China Daye Non Ferrous Metals Mining : CONTINUING CONNECTED TRANSACTIONS TECHNICAL SERVICES AGREEMENT

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(Incorporated in Bermuda with limited liability)

(Stock Code: 00661)

CONTINUING CONNECTED TRANSACTIONS

TECHNICAL SERVICES AGREEMENT

The Board is pleased to announce that, on 18 December 2019, Daye Metal (a non-wholly owned subsidiary of the Company) and Lualaba Copper entered into the Technical Services Agreement in relation to the provision of technical services regarding the operation of side-blown furnaces by Daye Metal to Lualaba Copper.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, China Times directly held 11,962,999,080 Shares, representing approximately 66.85% of the issued share capital of the Company, and is a wholly- owned subsidiary of the Parent Company. Accordingly, the Parent Company is a controlling Shareholder indirectly interested in approximately 66.85% of the issued share capital of the Company, and CNMC is the controlling shareholder of the Parent Company holding approximately 57.99% of the equity interests in the Parent Company. Lualaba Copper is a non-wholly-owned subsidiary of CNMC and is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Technical Services Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

According to Rule 14A.81 and Rule 14A.82(1) of the Listing Rules, as the Technical Services Agreement, the Existing Services Framework Agreement and the Parent Group Services Framework Agreement are entered into with parties who are connected with one another and involves technical services of a similar nature, the transactions contemplated under the Technical Services Agreement shall be aggregated with the transactions contemplated under the Existing Services Framework Agreement (for the year ending 31 December 2019) and the Parent Group Services Framework Agreement (for the year ending 31 December 2020), respectively.

As the highest applicable percentage ratio in respect of the transactions contemplated under the Technical Service Agreement, when aggregated with each of the Existing Services Framework Agreement and the Parent Group Services Framework Agreement, respectively, exceeds 0.1% but is less than 5%, the entering into of the Technical Services Agreement and the transactions contemplated thereunder are subject to the reporting, annual review and announcement requirements but are exempt from independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

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INTRODUCTION

The Board is pleased to announce that, on 18 December 2019, Daye Metal (a non-wholly owned subsidiary of the Company) and Lualaba Copper entered into the Technical Services Agreement in relation to the provision of technical services regarding the operation of side-blown furnaces by Daye Metal to Lualaba Copper.

TECHNICAL SERVICES AGREEMENT

The principal terms of the Technical Services Agreement are as follows:

Date:	18 December 2019
Parties:	(1)	Daye Metal
	(2)	Lualaba Copper
Scope of services:	Daye Metal will provide technical services regarding the operation of side-
	blown furnaces to Lualaba Copper, including:
	(i) to recommend qualified and healthy technical service staff in accordance
	with the technical service staff plan of Lualaba Copper; and
	(ii) to assist technical service staff with matters including political review for
	going abroad, passport application and vaccination.
Term:	18 December 2019 to 18 November 2020.
Service fees:	Monthly service fees of RMB481,818, subject to downward adjustment of up
	to 15% of the monthly fee based on (i) the number of technical service staff
	sent by Daye Metal to Lualaba Copper; and (ii) the performance of the relevant
	technical service staff pursuant to the terms and conditions of the Technical
	Services Agreement.
Time and method	Lualaba Copper shall pay the service fees on a monthly basis and within 10
of payment:	days upon receiving the relevant invoice(s) from Daye Metal.

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PROPOSED ANNUAL CAPS

The Group has not previously engaged in any transaction of provision of technical services to Lualaba Copper prior to the entering into of the Technical Services Agreement.

The table below sets out the Proposed Annual Caps for the Technical Services Agreement:

Year ending 31 December 2019 Proposed annual cap (RMB' 000)

482

Year ending 31 December 2020 Proposed annual cap (RMB' 000)

4,819

The above Proposed Annual Caps have been determined with reference to the monthly service fees and the payment terms as set out under the Technical Services Agreement, which in turn have been determined by the parties after arm's length negotiations with reference to (i) the expected number of technical service staff to be sent by Daye Metal to Lualaba Copper; (ii) the wages and other employee benefits for the technical service staff; and (iii) the average historical and anticipated market price for the provision of similar technical services.

