Xinjiang Xinxin Mining Industry Co., Ltd. - Proxy Solicitation & Information Statement 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult a 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 Xinjiang Xinxin Mining Industry Co., Ltd. (the “Company”), you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or the transferee or to the bank or stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

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

(Stock Code: 3833)

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee

and the Independent Shareholders

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A notice convening the extraordinary general meeting of the Company to be held on 21 August 2009 at 11:00 a.m. is set out on pages 46 to 47 of this circular.

A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 27 to 28 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 29 to 41 of this circular.

A notice convening an extraordinary general meeting of Xinjiang Xinxin Mining Industry Co., Ltd. to be held at 20th Level, Conference Room, Youse Building, No. 4 You Hao North Road, Urumqi, Xinjiang, the People’s Republic of China (the “PRC”) on 21 August 2009 at 11:00 a.m. is set out on pages 46 to 47 of this circular.

Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

For identification purposes only

3 July 2009

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	46

– i –

DEFINITIONS

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

“Announcement”

the announcement published by the Company on 11 June 2009

“Associates” has the meaning ascribed to it under the Listing Rules
“Board” or “Board of Directors” the board of directors of the Company
“Company”
Xinjiang Xinxin Mining Industry Co., Ltd.* ( ), a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the Stock Exchange
“Company’s Products”
nickel cathode, copper cathode, sulphuric acid, water, electricity and other ancillary materials provided by the Company to the Xinjiang Non-ferrous Group under the Existing Mutual Supply Agreement and the Renewed Mutual Supply Agreement
“connected person”
has the meaning ascribed to it under the Listing Rules
“Construction Services”
construction-related services, including project design, construction and facilities installation provided by the Xinjiang Non-ferrous Group to the Company under the Existing Mutual Supply Agreement and the Renewed Mutual Supply Agreement
“Director(s)”
one or all of the director(s) of the Company
“EGM”
the extraordinary general meeting of the Company to be held on 21 August 2009 for the approval of, among other things, the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps
“Existing Comprehensive Services Agreement”
the comprehensive services contract dated 17 September 2007 entered into between the Company and Fuyun Xingtong in respect of the provision of supporting services to the Kalatongke Mine

– 1 –

DEFINITIONS

“Existing Mutual Supply Agreement”
“Existing Property Lease Agreement”
“Fukang Refinery”
“Fuyun Xingtong”
“Group”
“Hong Kong”
“Independent Board Committee”
“Independent Financial Adviser” or “Hercules Capital”
“Independent Shareholders”
the master mutual supply agreement dated 17 September 2007 entered into between the Company and Xinjiang Non-ferrous in respect of the mutual provision of production supplies and ancillary services
the property leasing contract dated 22 June 2007 entered into between the Company and Xinjiang Non-ferrous in respect of the leasing of the Office Premises
the refinery located in Fukang, Xinjiang where Xinjiang Xinxin Mining Industry Co., Ltd. Fukang Refinery* ( ), a branch of the Company, carries out its business activities
Xinjiang Non-ferrous Fuyun Xingtong Service Company Limited* ( ( ) ), a limited liability company
established in the PRC and a wholly-owned subsidiary of Xinjiang Non-ferrous
the Company and its subsidiary
the Hong Kong Special Administrative Region of the PRC
an independent committee of the Board comprising the independent non-executive Directors, namely Mr. Chen Jianguo, Mr. Sun Baosheng and Mr. Ng Yuk Keung, to advise the Independent Shareholders in respect of the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps
Hercules Capital Limited, a licensed corporation to carry out type 6 regulated activity (advising on corporate finance) under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps

in respect of the Revised Annual Caps, the Renewed Annual Caps and the transactions contemplated by the Renewed Mutual Supply Agreement, shareholders of the Company other than the Xinjiang Non-ferrous Group

– 2 –

DEFINITIONS

“Independent Third Party(ies)”
“Kalatongke Mine”
“Latest Practicable Date”
“Listing”
“Listing Rules”
“Office Premises”
“PRC”
“Prospectus”
“Renewed Annual Caps”
“Renewed Comprehensive Services Agreement”
third party independent of and not connected with the Company and its connected persons
the mine located in Fuyun County, Xinjiang where Xinjiang Xinxin Mining Industry Co., Ltd. Kalatongke Nickel and Copper Mine* ( ), a branch of the
Company, carries out its business activities
29 June 2009, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
listing of the H Shares (overseas listed foreign shares in the Company’s ordinary share capital) on the main board of the Stock Exchange
the Rules Governing the Listing of Securities on the Stock Exchange
the office premises on the 7th and 8th floors, Youse Building, No. 4 You Hao North Road, Urumqi, Xinjiang, the PRC with a total gross floor area of approximately 1,992 square metres

the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, Taiwan and the Macau Special Administrative Region of the PRC)

the prospectus of the Company dated 27 September 2007

the annual caps for the provision of the Construction Services, the Supporting and Ancillary Services and the Company’s Products under the Renewed Mutual Supply Agreement for the three years ending 31 December 2012

the comprehensive services contract dated 11 June 2009 entered into between the Company and Fuyun Xingtong in respect of the provision of supporting services to the Kalatongke Mine

– 3 –

DEFINITIONS

“Renewed Mutual Supply Agreement”
“Renewed Property Lease Agreement”
“Reorganisation”
“Revised Annual Caps”
“RMB”
“SFO”
“Stock Exchange”
“subsidiary”
“Supporting and Ancillary Services”
the master mutual supply agreement dated 11 June 2009 entered into between the Company and Xinjiang Nonferrous in respect of the mutual provision of the Construction Services, the Supporting and Ancillary Services and the Company’s Products the property leasing contract dated 11 June 2009 entered into between the Company and Xinjiang Non-ferrous in respect of the leasing of the Office Premises
the reorganisation of the assets and liabilities of Xinjiang Non-ferrous pursuant to which the Company was incorporated on 1 September 2005 including the transfer of certain assets and interests to the Company subsequent to the Company’s incorporation in preparation for the global offering of Company’s shares in 2007
the revised annual caps for the increase in the provision of the Construction Services under the Existing Mutual Supply Agreement in respect of the year ending 31 December 2009

Renminbi, the lawful currency of the PRC

the Securities and Future Ordinance (cap 571 of the Laws of Hong Kong)
The Stock Exchange of Hong Kong Limited
has the meaning ascribed to it under section 2 of the Companies Ordinance (Chapter 32, Laws of Hong Kong)

services provided by the Xinjiang Non-ferrous Group to the Company under the Existing Mutual Supply Agreement and the Renewed Mutual Supply Agreement which include: (i) production supplies, transportation and supporting services: supplemental production materials (including chemical materials, coal, coke and product packaging materials) and work safety products; (ii) storage, transportation and loading services: warehousing services in Beijing for the sales and distribution of nickel cathode to the Company’s end-customers in Beijing and its surrounding areas, Hebei province and the northeastern region of the PRC; transportation service for the delivery of materials including coke and coal; and (iii) other supporting and ancillary services: machinery repair and improvement

– 4 –

DEFINITIONS

“Xinjiang Non-ferrous” Xinjiang Non-ferrous Metal Industry (Group) Ltd.* ( ( ) ), a wholly stateowned enterprise with limited liability and incorporated in the PRC, being one of the promoters and the controlling shareholder of the Company “Xinjiang Non-ferrous Group” Xinjiang Non-ferrous and its subsidiaries, excluding the Company “Yakesi” Xinjiang Yakesi Resources Co. Ltd ( ), a joint stock limited company incorporated in the PRC with limited liability “%” per cent.

– 5 –

LETTER FROM THE BOARD

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**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3833)

Executive Directors: Mr. Yuan Ze Mr. Shi Wenfeng Mr. Zhang Guohua Mr. Liu Jun

Statutory address and principal place of business in the PRC: 7/F Youse Building No. 4 You Hao North Road Urumqi, Xinjiang

Non-executive Directors: Mr. Zhou Chuanyou Mr. Niu Xuetao

Independent Non-executive Directors: Mr. Chen Jianguo Mr. Sun Baosheng Mr. Ng Yuk Keung

Registered office in Hong Kong: Unit 3102-3105, 31/F, Office Tower Convention Plaza 1 Harbour Road Wanchai, Hong Kong

3 July 2009

To the Shareholders

Dear Sir or Madam,

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS –

(1) RENEWED COMPREHENSIVE SERVICES AGREEMENT;
- (2) RENEWED PROPERTY LEASE AGREEMENT; AND
  - (3) RENEWED MUTUAL SUPPLY AGREEMENT
A. REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

Background

Reference is made to the Announcement of the Company dated 11 June 2009 in relation to the revision of annual caps for the Construction Services and the Company’s Products under the Existing Mutual Supply Agreement.

For identification purposes only

– 6 –

LETTER FROM THE BOARD

Reference is also made to the continuing connected transactions under the Existing Mutual Supply Agreement, the details of which are set out in the Prospectus. The Existing Mutual Supply Agreement includes the provision of (a) the Construction Services by the Xinjiang Non-ferrous Group to the Company; (b) the Supporting and Ancillary Services by the Xinjiang Non-ferrous Group to the Company; and (c) the Company’s Products by the Company to the Xinjiang Non-ferrous Group.

EXISTING MUTUAL SUPPLY AGREEMENT

Date: 17 September 2007 Parties: the Company and Xinjiang Non-ferrous Term: 12 October 2007 to 31 December 2009

Subject Matter

On 17 September 2007, the Company and Xinjiang Non-ferrous entered into the Existing Mutual Supply Agreement in respect of the mutual provision of the Construction Services, the Supporting and Ancillary Services and the Company’s Products. The Existing Mutual Supply Agreement will expire on 31 December 2009.

Term

The principal terms of the Existing Mutual Supply Agreement include the followings:

the Existing Mutual Supply Agreement is for a term commencing from 12 October 2007 and ending on 31 December 2009 which may be renewed upon agreement by Xinjiang Non-ferrous and the Company, subject to the approval by the Stock Exchange and/or the Independent Shareholders, if applicable;
the Company and the Xinjiang Non-ferrous Group are at liberty to procure from or provide to any Independent Third Party any of the required services and products save and except that Xinjiang Non-ferrous must provide the Company with services or supplies on terms no less favourable than those offered to any Independent Third Party and that Xinjiang Non-ferrous must source nickel cathode and copper cathode exclusively from the Company; and
each party of the Existing Mutual Supply Agreement may terminate the mutual provision of products and services on not less than six months’ prior written notice, however Xinjiang Non-ferrous may not terminate its service if the Company has informed them by written notice that the Company is unable to obtain similar products and services from an Independent Third Party (save that the Company has provided written consent to the termination by Xinjiang Non-ferrous).

