China Nonferrous Mining : INSIDE INFORMATION - UPDATE ON PROPOSED REORGANISATION AT CONTROLLING SHAREHOLDER LEVEL

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

China Nonferrous Mining Corporation Limited

中 國 有 色 礦 業 有 限 公 司

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 01258)

INSIDE INFORMATION

UPDATE ON PROPOSED REORGANISATION

AT CONTROLLING SHAREHOLDER LEVEL

This announcement is made by China Nonferrous Mining Corporation Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

1. INTRODUCTION
   References are made to the announcement of the Company dated 27 September 2019 and 18 October 2019 (the "Announcements"). Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings
   as those defined in the Announcements. As disclosed in the Announcements, China Nonferrous Mining Development Limited ( 中 色 礦 業 發 展 有 限 公 司*) ("CNMD"), the controlling shareholder of the Company, proposed to transfer all of the 2,600,000,000 Shares in the Company (representing approximately 74.52% of the Company's total issued share capital as of the date of this announcement) ("Target Assets") held by it to the Purchaser. In accordance with relevant laws, regulations and regulatory requirements in the PRC, the Purchaser has made an announcement in relation to the Proposed Acquisition on 9 March 2020 (the "Purchaser Announcement"), which include certain information relevant to the Company and its subsidiaries (the "Group") and the Proposed Acquisition,
   a key summary of which has been set out below. For further details of the Proposed Acquisition, please refer to the Purchaser（Stock Code: 000758.SZ) Announcement on the website of the Shenzhen Stock Exchange at www.szse.cn.

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1. THE CONSIDERATION OF THE PROPOSED ACQUISITION
   The consideration for the Proposed Acquisition is RMB7,361,654,800, which was determined by both transaction parties after negotiations and based on the valuation of the total equity interests in the Company held by CNMD as at 30 September 2019 (the "Valuation Benchmark Date") performed by an independent valuer engaged by the Purchaser. The Purchaser shall issue 1,740,343,925 new shares as consideration shares for the Proposed Acquisition. According to the valuation report issued by the independent valuer, at the Valuation Benchmark Date the valuation of the total equity of the Company is USD1,396,722,200 (which is translated to RMB9,878,875,000 at the rate of USD1 to RMB7.0729) .

1. PRC GAAP FINANCIAL INFORMATION OF THE GROUP
   In accordance with the relevant PRC regulatory requirements to which the Purchaser is subject in respect of the Proposed Acquisition, consolidated financial information of the Company for the two years ended 31 December 2017 and 31 December 2018 and the nine months ended 30 September 2019 (the "PRC GAAP Financial Information") have been prepared in accordance with the generally accepted accounting principles in the PRC (the "PRC GAAP") and the accounting policies consistent with those adopted by the Purchaser, which are different from the basis of preparation of the consolidated financial statements as included in the Company's interim and annual reports previously published and the 2019 annual report to be published by the Company. As the users of the PRC GAAP Financial Information are PRC regulatory authorities and domestic investors, in order for such users to have a better understanding of the overall financial position and operating results of the Target Assets, it adopted accounting policies consistent with those adopted by the Purchaser and was audited by the PRC auditor engaged by the Purchaser.

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The PRC GAAP Financial Information was set out in the Purchaser Announcement and the key items of which are extracted as follows:

			Unit: RMB'000
		As at	As at
	For the	31 December	31 December
	nine months	2018/ For the	2017/ For the
	ended	year ended	year ended
	30 September	31 December	31 December
Balance sheet items	2019	2018	2017
Total assets	23,315,709.6	20,410,173.8	19,001,261.8
Total liabilities	13,143,496.3	11,508,457.8	12,204,184.2
Owner's equity	10,172,213.3	8,901,716.0	6,797,077.6
Owner's equity attributable to the
parent company	7,282,437.5	6,569,384.2	5,217,264.9
Income and loss statement items
Operating income	10,408,167.7	14,092,192.5	12,872,964.3
Operating cost	7,861,808.2	10,496,529.8	9,694,056.7
Total profit	1,619,771.8	2,140,540.0	2,156,125.6
Net profit	1,163,908.6	1,615,243.2	1,579,490.8
Net profit attributable to the parent
company	705,777.9	972,177.2	961,691.6
Cash flow statement items
Net cash flow statement from
operating activities	1,623,457.3	1,355,422.6	2,123,833.6
Net cash flow statement used in
investing activities	-1,988,220.2	-2,319,935.6	-1,175,043.1
Net cash flow statement from
financing activities	630,590.4	-1,650,396.6	178,385.1
Effect of exchange rate changes on
cash and cash equivalents	155,854.7	248,589.0	-325,733.4
Increase in cash and cash equivalents	421,682.2	-2,366,320.5	801,442.3
Balance of cash and cash equivalents
as at the end of period	3,937,068.6	3,515,386.4	5,881,707.0

