China Metal Resources Utilization : (1) PROPOSED ISSUE AND ALLOTMENT OF NEW SHARES FOR SUBSCRIPTION UNDER SPECIFIC MANDATE AND (2) NOTICE OF EXTRAORDINARY GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in China Metal Resources Utilization Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

This circular is for your information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares or other securities of China Metal Resources Utilization Limited.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHINA METAL RESOURCES UTILIZATION LIMITED

中 國 金 屬 資 源 利 用 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1636)

1. PROPOSED ISSUE AND ALLOTMENT OF NEW SHARES FOR SUBSCRIPTION UNDER SPECIFIC MANDATE

AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM (as defined herein) of China Metal Resources Utilization Limited to be held at Unit 02-03, 44/F., Cosco Tower, 183 Queen's Road Central, Hong Kong on Tuesday, 15 September 2020 at 2:00 p.m. is set out on pages 15 to 17 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.cmru.com.cn) respectively.

Whether or not you are able to attend the EGM, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, as soon as possible and in any event not less than 48 hours before (i.e. 2:00 p.m. on Friday, 11 September 2020) the time appointed for the holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof (as the case may be) should you so wish.

The following precautionary measures will be taken by the Company for the EGM to prevent the spread of the COVID-19 epidemic: (i) compulsory temperature checks; (ii) compulsory wearing of surgical face masks; and (iii) no provision of refreshments and/or corporate gifts. Any person who does not comply with the precautionary measures may be denied entry into the EGM venue. Shareholders are encouraged to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM as an alternative to attending the EGM in person.

25 August 2020

PRECAUTIONARY MEASURES FOR THE EGM

In view of the ongoing novel coronavirus (COVID-19) pandemic and recent requirements for prevention and control of its spread, the Company will implement the following preventive measures at the EGM to protect attending Shareholders, staff and other stakeholders from the risk of infection:

1. Compulsory body temperature checks will be conducted on every attendee at the entrance of the EGM venue. Any person with a body temperature of over 37.3 degrees Celsius or is exhibiting flu-like symptoms may be denied entry into the EGM venue and be requested to leave the EGM venue.
2. Every attendee will be required to wear surgical face masks before they are permitted to attend, and throughout their attendance of, the EGM. Please note that no masks will be provided at the EGM venue. Attendees are advised to maintain appropriate social distance with each other at all times when attending the EGM.
3. No refreshments or drinks will be served and no corporate gifts will be distributed.

Attendees who do not comply with the above precautionary measures may be denied entry into the EGM venue, at the absolute discretion of the Company as permitted by law. Attendees are in addition requested to observe and practise good personal hygiene at all times.

For the health and safety of the Shareholders, the Company would like to encourage Shareholders to exercise their right to vote at the EGM by appointing the Chairman of the EGM as their proxy instead of attending the EGM in person.

The form of proxy were despatched to Shareholders and can otherwise be downloaded from the respective websites of the Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.cmru.com.cn). In order to be valid, the form of proxy must be deposited at the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, as soon as possible, and in any event not later than 2:00 p.m. on 11 September 2020.

Due to the constantly evolving COVID-19 pandemic situation in Hong Kong, the Company may be required to change the EGM arrangements at short notice. Shareholders should check the Company's website at www.cmru.com.cn for further announcements and updates on the EGM arrangements.

If Shareholders have any questions relating to the EGM. please contact the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited:

17M Floor, Hopewell Centre

183 Queen's Road East Wanchai, Hong Kong Telephone: [phone] Facsimile: (852) 2865 0990

Email: [e-mail]

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CONTENTS
	Page
PRECAUTIONARY MEASURES FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

- ii -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the meanings set out below:

