Revision of Annual Cap for Existing Continuing Connected Transaction

Reference is made to the announcement of the Company dated 22 February 2017.

On 22 February 2017, a subsidiary of the Company, Xinjiang Ashele, entered into the Copper Concentrates Supply Contract with Xinjiang Non-ferrous Materials, pursuant to which Xinjiang Ashele would sell copper concentrates to Xinjiang Non-ferrous Materials. The term of the Copper Concentrates Supply Contract is from 1 January 2017 to 31 December 2017. During the agreed effective period of the Copper Concentrates Supply Contract, Xinjiang Ashele would sell copper concentrates containing not more than 21,000 tonnes of copper metal to Xinjiang Non-ferrous Materials with an annual cap based on the then estimated sales amount of RMB850 million. Under the impact of rising prices of copper concentrates during 2017, it is expected that the sales amount under the Continuing Connected Transaction will exceed the original annual cap of sales amount of RMB850 million set at early 2017. It is necessary to increase the annual cap of the sales amount of the Continuing Connected Transaction by an estimate of RMB155 million, and the revised annual cap will become RMB1.005 billion. The Continuing Connected Transaction will continue to be carried out in accordance with the Copper Concentrates Supply Contract entered into on 22 February 2017. Except for the new annual cap based on new estimate of the sales amount, all the terms under the Continuing Connected Transaction (including the sales volume of copper metal in the copper concentrates) remain unchanged.

The Company is one of the substantial shareholders of Xinjiang Ashele, currently holding 51% equity interest in Xinjiang Ashele. Xinjiang Non-ferrous Metal Industry (Group) Company Limited and its subsidiary China Non-ferrous Metal Import and Export Xinjiang Corp. together hold 34% equity interest in Xinjiang Ashele. Xinjiang Non-ferrous Materials is a wholly-owned subsidiary of Xinjiang Non-ferrous Metal Industry (Group) Company Limited. Xinjiang Non-ferrous Materials is an associate of Xinjiang Non-ferrous Metal Industry (Group) Company Limited and a connected person to the Company (as defined in the Listing Rules). Therefore, under Chapter 14A of the Listing Rules, the transaction constitutes a continuing connected transaction of the Company.

The Continuing Connected Transaction, which is continuous in nature, was entered into in the ordinary and usual course of business of the Company. After revising the annual cap based on new estimate of the sales amount under the Continuing Connected Transaction, as one or more of the applicable percentage ratios (as set out in the Listing Rules, other than the profits ratio) in relation to the transaction is, on an annual basis, more than 1% but all the applicable percentage ratios are less than 5%, the transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules with exemption on the circular and approval from Independent Shareholders, but is subject to annual review, reporting and announcement requirements under Chapter 14A of the Listing Rules.

Reference is made to the announcement of the Company dated 22 February 2017.

On 22 February 2017, a subsidiary of the Company, Xinjiang Ashele, entered into the Copper Concentrates Supply Contract with Xinjiang Non-ferrous Materials, pursuant to which Xinjiang Ashele would sell copper concentrates to Xinjiang Non-ferrous Materials. The term of the Copper Concentrates Supply Contract is from 1 January 2017 to 31 December 2017. During the agreed effective period of the Copper Concentrates Supply Contract, Xinjiang Ashele would sell copper concentrates containing not more than 21,000 tonnes of copper metal to Xinjiang Non-ferrous Materials with an annual cap based on the then estimated sales amount of RMB850 million. Under the impact of rising prices of copper concentrates during 2017, it is expected that the sales amount under the Continuing Connected Transaction will exceed the original annual cap of sales amount of RMB850 million set at early 2017. It is necessary to increase the annual cap of the sales amount of the Continuing Connected Transaction by an estimate of RMB155 million, and the revised annual cap will become RMB1.005 billion. The Continuing Connected Transaction will continue to be carried out in accordance with the Copper Concentrates Supply Contract entered into on 22 February 2017. Except for the new annual cap based on new estimate of the sales amount, all the terms under the Continuing Connected Transaction (including the sales volume of copper metal in the copper concentrates) remain unchanged.

PRINCIPAL TERMS OF THE COPPER CONCENTRATES SUPPLY CONTRACT

Date:

22 February 2017

Parties:

Seller:

Xinjiang Ashele. Xinjiang Ashele is a subsidiary of the Company, a company incorporated in the PRC with limited liability, and is mainly engaged in the development of Xinjiang Ashele mine in Xinjiang Province.

