The Ann. In English - better than going under IMHOStock Code:...

The Ann. In English - better than going under IMHO

Stock Code: 601028 Stock Name: Yulong Shares Announcement No.: 2024-027Announcement of Shandong Yulong Gold Co., Ltd. on the Signing of Binding Memorandum and Related Transaction for Acquisition of Graphite ProjectThe board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the content of this announcement, and bear legal responsibility for the authenticity, accuracy and completeness of its content.Important content tips:? Shandong Yulong Gold Co., Ltd. (hereinafter referred to as the "Company") and Triton Minerals Limited (hereinafter referred to as "Cui Teng Mining") signed a "Binding Memorandum". The company intends to acquire 70% of the equity of Grafex Limited and KweKwe Graphite Limited held by Cui Teng Mining through a designated subsidiary to obtain the mining concession of the Ancuabe (hereinafter referred to as "Ancuabe") graphite project, the mining concession of the Cobra Plains (hereinafter referred to as "Cobra Plains") graphite project, and the intellectual property rights and drilling core assets related to the Nicanda Hill and Nicanda West graphite projects.? This transaction constitutes a related transaction and does not constitute a major asset reorganization.In order to further enhance the company's new energy and new material mineral resource reserves and enhance its core competitiveness, on June 27, 2024, the 15th meeting of the 6th Board of Directors of the company reviewed and approved the "Proposal on the Company's Signing of a Binding Memorandum and Related Transactions", and agreed that the company and Cuiteng Mining would sign a "Binding Memorandum". The company intends to acquire 70% of the equity of Grafex Limited and KweKwe Graphite Limited (collectively referred to as the project company) held by Cuiteng Mining through a designated subsidiary to obtain the mining concessions of the Anquabe graphite project, the mining concessions of the Cobra Plain graphite project, and the intellectual property rights and drilling core assets related to the Nicanda Hill and Nicanda West graphite projects. The total transfer price shall not exceed AUD 17,000,000. The specific transfer price shall be subject to the formal transfer agreement signed after the audit and evaluation.Because Zhang Peng, a director of the company, serves as a director of Cuiteng Mining, this transaction constitutes a related transaction and does not constitute a major asset reorganization. This transaction has been reviewed and approved by the 15th meeting of the 6th Board of Directors, the 2nd meeting of the Special Meeting of Independent Directors, the 10th meeting of the Audit Committee of the 6th Board of Directors and the 10th meeting of the 6th Board of Supervisors. The related directors have abstained from voting on this transaction. According to the relevant provisions of the Shanghai Stock Exchange Listing Rules, this transaction does not need to be submitted to the company's general meeting of shareholders for review.1. Basic information of the counterpartyCui Teng Mining is an Australian listed company headquartered in Perth, Western Australia. It was established on July 17, 2007. Through its wholly-owned subsidiary in the United Arab Emirates, it controls two graphite mining companies, Grafex Limited and KweKwe Graphite Limited, located in Mozambique, Africa. The company holds 11.44% of the equity of Cui Teng Mining.As of December 31, 2023, Cui Teng Mining has total assets of AUD 30,000,533 and net assets of AUD 28,520,818. In 2023, it achieved operating income of 0 yuan and net profit of AUD -2,881,245.II. Basic information of the target to be acquired(I) Grafex LimitedCui Teng Mining holds 100% of the shares of the company, which is headquartered in Pemba, the capital of Cabo Delgado Province in northern Mozambique. It was established on April 18, 2012 and is mainly engaged in the exploration, research and mining of minerals or gemstones, including the provision of all related activities and mineral export services.Grafex Limited holds the Ancuabe Mining Concession Certificate, the details of which are as follows: Mining Concession Certificate No.: 9132C; Equity holder: Grafex Limited, 100% equity interest; Grant date: August 7, 2019; Valid until: August 7, 2044; Mineral resources covered: graphite; Resource volume: 46.1 million tons; Average fixed carbon grade: 6.59%; Area: 10,274.7 hectares, the concession is located in Cabo Delgado Province, Mozambique. In addition, Grafex Limited owns the intellectual property rights and drill cores of the Nicanda Hill and Nicanda West projects.