Shandong Gold Mining Co., Ltd. — Proxy Solicitation & Information Statement 2024

Sep 26, 2024

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shandong Gold Mining Co., Ltd. , you should at once hand this circular to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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.

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SHANDONG GOLD MINING CO., LTD. 山東黃金礦業股份有限公司

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1787)

(1) THE RESOLUTION REGARDING THE HALF-YEAR PROFIT DISTRIBUTION PLAN FOR 2024 OF THE COMPANY AND PROPOSAL TO CARRY OUT THE ACTION OF “IMPROVING QUALITY, INCREASING EFFICIENCY AND ENHANCING RETURNS”;

(2) THE RESOLUTION REGARDING THE SIGNING OF THE FINANCIAL SERVICES FRAMEWORK AGREEMENT WITH SHANDONG GOLD GROUP FINANCE CO., LIMITED; AND (3) NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING

A notice convening the 2024 fifth extraordinary general meeting (the “ EGM ”) of Shandong Gold Mining Co., Ltd. (the “ Company ”) to be held at the conference room of the Company, No. 2503, Jingshi Road, Licheng District, Jinan, Shandong Province, the PRC at 10:00 a.m. on Friday, 18 October 2024 is set out on pages 20 to 21 of this circular.

The proxy form for use in connection with the EGM is enclosed herewith. The proxy form is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company’s website (http://www.sdhjgf.com.cn).

Any shareholder(s) of the Company (the “ Shareholder(s) ”) entitled to attend and vote at the EGM is(are) entitled to appoint one or more proxies to attend and vote on his/her(their) behalf. A proxy need not be a Shareholder of the Company. If you intend to appoint a proxy to attend the EGM and vote on your behalf, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return it by hand, by post or by facsimile to the Company’s H share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (for H Shareholders only) as soon as possible and in any event not later than 24 hours before the time appointed for the holding of the EGM (i.e. before 10:00 a.m. on Thursday, 17 October 2024) or adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting at the EGM or any adjournment hereof should you so wish.

27 September 2024

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . .		20

— i —

DEFINITIONS

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

“A Share(s)”

the domestic share(s) issued by the Company to domestic investors with a nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange;

• “A Shareholder(s)” holder(s) of A Share(s);

• “Articles of Association”

the articles of association of the Company, as amended from time to time;

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

• “Board” the board of Directors;

“Company”

Shandong Gold Mining Co., Ltd. (山東黃金礦業股份有限 公司), a joint stock company incorporated under the laws of the PRC with limited liability on 31 January 2000, the H Shares and A Shares of which are listed on the main board of the Hong Kong Stock Exchange (Stock Code: 1787) and the Shanghai Stock Exchange (Stock Code: 600547) respectively;

• “Company Law” the Company Law of the PRC;

• “connected person(s)” has the meaning as ascribed to it under the Hong Kong Listing Rules;

• “connected transactions” has the meaning as ascribed to it under the Hong Kong Listing Rules;

“controlling shareholder(s)” has the meaning as ascribed to it under the Hong Kong Listing Rules;

• “CSRC”

the China Securities Regulatory Commission;

• “Director(s)” the director(s) of the Company;

“EGM”

the 2024 fifth extraordinary general meeting of the Company to be held at the conference room of the Company, No. 2503, Jingshi Road, Licheng District, Jinan, Shandong Province, the PRC at 10:00 a.m. on Friday, 18 October 2024;

— 1 —

DEFINITIONS

“Group”

“H Share(s)”

• “H Shareholder(s)”

• “Hong Kong”

• “Hong Kong dollar”

• “Hong Kong Listing Rules”

• “Hong Kong Stock Exchange” or “SEHK”

• “Independent Shareholders”

• “Independent Third Party(ies)”

• “Latest Practicable Date”

• “NFRA”

• “PBOC”

• “PRC” or “China”

• “Profit Distribution”

• “RMB”

the Company and its subsidiaries;

the overseas-listed foreign invested share(s) in the Company’s share capital, with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange;

holder(s) of H Share(s);

Hong Kong Special Administrative Region of the PRC;

Hong Kong dollar, the lawful currency of Hong Kong;

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time;

The Stock Exchange of Hong Kong Limited;

the Shareholders other than SDG Group Co. and its associates;

the third party(ies) independent from the Company and its connected person(s) (as defined in the Hong Kong Listing Rules);

• 24 September 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

the National Financial Regulatory Administration, formerly known as China Banking and Insurance Regulatory Commission (中國銀行保險監督管理委員會);

• the People’s Bank of China (中國人民銀行), the central bank of the 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;

the proposed distribution of an interim dividend of RMB0.80 per 10 Shares (tax inclusive);

Renminbi, the lawful currency of the PRC;

— 2 —

DEFINITIONS

“SDG Finance”

Shandong Gold Group Finance Co., Ltd. (山東黃金集團財 務有限公司), a limited liability company incorporated in the PRC on 17 July 2013, which was held as to 30% by the Company and 70% by SDG Group Co.;

“SDG Group”

SDG Group Co. and all of its subsidiaries;

“SDG Group Co.”

