China Vanadium Titano-Magnetite Mining Company

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in China Vanadium Titano-Magnetite Mining Company Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. China Vanadium Titano-Magnetite Mining Company Limited ʕ਷௏⌹ှ᚛ᘤุϞࠢʮ̡ (Incorporated in the Cayman Islands with limited liability) (Stock Code: 00893) DISCLOSEABLE AND CONNECTED TRANSACTIONS (i) ACQUISITION OF MINORITY INTEREST IN HUILI COUNTY CAITONG IRON AND TITANIUM CO., LTD.* AND (ii) ACQUISITION OF THE ENTIRE EQUITY INTEREST IN ABA MINING COMPANY LIMITED* Financial adviser to China Vanadium Titano-Magnetite Mining Company Limited Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders China Everbright Capital Limited A letter from the Board is set out on pages 8 to 27 of this circular. A letter from the Independent Board Committee containing its recommendations to the Independent Shareholders is set out on page 28 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 29 to 44 of this circular. A notice convening an extraordinary general meeting to be held at Hennessy Room, Level 7, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 16 December 2010 at 9:30 a.m. is set out in Appendix III to this circular. Whether or not you are able to attend the extraordinary general meeting, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the extraordinary general meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or at any adjourned meeting thereof and, in such event, the relevant form of proxy shall be deemed to be revoked. * for identification purpose only 30 November 2010 CONTENT Page Definitions ................................................... 1 Letter from the Board ............................................... 8 Letter from the Independent Board Committee ........................... 28 Letter from the Independent Financial Adviser ........................... 29 Appendix I – Valuation Report ofAba Mining ..................... I-1 Appendix II – General Information .............................. II-1 AppendixIII – NoticeofEGM ................................... III-1 – i – DEFINITIONS In this circular, unless the context otherwise requires, the following terms or expressions have the meaning set out below: “Aba Equity Interest” the entire equity interest inAba Mining ᜠᘤุϞࠢʮ̡), aڛ)*AbaMining” AbaMiningCompanyLimited“ limited liability company established in the PRC on 27 February 2004 “Aba MiningAcquisition” the acquisition of the Aba Equity Interest contemplated by the Aba Mining Acquisition Agreement “Aba Mining Acquisition the equity interest transfer agreement dated 15 November Agreement” 2010 entered into between Lingyu (as transferee) and Chuan Wei (as transferor) under which the Aba Equity Interest is being transferred “Acquisitions” HuiliCaitongAcquisitionandAbaMiningAcquisition “Agreements” the Huili Caitong Acquisition Agreement and the Aba Mining Acquisition Agreement “associates” hasthemeaningascribedtoitundertheListing Rules “BaicaoMine” the vanadium-bearing titano-magnetite mine located in Xiaoheiqing Townlet, Huili County, Sichuan, the PRC and operated by Huili Caitong “Board” theboardofDirectors “China”or“PRC” thePeople’sRepublicofChinaexcluding,for the purpose of this circular, Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan ණྠϞ۾ChuanWei” SichuanChuanweiGroupCo.,Ltd.