SHANDONG GOLD MINING CO., LTD. 山東黃金礦業股份有限公司 (A Joint Stock Company Incorporated in the People’S Republic of China with Limited Liability) (Stock Code: 1787)
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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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Shandong Gold Mining Co., Ltd. (山東黃金礦業股份有限公司) (the “Company”), you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s). 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. SHANDONG GOLD MINING CO., LTD. 山東黃金礦業股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1787) (1) DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF 100% EQUITY INTEREST IN THE TARGET COMPANY (2) RESOLUTION ON THE ESTIMATED NEW DAILY CONNECTED TRANSACTIONS OF THE COMPANY AFTER THE ACQUISITION OF THE EQUITY INTEREST OF THE TARGET COMPANY (3) PROPOSED AMENDMENT TO ARTICLES OF ASSOCIATION (4) GENERAL MANDATE TO ISSUE H SHARES AND (5) REVISED NOTICE OF 2019 THIRD EXTRAORDINARY GENERAL MEETING Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders A revised notice convening the 2019 third extraordinary general meeting (the “EGM”) of Shandong Gold Mining Co., Ltd. (the “Company”) to be held at the conference room of the Company, Building No. 3, Shuntai Plaza, Shunhua Road No. 2000, Jinan, Shandong Province, the PRC at 9:00 a.m. on Friday, 23 August 2019 is set out on pages 91 to 94 of this circular. A revised proxy form for use in connection with the EGM is enclosed with this circular. The revised proxy form is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company’s website (http://www.sdhjgf.com.cn). Any shareholder(s) of the Company (the “Shareholders”) entitled to attend and vote at the EGM are entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a shareholder of the Company. If you intend to appoint a proxy to attend the EGM and vote on your behalf, you are requested to complete the accompanying revised proxy form in accordance with the instructions printed thereon and return it by hand, by post or by facsimile to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for H Shareholders only) as soon as possible and in any event not later than 24 hours before the time appointed for the holding of the EGM or any adjournment thereof (as the case may be) (i.e. before 9:00 a.m. on Thursday, 22 August 2019). Completion and return of the revised proxy form will not preclude you from attending and voting at the EGM or any adjournment hereof should you so wish. 7 August 2019 CONTENTS DEFINITIONS ........................................................... 1 LETTER FROM THE BOARD ............................................... 5 LETTER FROM THE INDEPENDENT BOARD COMMITTEE ..................... 32 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER ..................... 33 APPENDIX I — GENERAL INFORMATION ............................. 46 APPENDIX II — SUMMARY OF VALUATION REPORT ..................... 51 APPENDIX III — PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION ..................................... 57 APPENDIX IV — REVISED NOTICE OF 2019 THIRD EXTRAORDINARY GENERAL MEETING ................................ 91 —i— DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: “Acquisition” the acquisition of the entire equity interest in the Target Company by the Company from SDG Group Co. under the Sale and Purchase Agreement; “Announcements” the announcements of the Company both dated 21 June 2019 in relation to, among other things, the Sale and Purchase Agreement and the transactions contemplated thereunder the estimated new daily transaction of the Company after the acquisition of the equity interest of the Target Company and the proposed amendment to the Articles of Association; “A Share(s)” the domestic share(s) issued by the Company to domestic investors with a nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange; “Articles of Association” the articles of association of the Company; “Board” or “Board of Directors” the board of Directors; “Company” Shandong Gold Mining Co., Ltd. (山東黃金礦業股份有限 公司), a joint stock company incorporated in the PRC under the laws of the People’s Republic of China with limited liability on 31 January 2000; “Completion” completion of the Acquisition in accordance with the terms and conditions of the Sale and Purchase Agreement; “Conditions” conditions precedent to the Acquisition as set out in the paragraph headed “Conditions precedent” in this circular; “connected person(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules; “connected transaction” has the meaning ascribed thereto under the Hong Kong Listing Rules; “Director(s)” the director(s) of our Company; “EGM” the 2019 third extraordinary general meeting of the Company to be held at 9:00 a.m. on Friday, 23 August 2019 at the conference room of the Company, Building No. 3, Shuntai Plaza, Shunhua Road No. 2000, Jinan, Shandong Province, the PRC; —1— DEFINITIONS “Equity Entrustment Framework the framework agreement entered between the Company Agreement” and SDG Group Co. pursuant to which, SDG Group Co. will entrust us with the management and operation of certain of its PRC subsidiaries, which are, or through their subsidiaries principally engaged in gold mining, non-ferrous mining, other mining related operations by way of equity entrustment; “General Mandate” a general mandate to be granted to the Board for issuing H Shares representing up to the limit of 20% of the aggregate number of H Shares in issue on the date of passing the relevant resolution by the Shareholders; “Group” the Company and its subsidiaries; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; “H Shares” the overseas-listed foreign invested share(s) in the Company’s share capital, with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time; “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited; “Independent Board Committee” an independent committee of the Board comprising all its independent non-executive Directors, established for the purpose of advising the Independent Shareholders, on the terms of the Sale and Purchase Agreement and the transaction contemplated thereunder; “Independent Financial Adviser” China Tonghai Capital Limited, a licensed corporation under the SFO licensed to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed for the purposes of advising the Independent Board Committee and the Independent Shareholders in respect of the Acquisition and the transactions contemplated thereunder; —2— DEFINITIONS “Independent Shareholders” Shareholders who are independent of and have no interest in the transaction contemplated under the Sale and Purchase Agreement; “Latest Practicable Date” 2 August 2019, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein; “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Hong Kong Listing Rules; “PRC” or “China” the People’s Republic of China, for the purpose of this Circular, excluding Hong Kong, Macau and Taiwan; “RMB” Renminbi, the lawful currency of the PRC; “Sale and Purchase Agreement” the sale and purchase agreement dated 21 June 2019 entered into between SDG Group Co. and the Company in relation to the Acquisition; “SDG Group” SDG Group Co. and all of its subsidiaries; “SDG Group Co.” Shandong Gold Group Co., Ltd. (山東黃金集團有限公司), a limited liability company incorporated in the PRC on 16 July 1996, the controlling Shareholder of our Company, and was held as to approximately 70% by Shandong SASAC, as to approximately 20% by Shandong Guohui Investment Co., Ltd. (山東國惠投資有限公司) and as to approximately 10% by Shandong Social Security Fund Committee (山東省社會保障基金理事會); “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended, modified and supplemented from time to time; “Shanghai Stock Exchange” or “SSE” Shanghai Stock Exchange (上海證券交易所); “Share(s)” shares in the share capital of our Company, with a nominal value of RMB1.00 each, comprising our A Shares and our H Shares; “Shareholders” holder(s) of our Share(s); —3— DEFINITIONS “SSE Listing Rules” the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (上海證券交易所股票上市規則)as amended supplemented or otherwise modified from time to time; “Supervisor(s)” the supervisor(s) of our Company; “Target Company” SD Gold Capital Management Co., Ltd. (山金金控資本管 理有限公司), a limited liability company incorporated in the PRC on 14 November 2012 and a wholly-owned subsidiary of SDG Group Co.; “Target Group” the Target Company and its subsidiaries; “%” per cent. For the purpose of this circular, the exchange rate of HK$1.00 = RMB0.88066 have been used for currency translation, where applicable. Such exchange rate is for illustrative purposes only and does not constitute representations that any amount in HK$ or RMB has been, could have been or may be converted at such a rate or any other rate or at all.