Shandong Gold Group Co., Ltd. (山東黃金集團有限公司), a limited liability company incorporated in the PRC on 16 July 1996, the controlling shareholder of the Company; as at the Latest Practicable Date, SDG Group Co. is held as to 70%, 20% and 10% by the State-owned Assets Supervision and Administration Commission of Shandong Provincial People’s Government (山東省人民政府國有資產監督管 理委員會), Shandong Guohui Investment Holding Group Co., Ltd. (山東國惠投資控股集團有限公司) and Shandong Caixin Asset Management Co., Ltd. (山東省財欣資產運營 有限公司), respectively. Shandong Guohui Investment Holding Group Co., Ltd. is a limited liability company established in the PRC and is held as to 100% by the State-owned Assets Supervision and Administration Commission of Shandong Provincial People’s Government;

“Shanghai Stock Exchange” or “SSE”

Shanghai Stock Exchange (上海證券交易所);

• “Share(s)”

ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, including A Share(s) and H Share(s);

• “Shareholder(s)” A Shareholder(s) and H Shareholder(s);

“SSE Listing Rules”

the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (上海證券交易所股票上市規則) as amended, supplemented or otherwise modified from time to time;

• “Supervisory Committee” the supervisory committee of the Company; and

“%”

per cent.

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LETTER FROM THE BOARD

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SHANDONG GOLD MINING CO., LTD. 山東黃金礦業股份有限公司

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1787)

Executive Directors:

Mr. Liu Qin (Vice-chairman) Mr. Wang Shuhai Mr. Tang Qi

Non-executive Directors:

Mr. Li Hang (Chairman) Ms. Wang Xiaoling

Independent Non-executive Directors:

Mr. Wang Yunmin Mr. Liew Fui Kiang Ms. Zhao Feng

Registered office and headquarters in the PRC:

No. 2503, Jingshi Road Licheng District, Jinan Shandong Province The PRC

Principal place of business in Hong Kong:

Rooms 4003-06 China Resources Building No. 26 Harbour Road Wanchai Hong Kong

27 September 2024

To the Shareholders

Dear Sir or Madam,

(1) THE RESOLUTION REGARDING THE HALF-YEAR PROFIT DISTRIBUTION PLAN FOR 2024 OF THE COMPANY AND

PROPOSAL TO CARRY OUT THE ACTION OF “IMPROVING QUALITY, INCREASING EFFICIENCY AND ENHANCING RETURNS”;

(2) THE RESOLUTION REGARDING THE SIGNING OF THE FINANCIAL SERVICES FRAMEWORK AGREEMENT WITH SHANDONG GOLD GROUP FINANCE CO., LIMITED; AND

(3) NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

On behalf of the Board, I invite you to attend the EGM to be held at the conference room of the Company, No. 2503, Jingshi Road, Licheng District, Jinan, Shandong Province, the PRC at 10:00 a.m. on Friday, 18 October 2024. The purpose of this circular is to issue the notice of EGM and provide you with all reasonably necessary information to enable you to make an informed decision as to the resolutions to be proposed at the EGM.

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LETTER FROM THE BOARD

2. RESOLUTION REGARDING THE HALF-YEAR PROFIT DISTRIBUTION PLAN FOR 2024 OF THE COMPANY AND PROPOSAL TO CARRY OUT THE ACTION OF “IMPROVING QUALITY, INCREASING EFFICIENCY AND ENHANCING RETURNS”

In order to actively respond to the Initiative on Carrying out the Special Action of “Improving Quality, Increasing Efficiency and Enhancing Returns” for Listed Companies on the Shanghai Stock Exchange 《關於開展滬市公司「提質增效重回報」專項行動的倡議》( ) of Shanghai Stock Exchange, implement the investor-oriented concept, and further promote the high-quality development of the Company and the enhancement of investment value, the Company intends to carry out the half-year profit distribution plan for 2024 and carry out the action of “Improving Quality, Increasing Efficiency and Enhancing Returns”.

I. The Half-Year Profit Distribution Plan for 2024

Under the PRC Accounting Standards for Business Enterprises, in the first half of 2024, the Company realized a net profit attributable to shareholders of the listed company of RMB1,383,466,282.99 (unaudited), including profit attributable to perpetual bonds holders of RMB199,444,231.14. After deducting the interest of perpetual bonds, the Company realized a net profit attributable to ordinary shareholders of the listed company in the first half of 2024 was RMB1,184,022,051.85. The net profit of the parent company was RMB548,451,779.27 (unaudited), plus the undistributed profit of RMB6,902,035,103.18 for the beginning of the year and deducting the 2023 cash dividends of RMB626,280,133.50 and withdrawing the interest on perpetual bonds of RMB199,444,231.14 during the year, the profit of the parent company available for distribution to the Shareholders as of June 30, 2024 was RMB6,624,762,517.81.

In order to actively respond to the Initiative on Carrying out the Special Action of “Improving Quality, Increasing Efficiency and Enhancing Returns” for Listed Companies on the Shanghai Stock Exchange 《關於開展滬市公司「提質增效重回報」專項行動的倡議》( ) of Shanghai Stock Exchange, combined with the Company’s current financial situation, production and operation situation and strategic development plan, the Company intends to pay the cash dividend of RMB0.80 per 10 Shares (tax inclusive) to all Shareholders. As at the Latest Practicable Date, the Company had a total share capital of 4,473,429,525 Shares, and the proposed payment of cash dividend in the amount of RMB357,874,362.00 is calculated on such basis. The Company’s half-year cash dividend for 2024 accounted for 30.23% of the net profit attributable to ordinary shareholders of the listed company in the current period under the PRC Accounting Standards for Business Enterprises.

