09:31 ZIJIN MINING<02899> - Announcement (2) 2. Connected Transaction: Provide Transportation Services 2.1 Transportation Transaction On 11 July 2004, Xinjiang Jinbao and Jinbao Transportation Company entered into a transportation services agreement. Jinbao Transportation Company agreed to provide transportation services of iron concentrate powder to Xinjiang Jinbao for the period from 1 August 2004 to 31 December 2004. 2.2 Consideration Xinjiang Jinbao and Jinbao Transportation Company agreed that the service charges were based on the market price and normal commercial terms. The service charges were calculated and settled once a month based on the total transportation volume. The transportation price and calculation method in this contract was the same to other transportation service providers of Xinjiang Jinbao. Jinbao Transportation Company transported about 17,436 tonnes iron concentrate powder for Xinjiang Jinbao in 2004. Up to 31 December 2004, Xinjiang Jinbao have paid RMB3,661,448 (HK$3,454,196 equivalent) service charges to Jinbao Transportation Company. The transportation services agreement was expired by 31 December 2004. 2.3 Reasons of the Transaction The Directors of the Company consider that Jinbao Transportation Company is one of the transportation service providers of Xinjiang Jinbao and this transaction allowed Xinjiang Jinbao to appoint more qualified transportation companies which benefits the sale of iron concentrate powder. Xinjiang Jinbao can focus on the mining business in Mongku Iron Mine. After an arm's length negotiation between the parties, both parties signed the agreement in the ordinary and usual course of business and on normal commercial terms. The Directors including the independent non-executive directors consider that the terms of the agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. 2.4 Connected Transaction Mr. Gu Xinguang is a director of Jinbao Transportation Company and owns 70% shareholding of Jinbao Transportation, so Jinbao Transportation Company is a connected person to Mr. Gu Xinguang (see definitions in the Listing Rules). Mr. Gu Xinguang is a director of Xinjiang Jinbao, and owns 17.904% shareholding of Xinjiang Jinbao. Based on the Listing Rules, the transportation services agreement constituted a connected transaction of the Company. 3. Connected Transaction: Provide Mines Exploration Services 3.1 Mines Exploration Service Tibet Jindi carries out gold mine exploration and mining businesses in Mayoumu District, Tibet. The Company and its subsidiaries hold 51.9% shareholding of Tibet Jindi. Tibet Jindi accepted the mines exploration services from Tibet Geological Team in Tibet region and signed a contract on 31 December, 2003. Tibet Geological Team owns 44% shareholding of Tibet Jindi. Tibet Geological Team is a specialized geological exploration team in the Tibet plateau. This transaction was ended on 31 December 2004. 3.2 Consideration Tibet Jindi accepted Tibet Geological Team's mines exploration services in 2004, and the service fee was RMB2,500,000 (HK$2,358,490 equivalent). The calculation of service fee is based on market price and on normal commercial terms. 3.3 Reasons of the Transaction The Directors of the Company consider that Tibet Geological Team can effectively provide mines exploration services to Tibet Jindi in the Tibet Plateau and it is in line with the Company's benefit. After a fair negotiation between the parties, both parties signed the agreement on 31 December 2003 in the ordinary and usual course of business and on normal commercial terms. The Directors including independent non-executive directors of the Company consider that the terms of the agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. 3.4 Connected Transaction Tibet Geological Team owns 44% shareholding of Tibet Jindi and Tibet Geological Team is a connected person in this transaction (see definitions in the Listing Rules). Based on the Listing Rule 14A.13, the provision of services constituted a connected transaction. 4. Compliance of the Listing Rules The total amount of the consideration of all the three transactions mentioned above is less than 2.5% in the relevant percentage (except profit percentage) and it is a normal business arrangement. These three transactions require to be disclosed under the Listing Rule