Memorandum of Understanding in Relation to Possible Acquisition

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Shares.

(Incorporated in Bermuda with limited liability) (Stock Code: 380)

MEMORANDUM OF UNDERSTANDING IN RELATION TO POSSIBLE ACQUISITION

This announcement is made pursuant to Rule 13.09 of Listing Rules.

The Board announces that on 28 April 2010, the Company entered into a non-legally binding MOU with the Vendor in relation to the Possible Acquisition. The total consideration for the Possible Acquisition shall be approximately HK$10,700,000,000, subject to adjustment mechanism to be agreed between the parties. The Possible Acquisition, if it proceeds, is subject to various conditions and the entering into of legally binding agreement.

The Possible Acquisition may or may not proceed. Shareholders and investors are reminded to exercise caution when dealing in the Company’s Shares. Save for several legally-binding clauses, mainly relating to due diligence, exclusivity and confidentiality, the terms set out in the MOU are not legally-binding. The final terms of the formal agreement are subject to further negotiations between the parties and have yet to be finalised, and may however deviate from those set out in the MOU.

Subject to the terms of the formal agreement, if the Possible Acquisition materialises, it is presently expected that the Possible Acquisition may constitute a very substantial acquisition for the Company under the Listing Rules. Further detailed announcement will be made by the Company in accordance with all applicable requirements of the Listing Rules as and when appropriate, when the Company signs the formal agreement or decides to terminate the MOU or when there is material development on the Possible Acquisition.

1 THE NON-LEGALLY BINDING MEMORANDUM OF UNDERSTANDING DATED 28 APRIL 2010

Parties

The Company

Vendor : Ocean Ample Limited

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Ocean Ample (and its ultimate beneficial owner(s)) are not connected persons of the Company and are independent third parties with the Company and its connected persons.

The Company will elect its subsidiary (“Purchaser”) to enter into the formal agreement with the Vendor.

Assets to be acquired

(i) the entire issued share capital of the Target Company; and

(ii) the Shareholder’s Loan.

Major terms of the MOU

Consideration

The total consideration shall be approximately HK$10,700,000,000, subject to adjustment pursuant to a mechanism to be agreed, in the event the resource / reserve in respect of the Tin Deposits is less than certain amount to be agreed, and the valuation on the Tin Deposits is less than certain amount to be agreed. The consideration will be subject to further negotiations between the parties, shall be satisfied in the following manner:

(a) a refundable deposit of an amount to be agreed payable in cash and/or by cheque within 90 days from the signing of the formal agreement, with guarantee / security acceptable to the Purchaser for refund of such deposit;

(b) a portion to be agreed to be satisfied by the allotment and issue of the Shares at completion date at the issue price of HK$0.08 per Share (“Consideration Shares”);

(c) a portion to be agreed to be satisfied by the issue of promissory note by the Purchaser (“Promissory Note”) subject to terms and conditions to be agreed at completion date;

(d) a portion to be satisfied by the issue of convertible bonds by the Company convertible into the Shares (“Convertible Bonds”) at completion date at the conversion price of HK$0.08 per Share.

2 The proposed issue price or conversion price of HK$0.08 per Share for the Consideration Shares or the Convertible Bonds represents:–

(i) a premium of approximately 5.3% to the closing price of the Shares of HK$0.076 per Share as quoted on the Stock Exchange on 28 April 2010;

(ii) a premium of approximately 12.7% to the average of the closing prices of the Shares of approximately HK$0.071 per Share as quoted on the Stock Exchange for the 5 consecutive trading days up to and including 28 April 2010; and

(iii) a premium of approximately 19.4% to the average of the closing prices of the Shares of approximately HK$0.067 per Share as quoted on the Stock Exchange for the 10 consecutive trading days up to and including 28 April 2010.

If no completion occurs, the deposit (without interest) shall be returned to the Purchaser immediately.

Detailed terms and conditions of the issue of the Consideration Shares, the Convertible Bonds and the Promissory Note will be subject to agreement between the parties.