Where the total share capital of the Company changes before the record date for the implementation of the Profit Distribution, it is expected to remain the total amount of dividends unchange and adjust the amount of distribution per Share accordingly with specific adjustments to be announced separately.

The Company will continue to attach importance to returns to investors, strictly follow the requirements of the Company Law, the Securities Law, the Guideline for the Supervision and Administration of Listed Companies No. 3 - Cash Dividend Distribution for Listed Companies, the Articles of Association and other relevant laws and regulations, comprehensively consider various factors related to profit distribution, proactively implement the Company’s profit distribution system and share the fruits of its development with investors.

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LETTER FROM THE BOARD

II. Carrying out the Action of “Improving Quality, Increasing Efficiency and Enhancing Returns” to Increase Investor Returns and Share Development Fruits of the Company

In recent years, the Company has further strengthened the role of strategic leadership, actively promoted its reform deepening and innovation, continuously improved corporate governance and strengthened its core competitiveness. While achieving such growth and development, the Company insists on sharing its growth with investors, and strives to actively return Shareholders with the fruits of enterprise development. Since its listing, the Company has insisted to distribute cash dividends every year, bringing tangible returns to Shareholders. In 2023, the Company paid the cash dividend of RMB1.40 per 10 Shares (tax inclusive) to all Shareholders, with a total cash dividend of RMB626 million, accounting for 33.59% of the net profit attributable to ordinary shareholders of the listed company in the current period under the PRC Accounting Standards for Business Enterprises, doubling the amount of cash dividends as compared to 2022. In 2024, the Company intends to implement half-year dividends distribution to further enhance investors’ sense of gain. In the future, the Company will firmly foster a sense of rewarding Shareholders, and coordinate a dynamic balance between business development, performance growth and Shareholders’ returns in line with its actual operation situation and development plan, so that Shareholders can truly experience the development fruits of the Company.

3. TAXATION AND EXPECTED TIMETABLE

The cash dividends to be distributed will be denominated and declared in RMB, and will be distributed in RMB to A Shareholders and the Shareholders under the Shanghai-Hong Kong Stock Connect Program, and in Hong Kong dollar to H Shareholders. The exchange rate for calculating dividends paid in Hong Kong dollar is based on the middle rate of RMB against Hong Kong dollar announced by the PBOC on the date of which the EGM is held.

Taxation

According to the Enterprise Income Tax Law of the PRC (《中華人民共和國企業所得稅法》) and its implementation regulations (the “ EIT Law ”), the tax rate of the enterprise income tax applicable to the income of a non-resident enterprise deriving from the PRC is 10%. For this purpose, any H Shares registered under the name of non-individual enterprise, including the H Shares registered under the name of HKSCC Nominees Limited, other nominees or trustees, or other organizations or entities, shall be deemed as Shares held by non-resident enterprise Shareholders (as defined under the EIT Law). The Company will distribute the dividend to those non-resident enterprise Shareholders subject to a deduction of 10% enterprise income tax withheld and paid by the Company on their behalf.

Any resident enterprise (as defined under the EIT Law) which has been legally incorporated in the PRC or which was established pursuant to the laws of foreign countries (regions) but has established effective administrative entities in the PRC, and whose name appears on the H Shareholders’ register of the Company should deliver a legal opinion ascertaining its status as a resident enterprise furnished by a qualified PRC lawyer (with the official chop of the law firm issuing the opinion affixed thereon) and relevant documents to the Company’s H share registrar, Tricor Investor Services Limited, in due course, if they do not wish to have the 10% enterprise income tax withheld and paid on their behalf by the Company.

— 6 —

LETTER FROM THE BOARD

Pursuant to the Notice on the Issues on Levy of Individual Income Tax after the Abolishment of Guoshuifa (1993) No. 045 Document 《關於國稅發( (1993) 045號文件廢止後有關個人所得稅 徵管問題的通知》) (the “ Notice ”) issued by the State Administration of Taxation on 28 June 2011, the dividend to be distributed by the PRC non-foreign invested enterprise which has issued shares in Hong Kong to the overseas resident individual shareholders, is subject to the individual income tax with a tax rate of 10% in general. However, the tax rates for respective overseas resident individual shareholders may vary depending on the relevant tax agreements between the countries of their residence and Mainland China. Thus, 10% individual income tax will be withheld from the dividend payable to any individual H Shareholders whose names appear on the H Shareholders’ register of the Company on the record date, unless otherwise stated in the relevant taxation regulations, tax treaties or the Notice.

The Company assumes no responsibilities whatsoever in respect of any claim arising from any delay in, or inaccurate determination of the status of the Shareholders or any disputes over the mechanism of withholding.

PROFIT DISTRIBUTION TO INVESTORS OF NORTHBOUND TRADING

For investors of SEHK (including enterprises and individuals) investing in A Shares listed on the SSE (the “ Northbound Trading ”), their dividends will be distributed in RMB by the Company through the Shanghai Branch of China Securities Depository and Clearing Corporation Limited to the account of the nominees holding such Shares. The Company will withhold and pay income taxes at the rate of 10% and will report to the competent tax authorities for such withholding. For investors of Northbound Trading who are tax residents of other countries and whose country of domicile is a country which has entered into a tax treaty with the PRC stipulating a dividend tax rate of lower than 10%, those enterprises and individuals may by themselves, or may entrust a withholding agent to, apply to the competent tax authorities of the Company for the entitlement of the rate under such tax treaty. Upon approval by the competent tax authorities, the paid amount in excess of the tax payable based on the tax rate according to such tax treaty will be refunded.

