Jinchuan Announces All-Cash Offer of ZAR 8.90 Per Share to Acquire Metorex

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JOHANNESBURG, July 5, 2011 /PRNewswire/ -- Jinchuan announces it has today provided the Board of Directors of Metorex Limited ("Metorex") with a firm intention to make an all cash offer to acquire the entire issued and to be issued ordinary share capital of Metorex. Under the terms of the offer, shareholders in Metorex would receive a cash consideration of ZAR 8.90 per ordinary share, by way of a scheme of arrangement ("Jinchuan Offer"). This values Metorex at ZAR 9,112 million on a fully diluted basis, equating to approximately USD 1,356 million as at the USD/ZAR exchange rate on 4 July 2011.

Jinchuan has provided an irrevocable and unconditional bank guarantee from Bank of China Limited. Johannesburg Branch, a registered South African bank, for the payment of the Jinchuan Offer consideration.

The disposal or transfer by Metorex of the issued and to be issued share capital of Sable Zinc Kabwe Limited ("Sable") pursuant to an agreement entered into between Metorex and a subsidiary of Glencore International plc ("Glencore") as published on SENS on 8 June 2011, or to any other third party, is not a condition to the completion of the Jinchuan Offer. In the event that Sable is disposed of to Glencore, Metorex will retain the proceeds and will not distribute the proceeds to Shareholders.

The Jinchuan Offer announced today is at a premium of 58% to the 30 day Volume Weighted Average Price on 25 March 2011, the last trading day prior to Metorex's first cautionary announcement before the Vale Offer. It is also at a substantial premium to the Vale Offer announced on the 8th of April 2011. The Jinchuan Offer at a significant premium represents a compelling opportunity for Metorex shareholders to crystallise value from their investment.

In exercising its fiduciary duty and acting in good faith, Metorex's Board of Directors, after due consideration of a preliminary fairness opinion prepared by KPMG, have determined that the Jinchuan Offer would, if implemented in accordance with its terms, result in a transaction more favourable to Metorex's shareholders than the Vale Offer. Accordingly, Metorex has deemed the Jinchuan Offer a superior offer in relation to the Vale Offer.

The proposed acquisition of Metorex represents a unique opportunity for Jinchuan to build a scalable platform to acquire, develop and operate African copper and cobalt projects with substantial growth potential. Jinchuan's track record of mining investment and extensive experience, as well as significant financial resources will enable Jinchuan to accelerate the development of Metorex's mining projects.

This acquisition, if concluded, would be Jinchuan's second such transaction in South Africa, having previously acquired a 45% interest in platinum exploration company, Wesizwe, in 2010. Metorex will form part of Jinchuan's mining and exploration operations in the Central African Copperbelt.

Commenting on the offer, Chairman of Jinchuan's Board of Directors, Mr. Yang Zhiqiang said:

"We believe that the certainty of our cash offer represents significant value for Metorex shareholders. The proposed acquisition of Metorex represents another milestone for Jinchuan's African business. Jinchuan has had a long standing offtake relationship with Metorex and we know them to be an impressive operator, with a strong management team and a unique combination of copper and cobalt assets. We are very excited about the opportunity to further strengthen our current operations in the Republic of Zambia and the Democratic Republic of Congo, as we continue to build our African base metals business.

Metorex has afforded Vale a period of eight business days ('Matching Period') in which to match (or better) the Jinchuan Offer. The Matching Period shall close by no later than 17h00 on Friday, 15 July 2011. The Jinchuan Offer remains subject to a number of important conditions, including, inter alia, obtaining certain regulatory approvals. Jinchuan retains the right to improve the offer at its discretion. Metorex has not approved, recommended or entered into any agreement with respect to the Jinchuan Offer.

Goldman Sachs International, acting through its Johannesburg branch, which is authorised and regulated in the United Kingdom by the Financial Services Authority and authorised in the Republic of South Africa by the Financial Services Board, is acting for Jinchuan and no one else in connection with the transaction referred to herein and will not be responsible to any person other than Jinchuan for providing the protections afforded to clients of Goldman Sachs International or for advising any other person in relation to such transaction or any agreement or transaction referred to in this document.

About Jinchuan

Jinchuan is one of the largest global base metals producers, incorporated in China. Jinchuan has actively invested in international mining projects in recent years, and has established operations in over 20 countries and regions. It is China's largest producer of nickel and cobalt, as well as one of the top three producers of refined copper. Globally, Jinchuan is the fourth largest producer of nickel and the second largest producer of cobalt. Jinchuan is majority owned by the government of Gansu province, with China Development Bank as its second largest shareholder. Additional information about Jinchuan can be found by visiting: http://www.jnmc.com.

About Metorex

Metorex is a producer of copper and cobalt, with operations in the African Copper Belt. Metorex has two operating mines, Chibuluma located in Zambia, in which it holds an 85% interest, and Ruashi in the Democratic Republic of Congo ("DRC"), in which it holds a 75% interest. Metorex has three projects in the DRC, one in the development phase and two in the exploration phase. In 2010, Metorex produced 51,569 metric tons of copper and 3,622 metric tons of cobalt. Additional information about Metorex can be found by visiting: http://www.metorexgroup.com/.

Enquiries

Temple Bar Advisory:

• London : Alex Child-Villiers +44-779-5425580
• Johannesburg: Tom Allison +44-778-9998020 and Alex Money +44-795-6831007

This announcement does not constitute an offer to buy or subscribe for or a solicitation of an offer to sell any securities (including without limitation any securities of Metorex nor shall there be any sale of securities in any country or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such country or jurisdiction.

SOURCE Jinchuan Group