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China Nickel Resources Holdings Company Limited

中國鎳資源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 02889)

VOLUNTARY ANNOUNCEMENT SUPPLEMENTAL INFORMATION ON IMPAIRMENT LOSSES

This is a voluntary announcement made by China Nickel Resources Holdings Company Limited (the
"Company", together with its subsidiaries, the "Group").
The board of directors of the Company (the "Board") would like to provide supplemental information on the provisions for the impairment losses in respect of certain plants located in Zhengzhou (the "Zhengzhou Plants").
Due to the weak market demand for iron and steel products and intense competition in the PRC's market in
2013, Zhengzhou Yongtong Special Steel Co., Ltd. ("Yongtong Special Steel"), a wholly owned subsidiary of the Company, suspended production from March to November 2013 (the "Suspension"). During the period of the Suspension, Yongtong Special Steel commenced a maintenance and recalibration program with an objective to adjust the product mix at the production facilities at the Zhengzhou Plants.
In light of the Suspension and the prevailing business development and economic environment of the Group at the relevant time, the Board conducted an impairment assessment in respect of the processing facilities at the Zhengzhou Plants (the "Zhengzhou Processing Plants"). During the impairment assessment, the Board reviewed the total recoverable amount of the Zhengzhou Processing Plants. The Board considered that the Zhengzhou Processing Plants and the prepaid land lease payments in respect of a parcel of land relating to the Zhengzhou Processing Plants (the "Prepaid Land Lease Payments"), would not be utilised and would not generate any economic benefits to the Group in the foreseeable future. As such, the Board made full provisions for impairment losses on the Zhengzhou Processing Plants and the Prepaid Land Lease Payments for the year ended 31 December 2013 in the amounts of HK$195,783,000 and HK$15,623,000, respectively.
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In addition, as a result of the Suspension, the Board also conducted an impairment assessment in respect of the production facilities at the Zhengzhou Plants (the "Zhengzhou Production Plants"). The Board reviewed the total recoverable amounts of the Zhengzhou Production Plants, which was determined based on the value-in-use of the Zhengzhou Production Plants as a whole, and considered it appropriate to adopt a pre-tax discount rate of 17.2% (the "Discount Rate") in respect of estimated future cash flows generated by the Zhengzhou Production Plants. The Discount Rate was determined by considering the weighted average cost of capital of the Zhengzhou Production Plants with reference to the weighted average cost of capital of a number of comparable companies, as adjusted by a premium with reference to the size of such comparable companies and a premium with reference to the risks associated with the business operations of such comparable companies. The results of the assessment indicated that, as at 31 December 2013, the value-in- use of the Zhengzhou Production Plants exceeded the carrying value of the Zhengzhou Production Plants. Accordingly, the Board considered that no impairment provision was necessary in respect of the Zhengzhou Production Plants.
For and on behalf of the Board
China Nickel Resources Holdings Company Limited
Dong Shutong
Chairman

Hong Kong, 31 October 2014

As at the date of this announcement, the executive directors of the Company are Mr. Dong Shutong (Chairman), Mr. Dong Chengzhe, Mr. Wang Ping, Mr. Yin Sheping, Mr. Song Wenzhou and Mr. Yang Fei; the non-executive director of the Company is Mr. Yang Tianjun; and the independent non-executive directors of the Company are Mr. Bai Baohua, Mr. Huang Changhuai, Mr. Wong Chi Keung and Mr. Fahmi Idris.

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