CGN Mining : INSIDE INFORMATION LETTER OF INTENT IN RELATION TO A POSSIBLE ACQUISITION AND MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF 19.99% EQUITY INTEREST IN FISSION (in PDF)

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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.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01164)

INSIDE INFORMATION LETTER OF INTENT IN RELATION TO A POSSIBLE ACQUISITION AND MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF 19.99% EQUITY INTEREST IN FISSION

Sole Financial Adviser to the Company

This announcement is made by the Company pursuant to Rule 13.09(2) and Rule 14.34 of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.

THE LOI

The Board is pleased to announce that, on 21 December 2015, with an aim to set out the terms on which both parties have agreed to proceed towards, the Company entered into the LOI with Fission in relation to the Acquisition.

Pursuant to the LOI, the form and main terms of the Transaction Agreements are settled and finalised and will not be changed without the consent of both parties. The Company and Fission intend to enter into the Transaction Agreements on or before the Signing Deadline and if either party is not able to or will not enter into and deliver the Transaction Agreements by the Signing Deadline and the other party is willing and able to enter into the Transaction Agreements, then the Defaulting Party shall immediately pay the Termination Fee to the Non-Defaulting Party and such amount paid is liquidated damages for the Non-Defaulting Party and after receipt of the Termination Fee, neither party shall have any further rights or claims against the other party arising from or in relation to the LOI or any matter or transaction contemplated in the Transaction Agreements or any other agreements made between the Company and Fission. The Company and Fission will deposit CDN$3,000,000 (equivalent to approximately HK$16,680,000) respectively on or prior to 21 December 2015 (Vancouver, BC time) with counterparty's legal counsel to be held in escrow pursuant to the Escrow Agreement. The LOI shall become effective upon the Company providing Fission with evidence of Company's transmission of the aforesaid deposit to Fisson's legal counsel.

The LOI constitutes a legally binding commitment in respect of entering into the Transaction Agreements, of which the form and main terms have been finalised. The Acquisition is subject to the execution of Transaction Agreements. If the Company and Fission proceed to enter into the Share Subscription Agreement according to the LOI, the transaction contemplated therein will remain subject to conditions precedent in such agreements, of which main terms are set out in section 2.6 of this announcement. If the Acquisition materializes, it will constitute a major transaction of the Company under the Listing Rules. As such, this announcement is made by the Company to comply with applicable requirements for inside information as well as major transaction under the Listing Rules.

THE ACQUISITION

Pursuant to the Share Subscription Agreement in the form as set out in the LOI, Fission shall agree to issue and the Company shall agree to subscribe for 96,736,540 common shares and plus an additional number of common shares that is equal to approximately 24.98% of the number of common share issued by Fission prior to the Completion of the Acquisition pursuant to the exercise of outstanding convertible securities of Fission, at a price of CDN$0.85 (equivalent to approximately HK$4.73) per common share and for a total consideration equal to the product of $0.85 multiplied by the number of the Equity. The Subscription Price was determined upon arm's length negotiations between the Company and Fission with reference to the results of evaluation conducted by advisers and professionals engaged by the Company.

Following the Completion of the Acquisition, the Company will hold approximately 19.99% of the equity interest in Fission, and become the single largest shareholder of Fission. Fission will not become a subsidiary of the Company and its financial statements will not be consolidated into those of the Group.

The Directors are of the view that the terms of the Share Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio in respect of the Acquisition exceeds 25% but is less than 100%, the transaction contemplated under the Share Subscription Agreement will constitute a major transaction of the Company pursuant to Rule 14.06(3) of the Listing Rules and is therefore subject to the notification, announcement and Shareholders' approval requirements under the Listing Rules.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, no Shareholder has any material interest in the Acquisition and no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Share Subscription Agreement. As such, the Share Subscription Agreement may be approved by written Shareholders' approval in accordance with Rule 14.44 of the Listing Rules. The Company intends to obtain written Shareholders' approval from China Uranium Development who holds 2,974,347,826 Shares, representing approximately 64.15% of the issued share capital of the Company as at the date of this announcement.

