The mysterious “veil” of Shandong Gold’s major asset restructuring maneuver has finally been lifted: The Company plans to issue about 296 million shares at the price of 33.72 yuan/share, to purchase assets of Shandong Gold Group and other companies totaling 9.984 billion yuan, through which it will increase 401 tonnes of gold reserve. Meanwhile, it also plans to raise supporting funds of no more than 3 billion yuan through private placement. After the restructuring is completed, Shandong Gold’s asset size will multiply; its gold reserve will double to 800 tonnes.

At the current stage, excluding some individual gold mines, gold assets owned by Shandong Gold Group have all been incorporated into the listed company (those not yet incorporated will be placed under custody of Shandong Gold),Shandong Gold’s reserve will far surpass other listed companies in the same industry to become the “top gold stock in China”.

Based on calculation of the estimated value of the target assets held by all transaction counterparts and the issue price, the share quantity issued for asset purchase this time is about 296,071,400 shares. Wherein, about 149,398,900 shares will be issued to Shandong Gold Group to purchase its 100% equity of Shandong Tiancheng Mining Co., Ltd, Dongfeng exploration right, Dongfeng mining right as well as related asset liabilities, Sizhuang exploration right and Xincheng exploration right;about 70,519,000 shares will be issued to Shandong Gold Nonferrous Metal Mining Group Co., Ltd to purchase its 70.65% equity of Shandong Gold Guilaizhuang Mining Co.,Ltd, 70% equity of SongxianShanjin Mining Co., Ltd, 63% equity of Hainan Shanjin Mining Co., Ltd, and 51% equity of Shandong Gold Group Penglai Mining Corporation; about 60,144,300 shares will be issued to Shandong Shengda Mining Co., Ltd to purchase its 100%equity of LaizhouXinyuan Mining Investment& Development Co., Ltd and Matang mining right and related asset liabilities, Matang Second Mine’s mining right and related asset liabilities; about 9,474,900 shares will be issued to natural person Wang Zhiqiang to purchase its 29% equity of Penglai Mining; about 6,534,400 shares will be issued to YantaiJinmao Mining Co., Ltd to purchase its 20% equity of Penglai Mining. Meanwhile, it is scheduled to issue about 88,968,000 shares to raise supporting financing of no more than 3 billion yuan. After the transaction is completed, the total shares of Shandong Gold will reach about 1.808 billion shares.

In recent years, there is an increasingly obvious trend in the concentration of domestic gold industry. In 2012, Shandong Gold Group’s gold production output leapfrogged to top position in the industry nationwide to become the number one mineral gold manufacturer in the world’s largest gold-producing country, and ranked 13th among global gold producers on Forbes ranking. As the Group’s only subordinate listed company, in the recent three years Shandong Gold displayed healthy trend in main business development, all operation data kept steady growth.

After this transaction is completed, both total assets and net assets of the listed company will increase significantly, its profit-earning ability will be considerably boosted. On the other hand, among Shandong Gold Group and other enterprises under its control, only Qinghai Shanjin Mining Co., Ltd, SongxianTianyun Mining Co., Ltd and Shandong Gold Jinchuang Group Co., Ltd have a few gold business related assets within the territory. At present, the 52% equity of Qinghai Shanjin Mining Co.,Ltd and 70% equity of SongxianTianyun Mining Co., Ltd which were actually controlled by Shandong Gold Group are now under custody of Shandong Gold for management, related assets of its Jinchuang Group are also under the custody of Shandong Gold. Meanwhile, Shandong Gold Group guarantees that it will, within 3 years after issuing the Letter of Commitment,dispose of the above-mentioned assets related to gold business through external sale, Shandong Gold will enjoy pre-emptive right for the above assets under equal conditions.