Buyer:

Xinjiang Non-ferrous Materials. The controlling shareholder of Xinjiang Non-ferrous Materials is Xinjiang Non-ferrous Metal Industry (Group) Company

Limited. Xinjiang Non-ferrous Materials is mainly engaged in:

General business scope: Business in chrome ore, chrome-magnesite bricks, coke and furnace charging materials; sales of metal materials, machinery and electrical products, mining products, chemical products, construction materials, instruments and meters, metal hardware and electrical products; retail of chemical fertilizers; processing of machinery components; services relating to installation and technical consultation of machinery and equipment; services relating to loading and unloading, delivery and storage; leasing of houses; heating supply services; container transportation services by rail; freight agency services; sales of agricultural by-products, aquatic products and frozen food; sales of coals and stone materials.

Product of sales:

Copper concentrates

Pricing:

  1. The settlement price of copper concentrates containing copper shall be determined according to the monthly arithmetic average settlement price of standard copper cathodes under spot contract in Shanghai Futures Exchange for each trading day in the month when deliveries are made from the mining area (as determined by the date of delivery of the goods; the 1st day to the last day of each month) as a benchmark price multiplied by a relevant price coefficient;

  2. The settlement price of copper concentrates containing gold shall be determined according to the monthly arithmetic weighted average settlement price of AU99.95 gold in Shanghai Gold Exchange in the month when deliveries are made from the mining area (the 1st day to the last day of each month) as a benchmark price multiplied by a relevant price coefficient;

  3. The settlement price of copper concentrates containing silver shall be determined according to the monthly arithmetic average settlement price of No. 3 Guobiao silver in Shanghai Huatong Market in the month when deliveries are made from the mining area (the 1st day to the last day of each month) as a benchmark price multiplied by a relevant price coefficient;

  4. Price will be reduced in accordance with the provisions of the contract if impurities which do not comply with the provisions of the contract are found in the concentrates.

Term:

From 1 January 2017 to 31 December 2017

Payment term:

  1. Full payment should be made by the buyer in advance by wire transfer according to the forecast grade, quantity and forecast price for the month as informed by the seller.

  2. The principle of delivery of goods and payment by both parties: until the buyer makes the full payment, no copper concentrates shall be delivered by the seller; the total price of goods shall be settled on time on a monthly basis.

The terms of the Copper Concentrates Supply Contract were arrived at after an arm's length negotiation between Xinjiang Ashele and Xinjiang Non-ferrous Materials.

HISTORICAL FIGURES

Xinjiang Ashele and Xinjiang Non-ferrous Materials entered into the Copper Concentrates Supply Contract on 22 February 2017. The term of the Copper Concentrates Supply Contract is from 1 January 2017 to 31 December 2017. During the period from 1 January 2017 to 31 October 2017, Xinjiang Ashele sold copper concentrates containing 16,594 tonnes of copper metal to Xinjiang Non-ferrous Materials and the sales amount was approximately RMB705.28 million (unaudited). The Company confirms that the transaction amount from 1 January 2017 up to the date of this announcement is within the original annual cap for the year ended 31 December 2017.

It was estimated that Xinjiang Ashele would sell copper concentrates containing not more than 21,000 tonnes of copper metal to Xinjiang Non-ferrous Materials with an annual cap based on the then estimated sales amount of RMB850 million. As one or more of the applicable percentage ratios (as set out in the Listing Rules, other than the profits ratio) under the Continuing Connected Transaction was, on an annual basis, more than 1% but all the applicable percentage ratios were less than 5%, the transaction constituted a continuing connected transaction of the Company under Chapter 14A of the Listing Rules with exemption on the circular and approval from Independent Shareholders, but was subject to annual review, reporting and announcement requirements under Chapter 14A of the Listing Rules.

REVISION OF ANNUAL CAP

Under the impact of rising prices of copper concentrates during 2017, it is expected that the sales amount under the Continuing Connected Transaction will exceed the original annual cap of sales amount of RMB850 million set at early 2017. It is necessary to increase the annual cap of the sales amount of the Continuing Connected Transaction by an estimate of RMB155 million, and the revised annual cap will become RMB1.005 billion. The Continuing Connected Transaction will continue to be carried out in accordance with the Copper Concentrates Supply Contract entered into on 22 February 2017. Except for the

Zijin Mining Group Company Ltd. published this content on 28 November 2017 and is solely responsible for the information contained herein.
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