– 7 –

LETTER FROM THE BOARD

The Xinjiang Non-ferrous Group has agreed to provide the Company with the Construction Services and the Supporting and Ancillary Services. The Company has agreed to provide the Xinjiang Non-ferrous Group with supplies of the Company’s Products.

Consideration

The fees in relation to the above products, supplies and services payable between the Company and Xinjiang Non-ferrous for the terms of the Existing Mutual Supply Agreement are determined principally by commercial negotiation between the parties according to the principles of fairness and reasonableness with reference to the market price of the mutual supply services from time to time. Such transactions will be conducted in the ordinary and usual course of business of the Company, on normal commercial terms and on terms not less favourable to the Company than terms available to or from (as appropriate) Independent Third Parties.

The mutual supply services will be provided according to the following pricing policies in order of priority:

the State-prescribed price ( ) (including any price prescribed by any relevant local government), if applicable;
where there is no State-prescribed price, then the State-guidance price ( );
where there is neither a State-prescribed price nor a State-guidance price, the market price;
where none of the above is applicable, the price shall be determined by the parties based on reasonable costs incurred by them in providing the services plus a profit margin of not more than 5% of such costs; and
the Company and Xinjiang Non-ferrous will ensure that any specific agreements which set out the specific terms and conditions for the provision of any such services are entered into between the parties in accordance with the terms and conditions of the Existing Mutual Supply Agreement.

As a result of significant increases in the provision of the Construction Services by the Xinjiang Non-ferrous Group to the Company and the Company’s Products by the Company to the Xinjiang Non-ferrous Group recently, the Company expects that the fees payable to the Xinjiang Non-ferrous Group and the fees received from the provision of the Company’s Product to the Xinjiang Non-ferrous Group pursuant to the Existing Mutual Supply Agreement will correspondingly increase sharply, and the annual caps for the Construction Services and the provision of the Company’s Products in respect of the year ending 31 December 2009 will accordingly be insufficient. The Directors therefore

– 8 –

LETTER FROM THE BOARD

propose to revise the annual caps for the Construction Services and the provision of the Company’s Products in respect of the year ending 31 December 2009 under the Existing Mutual Supply Agreement as set out in this circular.

The original annual caps for the provision of the Supporting and Ancillary Services by the Xinjiang Non-ferrous Group to the Company is expected to be sufficient for the year ending 31 December 2009 and therefore no revision of the relevant annual caps is required.

The original annual caps for the Construction Services and the provision of the Company’s Products for each of the three years ending 31 December 2009 and the transaction amounts for the five months ended 31 May 2009 and their respective revised annual caps for the year ending 31 December 2009 under the Existing Mutual Supply Agreement are set out below:

				Transaction
	Original	Original	Original	amounts	Revised
	annual caps	annual caps	annual caps	for the	annual caps
	for the	for the	for the year	five months	for the
	year ended	year ended	ending	ended	year ending
	31 December	31 December	31 December	31 May	31 December
	2007	2008	2009	2009	2009
	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)
Construction Services
fees under the
Existing Mutual
Supply Agreement	85,015,700	197,007,000	120,200,000	36,801,100	293,822,400
The Company’s
Products fees under
the Existing Mutual
Supply Agreement	18,632,300	18,455,400	19,436,900	7,174,200	25,975,000

The Company confirms that the transaction amounts for the Construction Services and the provision of the Company’s Products under the Existing Mutual Supply Agreement for the period from 1 January 2009 to the date of this circular have not exceeded the respective original annual caps.

All the existing terms and conditions under the Existing Mutual Supply Agreement remain unchanged.

– 9 –

LETTER FROM THE BOARD

Reasons for the revision of the annual caps for the provision of the Construction Services and the Company’s Products for the year ending 31 December 2009

The Construction Services

The Company completed its acquisition of 50% equity interest in Hami Hexin Mining Company Limited* ( ) in August 2008. As Hami Hexin Mining Company Limited is undergoing project constructions to increase its daily production capacity, the relevant Construction Services being provided by the Xinjiang Non-ferrous Group to the Company will be increased by approximately RMB36,580,400 in 2009. A number of contracts for such Construction Services were signed between Hami Hexin Mining Company Limited and the Xinjiang Non-ferrous Group before the 50% equity interest in Hami Hexin Mining Company Limited were acquired by the Company.

Similarly, the Company completed its acquisition of 95% equity interest in Xinjiang Zhongxin Mining Company Limited* ( ) in June 2009. As Xinjiang Zhongxin Mining Company Limited is carrying out project constructions to increase its annual production capacity of water hardening and nickel matte by 9,565 tons (or 5,000 tons of nickel metal), the relevant Construction Services being provided by the Xinjiang Non-ferrous Group to the Company will be increased by approximately RMB8,400,000 in 2009. A number of contracts for such Construction Services were signed between Xinjiang Zhongxin Mining Company Limited and the Xinjiang Nonferrous Group before the 95% equity interest in Xinjiang Zhongxin Mining Company Limited were acquired by the Company.

Further, as certain construction works of the technical improvement projects in relation to the Kalatongke Mine and the Fukang Refinery originally scheduled to be carried out in year 2008 had been postponed to year 2009, such construction works are required to be accelerated in order to increase the annual production capacity of nickel cathode and copper cathode to 13,000 tons and 12,000 tons respectively by the end of 2009, therefore the relevant Construction Services being provided by the Xinjiang Non-ferrous Group to the Kalatongke Mine and the Fukang Refinery will be increased by approximately RMB128,642,000.

In light of the foregoing, it is expected that there will be an increase in the transaction amounts for the Construction Services under the Existing Mutual Supply Agreement for the period ending 31 December 2009 and it is anticipated that the original annual caps for the Construction Services will not be sufficient to cover the anticipated increase in the transaction amounts for the Construction Services. As the actual transaction amounts for the Construction Services for the five months ended 31 May 2009 are approaching its original annual caps, the revision of the annual caps thereof will be required.

– 10 –

LETTER FROM THE BOARD

The Company’s Products

It is expected that the transaction amounts for the provision of the Company’s Products to the Xinjiang Non-ferrous Group under the Existing Mutual Supply Agreement for the period ending 31 December 2009 will increase by approximately RMB6,538,100. The reason for such an increase is because the supplies of water, electricity and supporting materials to the Xinjiang Non-ferrous Group for providing the Construction Services to the Company have been increased in order to accelerate the progress of the construction projects. It is anticipated that the original annual caps for the provision of the Company’s Products will not be sufficient to cover the anticipated increase in the transaction amounts for such provisions. As the actual transaction amounts for the provision of the Company’s Products for the five months ended 31 May 2009 are approaching its original annual caps, the revision of the annual caps thereof will be required.

For the reasons stated above, the Company proposes to revise the original annual caps for the provision of the Construction Services and the Company’s Products under the Existing Mutual Supply Agreement for the year ending 31 December 2009. In view of the above, the Directors (including the independent non-executive Directors) consider that the Revised Annual Caps for the Construction Services and the revised annual caps for the provision of the Company’s Products for the year ending 31 December 2009 under the Existing Mutual Supply Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Directors are not aware of any disadvantage of the revisions.

Listing Rules Requirements

Pursuant to the Listing Rules, if the Company proposes to revise the annual caps for continuing connected transaction, the Company will have to re-comply with the provisions of Chapter 14A of the Listing Rules in relation to the relevant connected transaction. Xinjiang Non-ferrous is the controlling shareholder of the Company and therefore a connected person of the Company under the Listing Rules. Therefore, the transactions contemplated under the Existing Mutual Supply Agreement will constitute continuing connected transactions for the Company under the Listing Rules.

Given that the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) for the Revised Annual Caps for the Construction Services under the Existing Mutual Supply Agreement exceed 2.5% on an annual basis, the Revised Annual Caps for the Construction Services under the Existing Mutual Supply Agreement are subject to reporting, announcement, annual review requirements under Rules 14A.37 to 14A.40 and Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

Given that the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) for the revised annual caps for the provision of the Company’s Products under the Existing Mutual Supply Agreement are less than 2.5% on an annual basis, the

– 11 –

LETTER FROM THE BOARD

revised annual caps for the provision of the Company’s Products under the Existing Mutual Supply Agreement are subject to reporting, announcement and annual review requirements under Rules 14A.37 to 14A.40 and is exempt from the independent shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

Any connected person with a material interest in the relevant transaction, and any shareholder with a material interest in the relevant transaction and its associate, will not vote. Since Xinjiang Non-ferrous is the controlling shareholder of the Company, it and its Associates will be abstained from voting in relation to the approval of the Revised Annual Caps.

B. CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

Background

Reference is made to the Announcement of the Company dated 11 June 2009 in relation to the Renewed Comprehensive Services Agreement, the Renewed Property Leas Agreement and the Renewed Mutual Supply Agreement.

Reference is also made to the continuing connected transactions under (i) the Existing Comprehensive Services Agreement; (ii) the Existing Property Lease Agreement; and (iii) the Existing Mutual Supply Agreement and their respective annual caps for the three years ended 31 December 2009, the details of which are set out in the Prospectus. The annual caps for the continuing connected transactions under the Existing Comprehensive Services Agreement, the Existing Property Lease Agreement and the Existing Mutual Supply Agreement previously set for the three years ending 31 December 2009 will expire on 31 December 2009 and the Company proposes that the said annual caps for the three years ending 31 December 2012 be renewed.

On 11 June 2009, the Company entered into the Renewed Comprehensive Services Agreement, the Renewed Property Lease Agreement and the Renewed Mutual Supply Agreement.

1. RENEWED COMPREHENSIVE SERVICES AGREEMENT

Date: 11 June 2009 Parties: the Company and Fuyun Xingtong Term: 1 January 2010 to 31 December 2012

– 12 –

LETTER FROM THE BOARD

Subject Matter

On 17 September 2007, the Company and Fuyun Xingtong entered into the Existing Comprehensive Services Agreement pursuant to which Fuyun Xingtong agreed to provide supporting services to the Kalatongke Mine. The Existing Comprehensive Services Agreement will expire on 31 December 2009.

On 11 June 2009, the Company and Fuyun Xingtong entered into the Renewed Comprehensive Services Agreement pursuant to which Fuyun Xingtong agreed to continue to provide the Company supporting services to the Kalatongke Mine.

Term

The principal terms of the Renewed Comprehensive Services Agreement include the followings:

Fuyun Xingtong agrees to provide the Company with certain supporting services including educational services, nursery, medical and healthcare services to the Company’s employees at the Kalatongke Mine for a term commencing on 1 January 2010 to 31 December 2012 which may be further renewed upon agreement by Fuyun Xingtong and the Company, subject to the approval by the Stock Exchange and/or the Independent Shareholders, if applicable;
the Company is entitled to obtain such services from any Independent Third Party. If the Company is able to obtain better terms from any Independent Third Party provider than those offered by Fuyun Xingtong, the Company is entitled to request Fuyun Xingtong to offer the Company those better terms, and if Fuyun Xingtong refuses, the Company is entitled to terminate the provision of such services by Fuyun Xingtong; and
the Renewed Comprehensive Services Agreement is conditional and effective upon it having complied with the relevant Listing Rules and approved by the shareholders of the Company, if applicable.

