INFINIO GROUP LIMITED (Incorporated in Singapore) · also the Director of Raffles K12 Sdn Bhd and...

INFINIO GROUP LIMITED (Incorporated in Singapore)

(Company Registration No.: 199801660M)

RESPONSE TO QUERIES FROM THE SGX-ST REGARDING PROPOSED ACQUISITION OF THE ENTIRE ISSUED AND PAID UP SHARE

CAPITAL OF SUMMIT LIGHT VENTURES LTD FOR AN AGGREGATE CONSIDERATION OF S$6,450,000

The Board of Directors of Infinio Group Limited (the “Company” and together with its subsidiaries, the “Group”) refers to the queries from Singapore Exchange Securities Trading Limited (the “SGX-ST”) on 30 October 2013, 04 November 2013 and 05 November 2013, respectively and would like to provide additional information in relation to the Company’s announcement in respect of the proposed acquisition of the entire issued and paid-up share capital of Summit Light Ventures Ltd released on 28 October 2013 (the “28 October Announcement”). The queries from the SGX-ST and the Company’s corresponding response and additional information on the Target are as attached. Terms defined in the 28 October 2013 Announcement shall have the same meanings when used in this announcement, unless otherwise defined. BY ORDER OF THE BOARD INFINIO GROUP LIMITED Raymond Ho D’Orville Executive Director 12 November 2013 This announcement has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the SGX-ST. The Company’s Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Yap Wai Ming: Tel: 6389 3000 Email: [email protected]

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Query 1:

The Prospecting Licence 77/3982 will expire on 3 May 2014. It is stated that the tenement can be extended if prescribed ground for extension is available at that time. Please elaborate on what are the prescribed grounds for extension? Has the Company applied for the extension? How long does the process take? What is the likelihood of the Company obtaining approval for the extension?

Company’s Response:

The Prospecting Tenement is fronting the entrance to the mine hence is held for the purpose of maintaining access and not critical in terms of actual resource content, however the Company has discussed with the Vendors to apply for a general purpose lease on the same area in respect of the Mining Lease. This general purpose tenement will be valid for 21 years and does not require annual expenditure filings. This is being initiated and will be completed before the expiry of the prospecting lease. For more information on the General Purpose lease, please see information at the link below.

http://www.licence.smallbusiness.wa.gov.au/BusinessLicenceFinder/prod/licence?licence=8198

Query 2:

Does the Mining Lease 77/450 refer to the Birthday Mine? Company’s Response:

Yes, the Mining Lease 77/450 refers to the Birthday Mine.

Query 3:

What is the expected useful life of the Birthday Mine (given that mining at this tenement began in 1911)? The mine has been mined to a very limited extent on a very small scale. The diagram (Mined Tunnels) shows the limited extent of mined tunnels in relation to the whole tenement. The Company expects that depending on the rate of extraction, the mine will have a life of about 15 to 20 years.

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The target is to gradually increase extraction to a rate of about 6k to 8k tonnes per month. However for the initial year the company is targeting to have monthly extraction of about 2k tonnes of ore per month and depending on the rate of discovery, the mining will proceed on a conservative basis.

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Query 4:

To provide more information on the Vendors. Company’s Response:

Mr Lim Yeow Sun is an entrepreneur and businessman who currently has interest in the Jewellery business. He was previously involved in minerals and resources trading and is also involved in coal and gold related equipment processing equipment. He is the promoter of this project to be acquired. Mr Oei Liang Jen is an Australian based businessman who is involved in the media and content business and whom the Company understands has invested private wealth in a various projects including some in the mining industry. Ms Doris Chung Gim Lian is the spouse of Mr Chew Hua Seng and is the Director of Operations and Human Resources for Raffles Education Corporation Limited (REC). She is also the Director of Raffles K12 Sdn Bhd and is responsible for the management of the Raffles American School. She had prior experience at LaSalle KL and Raffles LaSalle Singapore when she first joined REC in 1992 as the Administration Manager, handling student services, programme scheduling and human resource needs. She is currently a Director of Raffles Design Institute Pte Ltd and Raffles Design Institute Sdn Bhd. She is also a Board Director of Raffles Iskandar Sdn Bhd. Ms Chung is a passive investor in Summit Light Ventures Ltd.

The Company has limited information on Ms Quek Lee Hoon, Bliss Deal Limited at the

moment other than the fact that they are private investors.

Query 5:

How was the Company introduced to the Vendors and this transaction?


The management of the Company has been considering various options in terms of new business direction for the Company including online business, as well as explored several mining related prospects including coal mines in Indonesia, Malaysia and gold mine projects in Australia, Indonesia and America. Having considered various options, the management is of the view that the size and extent of some of the other projects were prohibitive in terms of funding requirements. This project was made known to the Company by one of the Company’s former independent directors (Mr Isaac Ng) based in Australia when he was aware that the Company was exploring new business areas.