The record date and the distribution date of cash dividends and other arrangements for the investors of Northbound Trading will be the same as those for the A Shareholders.

PROFIT DISTRIBUTION TO INVESTORS OF SOUTHBOUND TRADING

For investors of the SSE and the Shenzhen Stock Exchange (including enterprises and individuals) investing in the H Shares listed on SEHK (the “ Southbound Trading ”), their cash dividends will be distributed in RMB. The record date and the distribution date of cash dividends and other arrangements for the investors of Southbound Trading will be the same as those for the H Shareholders. Pursuant to the relevant requirements under the Notice on the Tax Policies Related to the Pilot Program of the Shanghai-Hong Kong Stock Connect (Caishui [2014] No. 81) (《關於滬港 股票市場交易互聯互通機制試點有關稅收政策的通知》（財稅[2014]81號）) and the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong Kong Stock Connect (Caishui [2016] No. 127) 《關於深港股票市場交易互聯互通機制試點有關稅收政策的通知》( （財稅 [2016]127號）) and, for dividends received by domestic individual investors from investing in the H Shares listed on SEHK through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the Company shall withhold individual income tax at the rate of 20% on behalf of

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LETTER FROM THE BOARD

the relevant investors. For dividends received by domestic securities investment funds from investing in the H Shares listed on SEHK through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the tax payable shall be the same as that for individual investors. The Company shall not withhold income tax of dividends for domestic enterprise investors and those domestic enterprise investors shall report and pay the relevant tax themselves.

Shareholders are recommended to consult their tax advisor regarding the tax effects of ownership and disposal of the Shares in the PRC, Hong Kong and other countries (regions).

The cheques for the Profit Distribution will be despatched by ordinary post to the H Shareholders who are entitled to the Profit Distribution at their own risk. In case of joint shareholding, the cheques for the Profit Distribution will be posted to the first named person on the H Shareholders’ register in respect of such joint shareholding.

Expected Timetable for the Half-year Profit Distribution for 2024

Event		2024
		(Hong Kong time)
Latest time for lodging transfer of H Shares for
entitlement to attend and vote at the EGM .	. . . . . . . . . . . . . . . . .	. . . . Monday, 14 October
		(4:30 p.m.)
Closure of the register of members of the Company for
determining the identity of the H Shareholders
who are entitled to attend and vote at the EGM . . . . . . . . . . . . . .		. . Tuesday, 15 October to
		Friday, 18 October
Latest time to return proxy form for the EGM	. . . . . . . . . . . . . . . . .	. . . Thursday, 17 October
		(10:00 a.m.)
Date and time of the EGM . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . Friday, 18 October
		(10:00 a.m.)
Publication of poll results announcement of the	EGM. . . . . . . . . . . . . . . . . Friday, 18 October
Last day of dealings in H Shares on a cum-entitlement basis relating
to the Profit Distribution . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . .	. . Wednesday, 23 October
First day of dealings in H Shares on an ex-entitlement basis relating
to the Profit Distribution. . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . .	. . . Thursday, 24 October
Latest time for lodging transfers of H Shares for registration
in order to qualify for the Profit Distribution	. . . . . . . . . . . . . . . . . . . . . Friday, 25 October
		(4:30 p.m.)
Closure of register of members of the Company	for transfer of
H Shares for determining entitlement to the Profit Distribution . . .		. . Saturday, 26 October to
		Thursday, 31 October

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LETTER FROM THE BOARD

Event

2024 (Hong Kong time)

Record date to qualify H Shareholders for determination of

entitlement to the Profit Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 31 October

Register of members for transfer of H Shares of the Company re-opens . . . Friday, 1 November

Profit Distribution payment date . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 29 November [(Note)]

• Note: The dates with regard to the Profit Distribution are for reference only as they are subject to approval by the Shareholders and might be adjusted by the Company. If there is any such change, the Company will make announcement to inform the Shareholders. All times and dates in this circular are Hong Kong times and dates.

4. RESOLUTION REGARDING THE SIGNING OF THE FINANCIAL SERVICES FRAMEWORK AGREEMENT WITH SHANDONG GOLD GROUP FINANCE CO., LIMITED

Background

Reference is made to the announcement of the Company dated 28 March 2022 in relation to the renewal of the financial services framework agreement entered into between the Company and SDG Finance. Having considered that the existing financial services framework agreement will expire on 31 December 2024, the Company entered into a new financial services framework agreement (the “ New Financial Services Framework Agreement ”) with SDG Finance on 20 September 2024 (after trading hours) to renew these continuing connected transactions for facilitating the Group’s operational needs of financial services. The New Financial Services Framework Agreement will be valid for three years, and will take effect from 1 January 2025 upon approval by the EGM until 31 December 2027.

The principal terms of the New Financial Services Framework Agreement are set out below:

New Financial Services Framework Agreement

Date:

20 September 2024

Parties:

SDG Finance and the Company

Subject matter:

Pursuant to the New Financial Services Framework Agreement, SDG Finance will provide the Group with financial services, among others, (i) deposits and related services (the “ Deposit Services ”); (ii) loan, overdraft, bill and other financing related services under the total credit facilities (the “ Financing Services ”); and (iii) other financial services, including settlement, guarantee, financial consultancy, foreign exchange settlement and sale, and cross-border capital pool (the “ Other Financial Services ”).