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		As at	As at
	For the	31 December	31 December
	nine months	2018/ For the	2017/ For the
	ended	year ended	year ended
	30 September	31 December	31 December
Balance sheet items	2019	2018	2017
Main financial indicators
Quick ratios (times)	2.31	1.59	1.84
Current ratios (times)	1.62	1.01	1.43
Gearing ratios	56.37%	56.39%	64.23%
Total assets turnover rates
(time/year)	0.48	0.72	0.72
Accounts receivables turnover rates
(time/year)	9.18	11.17	8.28
Inventory turnover rates (time/year)	2.21	3.37	4.12
Gross profit margins	24.47%	25.52%	24.69%

Shareholders and potential investors of the Company should note that the PRC GAAP Financial Information is different from the consolidated financial information for the corresponding periods previously published by the Company. As such, Shareholders and potential investors of the Company are hereby reminded of the risks which may result from inappropriate reliance upon the PRC GAAP Financial Information.

IV. THE SELLER'S PROFIT COMMITMENT ON THE TARGET ASSET UNDER THE PROPOSED ACQUISITION

CNMC has undertaken that, in the event that the Proposed Acquisition completes by 2020, the audited net profit attributable to shareholders after deductions of non-recurring gains and losses for the years ended 2020, 2021 and 2022 will not be less than US$432,493,300 (the "Accumulated Promised Net Profit"); whereas, in the event that the Proposed Acquisition completes by 2021, the Accumulated Promised Net Profit for the years ended 2021, 2022 and 2023 will not be less than US$524,808,700. If the above commitments are not fulfilled during the relevant period, CNMD shall compensate the Purchaser in accordance with the terms set out in agreement(s) relevant to the Proposed Acquisition.

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1. RELEVANT OPERATING DATA OF THE GROUP AS AT THE NINE MONTHS ENDED 30 SEPTEMBER 2019
2. 1. Production of main products

	Unit: tonne
	For the
	nine months
	ended
	30 September
	2019
Copper concentrate	39,562
Copper cathodes	76,489
Blister copper and copper anodes	178,793
Sulfuric acid	513,311
Cobalt contained in cobalt hydroxide	45
Cobalt contained in copper-cobalt alloy	20

Note: The production volumes of copper concentrate, blister copper, copper anodes and copper cathodes are on a contained-copper basis. Cobalt contained in cobalt hydroxide and cobalt contained in copper-cobalt alloy represent the aggregated cobalt-contained volume in cobalt compound products.

1. Reserves and resources
   According to the relevant technical assessment report issued by mining experts, as at 30 September 2019, the proved ore reserves and the approximate ore reserves of the Group calculated based on JORC Code were 42,770,000 tonnes with an average copper grade of 1.87%, and 65,580,000 tonnes with an average copper grade of 1.90%, respectively. The amounts of ore resources measured, controlled and inferred were 88,330,000 tonnes with an average copper grade of 2.05%, 98,610,000 tonnes with an average copper grade of 2.11%, and 130,410,000 tonnes with an average copper grade of 1.68%, respectively. The total metal-containing reserves of the Group were approximately 2,043,000 tonnes of copper and 40,000 tonnes of cobalt, and the total metal-containing resources were approximately 6,079,000 tonnes of copper and 162,000 tonnes of cobalt.

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Details of the reserves are as follows:

									Unit: '000 tonne
			Copper						Cobalt
Category	Ore		Grade		Metal		Ore		Grade		Metal
Proved	42,770	1.87%	799	27,880	0.09%	25
Approximate	65,580		1.90%		1,244		16,940		0.09%		15
Total	108,350	1.89%	2,043	44,820	0.09%	40

Details of the resources are as follows:

									Unit: '000 tonne
			Copper						Cobalt
Category	Ore		Grade		Metal		Ore		Grade		Metal
Measured	88,330	2.05%	1,812	43,060	0.10%	44
Controlled	98,610	2.11%	2,080	63,280	0.09%	58
Inferred	130,410	1.68%	2,187	86,340	0.07%	60
Total	317,350	1.92%	6,079	192,680	0.08%	162

Note: The above reserves and resources data are the actual reserves and resources held by subsidiaries of the Group, and are not calculated based on equity interests.