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Some of the Vendors are previously known to the Company due to the Company’s past involvement in similar industries as the Vendors. Mr Oei is an investor and businessman involved in the media business and content supply business and the Company has previously crossed paths with him when sourcing content for Broadband Network Systems IPTV business. The Company was also formerly known as Auston International Group Ltd and was previously in the Education sector, wherein the Company has crossed paths with Ms Doris Chung Gim Lian. With the Company’s ELN facility in place, the Company has decided to work within the funding ability of the Company while minimising the potential dilution effect for its existing Shareholders.

Query 6:

Will the Vendors have any board representation following the Proposed Acquisition?


The Vendors do not intend to have board representation. However, the Company may request their assistance in the handover of ongoing matters as necessary. No formal agreements have been discussed or entered into in respect of such assistance.

Query 7:

No valuation has been carried out on the Target. Is there intention to do so? If not, why not.


The Company recognises that any external valuation of mineral resources is highly subjective unless well supported by a detailed drilling exercise. The Company intends to conduct a more detail valuation once the acquisition is completed and additional work to prove up resources has been done.

Query 8:

How was the purchase consideration of S$6.45 million arrived at?


The Company has considered the historical information as filed with the Department of Mines and Petroleum, as well as reports of past extraction and sales records to the Perth Mint. The information is summarised in the table below:

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Furthermore, the Company has taken into consideration an historical Independent Qualified Persons Report (the “IQPR”). The IQPR is not a Joint Ore Reserves Committee (the “JORC”) certified report, hence the resources stated are only estimated based on the known ore bodies that have been worked. The report provides reference to an indicative gold resource 30k to 40k ounces from extensions from existing identified ore bodies with possibility of 100k ounces or more, and additional possibility of additional parallel gold bearing seams. Given that no further mining has been done since 2010, there is sufficient basis to place some reliance on the report. Additional results obtained recently from additional drill hole samples take in February 2013 subsequent to the 2012 report has further identified gold ore resources containing between 388g Au/t to 530g Au/t from 1 out of nine drill holes tested. The Company has further considered that prior to the acquisition; the Vendors have spent significant effort in preparing the mine to recommence mining operations, including installation of new water tanks, piping and installation of new accommodation units. The existence of which, have been verified in person. With the current gold prices at approximately A$1400+ per oz, and the relatively low extraction cost achieved in the past of between A$166 to A$397 reported, the resultant possible gross margins are significant, even after factoring other contingency costs, hence management is of the view that agreed consideration of $6.45m is at a very reasonable

YearAverage Volume

(t)Gold Extracted (g) Gold g/t

Operations

Expenditure

(Dept. Mines &

Petroleum)

Op's Expenditure

per Oz ($/Oz)

1991 No information n.a. n.a. $82,600 n.a.






1997 No information n.a. n.a. $102,500 n.a.1998 No information n.a. n.a. $39,100 n.a.


2000 1,107 29,213 26.4 $151,959 $166

2001 2,561 29,145 11.4 $190,400 $209

2002 1,190 28,663 24.1 $251,300 $281

2003 1,080 6,921 6.4 $144,931

2004 1,250 $14,675

2005 Missing $139,818

2006 Maintenance only n.a. n.a. $102,478

2007 Missing n.a. n.a. $39,097

2008 Missing n.a. n.a. $79,460

2009 2,100 33,950 16.2 $300,094 $283

2010 2,164 32,706 15.1 $405,566 $397

2011 No extraction $10,140



Ore extracted an left on site due to disputes


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price in relation to the lowest level of indicated resource and what the Company believes there to be, and provides significant upside potential in terms of value.

Query 9:

It is stated that the Board has conducted a preliminary assessment of the Target. To elaborate on what has been done.


In conducting a preliminary assessment, the Company has studied the project since prior to signing the MOU on 1 July 2013 and conducted independent verification of Vendor’s representations in respect of the history of the mining tenement and activities to date. Further to consideration of information above, the Company has also made site visits, had discussions with several prospective miners who are keen to work the site. The Company has also made enquiries into the mining requirements to move forward as well as and outsource mining options and mining process options and mining equipment cost. The Company has obtained indicative quotes and proposals on processing plant set up and mining to further understand the indicative cost of mining the project. However these will be considered in more detail subject to the completion of the acquisition.

Query 10:

Has an Independent Qualified Person’s Report been prepared on the Target? If not, why not. (Who was the professional (firm as well as Qualified Person) who prepared the IQPR?)