Due diligence

After the signing of the MOU, the Company shall be entitled to conduct a due diligence review on the Target Group.

Conditions precedents

Completion of the Possible Acquisition is subject to the fulfillment (or waiver by the Purchaser) of a number of conditions, including but not limited to the following:

(a) the approval by the necessary Shareholders at a special general meeting of (i) the Possible Acquisition and the transactions contemplated thereunder; and (ii) the allotment and issue of the Consideration Shares, the issue of the Promissory Note, and the creation and issue of the Convertible Bonds and the allotment and issue of the Conversion Shares upon conversion of the Convertible Bonds, being obtained;

(b) the Listing Committee of the Stock Exchange having granted or having agreed to grant the listing of, and permission to deal in, the Consideration Shares and the Conversion Shares;

(c) (i) (if required) all requisite waivers, consents and approvals from any relevant governments or regulatory authorities or other relevant third parties in connection with the Possible Acquisition and the transactions contemplated thereunder required to be obtained on the part of the Purchaser and the Company having been obtained;

(ii) no law shall be in effect which prohibits or restricts the consummation of the Possible Acquisition and the transactions contemplated thereunder;

3 (d) (i) the Purchaser being reasonably satisfied with the results of the due diligence exercise (whether business, legal, accounting, financial, tax, operational, technical or other aspects that the Purchaser considers necessary) on the Target Group and their related business assets, liability, activities, operations, prospects and other status;

(ii) (if required by the Stock Exchange or the Listing Rules) the Purchaser shall have received a technical advisor’s report to be issued by a technical advisor acceptable to the Purchaser in relation to the mineral deposits covered by the exploration concessions and/or the exploitation area (the “Tin Deposits”), which complies with the requirements of the Listing Rules and the Stock Exchange;

(iii) the Purchaser shall have received a valuation report to be issued by a firm of independent valuer acceptable to the Purchaser, which (where applicable) complies with the requirements of the Listing Rules and the Stock Exchange;

(e) the receipt by the Purchaser of legal opinions in respect of BVI laws and the laws of the Republic of Indonesia (in such form and substance to its reasonable satisfaction); and

(f) no indication being received from the Stock Exchange that the Possible Acquisition will be treated or, as the case may be, ruled by the Stock Exchange as a “reverse takeover” under the Listing Rules or the Company being treated as a new listing applicant under the Listing Rules.

Other terms and conditions

The Vendor shall provide a guarantor(s) (acceptable to the Purchaser) to join as a party(ies) to the formal agreement to guarantee the obligations of the Vendor under the formal agreement. The formal agreement shall contain a profit guarantee for such periods and amounts to be further discussed and agreed between the parties and standard representations and warranties which will be normally given for transaction of this nature.

The parties will make good faith and efforts to conclude the formal agreement within 30 working days (excluding Saturday, Sunday and public holiday in Hong Kong) from signing of the MOU or such longer period as the parties may agree.

Exclusivity

The Vendor shall not, whether by itself or through any of its directors, officers, employees, shareholders, agents or representatives, during the period of 30 working days (from the date of the MOU or such longer period as the parties may agree (“Exclusivity Period”)), negotiate or discuss or enter into any contract or agreement with or give any undertaking in favour of any third party in relation to the subject matter of the Possible Acquisition and the transactions contemplated in the MOU or for the purpose of frustrating or impeding the furtherance of the transaction contemplated under the MOU.

4 Each of the Company and its subsidiaries shall not, whether by itself or through any of its directors, officers, employees, shareholders, agents or representatives, during the Exclusivity Period, negotiate or discuss or enter into any very substantial acquisition (as defined under the Listing Rules) with any third party or enter into any agreement so to do.

INFORMATION ON THE TARGET GROUP

The information contained in this section is provided by the Vendor:

The Target Company is an investment holding company incorporated under the laws of the British Virgin Islands, and together with its subsidiaries, are involved or interested in the business of exploration, exploitation, processing, smelting and marketing of tin in the Bangka Belitung province of the Republic of Indonesia.