''AGM''	the annual general meeting of the Company held on 6 June
	2019;
''Announcement''	the announcement of the Company dated 20 July 2020;
''associate(s)''	has the same meaning ascribed thereto under the Listing
	Rules;
''Board''	the board of Directors;
''Business Day''	a day (excluding Saturday, Sunday, a public holiday or a
	day on which typhoon signal no. 8 or above or a ''black''
	rainstorm warning is hoisted in Hong Kong between 9:00
	a.m. and 5:00 p.m.) on which banks in Hong Kong are
	generally open for business;
''Company''	China Metal Resources Utilization Limited, a company
	incorporated in the Cayman Islands with limited liability
	and the shares of which are listed on the Main Board of the
	Stock Exchange (Stock Code: 1636);
''Completion''	completion of the Subscription;
''connected person(s)''	has the same meaning ascribed thereto under the Listing
	Rules;
''Director(s)''	the director(s) of the Company;
''EGM''	the extraordinary general meeting of the Company to be
	convened for the purpose of considering and, if thought fit,
	approving, among other things, (i) the grant of the Specific
	Mandate; and (ii) the Subscription Agreement and the
	transaction contemplated thereunder;
''Existing Indebtedness''	the indebtedness of the Group, details of which is contained
	in the section under ''THE FULE LIABILITIES AND THE
	LOAN AGREEMENT - Use of proceeds of the Loan
	Agreement'';
''Fule Liabilities''	the loan in the principal amount of up to RMB298,000,000
	owed by Mianyang Tongxin Copper Co., Ltd., a wholly
	owned subsidiary of the Group to Fule under the Loan
	Agreement;
''Fule'' or the ''Subscriber''	Mianyang Fule Investment Co., Ltd.* (綿陽富樂投資有限
	公司), a company incorporated in PRC;

- 1 -

DEFINITIONS

''General Mandate''

''Group'' ''HK$'' ''Hong Kong''

''Huarong''

''Independent Third Party''

''Latest Practicable Date'' ''Listing Rules''

''Loan Agreement''

''PRC''

''RMB''

''Share(s)''

''Shareholder(s)''

''Specific Mandate''

''Stock Exchange''

the general mandate granted to the Directors by the resolution of the Shareholders passed at the AGM to allot, issue and deal with Shares and to make or grant offers, agreements and options which may require Shares to be issued, allotted or dealt with, which is subject to the limit of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the AGM;

the Company and its subsidiaries;

Hong Kong dollars, the lawful currency of Hong Kong;

the Hong Kong Special Administrative Region of the People's Republic of China;

China Huarong International Holdings Limited, a limited liability company incorporated under the laws of Hong Kong;

person(s) who is/are independent of the Company and its connected persons and their respective associates;

19 August 2020;

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

the loan agreement entered into between Mianyang Tongxin Copper Co., Ltd. and Fule dated 17 July 2020;

the People's Republic of China, excluding (except where the context requires) Hong Kong, Macau Special Administrative Region and Taiwan;

Renminbi, the lawful currency of the PRC;

ordinary share(s) of HK$0.10 each in the share capital of the Company;

holder(s) of the Shares;

the specific mandate to allot, issue and deal with the Subscription Shares to be proposed for approval as an ordinary resolution of the Shareholders at the EGM;

The Stock Exchange of Hong Kong Limited;

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	DEFINITIONS
''Subscription''	the subscription by Fule of the Subscription Shares pursuant
	to the Subscription Agreement;
''Subscription Agreement''	the subscription agreement dated 20 July 2020 between the
	Company and Fule in respect of the Subscription;
''Subscription Price''	HK$0.53 per Subscription Share;
''Subscription Shares''	new Share(s) to be allotted and issued to Fule pursuant to
	the Subscription Agreement, comprising a total of
	618,490,566 Shares;
''%''	per cent.

