head office and principal place of business Cricket Square in Hong Kong: Hutchins Drive 16/F P.O. Box 2681 No. 8 Queen’s Road Central Grand Cayman KY1-1111 Central Cayman Islands Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or, if he is the holder of two or more shares, more than one, proxy to attend and vote in his stead. A proxy need not be a member of the Company.

2. In the case of joint holders of shares, any one of such holders may vote at the meeting, either in person or by proxy, in respect of such shares as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the meeting, whether in person or by proxy, that one of such joint holders whose name stands first on the register of members of the Company in respect of the relevant joint holding shall alone be entitled to vote in respect thereof.

3. To be valid, the form of proxy, together with any power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney or authority must be deposited with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong no less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

4. Completion and return of the accompanying form of proxy will not preclude members of the Company from attending and voting in person at the aforesaid meeting or any adjournment thereof should they so wish.

5. The voting on the proposed resolution at the Second EGM will be conducted by way of poll.

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