Consideration

The supporting services fees payable by the Company to Fuyun Xingtong for the terms of the Renewed Comprehensive Services Agreement is determined principally by commercial negotiation between the parties according to the principles of fairness and reasonableness with reference to the market price of the supporting services from time to time. Such transactions will be conducted in the ordinary and usual course of business of the Company, on normal commercial terms and on terms not less favourable to the Company than terms available to or from (as appropriate) Independent Third Parties.

– 13 –

LETTER FROM THE BOARD

The supporting services will be provided according to the following pricing policies in order of priority and to be settled on a monthly basis:

the State-prescribed price ( ) (including any price prescribed by any relevant local government), if applicable;
where there is no State-prescribed price, then the State-guidance price ( );
where there is neither a State-prescribed price nor a State-guidance price, the market price which is determined by (i) the price offered by an Independent Third Party for providing similar services in an area where such supporting services are provided under general commercial terms, or (ii) where not applicable, the market price offered by an Independent Third Party for providing similar services in the PRC under general commercial terms;
where none of the above is applicable, the price shall be determined by the parties based on reasonable costs incurred by Fuyun Xingtong in providing the services plus a profit margin of not more than 5% of such costs; and
the Company and Xinjiang Non-ferrous will ensure that any specific agreements which set out the specific terms and conditions for the provision of any such services are entered into between the parties in accordance with the terms and conditions of the Renewed Comprehensive Services Agreement.

Historical figures

The supporting services fees paid by the Company to Fuyun Xingtong for each of the two years ended 31 December 2008 and the five months ended 31 May 2009 under the Existing Comprehensive Services Agreement are set out below:

			Transaction
	Transaction	Transaction	amounts
	amounts	amounts	for the
	for the	for the	five months
	year ended	year ended	ended
	31 December	31 December	31 May
	2007	2008	2009
	(RMB)	(RMB)	(RMB)
The supporting services fees
under the Existing
Comprehensive Services
Agreement	2,320,900	2,760,900	1,337,000

– 14 –

LETTER FROM THE BOARD

Proposed Annual Caps

The Directors have considered and proposed the following annual caps in respect of the supporting services fees under the Renewed Comprehensive Services Agreement:

	For the year ending 31	For the year ending 31	December
	2010	2011	2012
	(RMB)	(RMB)	(RMB)
Annual caps for the supporting
services fees under the
Renewed Comprehensive
Services Agreement	3,652,990	3,985,080	3,985,080

In determining the above annual caps, the Directors have assumed that the Company’s business will continue to grow and the need for the provision of supporting services by Fuyun Xingtong to the Company will continue to increase. The above proposed annual caps for the supporting services fees under the Renewed Comprehensive Services Agreement for the three years ending 31 December 2012 have been determined based on the historical transaction amounts, the development trend of the Company’s business, the expected demand and supply of its products and the expected increase in its workforce.

The proposed annual caps for the supporting services fees under the Renewed Comprehensive Services Agreement for the three years ending 31 December 2012 are higher than its historical transaction amount for the year ended 31 December 2008 and the five months ended 31 May 2009. Such expected increase are as a result of the expected increase of the labour cost caused by the increase in salary and other ancillary expenses on insurance costs and other employment related benefits.

The Directors consider that the above annual caps are reasonably determined pursuant to Rule 14A.35(2) of the Listing Rules.

Reasons for and benefits of the Renewed Comprehensive Services Agreement

Under the Reorganisation, the Xinjiang Non-ferrous Group has retained certain assets and businesses which formerly provided supporting services to the Kalatongke Mine. In order for the provision of such services to be continued after the Listing, the Company entered into the Existing Comprehensive Services Agreement with Fuyun Xingtong.

The Directors believe that it is in the best interest of the Company that it enters into the Renewed Comprehensive Services Agreement to continue to procure the supporting services from Fuyun Xingtong in order to ensure a smooth operation of the Company’s business as its business and workforce continues to grow.

– 15 –

LETTER FROM THE BOARD

The Directors (including the independent non-executive Directors) are of the view that the terms of the Renewed Comprehensive Services Agreement was entered into on normal commercial terms and such terms are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Directors are not aware of any disadvantage of the Renewed Comprehensive Services Agreement.

2. RENEWED PROPERTY LEASE AGREEMENT

Date: 11 June 2009 Parties: the Company and Xinjiang Non-ferrous Term: 1 January 2010 to 31 December 2012

Subject Matter

On 22 June 2007, the Company and Xinjiang Non-ferrous entered into the Existing Property Lease Agreement pursuant to which Xinjiang Non-ferrous agreed to lease to the Company the Office Premises for office use. The Existing Property Lease Agreement will expire on 31 December 2009.

On 11 June 2009, the Company and Xinjiang Non-ferrous entered into the Renewed Property Lease Agreement pursuant to which Xinjiang Non-ferrous agreed to continue to lease the Office Premises to the Company.

Term

The principal terms of the Renewed Property Lease Agreement include the followings:

the term is for a period commencing from 1 January 2010 and ending 31 December 2012; the Company will be entitled to renew the lease by giving two months’ written notice prior to its expiry and entering into a new lease with Xinjiang Non-ferrous;
the annual rental is RMB1,635,930;
the Company’s rights under the Renewed Property Lease Agreement survive any sale by Xinjiang Non-ferrous of the Office Premises or any part thereof and remain valid against Xinjiang Non-ferrous and/or the new owner of the Office Premises or any part thereof;
if Xinjiang Non-ferrous intends to sell the Office Premises or any part thereof, it has to give the Company one month’s prior written notice, and the Company is granted a right of first refusal on terms Xinjiang Non-ferrous offers to any Independent Third Party; and

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LETTER FROM THE BOARD

the Company is entitled to sub-let the Office Premises or any part thereof to its associated entities during the subsistence of the lease.

Consideration

The rental fees payable by the Company to Xinjiang Non-ferrous for the terms of the Renewed Property Lease Agreement are determined principally by commercial negotiation between the parties according to the principles of fairness and reasonableness with reference to the prevailing market condition in the PRC and market rates of comparable properties. Such transactions will be conducted in the ordinary and usual course of business of the Company, on normal commercial terms and on terms not less favourable to the Company than terms available to or from (as appropriate) Independent Third Parties. The rental fees are to be settled on a monthly basis.

Historical figures

The rental paid by the Company to Xinjiang Non-ferrous for each of the two years ended 31 December 2008 and the five months ended 31 May 2009 under the Existing Property Lease Agreement are set out below:

			Transaction
	Transaction	Transaction	amounts
	amounts	amounts	for the
	for the	for the	five months
	year ended	year ended	ended
	31 December	31 December	31 May
	2007	2008	2009
	(RMB)	(RMB)	(RMB)
The rental under the Existing
Property Lease Agreement	1,635,930	1,635,930	681,600

Proposed Annual Caps

The Directors have considered and proposed the following annual caps in respect of the rental payable under the Renewed Property Lease Agreement:

		For the year ending 31	For the year ending 31	December
		2010	2011	2012
		(RMB)	(RMB)	(RMB)
Annual	caps for the rental
under	the Renewed Property
Lease	Agreement	1,635,930	1,635,930	1,635,930

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LETTER FROM THE BOARD

The Directors expect that there will be no annual increase in the rental and the total area of the Office Premises under the Renewed Property Lease Agreement. The above proposed annual caps for rental under the Renewed Property Lease Agreement for the three years ending 31 December 2012 have been determined based on the prevailing market condition in the PRC and market rates of comparable properties.

The Directors consider that the above annual caps are reasonably determined pursuant to Rule 14A.35(2) of the Listing Rules.

Reasons for and benefits of the Renewed Property Lease Agreement

The Company enters into the Renewed Property Lease Agreement for the following reasons:

the Company has been leasing the Office Premises from Xinjiang Non-ferrous for the past three years;
the Office Premises are in close proximity to the central business district of Urumqi which is administratively convenient for the Company to conduct its business; and
the Company has been conducting business historically at office premises in the Youse Building and additional relocation costs have to be incurred if it leases office premises elsewhere, which the Directors do not consider justified.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Renewed Property Lease Agreement was entered into on normal commercial terms and such terms are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Directors are not aware of any disadvantage of the Renewed Property Lease Agreement.

3. RENEWED MUTUAL SUPPLY AGREEMENT

Date: 11 June 2009 Parties: the Company and Xinjiang Non-ferrous Term: 1 January 2010 to 31 December 2012

Subject Matter

On 11 June 2009, the Company and Xinjiang Non-ferrous entered into the Renewed Mutual Supply Agreement in respect of the continuing provision of the Construction Services, the Supporting and Ancillary Services and the Company’s Products.

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LETTER FROM THE BOARD

Term

The principal terms of the Renewed Mutual Supply Agreement include the followings:

the Renewed Mutual Supply Agreement is for a term commencing from 1 January 2010 and ending on 31 December 2012 which may be renewed upon agreement by Xinjiang Non-ferrous and the Company, subject to the approval by the Stock Exchange and/or the Independent Shareholders, if applicable;
the Company and the Xinjiang Non-ferrous Group are at liberty to procure from or provide to any Independent Third Party any of the required services and products save and except that Xinjiang Non-ferrous must provide the Company with services or supplies on terms no less favourable than those offered to any Independent Third Party and that Xinjiang Non-ferrous must source nickel cathode and copper cathode exclusively from the Company;
each party of the Renewed Mutual Supply Agreement may terminate the mutual provision of products and services on not less than six months’ prior written notice, however Xinjiang Non-ferrous may not terminate its service if the Company has informed them by written notice that the Company is unable to obtain similar products and services from an Independent Third Party (save that the Company has provided written consent to the termination by Xinjiang Non-ferrous); and
the Renewed Mutual Supply Agreement is conditional and effective upon it having complied with the relevant Listing Rules and approved by the Independent Shareholders, if applicable, at the EGM.

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LETTER FROM THE BOARD

Consideration

The fees in relation to the above products, supplies and services payable between the Company and Xinjiang Non-ferrous for the terms of the Renewed Mutual Supply Agreement are determined principally by commercial negotiation between the parties according to the principles of fairness and reasonableness with reference to the market price of the mutual supply services from time to time. Such transactions will be conducted in the ordinary and usual course of business of the Company, on normal commercial terms and on terms not less favourable to the Company than terms available to or from (as appropriate) Independent Third Parties.