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LETTER FROM THE BOARD

CHINA METAL RESOURCES UTILIZATION LIMITED

中 國 金 屬 資 源 利 用 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1636)
Executive Directors:	Registered office:
Mr. Yu Jianqiu (Chairman)	Cricket Square, Hutchins Drive
Mr. Kwong Wai Sun Wilson	PO Box 2681
Mr. Huang Weiping	Grand Cayman, KY1-1111
Ms. Zhu Yufen	Cayman Islands
Independent non-executive Directors:	Head office in the PRC:
Mr. Lee Ting Bun Denny	She Nos 1, 3 and 8
Mr. Pan Liansheng	Shunhe Village
Ms. Ren Ruxian	Xiaojiangou Town
	Youxian District
	Mianyang
	Sichuan Province
	China
	Place of business in Hong Kong:
	Unit 02-03, 44/F., COSCO Tower
	183 Queen's Road Central
	Hong Kong
	25 August 2020
To the Shareholders
Dear Sir/Madam,

1. PROPOSED ISSUE AND ALLOTMENT OF NEW SHARES FOR SUBSCRIPTION UNDER SPECIFIC MANDATE

AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference are made to the announcements of the Company dated 7 July 2020 and 20 July 2020 in relation to the Subscription. As disclosed in the Announcement, on 20 July 2020, the Company and Fule entered into the Subscription Agreement, pursuant to which the Company has conditionally agreed to issue and Fule has conditionally agreed to subscribe for 618,490,566 Subscription Shares at a Subscription Price of HK$0.53 per Subscription Share.

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LETTER FROM THE BOARD

The Subscription Shares will be allotted and issued under the Specific Mandate, Completion is subject to the Shareholders' approval at the EGM and listing approval to be granted by the Stock Exchange. The purpose of this circular is to provide you with further details of the Subscription and the Specific Mandate, the notice of the EGM, and other information as required under the Listing Rules.

THE SUBSCRIPTION AGREEMENT

Date

20 July 2020

Parties

1. The Company, as issuer; and
2. Fule, as subscriber.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, each of Fule and its sole shareholder and also its sole ultimate beneficial owner, the State Owned Assets Supervision and Administration Office of Youxian District Mianyang City* 綿陽市遊仙區國有資產監督管理辦公室, is an Independent Third Party.

Subscription Shares

The 618,490,566 Subscription Shares to be allotted and issued to Fule represent (i) approximately 23.5% of the existing issued share capital of the Company of 2,631,603,838 Shares as at the Latest Practicable Date; and (ii) approximately 19.0% of the Company's issued share capital of 3,250,094,404 Shares as enlarged by the issue and allotment of the Subscription Shares (assuming that there will be no change in the issued share capital of the Company between the Latest Practicable Date and date of the Completion save for the issue of the Subscription Shares).

Immediately upon the Completion, Fule will become a substantial Shareholder of the Company. The Subscription Shares will be allotted and issued under the Specific Mandate to be granted by the Shareholders at the EGM.

Subscription Price

The Subscription Price of HK$0.53 per Subscription Share represents:

1. a premium of approximately 60.6% to the closing price of HK$0.330 per Share as quoted on the Stock Exchange on 20 July 2020, being the date of the Subscription Agreement;
2. a premium of approximately 48.0% to the average closing price of HK$0.358 per Share as quoted on the Stock Exchange for five consecutive trading days immediately prior to the date of the Subscription Agreement; and

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LETTER FROM THE BOARD

1. a premium of approximately 33.7% to the average closing price of HK$0.397 per Share as quoted on the Stock Exchange for 10 consecutive trading days immediately prior to the date of the Subscription Agreement.

The Subscription Price was determined after arm's length negotiations between the Company and Fule with reference to the recent trading prices of the Shares, and was at a premium to the highest closing price of HK$0.51 per Share as quoted on the Stock Exchange for the period from 1 July 2020 (the date of a non-legally binding framework agreement signed between the Company and Fule) to 20 July 2020 (the date of the Subscription Agreement). The Directors consider that the terms and conditions of the Subscription Agreement (including the Subscription Price) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Ranking of the Subscription Shares

The Subscription Shares, when allotted and issued, will be fully paid and rank pari passu in all respects among themselves and with the Shares in issue as at the date of allotment and issue of such Subscription Shares.