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VI. FUNDRAISING PROCEEDS AND ITS USEAGE

As disclosed in the Purchaser Announcement, the Purchaser intends to raise proceeds not more than RMB3.2 billion in total through non-public issuance of shares (the "Fundraising"), and the final amount of the Fundraising proceeds remains subject to the amount as approved by China Securities Regulatory Commission of the People's Republic of China (the "CSRC").

After deducting the issuance fees and paying the relevant intermediary fees, the Fundraising proceeds will be used for investment in the "Kambove Main Mine Leach Copper Smelting Project" (referred to as "Kambove Integrated Exploration and Construction Project" in the 2018 annual report of the Company), "Lualaba Copper Smelter Project" and "Integrated Exploration and Construction Project of the Chambishi Southeast Mine" of the Group, and to replenish current funds of the Purchaser and to pay for relevant tax expenses incurred in the Proposed Acquisition, among which, the proportion of proceeds used for replenishing current funds shall not exceed 25% of the transaction consideration, or 50% of total amount of the Fundraising Proceeds. The specific usages of the Fundraising Proceeds are as follows:

		Total amount		Amount of
		of project		proceeds
No.	Project name	investment		to be used
		(RMB'000)		(RMB'000)
1.	Kambove Main Mine Leach Copper Smelting	1,687,557.2	1,530,000.0
	Project
2.	Lualaba Copper Smelter Project	3,328,703.2	840,000.0
3.	Integrated Exploration and Construction Project	5,890,562.9	490,000.0
	of the Chambishi Southeast Mine
4.	Supplement of current funds	340,000.0		340,000.0
Total		11,246,823.3	3,200,000

Note: Total investment amount of Kambove Main Mine Leach Copper Smelting Project is USD238,594,800 which is converted into RMB1,687,557,200 at the rate of USD1 to RMB7.0729; total investment amount of Lualaba Copper Smelter Project is USD470,627,800 which is converted into RMB3,328,703,200 at the rate of USD1 to RMB7.0729; total investment amount of Integrated Exploration and Construction Project of the Chambishi Southeast Mine is USD832,835,600 which is converted into RMB5,890,562,900 at the rate of USD1 to RMB7.0729 (the translation of USD to RMB refers to average of the middle exchange rate of RMB on the interbank foreign exchange market on 30 September 2019)

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While the Fundraising is conditional upon the successful implementation of the Proposed Acquisition, the success of the Fundraising shall not affect the implementation of the Proposed Acquisition. Before the Fundraising proceeds are in place, the Purchaser will choose to use the self-raised proceeds when appropriate, for the purpose of the above usages of the Fundraising proceeds depending on market conditions and its own actualities, and replenish the proceeds after completion of the Fundraising. If the Purchaser fails to complete the Fundraising or the actual amount of the proceeds is less than the capital demand for the usages thereof, it will utilize its self-raised funds to compensate the shortfall. The Purchaser shall make the appropriate adjustments to the funding order, amount and specific methods of capital input for the above projects in accordance with the actual net amount of proceeds and the actual demands of the projects.

VII. OTHERS

As disclosed in the Purchaser Announcement, the implementation of the Proposed Acquisition is subject to, amongst others, the approval by the general meeting of the Purchaser and the approval by the CSRC. The information disclosed in this announcement is only for reference purpose and shall not indicate the financial performance of the Company. Shareholders and the public are reminded to exercise caution when dealing in the securities of the Company.

The Company will make further announcement(s) on the Proposed Acquisition as and when appropriate and in accordance with the Listing Rules.

By Order of the Board

China Nonferrous Mining Corporation Limited

Aibin HU and Man Yi WONG

Joint Company Secretaries

Beijing, 9 March 2020

As at the date of this announcement, the Board of Directors of the Company comprises Mr. Tongzhou WANG, Mr. Xiaowei WANG, Mr. Lin ZHANG, Mr. Chunlai WANG and Mr. Kaishou XIE as executive Directors, Mr. Jinjun ZHANG as non-executive Director, and Mr. Chuanyao SUN, Mr. Jingwei LIU and Mr. Huanfei GUAN as independent non-executive Directors.

• for identification purposes only

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