The mutual supply services will be provided according to the following pricing policies in order of priority and to be settled on a monthly basis:

the State-prescribed price ( ) (including any price prescribed by any relevant local government), if applicable;
where there is no State-prescribed price, then the State-guidance price ( );
where there is neither a State-prescribed price nor a State-guidance price, the market price which is determined by (i) the price offered by an Independent Third Party for providing similar services in an area where such supporting services are provided under general commercial terms, or (ii) where not applicable, the market price offered by an Independent Third Party for providing similar services in the PRC under general commercial terms;
where none of the above is applicable, the price shall be determined by the parties based on reasonable costs incurred by them in providing the services plus a profit margin of not more than 5% of such costs; and
the Company and Xinjiang Non-ferrous will ensure that any specific agreements which set out the specific terms and conditions for the provision of any such services are entered into between the parties in accordance with the terms and conditions of the Renewed Mutual Supply Agreement.

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LETTER FROM THE BOARD

Historical figures

The fees paid by the Company to Xinjiang Non-ferrous in relation to the Construction Services and the Supporting and Ancillary Services and the fees received for the Company’s Products provided by the Company to the Xinjiang Non-ferrous Group under the Existing Mutual Supply Agreement for each of the two years ended 31 December 2008 and the five months ended 31 May 2009 are set out below:

			Transaction
	Transaction	Transaction	amounts
	amounts	amounts	for the
	for the	for the	five months
	year ended	year ended	ended
	31 December	31 December	31 May
	2007	2008	2009
	(RMB)	(RMB)	(RMB)
The Construction Services fees
under the Existing Mutual
Supply Agreement	63,658,430	102,066,650	36,801,100
The Supporting and Ancillary
Services fees under the
Existing Mutual Supply
Agreement	21,882,690	13,855,010	3,457,650
The Company’s Products fees
received under the Existing
Mutual Supply Agreement	6,464,760	5,295,790	7,174,200

The transaction amounts in relation to the Supporting and Ancillary Services under the Existing Mutual Supply Agreement have been decreasing between the year ended 31 December 2007 and the five months ended 31 May 2009. Such decrease is mainly attributable to the change in the Company’s connected transactions management policy in order to establish its own market purchasing network. As agreed between the Company and the Xinjiang Non-ferrous Group, a portion of the Supporting and Ancillary Services (such as the supplies of coke and fireproof materials) originally provided by the Xinjiang Non-ferrous Group under the Existing Mutual Supply Agreement have been provided by Independent Third Parties instead, which leads to the decrease in the transaction amounts of the Supporting and Ancillary Services from 2007 to 2009.

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LETTER FROM THE BOARD

Proposed Annual Caps

The Directors have considered and proposed the following annual caps in respect of the services fees for the three years ending 31 December 2012 under the Renewed Mutual Supply Agreement:

	For the	year ending 31	December
	2010	2011	2012
	(RMB)	(RMB)	(RMB)
Annual caps for the Construction
Services fees under the
Renewed Mutual Supply
Agreement	258,692,510	181,984,000	193,250,000
Annual caps for the Supporting
and Ancillary Services fees
under the Renewed Mutual
Supply Agreement	26,275,000	33,678,000	35,673,000
Annual caps for the Company’s
Products fees under the
Renewed Mutual Supply
Agreement	30,432,000	36,455,000	39,813,000

In determining the annual caps for the three years ending 31 December 2012 under the Renewed Mutual Supply Agreement, the Directors have assumed that (i) the Company’s business will continue to grow and the need for the mutual provision of the Construction Services and the Company’s Products will continue to increase and the provision of the Supporting and Ancillary Services will decrease from those for the two years ended 31 December 2008 and the five months ended 31 May 2009; and (ii) the prices of utilities, raw materials and finished products are expected to increase in 2010, 2011 and 2012. The above proposed annual caps for the Construction Services fees, the Supporting and Ancillary Services fees and the Company’s Products fees under the Renewed Mutual Supply Agreement for the three years ending 31 December 2012 have been determined based on the historical transaction amounts, the expected market conditions, the development trend in the non-ferrous metals industry, the expected demand and supply of the Company’s products and its production expansion plans.

The Renewed Annual Caps for the Construction Services fees under the Renewed Mutual Supply Agreement for the three years ending 31 December 2012 are higher than its historical transaction amounts for the two year ended 31 December 2008 and the five months ended 31 May 2009. Such expected increase is as a result of the expected increase of the project construction after the completion of the acquisition of 50% equity interest in Hami Hexin Mining Company Limited, 95% equity interest in Xinjiang Zhongxin Mining Company Limited and 100% equity interest in Yakesi. The Renewed Annual Caps for the Construction Services fees under the Renewed Mutual Supply Agreement for the

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LETTER FROM THE BOARD

year ending 31 December 2011 are expected to decrease from those for the year ending 31 December 2010. Such decrease is mainly because the construction of the technical improvement projects in relation to the Kalatongke Mine and the Fukang Refinery to increase the annual production capacity of nickel cathode and copper cathode to 13,000 tons and 12,000 tons respectively is expected to be completed by the end of 2009 and the balance of final payments of the projects will be due in 2010 upon closing (“ ”).

Although the transaction amounts in relation to the Supporting and Ancillary Services decreased between 2007 and 2009, the proposed annual caps for the Supporting and Ancillary Services under the Renewed Mutual Supply Agreement are expected to increase in 2010, 2011 and 2012 as a result of the three acquisitions completed by the Company in 2008 and 2009, namely the acquisitions of 50% equity interest in Hami Hexin Mining Company Limited, 95% equity interest in Xinjiang Zhongxin Mining Company Limited and 100% equity interest in Yakesi. Such acquisitions would require the Xinjiang Non-ferrous Group to increase the Supporting and Ancillary Services to be provided to the Company and its subsidiaries on a consolidated basis.

The Company also projects that there will be a increase in its fees received in respect of the Company’s Products provided to the Xinjiang Non-ferrous Group under the Renewed Mutual Supply Agreement for the three years ending 31 December 2012 because of the increase in supplies of copper cathode for the Xinjiang Non-ferrous Group’s own development and the expected increase in prices of copper cathode in 2010, 2011 and 2012, which explains the increase of the proposed annual cap from the historical transaction amounts.

The Directors consider that the above annual caps are reasonably determined pursuant to Rule 14A.35(2) of the Listing Rules.

Reasons for and benefits of the Renewed Mutual Supply Agreement

The Company enters into the Renewed Mutual Supply Agreement to continue to procure from and provide to the Xinjiang Non-ferrous Group services for the following reasons:

the Xinjiang Non-ferrous Group has an established system of mining, ore processing, smelting, processing, repairing, manufacturing, equipment installation, construction, transportation, storage, design, and it has competitive strengths over other suppliers of similar services in Xinjiang;
the Company’s smelting operation is enhanced by the capability and techniques of the Xinjiang Non-ferrous Group in designing and producing non-standardised production facilities and equipment;
the design institute of the Xinjiang Non-ferrous Group has the expertise in the design of production facilities in respect of mining, ore processing and refining of non-ferrous and precious metals and they are familiar with the Company’s production sites, facilities and equipment;

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LETTER FROM THE BOARD

the Xinjiang Non-ferrous Group has an experienced and stable construction team in shafts construction and facilities installation; and
the automobile transportation companies, the materials procurement company and the storage warehouse of the Xinjiang Non-ferrous Group are able to provide the Company with a stable supply of materials, transportation services and warehousing services.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Renewed Mutual Supply Agreement was entered into on normal commercial terms and such terms, the Renewed Annual Caps for the Construction Services, the Supporting and Ancillary Services and the provision of the Company’s Products for the three years ending 31 December 2012 are fair and reasonable and in the interests of the Company and its shareholders as a whole. The Directors are not aware of any disadvantage of the Renewed Mutual Supply Agreement and the Renewed Annual Caps.

Listing Rules Requirements

Renewed Comprehensive Services Agreement and Renewed Property Lease Agreement

Xinjiang Non-ferrous is the controlling shareholder of the Company and therefore a connected person of the Company under the Listing Rules and Fuyun Xingtong is a wholly-owned subsidiary of Xinjiang Non-ferrous. Therefore, the transactions contemplated under the Renewed Comprehensive Services Agreement and the Renewed Property Lease Agreement will constitute continuing connected transactions for the Company under the Listing Rules.

Given that the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the respective annual caps for the three years ending 31 December 2012 in relation to the continuing connected transactions under the Renewed Comprehensive Services Agreement and the Renewed Property Lease Agreement are less than 2.5% on an annual basis, the continuing connected transactions thereunder are only subject to the reporting, announcement and annual review requirements under Rules 14A.37 to 14A.40 and is exempt from the independent shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

Renewed Mutual Supply Agreement

Xinjiang Non-ferrous is the controlling shareholder of the Company and therefore a connected person of the Company under the Listing Rules. Therefore, the transactions contemplated under the Renewed Mutual Supply Agreement will constitute continuing connected transactions for the Company under the Listing Rules.

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LETTER FROM THE BOARD

Given that the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Renewed Annual Caps for the three years ending 31 December 2012 under the Renewed Mutual Supply Agreement exceed 2.5% on an annual basis, the Renewed Annual Caps and the Renewed Mutual Supply Agreement are subject to the reporting, announcement, annual review requirements under Rules 14A.37 to 14A.40 and Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing Rules.

INFORMATION RELATING TO THE COMPANY

The Company is principally engaged in the mining, ore processing, smelting and refining of nickel, copper and other non-ferrous metals, which include cobalt and precious metals such as gold, silver, platinum and palladium.

INFORMATION RELATING TO XINJIANG NON-FERROUS GROUP AND FUYUN XINGTONG

Xinjiang Non-ferrous is the controlling shareholder of the Company and therefore a connected person of the Company under the Listing Rules. Fuyun Xingtong is a wholly-owned subsidiary of Xinjiang Non-ferrous, principally engaged in, among other things, beverage, catering services, transportation, satellite communication and sales of liquefied gases.

EGM

A notice convening the EGM of the Company to be held at 20th Level, Conference Room, Youse Building, No. 4 You Hao North Road, Urumqi, Xinjiang, the People’s Republic of China (the “PRC”) on 21 August 2009 at 11:00 a.m. is set out on pages 46 to 47 of this circular. The EGM will be held to consider and, if thought fit, approve, among other matters, the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps.

Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

PROCEDURES FOR VOTING AT THE EGM

According to Rule 13.39(4) of the Listing Rules, any vote at a general meeting must be taken by poll.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that all resolutions proposed for consideration and approval by the shareholders of the Company at the EGM are in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM as set out in the notice of the EGM to approve, if thought fit, among other matters, the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps.