Conditions Precedent

Completion shall be subject to the following conditions being satisfied:

1. the listing of the Shares not having been revoked and the Shares continuing to be listed on the Stock Exchange before Completion (save for any temporary suspension in trading pending the release of an announcement in connection with the Subscription Agreement), and neither the Stock Exchange nor the Securities and Futures Commission having expressed that it will raise any objection against the listing status of the Shares due to the transactions contemplated under the Subscription Agreement or any reasons in connection with such transactions;
2. the Stock Exchange having granted the approval for the listing of the Subscription Shares, and such approval not having been revoked before Completion;
3. obtaining all approvals and/or filings required to complete the Subscription under the laws and regulations of PRC and Hong Kong, including but not limited to the approval for operator concentration review, the filing procedures in relation with foreign investment matters with the relevant departments at the development and reform commission, department of commerce, foreign exchange or its authorized banks;
4. the Company having obtained all required consents and approvals for the transactions contemplated under the Subscription Agreement, including the approval by the Shareholders at the EGM of the Subscription Agreement and the transactions contemplated thereunder, and met and fully complied with the relevant laws and regulations (including but not limited to the Listing Rules and the relevant regulations in the Cayman Islands and Hong Kong), such consents and approvals

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LETTER FROM THE BOARD

remaining valid until the date of Completion and the relevant authorities not having implemented any rules or regulations to prohibit or severely delay the fulfilment and Completion of the Subscription Agreement; and

1. Fule having confirmed in writing that it has obtained all required consents and approvals for the transactions contemplated under the Subscription Agreement, and having met and fully complied with the relevant laws and regulations.

Save and except for conditions (1), (2) and (3) above, Fule has the right to waive the conditions above in part or in full. Fule has also further undertaken to the Company that it shall not exercise its right to waive condition (4). The Company has the right to waive the condition (3) above in part or in full.

If the above conditions have not been fulfilled before 31 December 2020 (or such other date the parties agree in writing), the Subscription Agreement will be automatically terminated and lapse, and the obligations of the parties under the Subscription Agreement will be released, except for certain specified provisions and legal responsibilities arising from the antecedent breach.

Completion

Completion shall take place no later than two Business Days following the fulfilment of the conditions above or such other date as agreed by the Company and Fule.

Lock Up

Fule shall not, at any time during the thirty-six-month period following the Completion and without prior written consent from the Company, sell, transfer or otherwise deal in or create any incumbrance over all or part of the Subscription Shares.

SPECIFIC MANDATE TO ISSUE THE NEW SHARES

As at the date of the Subscription Agreement, the Directors are only allowed to issue up to 522,998,883 new Shares under the General Mandate. The issue of the Subscription Shares is subject to the Shareholders' approval. The Subscription Shares will be issued and allotted pursuant to the Specific Mandate to be sought from the Shareholders at the EGM.

APPLICATION FOR LISTING

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

INFORMATION ON THE GROUP

The Group is a fast-growing manufacturer of recycled copper products (also known as copper semis), communication cables and power transmission and distribution cables in Southwest China. The Group processes recycled scrap copper and, to a lesser extent, electrolytic copper, to manufacture a range of copper products, including copper wire rods,

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LETTER FROM THE BOARD

copper wires, copper plates, copper granules, communication cables and power transmission and distribution cables. Since 2015, the Group has also extended its product range to aluminium products and has entered into trading activities in relation to electrolytic copper.

INFORMATION ON FULE

Fule is a wholly state-owned enterprise incorporated in the PRC, and its principal activities include property management services; investments in infrastructure facilities, key projects construction, advanced technology, energy, telecommunication, property development, hospitality and tourism projects; assets management and other corporate management services; sales of non-ferrous metals, copper products, aluminium products and power cables; transportation of goods, packaging services, cargo handling, storage services; logistics information consulting services.

Fule's ultimate beneficial owner is the State Owned Assets Supervision and Administration Office of Youxian District Mianyang City* 綿陽市遊仙區國有資產監督管理辦 公室, and Fule and its ultimate beneficial owner have been introduced to the Company in 2012 when the Group started investing in its manufacturing facilities in Youxian District of Mianyang City.