(II) KweKwe Graphite LimitedCui Teng Mining holds 80% of the shares of the company, which is headquartered in Pemba, the capital of Cabo Delgado Province in northern Mozambique. It was established on February 22, 2019 and is mainly engaged in the acquisition, exploration, research and mine operation of mineral resources, and carries out other activities and businesses related to the above activities.KweKwe Graphite Limited holds the Cobra Plain mining concession certificate, the details of which are as follows:Mining concession number: 11584C; equity holder: KweKwe Graphite Limited, with 100% equity; grant date: August 25, 2023; validity period: August 25, 2048; mineral resources covered: graphite; resource volume: 103 million tons; average fixed carbon grade: 5.52%; area: 17,212.9 hectares, the concession is located in Cabo Delgado Province, Mozambique.3. Main contents of the binding memorandumParty A: Shandong Yulong Gold Co., Ltd. Party B: Triton Minerals Limited(I) Transaction contents1. Party A plans to acquire 70% of the equity of each project company (Grafex Limited and KweKweGraphite Limited) through a designated subsidiary.2. Transaction price: The transaction price of 70% of the equity of each of the two project companies shall not exceed AUD17,000,000 in total.3. Deposit: Party A shall pay Party B AUD2,550,000 as a deposit within 15 days after the execution of this memorandum; the deposit will be paid to a special bank account established by Cuiteng Mining, which is only used for transaction deposits, and the scope of use of funds includes working capital and project engineering in Mozambique, as well as corporate costs of Cuiteng Mining, etc.4. With the approval of the representative designated by Yulong Co., Ltd., Cuiteng Mining may transfer the deposit (if applicable) from the designated account to its operating account.(II) Operation and management agreementThe parties agree that after the completion of this equity acquisition transaction, Party A will hold a majority of seats on the board of directors of the project company, and the project company will be led by Party A and will be responsible for the daily production and operation management of the project company.(III) Other matters1. The parties agree to sign a formal transaction document within three months after the signing of this memorandum, and other transaction details will be included in the formal agreement.2. After meeting certain preconditions and signing a formal agreement, AUD 5,950,000 will be paid to Cuiteng Mining, and the remaining transaction price will be paid to Cuiteng Mining before February 28, 2025. The specific transaction price and payment time shall be subject to the formal agreement.3. The deposit will be fully refunded only in the following circumstances1) If Party A and Party B fail to reach a formal agreement on the transaction within three months after the signing of this Agreement, Party B shall return the deposit in full to NQM Gold 2 Pty Limited, the designated payment entity of Party A, within 5 days after the expiration of the above period, and pay interest on the use of funds to NQM Gold 2 Pty Limited, the designated payment entity of Party A, at an annual rate of 3.45%.(2) The government department in charge of Party A does not approve the transaction within one year from the date of signing the binding framework agreement. Party B shall return the deposit in full to NQM Gold 2 Pty Limited, the designated payment entity of Party A, within 5 days after the expiration of the above period, and pay interest on the use of funds to NQM Gold 2 Pty Limited, the designated payment entity of Party A, at an annual rate of 3.45%.(3) FIRB does not approve the transaction within one year from the date of signing the binding framework agreement. Party B shall return the above deposit in full to NQM Gold 2Pty Limited, the designated payment entity of Party A, within 5 days after the expiration of the above period, and pay interest on the use of funds to NQM Gold 2Pty Limited, the designated payment entity of Party A, at an annualized rate of 3.45%.(IV) Representations and Warranties1. Party B guarantees that before the signing of the formal agreement, Party B shall clear all debts of the project company and ensure that the project company has no external debts and contingent liabilities. If the project company has other debts caused by reasons before the equity delivery date (even if the debt actually occurs after the equity delivery date), Party B and its designated formal agreement signing entity shall be responsible for resolving and bearing the relevant expenses incurred thereby.2. Party B guarantees that before the signing of this agreement, the equity of the project company and its core assets are not subject to any undisclosed mortgage, pledge, seizure, external guarantee, third party priority or third party