REASONS FOR AND BENEFITS OF THE TECHNICAL SERVICES AGREEMENT

The Directors consider that the entering into of the Technical Services Agreement will allow the Group to leverage on its technical expertise in the copper smelting industry, facilitate the Group to fully utilize the capability of its technical knowhow and technical team, and increase the revenue of the Group and diversify the revenue base of the Group.

The Directors (including the independent non-executive Directors) are of the view that the Technical Services Agreement have been entered into on normal commercial terms, in the ordinary and usual course of business of the Group, and together with the Proposed Annual Caps, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Mr. Wang Yan and Mr. Long Zhong Sheng, who are executive Directors, is also a director of the Parent Company and a director of China Times, respectively. As such, each of Mr. Wang Yan and Mr. Long Zhong Sheng was deemed to have a material interest in, and they have abstained from voting on, the resolution passed by the Board to approve the Technical Services Agreement and the transactions contemplated thereunder. Save as disclosed above, none of the Directors has any material interest in, or is required to abstain from voting on the resolution passed by the Board to approve the Technical Services Agreement and the transactions contemplated thereunder.

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INFORMATION ON THE GROUP AND LUALABA COPPER

The Group

The Group is principally engaged in the exploitation of mineral resources, the mining and processing of mineral ores and the trading of metal products.

Daye Metal

Daye Metal is a limited liability company established in the PRC and principally engaged in mining and processing of mineral ores and trading of metal concentrates. It is indirectly held as to 95.35% by the Company and is a non-wholly owned subsidiary of the Company.

Lualaba Copper

Lualaba Copper is a limited liability company incorporated in the Democratic Republic of Congo and principally engaged in the business of copper smelting in the Democratic Republic of Congo. Lualaba Copper is a non-wholly-owned subsidiary of CNMC.

CNMC is a PRC state-owned enterprise directly administered by the State-owned Assets Supervision and Administration Commission of the State Council. CNMC and its subsidiaries are principally engaged in the development of non-ferrous metal resources, construction and engineering, as well as related trade and services, both in the PRC and overseas.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, China Times directly held 11,962,999,080 Shares, representing approximately 66.85% of the issued share capital of the Company, and is a wholly-owned subsidiary of the Parent Company. Accordingly, the Parent Company is a controlling Shareholder indirectly interested in approximately 66.85% of the issued share capital of the Company, and CNMC is the controlling shareholder of the Parent Company holding approximately 57.99% of the equity interests in the Parent Company. Lualaba Copper is a non-wholly-owned subsidiary of CNMC and is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Technical Services Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

According to Rule 14A.81 and Rule 14A.82(1) of the Listing Rules, as the Technical Services Agreement, the Existing Services Framework Agreement and the Parent Group Services Framework Agreement are entered into with parties who are connected with one another and involves technical services of a similar nature, the transactions contemplated under the Technical Services Agreement shall be aggregated with the transactions contemplated under the Existing Services Framework Agreement (for the year ending 31 December 2019) and the Parent Group Services Framework Agreement (for the year ending 31 December 2020), respectively.

As the highest applicable percentage ratio in respect of the transactions contemplated under the Technical Service Agreement, when aggregated with each of the Existing Services Framework Agreement and the Parent Group Services Framework Agreement, respectively, exceeds 0.1% but is less than 5%, the entering into of the Technical Services Agreement and the transactions contemplated thereunder are subject to the reporting, annual review and announcement requirements but are exempt from independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

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INTERNAL CONTROL

The Company has established the connected transactions management committee, which is the discussion and decision-making body for the connected transactions management, and is led by the Board which directly and comprehensively manages the relevant matters of the connected transactions.