The Group has been selling copper products to Fule since 2017, and the unaudited revenue generated by the Group from Fule was approximately RMB80 million for the year 2019, and approximately RMB45 million for the seven months for the period ended 31 July 2020. In addition, other than the Loan Agreement, Fule has provided the Group with certain short term loans, the following set forth the particulars:

				Outstanding
				principal
				amount as at
				the Latest
			Interest	Practicable
Period		Principle	expenses	Date
		(RMB)	(RMB)	(RMB)
2017-2018		55,000,000	4,340,000	-
2019-2020	(up to July 2020)	30,000,000	4,220,000	25,600,000

Fule's subsidiary also held approximately 2.89% of the existing issued share capital of the Company as at the Latest Practicable Date.

Save as disclosed above, there are no further past or existing relationship (including financial, business or other) or transactions between Fule (and its connected persons) and the Group.

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LETTER FROM THE BOARD

Upon Completion of the Subscription, Fule will become a substantial shareholder of the Company, and any transactions subsisting as at the date of Completion shall become connected transactions or continuing connected transactions between the Group and Fule. The Company shall comply with the requirements under Chapter 14A, including making necessary announcements promptly upon the completion of the Subscription.

As at the Latest Practicable Date, the Company was still in negotiation with Fule on arrangements after completion of the Subscription, but the Company understands from Fule that, subject to the applicable laws, rules and regulations including the articles of association of the Company, it intends to nominate one to two directors to the board of the Company. Based on current discussions with Fule, Fule is currently expected to be a passive investor of the Company, but the Company does not rule out further strategic cooperation with Fule. Whilst the Company will consider any constructive cooperation with Fule, there is no concrete proposal with respect to such cooperation as at the Latest Practicable Date.

REASONS FOR AND BENEFITS OF THE ISSUE OF THE SUBSCRIPTION SHARES AND USE OF PROCEEDS

The Group is of the view that the Subscription will (1) strengthen the Group's working capital; (2) further optimise the Group's capital structure; and (3) substantially strengthen the Company's shareholders base. Upon completion of the Subscription and to the best of the Company's knowledge, information and belief, the Subscription is not expected to impact on the existing business of the Company and the Company does not have any plans to dispose of or downsize its existing business and/or introduce new businesses into the Group.

Accordingly, the Directors consider that the terms of the Subscription Agreement including the Subscription Price are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The aggregate Subscription Price for all 618,490,566 Subscription Shares shall be settled by Fule at Completion by way of set off against the Fule Liabilities owed by the Group to Fule. Accordingly, there will be no proceeds from the Subscription.

THE LOAN AGREEMENT AND THE USE OF ITS PROCEEDS

The Loan Agreement

The Loan Agreement was entered into on 17 July 2020 pursuant to which Fule had agreed to lend to Mianyang Tongxin Copper Co., Ltd., a wholly-owned subsidiary of the Company, a loan in the principal amount of up to RMB298 million at an interest rate of 8% per annum. The maturity date of the Loan Agreement shall be 1 year from the respective drawdown date. There were no security or guarantee arrangement in respect of the Loan Agreement.

As at 28 July 2020, the Company has drawn down approximately RMB57,000,000 from the Loan Agreement, which has now been used for general working capital. The full sum is expected to be drawn down according to the schedule of the maturity dates of the Existing Indebtedness, and is expected to be drawn down by tranches before (i) the completion of the Subscription; and (ii) 30 September 2020, whichever is earlier.

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LETTER FROM THE BOARD

In negotiating the arrangement with Fule, the Company had decided to opt for the Loan Agreement given the Loan Agreement is not subject to shareholders' approval, whereas the Subscription will, amongst others, require a Specific Mandate. Accordingly, proceeding with the Loan Agreement first, followed by a Subscription Agreement will allow the Company to receive the proceeds from Fule first in order to meet the upcoming maturity dates of the Existing Indebtedness of the Group. For further details of the Existing Indebtedness, please refer to the paragraphs under ''Use of proceeds of the Loan Agreement''.

In addition, the Loan Agreement is not conditional on the Subscription. If the Subscription is not approved in the EGM, the arrangement under the Loan Agreement shall carry on and will become another indebtedness of the Group which should be repaid upon its maturity.