An independent Qualified Person’s report has previously been prepared on the tenement in early 2012 by Martin Dormer whom the Company understands is a Consulting Geologist at Unearthed Elements. He is a member of the Australian Institute of Mining and Metallurgy and also a Director of Tietto Minerals Pty Ltd, a company involved in exploration for gold, base metals and iron in Liberia, West Africa. The company has obtained a copy of the past report however we are currently unable to use this report for circulation purposes as it was commissioned by a third party, subject to confidentiality restrictions. The Company has initiated discussions with the said Qualified Person to have an updated report done with possibility of a proper JORC compliant assessment, however this is more for practical purposes to support properly mining efforts, this will require significant additional work and cost to be incurred.

Query 11:

The Company intends to engage the said Qualified Person to prepare an updated IQPR. When will this be done?

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As the mine has not been mined since the last report, the resource will not have changed. An exercise to update the report at this point not meaningful as there is limited new information upon which to make new inferences on the resource. Upon completion the company will undertake a proper JORC compliant study which will provide additional drill hole information. The indicative cost of such an exercise is estimated at about AUD $238k (based on quotations obtained) and will be conducted shortly upon completion of the acquisition. The intention in respect of the JORC report is to facilitate the operational mining rather than for valuation purposes. The mine to date comprises only about one stretch of approximately 400m of mining tunnel which essentially target the same ore body at two depths. Given the total size of the tenement and the locations of additional assay test from sample extractions done in early 2013 (which have not been considered in the previous IQP report, management believe there is sufficient comfort at this point to that the initial estimate of 30k to 40k ounces is very easily achievable, considering that the estimates were based on estimate average yields of about 14g/t-15g/t. The recent tests show much higher indications, with test results showing one hole with a strike of between 173g/t to 539g/t.

Query 12:

Would gold mining be the Company’s core business going forward?


The Company intends to focus on Gold as well as other resources such as coal and iron.

Query 13:

Would the Company be complying with continuous listing requirements for Mineral companies going forward?


The Company will comply.

Query 14:

Does Infinio have relevant experience in gold mining?


The Company has limited experience in mining, but has intention to bring technical expertise on board the management once the company has obtained relevant approvals

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from shareholders and relevant authorities. The company is currently considering options of working with outsource mining consultants as well as other options.

Query 15:

The Company intends to commission a valuation report only upon completion of the proposed acquisition. What is the objective of doing so at that stage? Would the Company have any recourse against the Vendors if the existence of resources is significantly lesser (as raised in (a) above) or valuation is materially lower than the acquisition consideration of S$6.45million?


The company does not intend to conduct a valuation report unless required for compliance reasons. In the company s earlier response, the Company has responded that: “Upon completion the company will undertake a proper JORC compliant study which will provide additional drill hole information.” The purpose of this is to identify the ore body for extraction purposes. The company believes that even in the (Highly unlikely) worst case scenario assuming no additional other ore bodies are found, which are highly unlikely because the Company already has additional some test data showing other areas containing gold to mine, the minimum expected extraction would be about 40k to 50k Oz. With cost based on outsource production of $800 per Oz, the Net profit would still be approximately $600/Oz representing about $30m in value (based on 50k Oz). There is no recourse provided against the vendors in the S&P agreement.

Query 16:

What does the Company intend to include in the shareholders’ circular (since the JORC compliant report and valuation report would not be commissioned yet at the time of the EGM), seeking shareholders’ approval for the proposed acquisition?

In addition to the information needed for compliance requirements, the company endeavours to provide as much information on the asset as possible, in so far as it is available to the company and can be released to the public, including any information on resource, test data, drill hole information etc at the point of printing. All known information will be made available for sighting to shareholders at the office of the company during the EGM or prior to the EGM as necessary. The company will provide updates on the state of matters in the mine as relevant and necessary during this period leading up to the EGM. For additional information on the target, please refer to the attached document the Company has compiled based on available information to date.

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Additional Information about the Birthday Mine Summit Light Ventures Ltd (‘Summit’) is the owner of two mining tenements including a Mining Lease, and Prospecting License which are herein described as the ‘Birthday Mine’. The Birthday Mine lies within a 57.75 hectare mining tenement, comprising mining lease ML77/450, a 54.25 hectare gold mining operation and a 3.5 hectare Prospecting License P77/3982 adjacent to the mining lease. The area was first mined for surface gold in 1911. Subsequently a Mining Lease was granted over the site allowing for the extraction of commercial volumes of minerals including gold. The Area The Yilgarn Shire is an area of 30,720 square miles. The area is most well known for the Golden Mile that has been mined since the late 1890s. The area is said to contain the richest square mile of gold reserves in the world and continues to be mined today by Karlgoolie Consolidated Gold Mines in what is now known as the Koolgardie Super Pit a pit that is 290m deep by 1.5km wide and 4km long. The Birthday Mine is located near an area called Bullfinch in Western Australia, approximately 300km East of Perth, (See area marked “A” below) and is about 40km from the mining town of Southern Cross, Western Australia.

