IRC : Announcements and Notices - Update on Negotiations Regarding ICBC Facility

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(Incorporated in Hong Kong with limited liability)

(Stock code: 1029)

Update on Negotiations Regarding ICBC Facility

Thursday, 24 May 2018: This announcement is made by IRC Limited ("IRC" or the "Company", together with its subsidiaries, the "Group"; Stock Code 1029) to provide an update on the negotiations involving the Company, Petropavlovsk PLC ("Petropavlovsk"), and the Industrial and Commercial Bank of China ("ICBC") in relation to the US$340 million project finance facility dated 13 December 2010 between Kimkano-Sutarsky Mining and Beneficiation Plant LLC ("K&S", a wholly owned subsidiary of the Company) and ICBC (the "ICBC Facility"). Petropavlovsk has guaranteed the outstanding amounts K&S owes to ICBC, with total loan principal as at 31 March 2018 amounting to approximately US$234 million.

Under the ICBC Facility, a payment of approximately US$35.16 million, including principal and interest, is due from K&S to ICBC on 20 June 2018. As previously announced, the Company, together with Petropavlovsk, have approached ICBC to request an amendment of the repayment schedule and to obtain waivers in respect of obligations to comply with certain financial covenants. The Company has also requested ICBC to waive the obligation to maintain certain cash deposits with ICBC. The negotiations with ICBC are continuing.

As no agreement has yet been reached with ICBC, both the Company and Petropavlovsk are pursuing a number of options to ensure the continued good standing of the ICBC Facility. These options include discussions regarding the full refinancing of the ICBC facility with a leading Russian leader, which are now well progressed. Petropavlovsk is also exploring a potential short-term advance to IRC to fund a portion of the June debt obligations if necessary. The primary objective of these discussions, as well as the pursuit of other options to ensure the continued good standing of the ICBC Facility, is to protect the interests of all of the Company's stakeholders.

If a missed repayment under debt or guarantee obligations in respect of the ICBC Facility occurs, or covenant requirements are not met, this would result in a default under the ICBC Facility.

The Company will continue to update the market in due course.

By Order of the Board

IRC Limited

Yury Makarov Chief Executive Officer

Hong Kong, People's Republic of China

Thursday, 24 May 2018

As at the date of this announcement, the Executive Directors of the Company are Mr Yury Makarov and Mr Danila Kotlyarov. The Non-Executive Directors are Mr George Jay Hambro, Mr Benjamin Tze For Ng, and Mr Chi Kin Cheng. The Independent Non-Executive Directors are Mr Daniel Bradshaw, Mr. Chuang-Fei Li, Mr Simon Murray, CBE, Chevalier de la Légion d'Honneur, Mr Jonathan Martin Smith and Mr Raymond Kar Tung Woo.

IRC Limited

6H, 9 Queen's Road Central Hong Kong

Tel: +852 2772 0007

Fax: +852 2772 0329 Email:ir@ircgroup.com.hkWebsite:www.ircgroup.com.hk

For further information please visitwww.ircgroup.com.hkor contact:

Kent Lo

Manager - Communications & Investor Relations Telephone: +852 2772 0007

Mobile: +852 9688 8293 Email:kl@ircgroup.com.hk