On the above basis, the Company is of the view that using the loan proceeds to repay the Existing Indebtedness, instead of directly applying the proceeds from the Subscription to repay such Existing Indebtedness is in the interests of the Company and its shareholders as whole.

Use of proceeds of the Loan Agreement

The net proceeds for the loan advanced pursuant the Loan Agreement are intended to be used, including but not limited to, to repay the Existing Indebtedness of the Group and general working capital of the Group. The Company intended to use the net proceeds principally for repaying the Existing Indebtedness of the Group; and if any of the term of such Existing Indebtedness is extended before its maturity, such remainder of the proceeds shall be used as to the Group's general working capital.

With respect to the Existing Indebtedness, it is intended that the net proceeds of the loan will be utilised to discharge the following Existing Indebtedness:

		Nature of	Outstanding
	Name of creditor	indebtedness	amount	Maturity date
1.	Huarong(1)	Convertible Bond	HK$390,000,000	11	August 2020
2.	A registered bank in	Bank loan	RMB20,000,000	20	August 2020
	the PRC
3.	A registered bank in	Bank loan	RMB19,000,000	21	August 2020
	the PRC
4.	Licensed money lender	Term loan	RMB88,220,000	25	August 2020
	in the PRC
5.	A registered bank in	Bank loan	RMB12,600,000	26	August 2020
	the PRC
6.	A registered bank in	Bank loan	RMB10,000,000	25	September 2020
	the PRC
7.	A registered bank in	Bank loan	RMB5,000,000	13	October 2020
	the PRC

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LETTER FROM THE BOARD

Note 1: The convertible bond in the principal amount of HK$390,000,000 issued to Huarong matured on 11 August 2020. As disclosed in the announcement of the Company dated 9 July had entered into a non legally binding letter of intent with Huarong pursuant to which the parties are in the process of discussion a possible extension of the maturity date of such convertible bond. As of the Latest Practicable Date, the discussion with Huarong of a potential extension is still ongoing.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, other than Huarong, none of the above creditors to the Existing Indebtedness are shareholders of the Company.

With respect to general working capital, it is intended that the net proceeds of the loan will be utilised as follows as follows:

		Percentage of
		such remainder of
	Nature of general working capital	the proceeds
1.	Procurement of raw material	80%
2.	Payment of operating expenses	20%

The net price of each Subscription Share is approximately HK$0.53.

EFFECT ON THE SHARE CAPITAL OF THE COMPANY AS A RESULT OF THE ISSUANCE OF THE SUBSCRIPTION SHARES

The following table illustrates, based on the latest information available and to the best knowledge of the Directors, (1) the existing shareholding structure of the Company as at the Latest Practicable Date; and (2) the shareholding structure of the Company upon Completion; on the assumptions that (a) there will be no other change to the share capital of the Company

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LETTER FROM THE BOARD

from the Latest Practicable Date until the Completion, save for the issue of the Subscription Shares; and (b) Fule does not and will not hold any additional Shares other than the Shares held on the Latest Practicable Date and the Subscription Shares.

	As at the Latest Practicable Date	Immediately after Completion
			Approximate			Approximate
	Number of	percentage of	Number of	percentage of
	Shares directly	the issued share	Shares directly	the issued share
	or indirectly	capital of the	or indirectly	capital of the
	held	Company (%)	held	Company (%)
Shareholders
Mr. Yu Jianqiu and Epoch Keen
Limited (note 1)	541,122,400		20.56%		541,122,400		16.65%
First Harvest Global Limited,
Gold Wide Enterprises Limited
and Ocean Through Limited
(note 2)	310,317,000		11.79%		310,317,000		9.55%
Mr. Kwong Wai Sun Wilson
(note 3)	3,272,600		0.12%		3,272,600	0.10%
Quaetus Capital Pte Ltd (Note 4)	280,312,902		10.65%		280,312,902		8.62%
Hammer Capital Private
Investments Limited (Note 5)	153,828,000		5.85%		153,828,000	4.73%
China Huarong International
Holdings Limited (Note 6)	90,881,295		3.45%		90,881,295	2.80%
Fule	75,980,000	2.89%	694,470,566		21.37%
Public Shareholders
Other public shareholders	1,175,889,641		44.69%		1,175,889,641		36.18%
Total	2,631,603,838		100.00%		3,250,094,404	100.00%