GENERAL

Your attention is drawn to the letter from the Independent Board Committee, the letter from the Independent Financial Adviser and the additional information set out in the appendix to this circular and the notice of the EGM.

By Order of the Board Zhang Junjie, Lam Cheuk Fai Joint Company Secretaries

– 26 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [99 x 60] intentionally omitted <==

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3833)

3 July 2009

To the Independent Shareholders

Dear Sir or Madam,

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

We refer to the circular dated 3 July 2009 (the “Circular”) of Xinjiang Xinxin Mining Industry Co., Ltd. (the “Company”) of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless otherwise specified.

We, being the independent non-executive Directors, have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders of the Company on the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps. Hercules Capital has been appointed as the Independent Financial Adviser to advise the Independent Shareholders and us on the fairness and reasonableness of, among other things, the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps. Details of Hercules Capital’s advice, together with the principal factors and reasons it has taken into consideration in giving such advice, are set out in the “Letter from the Independent Financial Adviser” on pages 29 to 41 of the Circular.

The Independent Shareholders’ attention is drawn to the “Letter from the Board”, the advice of Hercules Capital in its capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of whether the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps

For identification purposes only

– 27 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

are fair and reasonable and in the interest of the Company and the Independent Shareholders as a whole, as set out in the “Letter from the Independent Financial Adviser” as well as other additional information set out in other parts of the Circular.

Having taken into account the independent advice of Hercules Capital, in particular the principal factors, reasons and recommendations set out in the “Letter from the Independent Financial Adviser” on pages 29 to 41 of the Circular and having considered the terms of the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps, we consider the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps to be fair and reasonable and are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps.

Yours faithfully, Independent Board Committee Mr. Chen Jianguo, Mr. Sun Baosheng and Mr. Ng Yuk Keung Independent Non-executive Directors

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from the Independent Financial Adviser prepared for the purpose of inclusion in this circular, setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Revised Annual Caps, the Renewed Mutual Supply Agreement and the Renewed Annual Caps.

==> picture [74 x 33] intentionally omitted <==

1503 Ruttonjee House 11 Duddell Street Central Hong Kong

3 July 2009

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

REVISION OF THE REVISED ANNUAL CAP AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders with respect to (i) the Revised Annual Cap under the Existing Mutual Supply Agreement for the year ending 31 December 2009; and (ii) the continuing connected transactions contemplated under the Renewed Mutual Supply Agreement in relation to the mutual provision of the Construction Services, the Supporting and Ancillary Services and the Company’s Products between the Company and Xinjiang Non-ferrous (the “Continuing Connected Transactions”) and the Renewed Annual Caps thereunder, details of which are set out in the letter from the Board contained in the circular dated 3 July 2009 to the shareholders of the Company (the “Shareholders”) (the “Circular”), of which this letter forms part. Terms used in this letter have the same meanings as defined elsewhere in the Circular unless the context requires otherwise.

On 11 June 2009, the Board announced that, inter alia, the Company proposed to revise the annual cap of the Construction Services under the Existing Mutual Supply Agreement for the year ending 31 December 2009. As the applicable percentage ratios for the Revised Annual Cap exceeds 2.5% on an annual basis, the Revised Annual Cap is subject to reporting, announcement and annual review requirements under Rules 14A.37 to 14A.40 of the Listing Rules and Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Rules. Xinjiang Non-ferrous, being the controlling Shareholder and the counterparty of the Existing Mutual Supply Agreement, and its Associates will abstain from voting in relation to the approval of the Revised Annual Cap at the EGM.

On 11 June 2009, the Company also entered into the Renewed Mutual Supply Agreement with Xinjiang Non-ferrous in relation to the provision of (i) the Construction Services and the Supporting and Ancillary Services by the Xinjiang Non-ferrous Group to the Company; and (ii) the Company’s Products by the Company to the Xinjiang Non-ferrous Group for a period of three years commencing from 1 January 2010.

Xinjiang Non-ferrous is the controlling Shareholder and thus a connected person of the Company under Chapter 14A of the Listing Rules. Therefore, the transactions contemplated under the Renewed Mutual Supply Agreement constitute continuing connected transactions for the Company. As the applicable percentage ratios in respect of the Renewed Annual Caps for the three years ending 31 December 2012 under the Renewed Mutual Supply Agreement exceed 2.5% on an annual basis, the Renewed Annual Caps and the Renewed Mutual Supply Agreement are subject to the reporting, announcement and annual review requirements under Rules 14A.37 to 14A.40 of the Listing Rules and Independent Shareholders’ approval requirements under Rule 14A.35 of the Listing Rules. Xinjiang Non-ferrous and its Associates will abstain from voting in relation to the approval of the Renewed Mutual Supply Agreement and the Renewed Annual Caps at the EGM.

The Independent Board Committee, comprising all independent non-executive Directors, namely Mr. Chen Jianguo, Mr. Sun Baosheng and Mr. Ng Yuk Keung, has been established to advise the Independent Shareholders in respect of the fairness and reasonableness of the Revised Annual Cap, the Continuing Connected Transactions and the Renewed Annual Caps. We, Hercules Capital Limited, have been appointed to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to whether the Continuing Connected Transactions are conducted in the ordinary and usual course of business and the terms of which, the Revised Annual Cap and the Renewed Annual Caps are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole, and whether the Independent Shareholders should vote in favour of the resolutions for approving the Revised Annual Cap, the Continuing Connected Transactions and the Renewed Annual Caps.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have relied on the information and representations supplied, and the opinions expressed, by the Directors and management of the Company and have assumed that such information and statements, and representations made to us or referred to in the Circular are true, accurate and complete in all material respects as of the date hereof and will continue as such at the date of the EGM. The Directors have jointly and severally accepted full responsibility for the accuracy of the information contained in the Circular. We have no reasons to suspect that any material information has been withheld by the Directors or the management of the Company, or is misleading, untrue or inaccurate, and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

consider that they may be relied upon in formulating our opinion. The Directors confirmed that, having made all reasonable enquiries and to the best of their knowledge and belief, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no material facts not contained in the Circular the omission of which would make any statement in the Circular misleading.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have not, however, for the purpose of this exercise, conducted any independent investigation or audit into the businesses or affairs or future prospects of the Group and the related subject of and parties to the agreements of the Continuing Connected Transactions. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the Continuing Connected Transactions and the Revised Annual Caps, we have considered the following principal factors and reasons:

1. Background and reasons for the Continuing Connected Transactions

(a) Background

The Group is principally engaged in the mining, ore processing, smelting and refining of nickel, copper and other non-ferrous metals, which include cobalt and precious metals such as gold, silver, platinum and palladium. Xinjiang Non-ferrous, the controlling Shareholder, is principally engaged in mining, ore processing, smelting and refining of rare metals; providing research, design, mechanical processing and construction services for the mining and processing of non-ferrous metals; and sales of raw materials, transportation and real estate development.

The Xinjiang Non-ferrous Group has been providing the Construction Services and the Supporting and Ancillary Services to the Company and the Company has been providing the Company’s Products to the Xinjiang Non-ferrous Group under the Existing Mutual Supply Agreement since October 2007 and such agreement shall expire on 31 December 2009. The Directors wish to continue such continuing connected transactions with the Xinjiang Non-ferrous Group on an on-going basis after the expiry of the Existing Mutual Supply Agreement. As such, the Company entered into the Renewed Mutual Supply Agreement with Xinjiang Non-ferrous on 11 June 2009.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) Provision of the Construction Services

The Xinjiang Non-ferrous Group has been providing construction related services, including project design, construction and facilities installation to the Company from time to time in its ordinary and usual course of business. We understand from the management of the Company that the Xinjiang Non-ferrous Group is a major player in the non-ferrous metal industry in Xinjiang and it has an established system of mining, ore processing, smelting, processing, repairing, manufacturing, equipment installation, construction, transportation, storage and design. The design institute of the Xinjiang Non-ferrous Group has the expertise in the design of production facilities in respect of mining, ore processing and refining of non-ferrous and precious metals, and the Xinjiang Non-ferrous Group has an experienced and stable construction team in shafts construction and facilities installation. The Company considers that the Xinjiang Non-ferrous Group has competitive strengths over other suppliers of similar services in Xinjiang. In addition, through the co-operations with the Xinjiang Non-ferrous Group in relation to the Company’s previous technical improvement projects, the Company’s smelting operation is enhanced by the capability and techniques of the Xinjiang Non-ferrous Group in designing and producing non-standardized production facilities and equipment and the Company is satisfied with the reliable and high quality services and technical advises rendered by the Xinjiang Non-ferrous Group. Therefore, the Company considers it is appropriate to continue to engage the Xinjiang Non-ferrous Group as the construction service provider of the Group.

(c) Provision of the Supporting and Ancillary Services

Pursuant to the Renewed Mutual Supply Agreement, the Xinjiang Non-ferrous Group will provide the Supporting and Ancillary Services to the Company including (i) production supplies, transportation and supporting services such as supplemental production materials (including chemical materials, coal, coke and product packaging materials) and work safety products; (ii) storage, transportation and loading services, including warehousing services in Beijing for the sales and distribution of nickel cathode to the Company’s end-customers in Beijing and its surrounding areas, Hebei province and the north-eastern region of the PRC, and transportation services for the delivery of materials including coke and coal; and (iii) other supporting and ancillary services like machinery repair and improvement.

We understand from the management of the Company that the aforementioned Supporting and Ancillary Services are essential for the Company to secure a smooth operation of the Group. Being a major player in the non-ferrous metals industry in Xinjiang, the Xinjiang Non-ferrous Group is capable of providing the supplies and materials, transportation services and warehousing services that meet the needs and standard of the Company. Therefore, the Directors consider that it is in the interest of the Company to maintain a long-term supplier relationship with the Xinjiang Non-ferrous Group for securing a stable supply of the Supporting and Ancillary Services, which are essential for the operation of the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(d) Provision of the Company’s Products

Pursuant to the Renewed Mutual Supply Agreement, the Xinjiang Non-ferrous Group will purchase the Company’s Products such as nickel cathode, copper cathode, sulphuric acid, water, electricity and other ancillary materials from the Company. The Directors consider that the sale of the Company’s Products to the Xinjiang Non-ferrous Group helps to secure a stable sales channel and turnover for the Company.

Having considered that (i) the Xinjiang Non-ferrous Group is in its ordinary and usual course of business to provide the Construction Services and the Supporting and Ancillary Services; (ii) the Xinjiang Non-ferrous Group is a major player in the non-ferrous metals industry in Xinjiang which has been offering high quality Construction Services that meet the Company’s stringent standards in the previous technical improvement and construction projects; (iii) the Company needs to purchase the Supporting and Ancillary Services for its daily operation from time to time; (iv) the entering into of the Renewed Mutual Supply Agreement in respect of the Supporting and Ancillary Services can stabilize the supply channels of products and services for the Company; and (v) the sale of the Company’s Products to the Xinjiang Non-ferrous Group is under ordinary and usual course of business of the Company and provides additional turnover to the Group, we consider that the Continuing Connected Transactions are commercial transactions conducted in the ordinary and usual course of business of the Group and it is reasonable and in the interest of the Company and the Shareholders as a whole to continue such transactions.