The Target Company, together with its affiliates, hold or have interests in 187 IUP exploration concessions and 1 IUP exploitation area in respect of tin as follows:

(1) 16 exploration concessions covering an aggregate area of approximately 28,700 hectares valid until September 2012, of which, an area of approximately 300 hectares in one of the exploration concessions (“exploitation area”) has exploitation licence valid until November 2016, held by its approximately 80% owned subsidiary. In relation to the exploitation area, commercial exploitation commenced in May 2009; and

(2) 171 exploration concessions covering an aggregate area of approximately 306,200 hectares, 52 of which are valid until September 2012, 84 until October 2012, 35 until December 2012, through various arrangements, which according to the Vendor, enable the Target Group to secure the economic benefits and establish control of, and acquire these concessions. In view of the laws of the Republic of Indonesia regarding foreign ownership, the intention is for the Target Group to enjoy 80% benefits and interests of these concessions.

(The exploration concession rights entitle the holder to conduct exploration activities for tin and its auxiliary minerals in accordance with the applicable laws).

(Under the Mining and Coal Law No.4 of 2009 (the “New Mining Law”) of the Republic of Indonesia, the previous mining concession Kuasa Pertambangan – “KP” would need to be modified to a new form of mining concession called Ijin Usaha Pertambangan – “IUP”. The 187 exploration concessions and the 1 exploitation area referred to above have been changed from their respective KP to IUP in compliance with the New Mining Law.)

The exploration concessions and the exploitation area are in respect of areas located offshore close to the shores surrounding Bangka Island, which, as compared to onshore exploitation, requires lower capital and infrastructural investment as mineral resource is in form of alluvial placer deposits in offshore areas. Bangka Island is located approximately 455 km from Jakarta (1-hour by plane or 1 day by boat from Jakarta), the island covers an area of about 12,000 sq. km. and has been one of the world’s principal tin- producing centres.

5 According to a preliminary geological review report issued by an independent consultant, the offshore tin deposit area covered by the exploration concessions (including the exploitation area) of approximately 335,000 hectares has a potential tin-bearing sand concentrate resource of approximately in the region from 3.7 million tonnes to 4.6 million tonnes at an average grade of 55-58% Sn.

Offshore exploitation is principally conducted via dredgers. The Target Group currently has 1 cutter suction dredger capable of operating in 15 to 50 meters of sea depth in operation. Exploitation in the exploitation area commenced in May 2009 with the Target Group’s own cutter suction dredger (CSD) and an additional rented cutter suction dredger (CSD) to assist.

In addition, the Target Group includes an approximately 99% owned subsidiary which operates a tin smelter, which commenced commercial production in about July 2008. The tin smelting facility has an annual production capacity of approximately 7,200 metric tons tin ingot of approximately 99.9% purity and is located in Ketapang Industrial Estate of Pangkal Pinang, which is within close vicinity to the Pangkal Balam shipping port, where most of the tin ingots in Bangka are shipped to domestic and overseas customers. The Target Group also has a company trading tin ingots and other tin products and a company responsible to conduct exploitation and exploration activities.

REASONS FOR THE POSSIBLE ACQUISITION

The Group is principally engaged in the trading of construction materials, mainly pipes and fittings, manufacturing and sale of seamless pipes and property investment. As disclosed in the 2009 annual report of the Company, in order to further improve return to the Shareholders, the Company is actively seeking investment opportunities in the Asia Pacific region.

Tin is considered the “green” replacement of lead, and is mainly used in the production of solder, tinplate, chemicals, brass, bronze, glass and other alloys, and in particular, in food preservation. It is believed that the majority if not all the growth in demand for tin would be likely coming from the PRC and other emerging Asian markets, with both solder and tinplate usage increasing. Thus, the Company considers that the exploitation industry related to tin resources has considerable development potentials. The Directors believe that demand of tin ore will remain strong in the future and consider that, subject to the results of due diligence, the Possible Acquisition offers a good opportunity for the Group to invest in tin ore asset with significant expansion potential.