*(̬ʇ޲ʇ“ ࠢʮ̡), a limited liability company established in the PRC on 29 March 1998 and a connected person to the Company “CizhuqingMine” CizhuqingMine(ভ϶❮᚛ᘤ) located in Huili County, Sichuan, the PRC – 1 – DEFINITIONS “Company” China Vanadium Titano-Magnetite Mining Company Limited (ʕ਷௏⌹ှ᚛ᘤุϞࠢʮ̡), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange “CompletionDate” in respect of any of theAgreements, the date on which completion of the equity interest transfer contemplated under the relevant agreement will take place, being the 3rd working day after satisfaction (or waiver) of the conditions precedent set out in the relevant agreement “Director(s)” thedirector(s)oftheCompany “EGM” extraordinarygeneralmeetingoftheShareholdersto be convened by the Company to consider and, if thought fit, to approve (among other things) the Acquisitions “FirstChina” First China Limited (ɧ͏Ϟࠢʮ̡), a company incorporated in Hong Kong on 5 March 2008 and a wholly-owned subsidiary of the Company “Founders” MessrsWangJin,ShiYinjun,YangXianlu,WuWendong, Zhang Yuangui and Li Hesheng, parties acting in concert “Geological Exploration Work the Geological Exploration Work Implementation Plan on Implementation Plan on the the Extended Exploration Area of the Maoling Mine of Extended Exploration Area of Wenchuan County, Sichuan Province* (̬ʇ޲ӡʇጤˣ the Maoling Mine” Ꮚ᚛ᘤַଉήሯਖݟʈЪྼ݄˙ࣩ) submitted by the Sichuan Provincial Bureau of Geology and Mineral Exploration and Development Exploration Team* (̬ʇ ޲ήሯᘤପਖݟක೯҅ʷઞඟ) to Aba Mining in July 2010 “Geological Exploration Work the Geological Exploration Work Implementation Plan on Implementation Plan on the the Yanglongshan Mine of Wenchuan County, Sichuan Yanglongshan Mine” Province* (̬ʇ޲ӡʇጤϺᎲʆ᚛ᘤਖઞήሯʈЪྼ݄˙ ࣩ) submitted by the Sichuan Provincial Bureau of Geology and Mineral Exploration and Development (Exploration Team* (̬ʇ޲ήሯᘤପਖݟක೯҅ʷઞඟ to Aba Mining in May 2010 “Group” theCompanyanditssubsidiaries “HK$” HongKongdollars,thelawfulcurrencyofHongKong – 2 – DEFINITIONS “HuiliCaitong” HuiliCountyCaitongIronandTitaniumCo., Ltd.* (ึଣ ጤৌஷ᚛⌹Ϟࠢப΂ʮ̡), a sino-foreign equity joint venture enterprise established in the PRC on 22 September 2006 and is a member of the Group beneficially owned as to 45.38% by Simply Rise, 47.39% by First China and 7.23% by Chuan Wei as at the Latest Practicable Date “Huili CaitongAcquisition” the acquisition of the Huili Caitong Equity Interest contemplated by the Huili Caitong Acquisition Agreement “Huili Caitong Acquisition the equity interest transfer agreement dated 15 November Agreement” 2010 entered into between Lingyu (as transferee) and Chuan Wei (as transferor) under which the Huili Caitong Equity Interest is being transferred “Huili Caitong Equity Interest” 7.23% equity interest in Huili Caitong held by Chuan Wei as at the date of this circular “Independent Board Committee” the independent board committee of the Company, comprising all the independent non-executive Directors “Independent Financial Adviser” China Everbright Capital Limited, a corporation licensed or “China Everbright” to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Acquisitions “Independent Shareholders” Shareholders who are not required to abstain from voting on the resolutions to be proposed at the EGM to approve the Acquisitions under the Listing Rules “JLLS”or“Valuer” Jones Lang LaSalle Sallmanns Limited, an independent valuer “km” kilometre(s),ametricunitmeasureofdistance – 3 – DEFINITIONS “Latest Practicable Date” 26November2010,beingthelatest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular “Lingyu” SichuanLingyuInvestmentCo.,Ltd*(̬ʇ޲ࡗ੿ҳ༟ Ϟࠢʮ̡), a limited liability company established in the PRC on 9 June 2010 and wholly-owned by First China “ListingRules” the Rules Governing the Listing of Securities on the Stock Exchange “Maoling Extended Exploration the extended exploration area to be covered under the Area” Maoling Proposed Exploration Permit “MaolingMine” Maolingmine(ˣᏊ᚛ᘤ), an iron ore mine located at Maoling Village, Weizhou Town, Wenchuan County, Aba Autonomous Prefecture, Sichuan, the PRC “Maoling Proposed Exploration the exploration permit in respect of the Maoling Mine Permit” which Chuan Wei guaranteed to Lingyu that Aba Mining will obtain before 31 December 2010 pursuant to the Aba Mining Acquisition Agreement “New Maoling Mining Permit” the new mining permit in respect of the Maoling Mine regarding

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