Xuchen International Co., Ltd. entered into a scheme implementation deed to acquire Nzuri Copper Limited (ASX:NZC) from Ndovu Capital VI B.V., La Generale Industrielle et Commerciale au Congo SPRL, Huayou International Mining (Hong Kong) Limited, Tembo Capital Management Ltd, Zhejiang Huayou Cobalt Co., Ltd and others for approximately AUD 110 million on February 26, 2019. Under the terms, Xuchen International Co., Ltd. will acquire 100% of the share capital of Nzuri Copper Limited by way of a scheme of arrangement at AUD 0.37 per share. The consideration will be paid in cash. Additionally, Xuchen International Co., Ltd. will acquire in-the-money options of Nzuri Copper Limited and cancel it by paying the difference of offer per share and exercise price. Xuchen International Co., Ltd. will pay option holders up to a total of AUD 1.25 million. Ndovu Capital VI B.V., La Generale Industrielle et Commerciale au Congo SPRL and Huayou International Mining (Hong Kong) Limited will sell 48.5%, 3.8% and 14.7% stake respectively. Xuchen International Co., Ltd. also agreed to provide Nzuri Copper Limited with interim funding by way of a secured loan, in the amount of up to AUD 5 million. Upon capital injection from Chengtun Mining, Xuchen International Co., Ltd. will fund the consideration using cash. As of November 25, 2019, Transaction will be funded through third party loan which remains subject to receipt of certain Chinese provincial approvals. The scheme implementation deed includes customary deal protection and exclusivity terms, including “no shop”, “no talk”, “notification” and “matching” obligations. A termination fee of AUD 1.09 million is payable by the defaulting party in the event of termination.

The transaction is subject to Australian Court's approval, all necessary Government/regulatory approvals from the Democratic Republic of the Congo, Australia and China, approval by the requisite majority of Nzuri shareholders (75% of all votes cast by shareholders and 50% of the number of Nzuri shareholders who vote), approval of requisite majority of Chengtun Mining shareholders, if required; independent expert concluding that the transaction is in the best interests of Nzuri shareholders, Nzuri completing its expenditure requirements to earn a 90% equity interest in the joint venture vehicle for the Fold and Thrust Belt JV, five exploration permits (PR688, PR689, PR690, PR701 and PR702) held by Ivanhoe Mines Limited having been transferred to Regal Exploration DRC SASU; the S&P/ASX 300 Index not closing 20% or more below its level at the close of trade on the date of the transaction implementation, all outstanding Nzuri options lapsing or being cancelled pursuant to an option cancellation deed, approval of National Development and Reform Commission of China, the Ministry of Commerce of the PRC, the State Administration of Foreign Exchange of China and other customary conditions. The second hearing of Supreme Court of Western Australia is scheduled for September 5, 2019. If the conditions are not satisfied by November 26, 2019, the transaction will terminate. The transaction was approved on February 26, 2019 in the 29th meeting of the 9th Directorate of Chengtun Mining Group Co., Ltd., parent of Xuchen International Co., Ltd. The Directors of Nzuri Copper Limited unanimously recommend that Nzuri shareholders vote in favor of the transaction, subject to the independent expert determining that the transaction is in the best interests of Nzuri shareholders and no superior proposal emerging. Majority of Nzuri Directors who hold or control Nzuri shares intend to vote in favor of the transaction. On May 7, 2019, the transaction is approved by the Minister of Mines of the Democratic Republic of Congo. As of June 6, 2019, scheme meeting of shareholders of Nzuri Copper Limited is scheduled to take place on July 8, 2019. As of June 30, 2019, scheme meeting has been delayed due to regulatory approvals from People's Republic of China. Scheme Meeting will be held on August 19, 2019. As of August 19, 2019, Nzuri shareholders has approved the transaction. As of August 30, 2019, Nzuri confirmed that it has received confirmation that the transfer of the permits has been approved by the Minister of Mines in the DRC. Completion of the registration of the transfer of the permits is now subject to completion of an administrative process undertaken by CAMI (the Cadastre Minier, or Mining Register, of the DRC). As of September 2, 2019, approval of National Development and Reform Commission of China has been obtained and approval from certain Chinese authorities will be delayed. As of September 5, 2019, the court approval has been adjourned till October 11, 2019. The approval from the Ministry of Commerce was received on September 23, 2019. However, approval from SAFE is still outstanding. As of September 30, 2019, the administrative process has been completed with respect to three of the five permits (PR 688, 689 & 702). The process with respect to the remaining two permits (PR 690 & 701) is expected to be completed imminently. As of September 30, 2019, it is requested that the Court meeting be adjourned to October 29, 2019. As of October 7, 2019, the transfer process has been completed for all five permits. As of October 11, 2019, the court approval hearing was adjourned to October 29, 2019. On October 29, 2019, the court hearing is further adjourned to November 18, 2019. As of November 18, 2019, the court hearing is further adjourned to November 25, 2019. As of December 9, 2019, Xuchen has agreed to advance additional loan funding to Nzuri of up to AUD 3.5 million. As of January 16, 2020, the transaction was unanimously approved by the Board of Nzuri Copper Limited. Nzuri will also make a scheme replacement booklet available with some updates about the scheme by no later than January 21, 2020. State Administration of Foreign Exchange of PRC approved the transaction on January 20, 2020.

The transaction is expected to be implemented in mid to late July 2019. As of May 30, 2019, the transaction is expected to close on July 26, 2019. As of June 30, 2019, scheme is expected to be implemented by mid to late September 2019. As of August 1, 2019, scheme implementation date is September 18, 2019. As of September 2, 2019, scheme is expected to be completed by middle to late October 2019. As of September 5, 2019, the implementation date for the scheme is set as October 24, 2019. As of September 30, 2019, the implementation of scheme is delayed and it will now occur in mid early November 2019. As of October 11, 2019, the implementation of scheme will occur on November 11, 2019. On October 29, 2019, the expected closing is further delayed to November 29, 2019. As of November 25, 2019, approval hearing will take place on or about February 3, 2020 and scheme will implement around February 14, 2020. As of December 9, 2019, the expected closing date postponed to March 31, 2020. As of January 15, 2020, indicative effective date of the scheme was February 28, 2020. As of January 20, 2020, Implementation date is March 11, 2020.

Sherif Andrawes and Adam Myers of BDO Corporate Finance (WA) Pty Ltd acted as an independent expert to the Board of Directors of Nzuri Copper Limited. Deanna Carpenter and Shaun Hardcastle of Bellanhouse Legal acted as legal advisors to Nzuri Copper Limited whereas Nicholas Chan, Sophie Chen, Dimitri Kalis, Kevin Ko, Jessica Liang, Brent Thompson and Robert Trowbridge of Gilbert + Tobin acted as a legal advisors to Chengtun Mining Group Co., Ltd., parent of Xuchen International Co., Ltd. BDO Audit (WA) Pty Ltd. acted as the auditor to Nzuri Copper Limited. Advanced Share Registry Limited (ASX:ASW) acted as the registrar to Nzuri Copper Limited. HWL Ebsworth Lawyers acted as legal advisor to Nzuri Copper. BDO Corporate Finance and HWL Ebsworth will receive a fees of AUD 0.12 million and AUD 0.49 million respectively.