6 The management of the Company also considers favorably of the Possible Acquisition, as, based on the information provided by the Vendor, Bangka Island is located in the South-East Asia Tin Belt, and has been one of the world’s principal tin-producing centres. Two of the top 10 tin producers have been operating tin exploitation on Bangka Island for a long period of time, where the subject exploration concessions and exploitation area are in respect of areas located in and adjoined the areas under active exploitation by them. While onshore tin exploitation may involve, among other things, relocation of villagers, compensations, social costs and costs for reforestation, offshore tin exploitation has much less environmental and social issues. Further, it is noted that except for the drop in tin price due to the financial crisis in 2008, tin price has been steadily rising since 2005. In 2009, the average spot price in December was US$16,712.5 per tonne, a staggering 54% higher than that in January. As of 20 April, 2010, tin price has further increased to US$19,127 per tonne.

GENERAL

7 DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

“Board” the board of Directors

“Company” China Pipe Group Limited, a company incorporated in Bermuda with limited liabilities, the Shares of which are listed on the Stock Exchange

“connected person” has the meaning ascribed to it under the Listing Rules

“Consideration Shares” has the meaning ascribed to it in the section “The non-legally binding Memorandum of Understanding dated 28 April 2010 – Major terms of the MOU” above

“Conversion Shares” the Shares to be issued and allotted upon conversion of the Convertible Bonds

“Convertible Bonds” has the meaning ascribed to it in the section “The non-legally binding Memorandum of Understanding dated 28 April 2010 – Major terms of the MOU” above

“Director(s)” the directors of the Company

“Dynamic” or Dynamic Event Limited, a company incorporated in the British Virgin “Target Company” Islands

“Group” the Company and its subsidiaries

“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

“MOU” the non-legally binding memorandum of understanding dated 28 April 2010 entered into between Ocean Ample and the Company in relation to the Possible Acquisition

“Ocean Ample” or “Vendor” Ocean Ample Limited, a company incorporated in the British Virgin Islands with limited liability, the vendor in the Possible Acquisition

“Promissory Note” has the meaning ascribed to it in the section “The non-legally binding Memorandum of Understanding dated 28 April 2010 – Major terms of the MOU” above

8 “Possible Acquisition” the possible acquisition by the Purchaser from Ocean Ample of the entire issued share capital of the Target Company and Shareholder’s Loan as contemplated in the MOU

“PRC” the Peoples’ Republic of China

“Purchaser” the subsidiary of the Company to be elected by the Company to enter into the formal agreement in relation to the Possible Acquisition

“Shareholder’s Loan” all shareholder’s loan due from the Target Company to the Vendor and its associates (as defined in the Listing Rules) as at completion of the Possible Acquisition

“Share(s)” ordinary share(s) of HK$0.002 each in the capital of the Company

“Shareholder(s)” holder(s) of the Shares

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Target Group” the Target Company and its subsidiaries

“Tin Deposits” has the meaning ascribed to it in the section “The non-legally binding Memorandum of Understanding dated 28 April 2010 – Major terms of the MOU” above

“HK$” Hong Kong dollar, the lawful currency of Hong Kong

“Sn” tin

“%” per cent.

On behalf of the Board China Pipe Group Limited Lai Guanglin Chairman

Hong Kong, 28 April 2010

As at the date of this announcement, the Board consists of Mr. Yu Ben Ansheng, Mr. Sam Ming Choy, Mr. Lai Fulin and Mr. Cai Shangwu as executive directors, Mr. Lai Guanglin, Mr. U Kean Seng and Mr. Zhao Yue as non-executive directors; and Mr. Wong Yee Shuen, Wilson, Mr. Lau Kwok Ting, Ms. Wu Xiuru and Mr. Chen Wei Wen as independent non-executive directors.