2. Terms of the Continuing Connected Transactions

Pursuant to the Renewed Mutual Supply Agreement, the Xinjiang Non-ferrous Group agreed to provide the Construction Services and the Supporting and Ancillary Services to the Company and the Company agreed to provide the Company’s Products to the Xinjiang Non-ferrous Group for a period of three years commencing from 1 January 2010. The Company and the Xinjiang Non-ferrous Group are at liberty to procure from, or provide to, any Independent Third Party any of the required services and products save and except that Xinjiang Non-ferrous must provide the Company with services or supplies on terms no less favourable than those offered to any Independent Third Party and that Xinjiang Non-ferrous must source nickel cathode and copper cathode exclusively from the Company.

Each party of the Renewed Mutual Supply Agreement may terminate the mutual provision of products and services on not less than six months’ prior written notice. However, Xinjiang Non-ferrous may not terminate its supply of services and/or products if the Company has informed them by written notice that the Company is unable to obtain similar products and/or services from an Independent Third Party.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Renewed Mutual Supply Agreement is a framework agreement which sets out the principles upon which detailed terms and conditions of the transactions are to be determined between the parties. Under the Renewed Mutual Supply Agreement, the Company and Xinjiang Non-ferrous agreed that the actual price of the services and products would be determined principally by commercial negotiation between the parties according to the principles of fairness and reasonableness with reference to the market price of the mutual supply services from time to time and would be conducted in the ordinary and usual course of business of the Company, on normal commercial terms and on terms not less favourable to the Company than terms available to or from, as appropriate, Independent Third Parties. The following pricing policies will be followed in order of priority and settled on a monthly basis:

the State-prescribed price, including any price prescribed by any relevant local government, if applicable;
where there is no State-prescribed price, then the State-guidance price;
where there is neither a State-prescribed price nor a State-guidance price, the market price which is determined by (i) the price offered by an Independent Third Party for providing similar services in an area where such supporting services are provided under general commercial terms; or (ii) where not applicable, the market price offered by an Independent Third Party for providing similar services in the PRC under general commercial terms; and
where none of the above is applicable, the price shall be determined by the parties based on reasonable costs incurred by them in providing the services plus a profit margin of not more than 5% of such costs.

(a) Provision of the Construction Services

According to the management of the Company, the service fees for the provision of the Construction Services will be determined by reference to the prevailing market prices under general commercial terms. Since the Construction Services are tailor-made to fit the specific requirements of the Company, we were unable to compare the terms of the transactions in respect of the Construction Services between the Xinjiang Non-ferrous Group and other Independent Third Parties. We were advised by the management of the Company that, pursuant to the internal guidance of the Company on the construction projects, the Company is required to select service providers for all major construction projects, including the technical improvement projects, through an open tender process, through which the price and terms of services offered by the vendors will be compared and the service contracts will be awarded to vendor(s) which offer(s) the best price and/or terms of service. We have reviewed the tender assessment report for the previous technical improvement project of the Kalatongke Mine in relation to shaft construction and noted that the bidding parties included both members of the Xinjiang Non-ferrous Group and Independent Third Parties. We also noted that the tenders with the highest scores, which were rated by the tender evaluation committee based on the same objective

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

selection criteria such as qualification, resources, experience and technical expertise of the tenders, reputation and quality of work and pricing and terms of service, were selected. We considered the results of the tender process fair and reasonable. With a similar open tender system in place, we believe that the prices and terms of the transactions in respect of the Construction Services will be determined on normal commercial terms, taking into account the nature of services and the prevailing market circumstances, and be fair and reasonable so far as the Independent Shareholders are concerned.

(b) Provision of the Supporting and Ancillary Services and the Company’s Products

According to the management of the Company, there are no State-prescribed prices or State-guidance prices for the Supporting and Ancillary Services and the Company’s Products. Therefore, the prices on these products or services are and will be determined by reference to the prevailing market prices under general commercial terms.

We have reviewed samples of invoices issued by the Xinjiang Non-ferrous Group and the Independent Third Parties to the Company in relation to similar Supporting and Ancillary Services rendered and noted that the terms offered by the Xinjiang Non-ferrous Group were similar to those offered by the Independent Third Parties. We have also reviewed samples of invoices issued by the Company to the Xinjiang Non-ferrous Group and the Independent Third Parties in relation to the sales of similar products and noted that the terms offered by the Company to the Xinjiang Non-ferrous Group are similar to those offered to the Independent Third Parties. The management of the Company also confirmed us that the aforementioned pricing policy would be consistently applied to all transactions in respect of the mutual supply of the Supporting and Ancillary Services and the Company’s Products.

Taking into account that (i) the Company has the liberty to procure from, or provide to, any Independent Third Party any of the Construction Services, Supporting and Ancillary Services and Company’s Products while Xinjiang Non-ferrous must source nickel cathode and copper cathode exclusively from the Company; (ii) Xinjiang Non-ferrous must provide the Company with services or supplies on terms no less favourable than those offered to any Independent Third Party and such practices have been and will be consistently applied by Xinjiang Non-ferrous; and (iii) the Company may terminate the mutual provision of products and services by giving to Xinjiang Non-ferrous not less than six months’ prior written notice while the termination of the provision of services and products by Xinjiang Non-ferrous is subject to the consent of the Company, and Xinjiang Non-ferrous may not terminate its supply of services and/or products if the Company has informed them by written notice that the Company is unable to obtain similar products and/or services from an Independent Third Party, we consider that the terms of the Continuing Connected Transactions are fair and reasonable and on normal commercial terms so far as the Independent Shareholders are concerned and in the interest of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Bases of the Revised Annual Cap

The historical transaction amounts, original annual cap and proposed Revised Annual Cap for the Construction Services under the Existing Mutual Supply Agreement are set out as follows:

					Original	Revised
		Historical Transaction		Amounts	annual cap	Annual Cap
				For the
				five months	For the year	For the year
		For the year	ended	ended 31	ending 31	ending 31
		31 December		May	December	December
		2007	2008	2009	2009	2009
		RMB	RMB	RMB	RMB	RMB
Construction	Services	63,658,430	102,066,650	36,801,100	120,200,000	293,822,400

As stated in the letter from the Board, the Directors expected that the provision of the Construction Services by the Xinjiang Non-ferrous Group to the Company for the year ending 31 December 2009 would increase significantly and thus the fees payable to the Xinjiang Non-ferrous Group in respect of the Construction Services under the Existing Mutual Supply Agreement for the year ending 31 December 2009 would increase and exceed the original annual cap as stated in the Prospectus dated 27 September 2007. Therefore, the Directors proposed to increase the annual cap for the year ending 31 December 2009 by approximately RMB173,622,400 to RMB293,822,400.

We have discussed with the management of the Company and noted that the expected increase in fees payable to the Xinjiang Non-ferrous Group in respect of the Construction Services for the year ending 31 December 2009 was mainly attributable to the carrying out of the additional construction works that have not been taken into account in the original annual cap for the year ending 31 December 2009, which includes (i) the construction project for increasing the daily production capacity of Hami Hexin Mining Company Limited (”Hami Hexin”), a subsidiary which was acquired by the Company in August 2008, amounting to approximately RMB36,580,400; (ii) the construction project for increasing the annual production capacity of water hardening and nickel matte by 9,565 tons (or 5,000 tons of nickel metal) of Xinjiang Zhongxin Mining Company Limited (the “Xinjiang Zhongxin”), which was acquired by the Company in June 2009, amounting to approximately RMB8,400,000; and (iii) the construction works amounting to approximately RMB128,642,000 to accelerate the technical improvement projects, which are in relation to the Kalatongke Mine and the Fukang Refinery for increasing the annual production capacity of nickel cathode and copper cathode to 13,000 tons and 12,000 tons respectively by the end of 2009 and were originally scheduled to be carried out in 2008 but had been postponed to 2009.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We understand from the management of the Company that the above-mentioned projects were awarded to the Xinjiang Non-ferrous Group in accordance with the Company’s open tender system. We have also reviewed the construction contracts signed between the Group and the Xinjiang Non-ferrous Group in respect of the above construction projects and noted that certain construction contracts had been signed by the Xinjiang Non-ferrous Group with Hami Hexin and Xinjiang Zhongxin respectively before the Company acquired Hami Hexin and Xinjiang Zhongxin. We were advised by the management of the Company that a maximum of approximately RMB257,021,300 was expected to be paid/payable to the Xinjiang Non-ferrous Group during the seven months ending 31 December 2009.

Having taken into account the reasons for, and terms of, the additional construction works to be carried out in 2009, we consider that the Revised Annual Cap proposed by the Directors is fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole.

4. Bases of the Renewed Annual Caps

The historical transaction amounts and proposed Renewed Annual Caps for the Continuing Connected Transactions are summarized as follows:

	Historical Transaction	Historical Transaction	Amounts	Renewed Annual	Renewed Annual	Renewed Annual	Caps
			For the
			five
			months
	For the	year ended	ended
	31 December		31 May	For the year		ending 31	December
	2007	2008	2009	2010		2011	2012
	RMB	RMB	RMB	RMB		RMB	RMB
Provision of the
Construction Services	63,658,430	102,066,650	36,801,100	258,692,510	181,984,000		193,250,000
Provision of the Supporting
and Ancillary Services	21,882,690	13,855,010	3,457,650	26,275,000	33,678,000		35,673,000
Provision of the Company’s
Products	6,464,760	5,295,790	7,174,200	30,432,000	36,455,000		39,813,000

According to the management of the Company, the proposed Renewed Annual Caps were estimated with reference to the historical transaction amounts, the expected market conditions, the development trend in the non-ferrous metals industry, the expected demand and supply of the Company’s products and its production expansion plans. In determining the Renewed Annual Caps, the Directors have assumed that (i) the Company’s business will continue to grow and the need for the provision of the Construction Services and the Company’s Products will continue to increase while the provision of the Supporting and Ancillary Services will decrease from those for the two years ended 31 December 2008 and the five months ended 31 May 2009; and (ii) the prices of utilities, raw materials and finished products are expected to increase in the three years ending 31 December 2012.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(a) Provision of the Construction Services

Currently, the Group is undergoing two major technical improvement projects, including (i) the project for improving converter smelting in the smelting operation of the Kalatongke Mine by utilizing the advanced oxygen side-blown smelting technique; and (ii) the expansion project of 13,000 tons of nickel cathode and 12,000 tons of copper cathode in the Fukang Refinery. The Company expected that the construction works for such projects would continue during 2010 and 2012. We have reviewed the Company’s budgets for the construction services of the abovementioned projects and noted that the construction fees payable to the Xinjiang Non-ferrous Group in relation to the above technical improvement projects would be approximately RMB172,676,000, RMB45,984,000 and RMB16,250,000 for the year ending 31 December 2010, 2011 and 2012 respectively.