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LETTER FROM THE BOARD

Term:

The New Financial Services Framework Agreement will take effect from 1 January 2025 upon approval by the Company’s general meeting until 31 December 2027.

Pricing Policy

The New Financial Services Framework Agreement provides that the interest rates applicable to the Deposit Services provided by SDG Finance to the Group shall (i) comply with the normal commercial terms and the relevant requirements of the PBOC; (ii) be no less than benchmark deposit interest rates for the same period published by the PBOC and interest rates for comparable deposits for the same period provided by other major domestic commercial banks; and (iii) no less than interest rates for comparable deposits for the same period of other members of SDG Group with SDG Finance.

The interest rates for the Financing Services provided by SDG Finance to the Group shall (i) be on normal commercial terms and in compliance with applicable loan interest rate policies; and (ii) be no higher than rates for comparable loans for the same period obtained by members of the Group from other domestic financial institutions. For bill services, the proportion of handling fees shall not be higher than those charged by other domestic financial institutions to members of the Group. No security over the assets of the Group will be granted in respect of the financial assistance given by SDG Finance.

The handling fees for Other Financial Services shall be (i) charged based on the relevant rates or standards published by the PBOC or the NFRA; or (ii) no higher than handling fees for similar financial services provided by other commercial banks to members of the Group, if there are no official rates or standards applicable.

Taking into account that no less favorable interest rates were charged with the Group and other commercial benefits provided to the Group, the Directors consider that the preservation of such financial arrangement with SDG Finance is beneficial to the Group and the Shareholders as a whole.

Reasons for and Benefits of the Transactions

The benefits to the Group from relevant financial services provided by SDG Finance pursuant to the New Financial Services Framework Agreement are as follows:

• (i) the rates on loans and deposits offered by SDG Finance to the Group will be equal to or more favourable than those offered by other PRC commercial banks;

• (ii) SDG Finance is regulated by the PBOC and the NFRA and provides its services in accordance with and in satisfaction of the rules and operational requirements of these regulatory authorities;

• (iii) pursuant to the relevant regulations of the PBOC and the NFRA, the customers of SDG Finance are limited to entities within SDG Group (including the Group), thereby reducing the credit and operational risks that SDG Finance may otherwise be exposed to if its customers included other entities unrelated to SDG Group.

— 10 —

LETTER FROM THE BOARD

Historical Amounts

Set out below are the historical annual caps of the relevant financial services provided by SDG Finance for the three financial years ended/ending 31 December 2024.

	Historical annual caps (RMB million)	Historical annual caps (RMB million)	Historical annual caps (RMB million)
	For the financial year ended/ending
		31 December
	2022	2023	2024
Deposit Services
Maximum daily balance of Deposit
Services	3,000	3,300	3,300
Interest income from Deposit
Services on an actual basis	65	75	75
Financing Services
Maximum daily balance of loan and
other financing services	3,000	3,500	4,300
Maximum daily balance of overdraft
services	900	900	900
Total annual credit facilities	4,300	4,700	5,500
Interest expenses for Financing
Services on an actual basis	75	85	100
Other Financial Services
Handling fees and Other Financial
Services	50	50	50

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LETTER FROM THE BOARD

Set out below are the historical transaction amounts of the relevant financial services provided by SDG Finance for the two financial years ended 31 December 2022 and 2023 as well as the six months ended 30 June 2024.

	Historical transaction amounts	Historical transaction amounts	Historical transaction amounts	Historical transaction amounts
		(RMB million)
				For the six
	For the financial year			months
	**ended 31 **	December		ended 30
	2022		2023	June 2024
Deposit Services
Maximum daily balance of Deposit
Services	2,999.88	3,297.84		3,298.41
Interest income from Deposit
Services on an actual basis	26.43		35.99	19.73
Financing Services
Maximum daily balance of loan and
other financing services	2,392.16	3,068.80		3,276.03
Maximum daily balance of overdraft
services	510.00	300.00		360.00
Total annual credit facilities	4,300.00	4,700.00		5,500.00
Interest expenses for Financing
Services on an actual basis	22.07		20.09	21.06
Other Financial Services
Handling fees and Other Financial
Services	0.98		1.58	0.72

As at the Latest Practicable Date, the Board confirms that the Company’s historical transaction amounts under the existing financial services framework agreement have not exceeded the historical annual caps.

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LETTER FROM THE BOARD

Proposed Caps and Basis of Caps

The proposed caps for the transactions contemplated under the New Financial Services Framework Agreement for the three financial years ending 31 December 2027 are as follows.

	**Proposed annual **	cap (RMB million equivalent)	cap (RMB million equivalent)
	**For the **	financial year ending
		31 December
	2025	2026	2027
Deposit Services
Maximum daily balance of Deposit
Services	3,600	3,800	4,000
Interest income from Deposit
Services on an actual basis	85	100	120
Financing Services
Maximum daily balance of loan and
other financing services	4,800	5,000	5,200
Maximum daily balance of overdraft
services	1,000	1,100	1,200
Total comprehensive credit facilities	6,000	6,300	6,600
Interest expenses for Financing
Services on an actual basis	130	140	150
Other Financial Services
Handling fees and Other Financial
Services	50	50	50

In determining the proposed annual caps for the transactions contemplated under the New Financial Services Framework Agreement, the Company has considered, among others, the following key factors:

• (i) For proposed caps of the Deposit Services, the Company has considered various key factors including the daily deposit balance and the caps set in the historical financial services framework agreements entered into with SDG Finance.

