Yunhai Metal: release the supplementary announcement of the joint venture company Anhui Bao mg participating in the bidding for mining rights.

On November 19, Yunhai Metal issued a supplementary announcement on the participation of Anhui Bao magnesium in the bidding for mining rights, the relevant contents are as follows:

I. on the sources of project funds

Nanjing Yunhai Special Metals Co., Ltd. (hereinafter referred to as "the company", Baosteel Metal Co., Ltd. and Qingyang County Construction Investment Group Co., Ltd.) signed an investment agreement on November 25, 2020. jointly invested in the establishment of Anhui Baomagnesia Light Alloy Co., Ltd. (hereinafter referred to as "Baomagnesia Company"). Bao magnesium Co., Ltd. as the main body of the project, plans to build a 26.5km corridor in Wujia Dolomite Mining area, Youhua Town, Qingyang County, with an annual throughput of 30 million tons. Construction project with an annual output of 300000 tons of high-performance magnesium-based light alloy, 150000 tons of magnesium alloy die-casting components, 1 million tons of flux and 25 million tons of aggregate and machine-made sand. The total investment of the project is 11.2 billion yuan. The mining right investment is a sub-project of the project.

The mining right transfer is listed with a reserve price, with a starting price of 4.2221 billion yuan. The board of directors of Bao mg Co., Ltd. authorized the management to participate in the bidding related matters.

The cost of obtaining the mining right is included in the total investment of 11.2 billion yuan.

The company's funds come from its own funds. The funds required for the transfer of mining rights shall be paid in installments within 10 years. At present, the registered capital of Bao mg Company is 20 million yuan (the company contributes 9 million yuan according to the proportion of shareholding), and the down payment required for the transfer of mining rights will be contributed by the shareholders according to the proportion of shares in the near future. The funds needed for the follow-up of the project will be funded by the shareholders according to the capital plan, and Bao-mg Company will meet the project capital needs of Bao-mg Company through bank financing, project cooperation and other financing methods. The investment needed by the company meets the capital demand through the combination of direct financing and indirect financing.

Second, whether the examination and approval of Baomeng project is affected by the relevant policies of the two high projects.

According to the notice of the National Development and Reform Commission and other departments on the release of the energy efficiency benchmarking level and benchmark level in key areas of high energy-consuming industries (2021 version) (document number: development and Reform Industry (2021) No. 1609), Baomagnesia project does not belong to the list of key areas of high energy-consuming industries, and the procedures for energy assessment, environmental assessment and safety assessment of Baomagnesia project have been completed.

Third, risk hint

1. The exploitation of mineral resources has high investment risk, unforeseen natural and social factors, as well as the adjustment of laws and policies related to mining.

2. There may be errors between the resource reserves, orebody occurrence and grade of the assigned mining rights and the actual mining situation.

3. The scope of mining rights transferred this time overlaps with the current ecological protection red line of version 2018. According to the unified deployment of the Ministry of Natural Resources, Chizhou City has assessed and adjusted the ecological protection red line and reported it in May 2021 (the scope of mining rights does not overlap with the reported ecological protection red line). However, the ecological protection red line after evaluation and adjustment has not been formally approved by the state. If the country does not reply to the ecological protection red line after assessment and adjustment by November 4, 2022, the transferor has the right to cancel the act of granting mining rights, the contract for the transfer of mining rights signed shall not take effect, and the bona fide payment for the transfer of mining rights shall be refunded in full without interest, and the government and the transferor shall not bear any responsibility.

The other contents of the original announcement shall remain unchanged.