Furthermore, in order to improve the production capacity and efficiency of the newly acquired companies, Hami Hexin, Xinjiang Zhongxin and Yakesi, the Company expected that more improvement and construction projects would be carried out in the coming few years. Mining and ore processing capacity improvement project of Yakesi has been planned to be carried out in 2010 and completed by the end of 2012. According to the management of the Company, the improvement project of Yakesi is in the planning stage and no construction contracts have been signed yet. However, the Company expected that the Xinjiang Non-ferrous Group would be one of the service providers for such project. Based on the works required and the expected construction progress, the Company estimated that the construction fees payable to the Xinjiang Non-ferrous Group in relation to the technical improvement project in Yakesi would be approximately RMB85,000,000, RMB136,000,000 and RMB177,000,000 for the year ending 31 December 2010, 2011 and 2012 respectively.

We were confirmed by the management of the Company that the budgets for the abovementioned projects were determined after extensive consultation and feasibility studies with project consultants in the field and having considered the expected construction progress and the relevant payment schedules. Given the Company’s needs and budgets of the scheduled construction works, we consider that the proposed Renewed Annual Caps for the Construction Services are fair and reasonable.

(b) Provision of the Supporting and Ancillary Services

We have discussed with the management of the Company and reviewed the calculation of the Renewed Annual Caps for the Supporting and Ancillary Services. We noted that the historical transaction amounts of the Supporting and Ancillary Services between the Group and the Xinjiang Non-ferrous Group declined substantially during 2007 and 2009. We understand from the management of the Company that such decrease was mainly due to the shifting of purchases of certain Supporting and Ancillary Services such as supplies of coke and fireproof materials from the Xinjiang Non-ferrous Group to other Independent Third Parties sourced from the Group’s own market purchasing

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

network. Although the Company will continue to purchase Supporting and Ancillary Services from Independent Third Party, the transaction amounts in relation to the Supporting and Ancillary Services between the Group and the Xinjiang Non-ferrous Group is expected to increase during the three years ending 31 December 2012 as demand of such services shall increase in line with the expected increase in production capacity of the Group resulted from the completion of the acquisitions of Hami Hexin, Xinjiang Zhongxina and Yakesi. The Company expected that the production capacity of the Company would increase by approximately 30% as a result of the acquisitions and lead to an increase in demand of the Supporting and Ancillary Services by a compound annual growth rate of 16.5% during the three years ending 31 December 2012.

(c) Provision of the Company’s Products

We have discussed with the management of the Company and reviewed the calculation of the Renewed Annual Caps for the Company’s Products. We noted that the historical transaction amount of the Company’s Products between the Group and the Xinjiang Non-ferrous Group dropped significantly by approximately 18% in 2008 as compared to that of 2007. We were advised by the management of the Company that the transaction amount decreased because the Xinjiang Non-ferrous Group ceased to purchase nickel cathode from the Group in 2008. However, there was a sharp increase in the transaction amount for the five months ended 31 May 2009 as a result of (i) the substantial increase in order of copper cathode by the Xinjiang Non-ferrous Group for its production of beryllium copper alloy; and (ii) the increase in demand of water, electricity and supporting materials by the Xinjiang Non-ferrous Group caused by the acceleration of the progress of the Construction Services provided by the Xinjiang Non-ferrous Group in respect of the Kalatongke Mine and the Fukang Refinery.

Based on the historical transaction amounts, the sales of copper cathode accounted for approximately 91.3% and 72.3% of the total transaction amount of the Company’s Products between the Group and the Xinjiang Non-ferrous Group for the year ended 31 December 2008 and the five months ended 31 May 2009 respectively. The Company predicted that the demand of copper cathode by the Xinjiang Non-ferrous Group would further increase with a compound annual growth rate of approximately 8.7% for the three years ending 31 December 2012 in accordance with its business expansion plan and copper cathode would continue to be the major product to be sold by the Company to the Xinjiang Non-ferrous Group. The Company anticipated that the sales of copper cathode to the Xinjiang Non-ferrous Group would account for, on average, approximately 82.2% of the total transaction amount of the Company’s Products between the Group and the Xinjiang Non-ferrous Group for the three years ending 31 December 2012.

According to the statistics released by the National Bureau of Statistics of China, the production volume of refined copper for the year ended 31 December 2008 and the five months ended 31 May 2009 were approximately 3.79 million tons and 1.60 million tons respectively, representing an increase of approximately 10.1% and 5.6% as compared to the last corresponding year and period respectively. The China Non-ferrous Metals Industry Association expected that the growth rate on the production volume of the refined copper would be approximately 6% for the year ending 31 December 2009.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Following the plunge in 2008, the price of copper resumed its rising trend in the first quarter of 2009. According to the information released by the China Non-ferrous Metals Industry Association, the average price of copper in March 2009 increased to approximately RMB31,873 per ton, representing a growth of approximately 18.1% as compared to that of December 2008. In view of the prevailing market conditions and the positive effects of the implementation of the macroeconomic measures in the late 2008 by the PRC government, including the major investment plan for 2009 to 2010 with total expenditure amounting to approximately RMB4,000 billion, and the release of the “Adjustment and Development Plan of the Nonferrous Metals Industry” ( ) in May 2009, management of the Company expected that the price of copper cathode in the PRC would increase at a compound annual growth rate of approximately 17.3% for the three years ending 31 December 2012.

Driven by the expected increases in trading volume and prices of copper cathode, the Company anticipated that there would be a compound annual growth rate of approximately 14.4% in the transaction amount of the Company’s Products between the Group and the Xinjiang Non-ferrous Group for the three years ending 31 December 2012.

Having taken into account the above analysis, we consider that the Renewed Annual Caps proposed by the Directors are fair and reasonable.

5. Annual review of the Continuing Connected Transactions

The Company confirms us that it will comply with Rule 14A.37 to Rule 14A.41 of the Listing Rules during the term of the Renewed Mutual Supply Agreement, in particular:

(a) the Renewed Annual Caps shall not be exceeded;
(b) each year the independent non-executive Directors will review the Continuing Connected Transactions and confirm in the annual report of the Company that such transactions have been entered into:
(i) in the ordinary and usual course of business of the Company;
(ii) either on normal commercial terms or, if there are no sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to the Company than terms available to or from independent third parties; and
(iii) in accordance with the relevant agreements governing them on terms;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(c) each year the auditors of the Company must provide a letter to the Board (with a copy provided to the Stock Exchange at least 10 business days prior to the bulk printing of the Company’s annual report), confirming that the Continuing Connected Transactions:
(i) have received the approval of the Board;
(ii) have been entered into in accordance with the pricing policy of the Group;
(iii) have been entered into in accordance with the terms of the Renewed Mutual Supply Agreement; and
(iv) have not exceeded the caps as disclosed;
(d) the Board must state in the annual report of the Company whether its auditors have confirmed the matters as referred to in paragraph (c) above; and
(e) upon any variation or renewal of the Renewed Mutual Supply Agreement, the Company will comply in full with all applicable reporting, disclosure and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.

Given the above, we are of the view that the interests of the Company and the Independent Shareholders under the Continuing Connected Transactions will be properly safeguarded.

RECOMMENDATION

Having considered the abovementioned principal factors and reasons, we consider that (i) the Continuing Connected Transactions are conducted in the ordinary and usual course of business and on normal commercial terms; and (ii) the terms of the Continuing Connected Transactions (and the Renewed Annual Caps thereunder) and the Revised Annual Cap are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Board Committee to advise the Independent Shareholders, as well as the Independent Shareholders, to vote in favour of the resolution(s) to approve the Continuing Connected Transactions (and the Renewed Annual Caps thereunder) and the Revised Annual Cap at the upcoming EGM.

Yours faithfully, For and on behalf of

Hercules Capital Limited

Louis Koo Amilia Tsang Managing Director Director

– 41 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors, supervisors and chief executive of the Company

(i) As at the Latest Practicable Date, save and except for Mr. Zhou Chuanyou, being a Director, who has interest in the Domestic Shares of the Company as set out in the section headed “Substantial shareholders of the Company” at page 43 of this circular, none of the Directors, supervisors and chief executive of the Company had any interests and short positions in the shares, underlying shares and/or debentures (as the case may be) of the Company or any of its associated corporations (within the meaning of the SFO) which was required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short position which any such Director, chief executive or supervisor is taken or deemed to have under such provisions of the SFO) or which was required to be entered into the register required to be kept by the Company under section 352 of the SFO or which was otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules.
(ii) As at the Latest Practicable Date, none of the Directors, proposed Directors, supervisors or proposed supervisors of the Company had any direct or indirect interest in any assets which have since 31 December 2008 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

– 42 –

GENERAL INFORMATION

APPENDIX

Substantial shareholders of the Company

As at the Latest Practicable Date, so far as the Directors are aware, each of the following persons, not being a Director, chief executive or supervisor of the Company, had an interest in the Shares which falls to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

==> picture [379 x 425] intentionally omitted <==

----- Start of picture text -----

|||||||||||
|---|---|---|---|---|---|---|---|---|---|
|Approximate|
|percentage|of|Approximate|
|shareholding|on|percentage|of|
|Number|of|relevant|class|of|the|total|share|
|Name|shares|held|Class|of|share|shares|capital|
|(%)|(%)|
|Xinjiang|Non-ferrous|885,204,000|(L)|Domestic|share|61.01|40.06|
|Metal|Industry|(Group)|
|Ltd.|
|(|
|(|)|)|
|Shanghai|Yilian|282,896,000|(L)|Domestic|share|19.50|12.80|
|Kuangneng|Co.|Ltd.|
|(|
|)|
|(Note)|
|Zhongjin|Investment|198,028,000|(L)|Domestic|share|13.65|8.96|
|(Group)|Ltd.*|
|(|(|)|
|)|(Note)|
|The|National|Council|for|69,000,000|(L)|H|share|9.09|3.12|
|Social|Security|Fund|
|of|the|PRC|
|(|
|)|

----- End of picture text -----

(L) = Long positions

Note: The entire shareholding or equity interest of Shanghai Yilian Kuangneng Co. Ltd ( ) (“Shanghai Yilian”) and 98.83% shareholding of Zhongjin Investment (Group) Ltd. ( ( ) ) (“Zhongjin Investment”) are beneficially owned by Mr. Zhou Chuanyou ( ). The interest attributable to Mr. Zhou represents his indirect deemed interest in the Company’s issued capital via his equity interests in Shanghai Yilian and Zhongjin Investment.