• a. The frequency of Company’s deposit balance reaching close to its annual caps has caused pressure on the daily management of the deposit quota. With the accumulation of operating funds by the member units of the Company and the increase in the requirements for centralized management of the SDG Group’s funds, the scale of funds collected in the fund platform of SDG Finance has been expanding. In 2023, the maximum daily deposit balance was capped at RMB3.3 billion. There were 146 days where the actual deposit balance has exceeded RMB3.2 billion and has been closed to the quota limit and 100 days where the daily deposit balance has reached between RMB2.5 billion and RMB3.2 billion. In 2024, the maximum daily deposit balance was capped at RMB3.3 billion. From January to June 2024, there were 74 days where the

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LETTER FROM THE BOARD

actual deposit balance has exceeded RMB3.2 billion and has been closed to the quota limit and 84 days where the daily deposit balance has reached between RMB2.5 billion and RMB3.2 billion. The frequency of the Company’s scale of deposits reaching close to the quota limit has caused certain pressure on the daily management of the deposit quota, requiring appropriate adjustments to the existing deposit quota.

• b. Matching with the Company’s business development strength. The Company has a comprehensive industrial layout with significant advantages in core resources reserves. Gold prices continue to maintain at a high level, which is favorable for the gold producers to which it belongs. While the Company grows stronger continuously, the scope and scale of its affiliated enterprises will also continue to expand, and at the same time, equity acquisitions, external financing and other businesses will also lead to significant changes in the Company’s monetary funds. In addition, SDG Finance’s cross-border service function has been continuously improved, and the provision of Deposit Services for the Company’s overseas enterprises is also being gradually realized. Based on the development plan of the Company for the next three years, it is necessary to adjust and increase the deposit quota of the Company accordingly to satisfy the long-term cooperation needs of the deposit businesses of both parties.

• c. The connected adjustments in the current loan quota. The current loan is based on the actual business needs of the Company to put forward proposals for quota adjustment. With the increase in the loan quota, the Company’s funds deposited with SDG Finance during the disbursement of the loan funds will be increased accordingly, and the deposit limit is required to be adjusted and increased accordingly.

• (ii) For the proposed caps of the Financing Services, the Company has considered various key factors including the needs of the Company’s business development and the advantages of SDG Finance’s acceptance bills.

• a. Further enhancing the financial support of the Company. With the increase in the number of the Company’s member units and the needs of business development, the demand for liquidity and mergers and acquisitions will increase accordingly, and the current quota for loans and acceptance bills business transactions is not sufficient to meet the business needs of both parties. The increase in the volume of loans provided by SDG Finance to the Company’s member units is beneficial to the Company to obtain low-cost funding.

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LETTER FROM THE BOARD

• b. Fully utilizing the advantages of the acceptance bills of SDG Finance to solve the enterprises’ liquidity needs. The enterprises are generally required to pay 20% to 30% deposit to open acceptance bills in banks, while SDG Finance has a higher credit rating for the Company’s affiliated enterprises and is able to waive the opening deposit for most enterprises, which has the advantages of reducing capital consumption and providing convenience and efficiency for business operations. In 2022 and 2023, the amount of acceptances conducted by the Company’s subsidiaries with SDG Finance was RMB1,892 million and RMB1,308 million, respectively, representing decreases of RMB473 million and RMB327 million in margin expenses as compared with acceptances conducted with banks, respectively. In addition, as a financial institution specializing in serving member companies, SDG Finance can provide timely, convenient and efficient services such as business approval processes and operating sections to fully meet the needs of business operations of the corporates.

• (iii) For Other Financial Services, the Company contemplated that the annual demand for the three financial years ending 31 December 2027 will remain unchanged.

Internal Control

With a view to safeguard the interests of the Independent Shareholders, the Company will require SDG Finance to provide it with periodic reports on its liquidity in order for the Company to determine the suitability of engaging SDG Finance for the transactions contemplated under the New Financial Services Framework Agreement from time to time. The Company’s external auditors will review the transactions as contemplated under the New Financial Services Framework Agreement annually to check and confirm, among others, whether the pricing terms have been adhered to and whether the proposed caps have been exceeded. The Company will have sufficient internal control system in place to ensure that the transactions as contemplated under the New Financial Services Framework Agreement will be on normal commercial terms and no less favourable to the Company than those offered by Independent Third Parties.

Information of the Relevant Parties

The Company

The Company was established by its promoters with approval from the Shandong Economic System Reform Committee (山東省經濟體制改革委員會) and the People’s Government of Shandong Province (山東省人民政府) in January 2000. The Company is an integrated gold company listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange since 2003 and 2018, respectively and engaged in gold exploration, mining, processing, smelting and sales. It is one of the largest gold producers listed domestically and/or in Hong Kong that operates in the PRC, controlling and operating more than 10 gold mines with operation primarily located in Shandong province. The Company has gradually expanded its business into the Inner Mongolia Autonomous Region, Gansu Province, Xinjiang Uygur Autonomous Region, Qinghai Province, Heilongjiang Province, Jilin Province, Yunnan Province and Fujian Province as well as Argentina in South America and Ghana in Africa.

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LETTER FROM THE BOARD

SDG Group Co.

