APAC Resources : Discloseable Transaction - Loan Transaction

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APAC RESOURCES LIMITED

亞 太 資 源 有 限 公 司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

DISCLOSEABLE TRANSACTION

LOAN TRANSACTION

On 27 July 2020, the Lender (a wholly-owned subsidiary of the Company) as the lender entered into the Facility Agreement with the Borrower as the borrower and the Guarantors as the guarantors, pursuant to which, the Lender agreed to, among other things, make available to the Borrower the Loan on the terms and subject to the conditions therein.

LISTING RULES IMPLICATIONS

As the Lender is a wholly-owned subsidiary of the Company, the Transaction entered into by the Lender shall be a deemed transaction of the Company under the Listing Rules as the definition of "listed issuer" under Chapter 14 of the Listing Rules shall include the listed issuer's subsidiaries.

The Transaction constitutes a discloseable transaction for the Company on the basis that the relevant percentage ratio(s) of the Company exceeds 5% but is below 25%.

INTRODUCTION

On 27 July 2020, the Lender (a wholly-owned subsidiary of the Company) as the lender entered into the Facility Agreement with the Borrower as the borrower and the Guarantors as the guarantors, pursuant to which, the Lender agreed to, among other things, make available to the Borrower the Loan on the terms and subject to the conditions therein.

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THE FACILITY AGREEMENT

Date:	27 July 2020
Parties:	(1)	the Lender as the lender for the Facility Agreement;
	(2)	the Borrower as the borrower for the Facility Agreement; and
	(3)	the Guarantors as the guarantors for the Facility Agreement.

As at the date of this announcement, to the best knowledge, information and belief of the Directors having made all reasonable enquiries and based on the confirmations of the Borrower and the Guarantors, other than (i) the Group holding approximately 15.31% of the issued share capital of the Borrower; and (ii) Mr. Brett Robert Smith, the deputy chairman and an executive Director, also being an executive director of the Borrower and holding approximately 0.02% of the issued share capital of the Borrower ((i) and (ii), the "Disclosed Relationships"), the Borrower, the Guarantors and their respective ultimate beneficial owner(s), being their substantial shareholder(s) holding of 5% or more of the issued share capital of the Borrower, are all third parties independent of the Company and its connected persons.

Having considered the Disclosed Relationships and the confirmation of the Borrower, the Directors are of the opinion that:

1. the grant of the Loan pursuant to the Facility Agreement is not a connected transaction of the Company pursuant to Chapter 14A of the Listing Rules; and
2. the independence of the Borrower in entering into the Facility Agreement is not impeded by the Disclosed Relationships as (i) Mr. Brett Robert Smith had abstained from voting on the board resolutions of the Borrower with respect to the Facility Agreement; and
3. 1. the Company cannot control the composition of all or the majority of the board of directors of the Borrower.

Principal terms of the Facility Agreement

The principal terms of the Facility Agreement are as follows:

Loan amount:	A$26,000,000
Termination date:	31 January 2021
Purpose:	the Loan shall be applied and used by the Borrower for partial
	repayment of all amounts payable or outstanding pursuant to the Citi
	Facility, working capital expenditure and general corporate purposes
	of the Borrower and its subsidiaries and payment of fees and expenses
	under the Facility Agreement and other documents in respect thereof
Interest rate:	the aggregate of 1% per annum and Bank Bill Swap Bid Rate (BBSY)

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Establishment fee:	A$910,000
Guarantee:	each of the Guarantors guarantee to the Lender punctual performance by
	each of the Borrower and Guarantors of all of its obligations under the
	Facility Agreement and other documents in respect thereof

REASONS FOR AND BENEFITS OF THE TRANSACTION

The Transaction, which forms part of the Group's financial services activities, allows the Group to apply certain of its funds to better use, thereby providing a higher return to the Group. The terms of the Facility Agreement, including the interest rate applicable, were arrived at after arm's length negotiations between the Lender and the Borrower having taken into account the current market norm in relation to similar transactions.

In view of the above, the Directors are of the view that the terms of the Facility Agreement are on normal commercial terms and the Transaction is fair and reasonable, and in the interests of the Company and its shareholders taken as a whole.

INFORMATION ABOUT THE COMPANY, THE GROUP, THE LENDER, THE BORROWER AND THE GUARANTORS

The Company and the Group

The Company is a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange.