The Southern Cross area is famous as being the heart of the original gold rush in the 1930’s, and has a number of highly successful mining operations currently in production.

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The Birthday Mine is on what is believed to be a north-south fault line spanning approximately 100 kilometres. The map below illustrates the existing gold finds in the region.

Birthday Mine (Au)

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The Mine

Entry to the Mine, is a straight tunnel approximately 3mx3m, which extends straight for approximately 100 meters before arriving at a split point approximately 100-120 meters from the entry point. The left tunnel extends down wards for approximately another 100 meters northward. The

tunnel to the right of the junction extends south ward and loops back northwards below towards the earlier left tunnel and shows evidence of several pockets of ore bodies removed on both sides of the tunnels.

< Northern shaft roof: A significant gold seam can be seen running through the roof of the north-facing shaft.

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The mine has been mine to a very limited extent on a very small scale. The attached diagram (Mined Tunnels) shows the limited extent of mined tunnels in relation to the whole tenement. The Prospecting Tenement (P77/3982) adjacent to the mining lease which expires on 3 May 2014, fronts the entrance to the mine hence is held for the purpose of maintaining access to the mine however it is not deemed significantly critical interms of actual resource content. Regardless the company has discussed with the owners to apply for a general purpose lease on the same area in respect of the Mining Lease. A general purpose lease entitles the owner to exclusive occupation of the land. It may be granted for one of the following purposes: - Erecting, placing and operating machinery in connection with mining operations; - Depositing or treating minerals or tailings obtain from any land; and - Using the land for any other specified purpose directly connected with mining operations. This general purpose tenement will be valid for 21 years and does not require annual expenditure filings hence once completed will run concurrently with the mining lease life. This is being initiated and is expected to be completed before the expiry of the prospecting lease.

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Historical Mining Most commercial gold mines in Western Australia produce an average of 1 to 5 grams of gold per tonne. Assays and data submitted to the Department of Mines and Petroleum (“DMP”) show mining grades from the Birthday Mine of between 1 gram per tonne to 1,236 grams per tonne. Most recently, in 2009/2010, 1,135.6 Oz (~32,706 grams) of gold was extracted from 2,164 tonnes mined, averaging approximately 15 grams per tonne. The average expenditure recorded during this period was $405,566, giving an average extraction cost of A$397/Oz. Auditable production results over the life of the Mine to date are shown below.

Expenditure Information extracted from Government of Western Australia, Department of Mines and Petroleum Mineral Titles Online website. Volume and Gold extracted information based on file records of payments for purchase from Perth Mint.

YearAverage Volume

(t)Gold Extracted (g) Gold g/t

Operations

Expenditure

(Dept. Mines &

Petroleum)

Op's Expenditure

per Oz ($/Oz)










2000 1,107 29,213 26.4 $151,959 $166

2001 2,561 29,145 11.4 $190,400 $209

2002 1,190 28,663 24.1 $251,300 $281

2003 1,080 6,921 6.4 $144,931

2004 1,250 $14,675

2005 Missing $139,818

2006 Maintenance only n.a. n.a. $102,478

2007 Missing n.a. n.a. $39,097

2008 Missing n.a. n.a. $79,460

2009 2,100 33,950 16.2 $300,094 $283

2010 2,164 32,706 15.1 $405,566 $397






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Independent Qualified Persons Report A Independent Qualified Persons Report in 2012 confirmed narrow high grade gold intersections, from 4 Drill holes Ranging between 2.26 g/t up to 26g/t Au and suggest significant potential of high grade veins along existing strikes “yielding upwards of 30k to 40k ounces of gold and possible a lot more”,… and that “it is possible that a 15g/t ore body could yield in excess of 100,000 ounces of gold with parallel lodes further contributing to the resource stocks.” Results obtained recently from nine additional drill hole samples taken in February 2013 subsequent to the 2012 report has further identified gold ore resources containing between 388g Au/t to 530g Au/t from 1 out of nine drill holes tested.

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Mining Preparation The mine has existing equipment and infrastructure on site left over from previous mining activities. An accommodation unit, still in reasonably good condition can be found on the south end of the mine.

Fuel storage tanks, which appear still useable are present on the site. For safety reasons DMP requires building of a new spill well below the tanks to contain any leakage should it occur.

To date, the owner’s have spent significant effort in preparing the mine to recommence mining operations, including installation of new water tanks, piping and installation of new accommodation units. The existence of which, have been verified in person. New water tanks have been purchase and installed on site

New piping has been purchase and installed in the tunnels.

A new accommodation unit has been purchase and placed on site

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Tenement Register Extracts:

INFINIO GROUP LIMITED (Incorporated in Singapore) · also the Director of Raffles K12 Sdn Bhd and...

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