As the controlling shareholder of the Company, SDG Group Co. was established in the PRC in July 1996. SDG Group Co. engages in gold mining related operations, including geological exploration and mining of gold, gold processing, gold smelting and technical services, and production and sales of specialized equipment and supplies and construction materials for gold mines. The gold resources of SDG Group Co. are mainly located in the PRC. As at the Latest Practicable Date, SDG Group Co. directly and indirectly holds approximately 45.30% of the Company’s issued share capital.

SDG Finance

As at the Latest Practicable Date, SDG Finance was held as to 30% by the Company and 70% by SDG Group Co. and is principally engaged in carrying on business approved by the NFRA pursuant to relevant applicable laws and regulations. SDG Finance is an institution regulated by the PBOC and the NFRA. SDG Finance is a non-banking financial institution incorporated in the PRC in July 2013 and is subject to the Administrative Measures on Finance Companies within Group Enterprises (《企業集團財務公司管理辦法》) and other relevant regulations promulgated by the PBOC and the NFRA.

Listing Rules Implications

Any transactions between the Group and SDG Group Co., or its associates (as defined under Chapter 14A of the Hong Kong Listing Rules) will constitute connected transactions under Chapter 14A of the Hong Kong Listing Rules. SDG Finance is controlled by SDG Group Co., hence SDG Finance is a connected person of the Company by virtue of being an associate of the Company’s substantial shareholder under Chapter 14A of the Hong Kong Listing Rules. As a result, the New Financial Services Framework Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules.

As each of the percentage ratio(s) (as defined in Rule 14.07 of the Hong Kong Listing Rules) applicable to the Deposit Services under the New Financial Services Framework Agreement is more than 0.1% but less than 5%, the Deposit Services provided by SDG Finance to the Group are subject to the reporting and announcement requirements as set out in Rule 14A.35 of the Hong Kong Listing Rules but exempt from the Independent Shareholders’ approval requirement under Rules 14A.36 to 14A.39 of the Hong Kong Listing Rules. The Company will disclose the relevant details in the next annual report to be published and the accounts of the Company in accordance with the relevant requirements as set out in Rule 14A.71 of the Hong Kong Listing Rules.

For the Financing Services to be provided by SDG Finance to the Group, its services are conducted on normal commercial terms or better and are not secured by the assets of the Group. According to Rule 14A.90 of the Hong Kong Listing Rules, the Financing Services are fully exempt from reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules.

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LETTER FROM THE BOARD

In respect of Other Financial Services to be provided by SDG Finance to the Group, each of the percentage ratio(s) is below the de minimis threshold set out in Rule 14A.76 of the Hong Kong Listing Rules, therefore the provision of Other Financial Services by SDG Finance to the Group is exempt from the reporting, announcement and Independent Shareholders’ approval requirements as set out in Chapter 14A of the Hong Kong Listing Rules.

As the A Shares are listed on the Shanghai Stock Exchange, the Company will continue to be subject to and regulated by the SSE Listing Rules and other applicable laws and regulations in the PRC insofar as the A Shares remain listed. The requirements of the Hong Kong Listing Rules in relation to connected transactions are different from those of the SSE Listing Rules. In particular, the definition of connected person under the Hong Kong Listing Rules is different from the definition of related party under the SSE Listing Rules. Therefore, a connected transaction under the Hong Kong Listing Rules may or may not constitute a related party transaction under the SSE Listing Rules, and vice versa.

According to the SSE Listing Rules and the Articles of Association, the New Financial Services Framework Agreement and the transactions contemplated thereunder have to be submitted to the general meeting for consideration and approval. An ordinary resolution will be proposed at the EGM to seek for approval of the New Financial Services Framework Agreement and the transactions contemplated thereunder.

Confirmation by the Board

The Directors, including the independent non-executive Directors, are of the view that, the above continuing connected transactions under the New Financial Services Framework Agreement are entered into on normal commercial terms in the ordinary and usual course of business of the Group, are fair and reasonable and are in the interest of the Company and its Shareholders as a whole.

The Directors, including the independent non-executive Directors, are also of the view that, the proposed annual caps set out for the transactions contemplated under the New Financial Services Framework Agreement are fair and reasonable and are in the interests of the Company and its Shareholders as a whole.

The Directors, Mr. Li Hang, Mr. Liu Qin and Ms. Wang Xiaoling, who also hold senior management positions in SDG Group Co., are deemed to have material interests in the continuing connected transactions contemplated under the New Financial Services Framework Agreement and have abstained from voting on the relevant resolution of the Board. Save for the Directors mentioned above, none of the other Directors has or is deemed to have a material interest in the above transactions.

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LETTER FROM THE BOARD

5. EGM

The EGM is to be held at the conference room of the Company, No. 2503, Jingshi Road, Licheng District, Jinan, Shandong Province, the PRC at 10:00 a.m. on Friday, 18 October 2024. The notice of the EGM is set out on pages 20 to 21 of this circular.

Any Shareholder entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote on his/her behalf. A proxy need not be a Shareholder. If you intend to appoint a proxy to attend the EGM and vote on your behalf, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return it by hand, by post or by facsimile, to the Company’s H share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (for H Shareholders only) as soon as possible and in any event not later than 24 hours before the time appointed for the holding of the EGM (i.e. before 10:00 a.m. on Thursday, 17 October 2024) or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof should you so wish.