The Company has implemented stringent measures to monitor the pricing standards for the continuing connected transactions of the Group. The department heads of the relevant business departments are responsible for the initial price determination of the proposed connected transactions of the Group. Such initial price determination will be reported to and approved by the finance department of the Company. Then, these prices will be reported to the legal department of the Company, which is responsible for collating from the various business departments such information regarding the proposed connected transactions of the Group, and ensuring that the terms of any such proposed connected transactions are in compliance with applicable laws, rules and regulations. After all these review processes, the legal representative or authorised representative of the Company will execute such connected transactions on behalf of the Company. The capital operation department, finance department and legal department of the Company are responsible for monitoring each of the connected transactions of the Group to ensure that they are conducted in accordance with its terms, including the relevant pricing mechanism and the periodic reporting of the relevant transaction amounts.

The capital operation department and the finance department of the Company will monitor the continuing connected transactions and summarise the transaction amounts incurred under each of the connected transaction framework agreements regularly on a monthly basis, and reports will be submitted to the Board for its quarterly review.

Further, the Technical Services Agreement is subject to the reporting requirements and the annual review by the independent non-executive Directors and the auditors of the Company to ensure that the transactions are conducted in accordance with its terms as set out in the Technical Services Agreement.

The Board is of the view that the above internal control measures can ensure that the continuing connected transactions of the Group under the Technical Services Agreement are conducted on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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DEFINITIONS

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

"Board"

"China Times"

"CNMC"

the board of Directors of the Company

China Times Development Limited, a company incorporated in the British Virgin Islands with limited liability and the immediate controlling Shareholder

China Nonferrous Metal Mining (Group) Co., Ltd* (中國有色礦業集團 有限公司), a limited liability company incorporated in the PRC and a controlling Shareholder

"Company"China Daye Non-Ferrous Metals Mining Limited (Stock code: 661), a company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

"connected person(s)"

"Daye Metal"

has the meaning ascribed to it under the Listing Rules

Daye Non-ferrous Metals Co., Ltd.* (大冶有色金屬有限責任公司), a limited liability company established in the PRC and a non-wholly owned subsidiary of the Company

"Director(s)"	director(s) of the Company
"Existing Services	the services framework agreement dated 3 November 2016 entered into
Framework	between the Company and the Parent Company, the details of which
Agreement"	are set out in the announcement of the Company dated 3 November
	2016
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Listing Rules"	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited
"Lualaba Copper"	Lualaba Copper Smelter SAS (盧阿拉巴銅冶煉股份有限公司*), a
	limited liability company incorporated in the Democratic Republic of
	Congo and a non-wholly-owned subsidiary of CNMC
"Parent Company"	Daye Nonferrous Metals Group Holdings Company Limited* (大冶有
	色金屬集團控股有限公司), a limited liability company incorporated in
	the PRC and a controlling Shareholder

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"Parent Group Services	the services framework agreement dated 22 November 2019 entered
Framework	into between the Company and the Parent Company, the details of
Agreement"	which are set out in the announcement of the Company dated 22
	November 2019
"percentage ratio"	has the meaning ascribed to it under Chapter 14 of the Listing Rules
"PRC"	the People's Republic of China, which for the purpose of this
	announcement, excludes Hong Kong, the Macau Special Administration
	of the People's Republic of China and Taiwan
"Proposed Annual	the proposed annual caps for each of the two years ending 31 December
Caps"	2020
"RMB"	Renminbi, the lawful currency of the PRC
"Share(s)"	the share(s) of the Company
"Shareholder(s)"	holder(s) of the share(s) of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Technical Services	the technical services agreement dated 18 December 2019 entered into
Agreement	between Daye Metal and Lualaba Copper, the details of which are set
	out in this announcement
"%"	per cent

By order of the Board

China Daye Non-Ferrous Metals Mining Limited

Wang Yan

Chairman

Hong Kong, 18 December 2019

As at the date of this announcement, the Board comprises four executive directors, namely Mr. Wang Yan, Mr. Long Zhong Sheng, Mr. Yu Liming and Mr. Chen Zhimiao; and three independent non-executive directors, namely Mr. Wang Qihong, Mr. Wang Guoqi and Mr. Liu Jishun.

• For identification purpose only

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