The English name is a translation of the Chinese name and provided for reference only.

– 43 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, there was no other person (other than a Director, supervisor or chief executive of the Company), who had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

3. SERVICE AGREEMENTS

As at the Latest Practicable Date, none of the Directors, proposed directors, supervisors or proposed supervisors of the Company had any existing or proposed service contract with any member of the Group (except contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation)).

4. INTEREST IN CONTRACT

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had a material interest, either directly or indirectly, in any contract of significance to the business of the Group to which any member of the Group was a party.

5. NO MATERIAL ADVERSE CHANGES

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2008 the date to which the latest published consolidated audited accounts of the Company were made up.

6. COMPETING INTEREST

As at the Latest Practicable Date, none of the directors of the Company and its subsidiary, or their respective associates (as defined in the Listing Rules) had interests in a business which competes or is likely to compete, either directly or indirectly, with the businesses of the Group.

7. EXPERT AND CONSENT

(a) The following is the qualifications of the expert who has given opinions and advice which are included in this circular:

Name

Qualification

Hercules Capital

A licensed corporation to carry out type 6 regulated activity (advising on corporate finance) under the SFO

(b) Hercules Capital does not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

– 44 –

GENERAL INFORMATION

APPENDIX

(c) Hercules Capital has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of the references to its name and/or its opinion in the form and context in which they are included.
(d) Hercules Capital did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2008, the date to which the latest published audited financial statements of the Group were made up.

8. MISCELLANEOUS

(a) The English text of this circular shall prevail over the Chinese text.
(b) The statutory address and principal place of business of the Company in the PRC is situated at Youse Building, No. 4 You Hao North Road, Urumqi, Xinjiang, the PRC 830000.
(c) The registered office of the Company in Hong Kong is Unit 3102-3105, 31/F, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong.
(d) The Hong Kong share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the registered office of the Company in Hong Kong at Unit 3102-3105, 31/F, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong, up to and including the date of the EGM:

(a) the letter of advice from Hercules Capital, the text of which is set out in this circular;
(b) the letter of consent referred to under the paragraph headed “Expert and Consent” in this appendix; and
(c) copies of the Existing Comprehensive Services Agreement, Existing Property Lease Agreement, Existing Mutual Supply Agreement, Renewed Comprehensive Services Agreement, Renewed Property Lease Agreement and Renewed Mutual Supply Agreement.

– 45 –

NOTICE OF EGM

==> picture [99 x 60] intentionally omitted <==

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3833)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (“EGM”) of Xinjiang Xinxin Mining Industry Co., Ltd. (the “Company”) will be held at 11:00 a.m. on 21 August 2009 at 20th Level, Conference Room, Youse Building, No. 4 You Hao North Road, Urumqi, Xinjiang, the People’s Republic of China (the “PRC”) for the following purposes:

Terms used herein shall have the same meanings as those defined in the circular to the shareholders of the Company dated 3 July 2009 (the “Circular”) of which this notice forms part.

To consider and, if thought fit, pass with or without amendments, the following as ordinary resolutions:

the Revised Annual Caps (as defined in the Circular) for the Construction Services (as defined in the Circular) provided by the Xinjiang Non-ferrous Group (as defined in the Circular) to the Company under the Existing Mutual Supply Agreement (as defined in the Circular) for the financial year ending 31 December 2009 be revised to RMB293,822,400. Any one director of the Company be and are hereby authorised to do all such acts and things and execute such other documents as he in his sole and absolute discretion deems necessary, desirable or expedient in relation to the implementation of the above;
the Renewed Mutual Supply Agreement (as defined in the Circular), a copy of which has been produced at the meeting marked “A” and initiated by the chairman of the meeting for identification purpose, as more particularly described in the Circular of which this notice forms part and all the transactions contemplated thereunder, be and hereby approved and confirmed. Any one director of the Company be and are hereby authorised to do all such acts and things and execute such other documents as he in his sole and absolute discretion deems necessary, desirable or expedient in relation to the implementation of the above; and
the Renewed Annual Caps (as defined in the Circular) for the provisions of the Construction Services (as defined in the Circular), the Supporting and Ancillary Services (as defined in the Circular) and the Company’s Products (as defined in the
For identification purposes only

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NOTICE OF EGM

Circular) under the Renewed Mutual Supply Agreement (as defined in the Circular) for the three years ending 31 December 2012 be and hereby approved and confirmed. Any one director of the Company be and are hereby authorised to do all such acts and things and execute such other documents as he in his sole and absolute discretion deems necessary, desirable or expedient in relation to the implementation of the above.

By order of the Board Zhang Junjie, Lam Cheuk Fai Joint Company Secretaries

Xinjiang, the PRC 3 July 2009

Notes:

1. Closure of register of members and eligibility for attending the EGM

The register of members of the Company will be closed from 22 July 2009 to 21 August 2009 (both days inclusive), during which time no share transfers will be registered. In order to be eligible to attend the EGM of the Company, instruments of transfer accompanied by share certificates and other appropriate documents must be lodged with the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, no later than 4:30 p.m. on 21 July 2009. Shareholders of the Company whose names appear on the register of members of the Company at the opening of business on 21 August 2009 are entitled to attend the EGM.

2. Notice of attendance

Shareholders who intend to attend the EGM should complete and lodge the accompanying reply slip and return it to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, on or before 31 July 2009. The reply slip may be delivered by hand, by post or by fax to the Company’s H Share registrar. Completion and return of the reply slip does not affect the right of a shareholder of the Company to attend the EGM. If the number of shares carrying voting rights at the EGM represented by the shareholders who intend to attend the EGM reaches one half or more of the voting shares at the EGM, the Company may hold the EGM; if not, the Company shall within five days notify the shareholders again by public notice, of the matters to be considered, the date and the place for the EGM. The Company may then hold the EGM after the publication of such notice.

3. Proxy

Every shareholder of the Company who has the right to attend and vote at the EGM is entitled to appoint one or more proxies, whether or not they are members of the Company, to attend and vote on his behalf at the EGM. A proxy must be appointed by an instrument in writing and signed by the appointer or his attorney duly authorised in writing. If the appointer is a legal person, then the instrument shall be signed under a legal person’s seal or signed by its director or an attorney duly authorised in writing. The instrument appointing the proxy shall be deposited at the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not less than 24 hours before the time appointed for the holding of the EGM. If the instrument appointing the proxy is signed by a person authorised by the appointer, the power of attorney or other document of authority under which the instrument is signed shall be notarised. The notarised power of attorney or other document of authority shall be deposited together and at the same time with the instrument appointing the proxy at the Company’s H Share registrar. Return of a form of proxy will not preclude a shareholder of the Company from attending in person and voting at the EGM if he so wishes. If more than one proxy is appointed, such proxies shall only be entitled to vote by poll. Shareholders or their proxies are required to produce their identification documents when attending the EGM.

4. Others

The EGM is expected to last for approximately two hours. Shareholders and their proxies attending the meeting shall be responsible for their own travelling and accommodation expenses. As at the date of this circular, the executive Directors of the Company are Mr. Yuan Ze, Mr. Shi Wenfeng, Mr. Zhang Guohua and Mr. Liu Jun; the non-executive Directors of the Company are Mr. Zhou Chuanyou and Mr. Niu Xuetao; and the independent non-executive Directors of the Company are Mr. Chen Jianguo, Mr. Sun Baosheng and Mr. Ng Yuk Keung.

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AI assistant

Xinjiang Xinxin Mining Industry Co., Ltd. — Proxy Solicitation & Information Statement 2009

50896_rns_2009-07-02_0f8991b7-8ad2-49ce-8988-97763147bcfa.pdf

Xinjiang Xinxin Mining Industry Co., Ltd.[*]

(Stock Code: 3833)

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

Xinjiang Xinxin Mining Industry Co., Ltd.[*]

To the Shareholders

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS –

Background

EXISTING MUTUAL SUPPLY AGREEMENT

Subject Matter

Term

Consideration

The Company’s Products

Listing Rules Requirements

B. CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

Background

1. RENEWED COMPREHENSIVE SERVICES AGREEMENT

Subject Matter

Term

Consideration

Historical figures

Proposed Annual Caps

Reasons for and benefits of the Renewed Comprehensive Services Agreement

2. RENEWED PROPERTY LEASE AGREEMENT

Subject Matter

Term

Consideration

Historical figures

Proposed Annual Caps

Reasons for and benefits of the Renewed Property Lease Agreement

3. RENEWED MUTUAL SUPPLY AGREEMENT

Subject Matter

Term

Consideration

Historical figures

Proposed Annual Caps

Reasons for and benefits of the Renewed Mutual Supply Agreement

Listing Rules Requirements

Renewed Comprehensive Services Agreement and Renewed Property Lease Agreement

Renewed Mutual Supply Agreement

INFORMATION RELATING TO THE COMPANY

INFORMATION RELATING TO XINJIANG NON-FERROUS GROUP AND FUYUN XINGTONG

EGM

PROCEDURES FOR VOTING AT THE EGM

RECOMMENDATION

GENERAL

Xinjiang Xinxin Mining Industry Co., Ltd.[*]

REVISION OF ANNUAL CAPS FOR EXISTING CONTINUING CONNECTED TRANSACTIONS – THE CONSTRUCTION SERVICES AND THE COMPANY’S PRODUCTS UNDER THE EXISTING MUTUAL SUPPLY AGREEMENT

CONTINUING CONNECTED TRANSACTIONS – (1) RENEWED COMPREHENSIVE SERVICES AGREEMENT; (2) RENEWED PROPERTY LEASE AGREEMENT; AND (3) RENEWED MUTUAL SUPPLY AGREEMENT

REVISION OF THE REVISED ANNUAL CAP AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background and reasons for the Continuing Connected Transactions

(a) Background

(b) Provision of the Construction Services

(c) Provision of the Supporting and Ancillary Services

(d) Provision of the Company’s Products

2. Terms of the Continuing Connected Transactions

(a) Provision of the Construction Services

(b) Provision of the Supporting and Ancillary Services and the Company’s Products

3. Bases of the Revised Annual Cap

4. Bases of the Renewed Annual Caps

(a) Provision of the Construction Services

(b) Provision of the Supporting and Ancillary Services

(c) Provision of the Company’s Products

5. Annual review of the Continuing Connected Transactions

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

Xinjiang Xinxin Mining Industry Co., Ltd. Proxy Solicitation & Information Statement 2009

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**

**Xinjiang Xinxin Mining Industry Co., Ltd.[*]**