6. CLOSURE OF REGISTER OF MEMBERS OF H SHARES

For the purpose of ascertaining the Shareholders who are entitled to attend and vote at the EGM, the H Shares register of members of the Company will be closed from Tuesday, 15 October 2024 to Friday, 18 October 2024, both dates inclusive, during which period no transfer of H Shares will be effected. H Shareholders whose names appear on the H Share register of members of the Company at the close of business on Monday, 14 October 2024 are entitled to attend and vote at the EGM.

In order to qualify to attend and vote at the EGM, all transfer instruments accompanied by the relevant share certificates must be lodged by H Shareholders with the Company’s H Share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong no later than 4:30 p.m. on Monday, 14 October 2024.

7. VOTING

Pursuant to Rule 13.39(4) of the Hong Kong Listing Rules and Article 119 of the Articles of Association, unless the chairman makes a decision in the spirit of honesty and credibility and agrees that the resolution on relevant procedures or administrative matters shall be voted on by show of hands, voting for a general meeting shall be held by ballot.

Pursuant to Article 111 of the Articles of Association, Shareholders (including proxies) shall exercise their voting rights according to the number of voting shares they represent, with one vote for each share. Pursuant to Article 120 of the Articles of Association, on a poll taken at a meeting, a Shareholder (including proxy) entitled to two or more votes need not cast all his/her votes in the same way.

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LETTER FROM THE BOARD

8. RECOMMENDATION

The Directors are of the view that the proposed resolutions at the EGM are fair and reasonable and in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the EGM.

9. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in satisfaction of the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors, after 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.

Yours faithfully, By order of the Board Shandong Gold Mining Co., Ltd. Li Hang Chairman

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NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING

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SHANDONG GOLD MINING CO., LTD. 山東黃金礦業股份有限公司

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1787)

NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2024 fifth extraordinary general meeting (the “ EGM ”) of Shandong Gold Mining Co., Ltd. (the “ Company ”) will be held at the conference room of the Company, No. 2503, Jingshi Road, Licheng District, Jinan, Shandong Province, the PRC at 10:00 a.m. on Friday, 18 October 2024 for the purpose of considering and, if thought fit, passing the following resolutions. Unless otherwise stated, the capitalized terms used herein shall have the same meanings as those defined in the circular of the Company dated 27 September 2024.

ORDINARY RESOLUTIONS

1. To consider and approve the resolution regarding the half-year profit distribution plan for 2024 of the Company and proposal to carry out the action of “Improving Quality, Increasing Efficiency and Enhancing Returns”.

2. To consider and approve the resolution regarding the signing of the Financial Services Framework Agreement with Shandong Gold Group Finance Co., Limited.

By order of the Board Shandong Gold Mining Co., Ltd. Li Hang Chairman

Jinan, the PRC, 27 September 2024

As at the date of this notice, the executive directors of the Company are Mr. Liu Qin, Mr. Wang Shuhai and Mr. Tang Qi; the non-executive directors of the Company are Mr. Li Hang and Ms. Wang Xiaoling; and the independent non-executive directors of the Company are Mr. Wang Yunmin, Mr. Liew Fui Kiang and Ms. Zhao Feng.

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NOTICE OF 2024 FIFTH EXTRAORDINARY GENERAL MEETING

Notes:

1. Holders of the Company’s H Shares should note that the H Shares register of members of the Company will be closed from Tuesday, 15 October 2024 to Friday, 18 October 2024 (both days inclusive). All transfer documents accompanied by the relevant share certificates must be lodged with the Company’s H share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong no later than 4:30 p.m. on Monday, 14 October 2024. H Shareholders whose names appear on the H Shares register of members of the Company at the close of business on Monday, 14 October 2024 are entitled to attend with their identity cards or passports and vote at the EGM. The record date and arrangements in respect of the holders of A Shares of the Company who are entitled to attend the EGM will be determined and announced separately in the PRC.

2. Any shareholder entitled to attend and vote at the EGM is entitled to appoint a proxy or more proxies (who need not be a shareholder of the Company) to attend the EGM and vote thereat in his/her stead. For any shareholder who appoints more than one proxy, the voting right can only be exercised by his/her proxies on a poll.

3. Any shareholder who intends to appoint a proxy to attend the EGM shall put it in writing, with the proxy form to be signed by the appointor or his/her attorney duly authorized in writing. If the appointor is a corporation, the proxy form must be affixed with its common seal, or signed by any of its directors or attorney duly authorized in writing. If the proxy form is signed by an attorney authorized by the appointor, the power of attorney or other authorization documents must be notarially certified. The notarially certified power of attorney or other authorization documents together with the proxy form must be delivered to the Company’s H share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (for H shareholders only) not later than 24 hours before the time appointed for the holding of the EGM (i.e. before 10:00 a.m. on Thursday, 17 October 2024) or any adjournment thereof (as the case may be). Completion and return of the proxy form will not affect the rights of the shareholders to attend and vote at the EGM in person.

4. Proxies of holders of the Company’s H Shares shall bring along the proxy form, instrument(s) for appointing a proxy (if applicable) and the proxies’ identity cards or passports to attend the EGM.

5. According to Article 108 of the Articles of Association, an ordinary resolution shall be passed by more than half of the votes cast by the shareholders (including proxies) present at the general meeting, while a special resolution shall be passed by more than two-thirds of the votes cast by the shareholders (including proxies) present at the general meeting.

6. Directors, supervisors and senior management of the Company and the witnessing lawyers and other relevant personnel employed by the Company will attend the EGM.

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