GENERAL

A circular containing, among others, (i) further details of the Acquisition and the Share Subscription Agreement; (ii) financial and other information of Fission; (iii) the unaudited pro forma financial information of the Enlarged Group; (iv) the competent person's report and the valuation report prepared according to Chapter 18 of the Listing Rules; and (v) if the Company fails to obtain Shareholders' written approval, the notice of the extraordinary general meeting approving the Acquisition, will be despatched to the Shareholders on or before 13 January 2016 in accordance with the Listing Rules.

Shareholders and potential investors should note that as at the date of this announcement, no formal agreement has been entered into relating to the Acquisition other than the LOI and the Escrow Agreement. In the event that the Transaction Agreements are agreed or signed, further announcement(s) will be made by the Company in compliance with the Listing Rules as and when appropriate. As the Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

1. INTRODUCTION

   
   

   On 21 December 2015, with an aim to set out the terms on which both parties have agreed to proceed towards, the Company entered into the LOI with Fission in relation to the Acquisition.

   
   

   Pursuant to the LOI, the form and main terms of the Transaction Agreements are settled and finalised and will not be changed without the consent of both parties. The Company and Fission intend to enter into the Transaction Agreements on or before the Signing Deadline and if either party is not able to or will not enter into and deliver the Transaction Agreements by the Signing Deadline and the other party is willing and able to enter into the Transaction Agreements, then the Defaulting Party shall immediately pay the Termination Fee to the Non-Defaulting Party and such amount paid is liquidated damages for the Non-Defaulting Party and after receipt of the Termination Fee, neither party shall have any further rights or claims against the other party arising from or in relation to the LOI or any matter or transaction contemplated in the Transaction Agreements or any other agreements made between the Company and Fission. The Company and Fission will deposit CDN$3,000,000 (equivalent to approximately HK$16,680,000) respectively on or prior to 21 December 2015 (Vancouver, BC time) with counterparty's legal counsel to be held in escrow pursuant to the Escrow Agreement. The LOI shall become effective upon the Company providing Fission with evidence of Company's transmission of the aforesaid deposit to Fisson's legal counsel.

   After the execution of the Transaction Agreements, the Company and Fission intend the Completion Date for the transactions contemplated in the Transaction Agreements to be on 29 January 2016 on terms set out in the Subscription Agreement.

   
   

   Fission will apply for price protection to the TSX as soon as practicable upon the Company's request for the price of CDN$0.85 (equivalent to approximately HK$4.73) per share for the transaction contemplated in the Subscription Agreement.

   
   

   The LOI constitutes a legally binding commitment in respect of entering into the Transaction Agreements, of which the form and main terms have been finalised. The Acquisition is subject to the execution of Transaction Agreements. If the Company and Fission proceed to enter into the Share Subscription Agreement according to the LOI, the transaction contemplated therein will remain subject to conditions precedent in such agreements, of which main terms are set out in section 2.6 of this announcement. If the Acquisition materializes, it will constitute a major transaction of the Company under the Listing Rules. As such, this announcement is made by the Company to comply with applicable requirements for inside information as well as major transaction under the Listing Rules.

   
   

2. THE SHARE SUBSCRIPTION AGREEMENT

   
   

   The major terms of the Share Subscription Agreement are set out as follows:

   
   
3. Date

   
   

   To be entered on or before 11 January 2016

   
   

4. Parties

   
   

   Issuer: Fission Subscriber: the Company

   To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Fission and its ultimate beneficial owners are Independent Third Parties as at the date of the this announcement.

   
   

5. Assets to be acquired




Pursuant to the Share Subscription Agreement, Fission shall agree to issue and the Company shall agree to subscribe for 96,736,540 common shares and plus an additional number of common shares that is equal to approximately 24.98% of the number of common share issued by Fission prior to the Completion of the Acquisition pursuant to the exercise of outstanding convertible securities of Fission by way of private placement. The Equity will be listed on the TSX upon its acceptance.