Gelonghui, September 23丨Yankuang Energy (600188.SH) announced that on September 23, 2024, Yankuang Energy and Highland Resources signed an “Implementation Agreement” (“Implementation Agreement”) and an “Equity Subscription Agreement” (“Share Subscription Agreement”). Yankuang Energy will obtain additional shares from Highland Resources through asset injection and cash subscription, becoming the largest shareholder of Highland Resources after the transaction and controlling the board of directors (“this transaction”). This transaction includes two transactions with mutual prerequisites, as follows:

(1) Stock exchange transactions

According to the “Implementation Agreement”, the company transferred 100% of its shares in Yancoal Canada to Highland Resources, and Highland Resources issued common shares at an issue price of 0.50 Australian dollars/share as transaction consideration. As of April 30, 2024, Yancoal International provided a total of US$83.25 million in shareholder loans to Yancoal Canada. The principal amount of the above loans and corresponding interest is intended to be converted into Yancoal Canada shares before the settlement of this transaction, or directly subscribe for Highland Resources shares at an issue price of 0.50 Australian dollars/share at the time of delivery (“Exchange Transaction”).

(2) Cash stock purchase transactions

According to the “Share Subscription Agreement”, Highland Resources will target additional Highland Resources shares at 0.50 Australian dollars/share to several strategic investors, including Yankuang Energy, to raise 0.22 billion US dollars. Yankuang Energy intends to invest no more than 0.09 billion US dollars to participate in the subscription. If other strategic investors have a subscription amount exceeding 0.13 billion US dollars, Yankuang Energy's subscription amount can be reduced accordingly (“cash subscription transaction”). The capital raised is mainly used for capital expenses and general working capital requirements required for the construction of the Muga project.

As of the disclosure date of this announcement, Beijing Energy International Holdings Co., Ltd., SingaporeTaizhong Global Development Pte. Ltd. formally signed share subscription agreements with Highland Resources respectively, with subscription amounts of 50 million US dollars and 30 million US dollars. On the same day, some investors signed a non-binding intent subscription agreement with Highland Resources.

Highland Resources was incorporated in Australia and listed on the Australian Stock Exchange in February 2012. Its main business is the development of potash fertilizer projects, and the core project is the Muga project in northern Spain. According to JORC specifications, its proven and controlled in-situ ore reserves are 0.104 billion tons, and the grade of potassium chloride is 16.1%; the first phase and phase two design production capacity are 0.5 million tons/year, with a total production capacity of 1 million tons/year.