Notes:

1. The shares are held by Mr. Yu Jianqiu, chairman and an executive Director of the Company, together with Epoch Keen Limited, a company wholly-owned by Mr. Yu Jianqiu.
2. First Harvest Global Limited, Gold Wide Enterprises Limited and Ocean Through Limited are companies wholly-owned by Mr. Huang Weiping, a Director.
3. Mr. Kwong Wai Sun Wilson is an executive Director.
4. Quaetus Capital Pte Ltd is 80% controlled by Kwek Steven Poh Song.
5. Each of Tsang Ling Kay Rodney and Cheung Siu Fai controls 50% of Hammer Capital Investments Limited.
6. The shares are held by China Huarong Asset Management Co., Ltd. through Huarong Real Estate Co., Ltd., Huarong Zhiyuan Investment & Management Co., Ltd. and China Huarong International Holdings Limited.

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LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE-MONTH PERIOD

The Company has not carried out any capital fund raising activities, other than entering into a subscription agreement as announced on 14 April 2020 (which did not proceed to completion), in the 12 months period immediately before the Latest Practicable Date.

LISTING RULES IMPLICATIONS

As at the date of the Subscription Agreement, the Directors are only allowed to issue up to 522,998,883 new Shares under the General Mandate. Accordingly, the Company will seek the Specific Mandate from the Shareholders at the EGM to allot and issue the Subscription Shares. Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

The EGM will be convened for the Shareholders to consider and, if thought fit, to approve among other things, the Subscription Agreement and the transactions contemplated thereunder (including but not limited to the Specific Mandate).

Fule, as of the Latest Practicable Date, holds 75,980,000 Shares, representing approximately 2.89% of the total issued Shares of the Company, being considered to have material interests in respect of the Subscription, shall abstain from voting on the relevant resolutions at the EGM.

Huarong, as of the Latest Practicable Date, holds 90,881,295 Shares, representing approximately 3.45% of the total issued Shares of the Company, being considered to have material interests in respect of the Subscription, is expected to abstain from voting on the relevant resolutions at the EGM.

Save as disclosed above, to the best of the Directors' knowledge, no other Shareholder will be required to abstain from voting on the resolution(s) approving the aforesaid matters.

EXTRAORDINARY GENERAL MEETING

The EGM will be held for the purpose of, among other matters, considering, and if thought fit, approving the transaction contemplated under the Subscription Agreement and the Specific Mandate. The notice of the EGM is set out on pages 15 to 17 of this circular. If you do not intend to attend and vote at the EGM in person, you are requested to complete and return the enclosed form of proxy to the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, as soon as possible and in any event not less than 48 hours before (i.e. 2:00 p.m. on Friday, 11 September 2020) the time appointed for the holding of the meeting or any adjournment thereof (as the case may be). The completion and delivery of a form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

The register of members of the Company will be closed from Thursday, 10 September 2020 to Tuesday, 15 September 2020, both days inclusive, during which period no share transfers can be registered. In order to be eligible for attending and voting at the EGM, all

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LETTER FROM THE BOARD

transfers accompanies by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not later than 16:30 p.m. on Wednesday, 9 September 2020.

VOTING BY POLL

The resolutions set out in the notice of the EGM would be decided by poll in accordance with the Listing Rules and the articles of association of the Company.

On a poll, every Shareholder present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy shall have one vote for every Share held. A Shareholder present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy who is entitled to more than one vote need not use all his/its votes or cast all his/its votes in the same way.

After the conclusion of the EGM, the poll results will be published on the website of the Stock Exchange at www.hkexnews.hk.

RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the opinion that the terms of the Subscription Agreement and the transaction contemplated thereunder are on normal commercial terms, in the ordinary and usual course of business of the Company, and are fair and reasonable, and that the Subscription and the grant of the Specific Mandate are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend that all Shareholders should vote in favour of the resolutions to be proposed at the EGM.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

Yours faithfully,

By order of the Board

China Metal Resources Utilization Limited

Mr. YU Jianqiu

Chairman

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NOTICE OF THE EGM

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this notice.

CHINA METAL RESOURCES UTILIZATION LIMITED

中 國 金 屬 資 源 利 用 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1636)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ''Meeting'') of China Metal Resources Utilization Limited (the ''Company'') will be held at Unit 02-03, 44/F., Cosco Tower, 183 Queen's Road Central, Hong Kong on Tuesday, 15 September 2020 at 2:00 p.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

''THAT:

• 1. the subscription agreement dated 20 July 2020 (the ''Subscription Agreement'') (a copy of which is marked ''A'' has been tabled before the Meeting and signed by the
     chairman of the Meeting for the purpose of identification) entered into between the Company as issuer and Mianyang Fule Investment Co., Ltd.* (綿陽富樂投資有限公 司) (''Fule'') as subscriber in relation to the subscription of 618,490,566 shares of the Company (the ''Subscription Share(s)'') at the subscription price of HK$0.53 per Subscription Share and transactions contemplated thereby, be and are hereby approved, ratified and confirmed;
  2. the directors of the Company be and are hereby granted a specific mandate to exercise the powers of the Company to issue and allot the Subscription Shares, subject to and in accordance with the terms and conditions of the Subscription Agreement; and
  3. any one or more directors of the Company be and are hereby authorised to sign, execute, perfect, deliver and do all such documents, deeds, acts, matters and things, as the case may be, as they may in their discretion consider necessary, desirable or
• For identification purposes only

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NOTICE OF THE EGM

expedient in connection with (1) the performance of the rights and/or obligations under the Subscription Agreement and (2) the issue and allotment of Subscription Shares pursuant to the Subscription Agreement.''

By order of the Board

China Metal Resources Utilization Limited

Mr. YU Jianqiu

Chairman

25 August, 2020

Notes:

1. All resolutions at the extraordinary general meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules''). The results of the poll will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company in accordance with the Listing Rules.
2. Any member entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him/her. A proxy need not be a member of the Company.
3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of any officer, attorney or other person duly authorised to sign the same.
4. In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority, must be deposited with the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M, Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not less than 48 hours before (i.e. 2:00 p.m. on Friday, 11 September 2020) the time appointed for holding the Meeting or any adjourned meeting thereof (as the case may be).
5. Completion and return of the form of proxy will not preclude members from attending and voting in person at the Meeting or at any adjourned meeting thereof (as the case may be) should they so wish, and in such event, the form of proxy shall be deemed to be revoke.
6. Where there are joint registered holders of any share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she was solely entitled thereto, but if more than one of such joint holders are present at the Meeting, whether in person or by proxy, the joint registered holder present whose name stands first on the register of members of the Company in respect of the shares shall be accepted to the exclusion of the votes of the other registered holders.
7. The register of members of the Company will be closed from Thursday, 10 September 2020 to Tuesday, 15 September 2020, both days inclusive, during which period no share transfers can be registered. In order to be eligible for attending and voting at the Meeting, all transfers accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Wednesday, 9 September 2020.
8. If a black rainstorm warning signal or a tropical cyclone warning signal no. 8 or above is in force in Hong Kong at 7:30 a.m. on the date of the Meeting, the Meeting will be adjourned. The Company will post an announcement on the websites of the Company at www.cmru.com and the Stock Exchange at www.hkexnews.hk to notify Shareholders of the date, time and place of the adjourned meeting.

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NOTICE OF THE EGM

As at the date of this notice, the Board comprises four executive directors, namely, Mr. Yu Jianqiu (Chairman), Mr. Kwong Wai Sun Wilson, Mr. Huang Weiping and Ms. Zhu Yufen; and three independent non-executive directors, namely, Mr. Lee Ting Bun Denny, Mr. Pan Liansheng and Ms. Ren Ruxian.

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