claim, nor are there any pending (referring to undecided or unexecuted) litigation, arbitration and other disputes. If the above circumstances cause losses to Party A or the project company, Party B and its designated formal agreement signatory shall bear compensation liability.3. Party B guarantees that within 6 months after the signing of this agreement, Party B shall not reach any oral or written agreement or arrangement with other third-party buyers on the transfer, division or business cooperation of the equity or assets of the project company.III. Impact on listed companiesNatural flake graphite is widely used in lithium-ion battery negative electrode materials, conductive materials and corrosion-resistant materials, and has broad application prospects in the fields of new energy and new materials, electrical fields and chemical industries. In particular, the unique physical and chemical properties of large flake graphite have wider applications in the fields of graphene preparation, refractory materials and sealing materials. Anquabe is a large flake graphite deposit with rich resources and high grade, and has high economic value. This transaction is in line with the company's "dual-wheel drive of gold minerals and new energy and new materials minerals" strategy. Mozambique is rich in mineral resources and has obvious location advantages. This transaction will help the company expand its mining layout in the "Belt and Road" countries.The target assets have good resource endowment. This transaction will help improve the company's new energy and new materials mineral resource reserves. As the project goes into production, it will have a positive impact on the company's finances, create new profit growth points, and enhance the company's core competitiveness.The relevant cooperation matters involved in the signing of the binding memorandum shall be subject to the signed formal agreement. There may be risks that the agreement may change, terminate, or fail to be performed as scheduled due to factors such as policy changes, market environment, and regulatory rules.IV. Relevant review procedures and opinions(I) On June 27, 2024, the 15th meeting of the 6th Board of Directors of the company reviewed and approved the "Proposal on the Company's Signing of the Binding Memorandum and Related Transactions" with 5 votes in favor, 0 votes against, and 0 abstentions. Related directors Mr. Niu Lei, Mr. Wang Chengdong, and Mr. Zhang Peng abstained from voting, and the proposal did not need to be submitted to the shareholders' meeting for review.(II) On June 25, 2024, the second meeting of the company's 2024 independent directors' special meeting reviewed and approved the "Proposal on the Company's Signing of the Binding Memorandum and Related Transactions" with 3 votes in favor, 0 votes against, and 0 abstentions. It is believed that this transaction will help improve the company's new energy and new material mineral resource reserves, enhance the company's core competitiveness, and be in the interests of the company. There is no situation that damages the interests of the company and shareholders, especially the interests of small and medium-sized shareholders. Therefore, we agree that the company signs a binding memorandum and submits it to the board of directors for deliberation. When the company's board of directors votes on the proposal, related directors should abstain from voting in accordance with regulations.(III) On June 25, 2024, the 10th meeting of the Audit Committee of the Sixth Board of Directors of the company reviewed and passed the "Proposal on the Company's Signing of a Binding Memorandum and Related Transactions" with 2 votes in favor, 0 votes against, and 0 abstentions. Related committee member Mr. Wang Chengdong abstained from voting. It is believed that this transaction is in line with the company's "dual-wheel drive of gold minerals and new energy and new material minerals" strategy, which will help further build the company's resource reserves. This related transaction follows the principle of fairness and justice, and after consensus between the two parties, there is no situation that damages the interests of the company and shareholders, especially small and medium-sized shareholders. It is agreed to submit the proposal to the board of directors for deliberation.V. Historical Related-party TransactionsFrom the beginning of the year to the date of disclosure of this announcement, the total amount of related-party transactions between the company and the related party is RMB 0; in the past 12 months, the total amount of related-party transactions between the company and the related party is RMB 0.This announcement is hereby made.Board of Directors of Shandong Yulong Gold Co., Ltd.June 28, 2024