Connected transaction: Disposal of shares in Condor Gold plc

(Incorporated in the Cayman Islands with Limited Liability)

Stock Code: 0575 13 January 2017

ANNOUNCEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

CONNECTED TRANSACTION: DISPOSAL OF SHARES IN CONDOR GOLD PLC SUMMARY

This announcement is made by the Company in compliance with the disclosure requirements under Chapter 14A of the HK Listing Rules.

The Company announces that during the period from 6 to 12 January 2017, it disposed of an aggregate of 3,977,274 Condor Shares, at the average price of approximately GBP 0.52 (or approximately US$0.6337 or HK$4.9429) per Condor Share, representing approximately 7.52 per cent of the existing issued share capital of Condor, for an aggregate amount of cash consideration of approximately GBP 2,073,533 (or approximately US$2,527,015 or HK$19,710,717), the details of which are set out in the announcement.

The Condor Disposal has provided the Company with total gross proceeds (before expenses) of approximately GBP 2.07 million (or approximately US$2.52 million or HK$19.66 million) and a net realised gain of approximately of GBP 25,000 (or approximately US$30,468 or HK$237,650) which will be recognised in the Company's results for the year ended 31 December 2017.

Following the Condor Disposal, the Company ceased to hold any interests in Condor, and James Mellon and Galloway hold 1,094,818 Condor Shares and 1,763,222 Condor Shares, representing approximately 2.07 per cent and 3.33 per cent of the existing issued share capital of Condor respectively.

The disposal of an aggregate of 1,636,998 Condor Shares to James Mellon and Galloway, being part of the Condor Disposal, constitutes a connected transaction of the Company under Chapter 14A of the HK Listing Rules, but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under the de minimis provisions of Rule 14A.76(2) of the HK Listing Rules. The views of the Independent Non-Executive Directors on the Condor Disposal are set out in this announcement.

This announcement is made by the Company in compliance with the disclosure requirements under Chapter 14A of the HK Listing Rules.

Disposal of shares in Condor

The Company announces that during the period from 6 to 12 January 2017, it disposed of an aggregate of 3,977,274 Condor Shares, at the average price of approximately GBP 0.52 (or approximately US$0.6337 or HK$4.9429) per Condor Share, representing approximately 7.52 per cent of the existing issued share capital of Condor, for an aggregate amount of cash consideration of approximately GBP 2,073,533 (or approximately US$2,527,015 or HK$19,710,717), being:

• 2,340,276 Condor Shares by an on-market transaction at GBP 0.54 per Condor Share on 6 January 2017;

• 395,998 Condor Shares to James Mellon at GBP 0.505 per Condor Share on 12 January 2017 (the trade having been agreed on 29 December 2016); and

• 845,000 Condor Shares and 396,000 Condor Shares to Galloway at GBP 0.485 per Condor Share and GBP 0.505 per Condor Share respectively on 12 January 2017 (the trades having been agreed on 28 and 29 December 2016 respectively).

Prior to the Condor Disposal:

1. the Company held 3,977,274 Condor Shares, representing approximately 7.52 per cent of the existing issued share capital of Condor, comprising:

2. 291,149 Condor Shares, which were acquired in October 2012 by way of subscription in respect of Condor's private placing at a price of GBP 1.60 (or approximately US$1.9499 or HK$15.2092) per Condor Share, for an aggregate amount of cash consideration of GBP 465,839 (or approximately US$567,718 or HK$4,428,200) (details of the holding having been announced by the Company on 15 February 2013);

3. an aggregate of 3,286,125 Condor Shares, which were acquired or otherwise received in February 2016 by way of subscription or underwriting fee in respect of Condor's private placing at a price of GBP 1.60 (or approximately US$1.9499 or HK$15.2092) per Condor Share, for an aggregate amount of cash consideration of GBP 5,257,800 (or approximately US$6,407,681 or HK$49,979,912) (details of the holding having been announced by the Company on 15 February and 22 March 2013); and

4. an aggregate of 400,000 Condor Shares, which were acquired during the period from 25 March to 9 April 2013 on market for an aggregate amount of cash consideration of GBP 548,442 (or approximately US$668,386 or HK$5,213,411);

5. James Mellon (the Non-Executive Chairman of the Board of the Company), also a non- executive director of Condor (currently one of four directors), held (by himself) 698,820 Condor Shares, representing approximately 1.32 per cent of the existing issued share capital of Condor; and

6. Galloway held 522,222 Condor Shares, representing approximately 0.99 per cent of the existing issued share capital of Condor.

In respect of all acquisitions of Condor Shares to date, the average price paid by the Company was approximately GBP 1.58 (or approximately US$1.9255 or HK$15.0189) per Condor Share, for an aggregate amount of cash consideration of GBP 6,272,081 (or approximately US$7,643,785 or HK$59,621,523).

The Condor Disposal has provided the Company with total gross proceeds (before expenses) of approximately GBP 2.07 million (or approximately US$2.52 million or HK$19.66 million) and a net realised gain of approximately of GBP 25,000 (or approximately US$30,468 or HK$237,650) which will be recognised in the Company's results for the year ended 31 December 2017.

The Company expects to recognise in its income statement a result different from that disclosed above, principally by reference to the carrying value of 3,977,274 Condor Shares, the subject of the Condor Disposal, as recorded in the Company's accounts. The difference between the two calculations arises and is derived from the relevant exchange rate ascribed by the Company at the relevant trade date for each acquisition of Condor Shares.

Following the Condor Disposal, the Company ceased to hold any interests in Condor, and James Mellon and Galloway hold 1,094,818 Condor Shares and 1,763,222 Condor Shares, representing approximately 2.07 per cent and 3.33 per cent of the existing issued share capital of Condor respectively.

The disposal of an aggregate of 1,636,998 Condor Shares to James Mellon and Galloway, being part of the Condor Disposal, constitutes a connected transaction of the Company under Chapter 14A of the HK Listing Rules, but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under the de minimis provisions of Rule 14A.76(2) of the HK Listing Rules. The views of the Independent Non-Executive Directors on the Condor Disposal are set out in this announcement.

Basis of consideration

The consideration for the Condor Disposal was determined on the basis of normal commercial terms and arm's length transactions by: (i) an on-market trade (as to the on-market transaction); and (ii) negotiations by reference to the mid prices of the Condor Shares traded on the dates when the respective lots of disposal were agreed (as to the disposals to James Mellon and Galloway).

The Directors (including the Independent Non-Executive Directors) consider the Condor Disposal to be on normal commercial terms and in the ordinary and usual course of business of the Company. They believe that the terms of the Condor Disposal are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

In respect of the Company's interest in Condor, the Company's attributable share (being 7.52 per cent disposed of) of Condor's: (i) net loss both before and after taxes for the financial year ended 31 December 2015 from continued operations was approximately GBP 230,233 (or