The Group is an established investment fund and commodity trading house which owns strategic interests in natural resource companies with the main business lines comprising of primary strategic investment, resource investment, and commodity trading business, focused primarily on metals, mining and energy and investment in financial assets.

The Lender

The Lender is a company incorporated in Hong Kong with limited liability and is a wholly- owned subsidiary of the Company. The principal business activity of the Lender is investment holding.

The Borrower

The Borrower is a company incorporated in Australia with limited liability, the shares of which are listed on the Australian Securities Exchange (Stock Code: MLX). The principal business activities of the Borrower are the mining, treatment and marketing of tin and copper and the exploration and development of nickel, copper, tin and base metals.

The Guarantors

Each of the Guarantors is a company incorporated in Australia with limited liability and are wholly-owned subsidiaries of the Borrower. The principal business activity of each of the Guarantors named Paterson Copper Pty Ltd, Nifty Copper Pty Ltd and Maroochydore Copper Pty Ltd is the exploration and development of copper, and that of each of the Guarantors named Bluestone Mines Tasmania Pty Ltd and Bluestone Australia Pty Ltd is the mining, treatment, marketing, exploration and development of tin.

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LISTING RULES IMPLICATIONS

As the Lender is a wholly-owned subsidiary of the Company, the Transaction entered into by the Lender shall be a deemed transaction of the Company under the Listing Rules as the definition of "listed issuer" under Chapter 14 of the Listing Rules shall include the listed issuer's subsidiaries.

The Transaction constitutes a discloseable transaction for the Company on the basis that the relevant percentage ratio(s) of the Company exceeds 5% but is below 25%.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"A$"	Australian dollars, the lawful currency of Australia;
"Board"	the board of Directors;
"Borrower"	Metals X Limited, a company incorporated in Australia with
	limited liability and the shares of which are listed on the
	Australian Securities Exchange (Stock Code: MLX), being the
	borrower under the Facility Agreement;
"Citi Facility"	the facility agreement between Bluestone Mines Tasmania Pty
	Ltd as borrower, Citibank N.A., Sydney Branch as original
	lender and others dated 29 August 2019;
"Company"	APAC Resources Limited, a company incorporated in Bermuda
	with limited liability, the shares of which are listed on the main
	board of the Stock Exchange (Stock Code: 1104);
"connected persons"	having the meaning ascribed to it under the Listing Rules;
"Directors"	directors of the Company;
"Facility Agreement"	the facility agreement entered into between the Lender as the
	lender, the Borrower as the borrower and the Guarantors as the
	guarantors dated 27 July 2020;
"Group"	the Company and its subsidiaries;

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"Guarantors"	(1) Bluestone Mines Tasmania Pty Ltd, (2) Paterson Copper
	Pty Ltd, (3) Nifty Copper Pty Ltd, (4) Maroochydore Copper
	Pty Ltd and (5) Bluestone Australia Pty Ltd, being companies
	incorporated in Australia with limited liability and wholly-
	owned subsidiaries of the Borrower, and being the guarantors
	under the Facility Agreement;
"Hong Kong"	Hong Kong Special Administrative Region of the People's
	Republic of China;
"Lender"	Asia Cheer Trading Limited, a company incorporated in Hong
	Kong with limited liability and a wholly-owned subsidiary of
	the Company, being the lender under the Facility Agreement;
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange;
"Loan"	the loan in the amount up to A$26,000,000 made or to be
	made available by the Lender to the Borrower on the terms and
	subject to the conditions set out in the Facility Agreement;
"percentage ratio(s)"	percentage ratio(s) as set out in Rule 14.07 of the Listing Rules
	to be applied for determining the classification of a transaction;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Transaction"	the transaction contemplated under the Facility Agreement; and
"%"	per cent.
	By Order of the Board
	APAC Resources Limited
	Andrew Ferguson
	Executive Director
Hong Kong, 27 July 2020

As at the date of this announcement, the directors of the Company are:

Executive Directors

Mr. Brett Robert Smith (Deputy Chairman) and Mr. Andrew Ferguson (Chief Executive Officer)

Non-Executive Directors

Mr. Arthur George Dew (Chairman) (Mr. Wong Tai Chun, Mark as his alternate), Mr. Lee Seng Hui and Ms. Lam Lin Chu

Independent Non-Executive Directors

Dr. Wong Wing Kuen, Albert, Mr. Chang Chu Fai, Johnson Francis and Mr. Wang Hongqian

• For identification purpose only

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