2016 Annual Results

Corporate Presentation

27 March 2017

This presentation has been prepared based on publicly available information and information provided by China Vanadium

Titano-Magnetite Mining Company Limited (the “Company”). The information contained in this presentation has not been

independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on,

the fairness, accuracy, completeness or correctness of the information or opinions contained herein.

The Company does not intend to provide, and you may not rely on this presentation as providing, a complete or comprehensive

analysis of the Company’s financial or trading position or prospects. The information contained herein is subject to change and

readers are cautioned not to place undue reliance on forward-looking information contained in this presentation. Such forward-

looking information reflects various assumptions of the management concerning the future performance of the Company, and

the assumptions may or may not prove to be correct. The Company is under no obligation to correct or update any such forward-

looking information.

The views contained in this presentation are based on financial, economic, market and other conditions prevailing to date. This

presentation is not intended to form the basis of any investment decision and does not constitute or form part of any advice or

any offer to sell or an invitation to subscribe for, hold or purchase any securities or any other investment, and neither this

presentation nor any of its contents shall form the basis of or be relied on in connection with any contract or commitment

whatsoever. This presentation is not, and should not be treated or relied upon as investment research or a research

recommendation under the applicable regulatory rules.

None of the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (in

negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in

connection with the document. No person is authorised to give any information or to make any representation not contained in

this document and, if given or made, should not be relied upon.

1

Disclaimer

2

Business Presence and Outlook 14

Operations and Financial Overview 6

Market Review 3

Agenda

3

Market Review

0%

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60%

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Steel Purchasing Managers’ Index

Source: http://www.cslpc.org/news/otherlist/1

• Overcapacity remained a serious concern

• Sluggish global economy and shift of China’s growth

model held back the recovery in steel demand

• Steel price surged due to industry consolidation and

various stimulus measures which boosted fiscal spending

in infrastructure

• Industry players remained doubtful on sustainability of

steel price rebound

50

60

70

80

90

100

110

Jan

-16

Fe

b-1

6

Ma

r-16

Ap

r-16

Ma

y-1

6

Jun

-16

Jul-1

6

Au

g-1

6

Se

p-1

6

Oct-

16

Nov-1

6

Dec-1

6

China Steel Price IndexSteel Industry

Source: China Iron & Steel Association

Supply-side Structural Reform

• Amid the nationwide supply-side structural reform,

provincial governments have strictly executed their plans

to curb excessive capacities

• Pace was slow in 1H 2016 but speeded up during August

and September 2016, mainly due to the merger of two

domestic giant steel makers

• Annual target of reducing steel production capacity by 45

Mt was completed, ahead of schedule, by the end of

October 20164

Market Review

200

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800

1000

1200

1400

1600

1800

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

China Iron Ore Price Index (1)

Source: China Iron & Steel Association

Note:

(1) Based on ordinary iron ore

• Supple-side structural reform caused the

decrease in steel supply and resulted in price

hikes in iron ore

• Increase in iron ore price followed the trend of

steel price

• Certain producers failed to meet

environmental protection standards and were

forced to suspend or close down, leading to a

short supply that pushed up the price

High-grade Titanium Concentrates’ Price Trend (2)

Source: http://www.100ppi.com/

Note:

(2) Dry base packaging, TiO2 46%, not including VAT

(RMB/t)

Ordinary Iron Ore

Titanium

100

120

140

160

180

200

220

240

260

280

300

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

5

Market Review (Cont’d)

6

Operations and Financial Overview

Products

Annual

capacity

(ktpa)

(wet basis)

Production volume

in FY 2016

(kt)

(dry basis)

Capacity

utilisation

(%)

Vanadium-bearing iron

concentrates2,600 290.9 12.4

- Baicao processing plant 700 0 0

- Xiushuihe processing plant 800 207.2 28.8

- Heigutian processing plant 800 0 0

- Hailong processing plant 300 83.7 31.0

High-grade titanium

concentrates280 71.4 28.3

- Baicao processing plant 60 22.7(1) 42.0

- Xiushuihe processing plant 100 48.7 54.1

- Heigutian processing plant 120 0 0

• Unfavourable market conditions

persevered

• Capacity utilisation of the group’s

plants was still low and below

optimal levels

• The group actively sought for

business diversification to

increase revenue (see pages 8

and 12)

• Classified the Heigutian

processing plant as assets held

for sale as there has been no

outputs since 2015 (see page

10)

Note:(1) This figure represented the production volume of medium-grade titanium concentrates

7

Continual Low Utilisation Rate of

Processing Plants

Sales Volume by Product and Nature

FY 2015

(kt)

FY 2016

(kt)

Trading

- Steels and coals 95.0 929.9

- Iron products 110.9 128.6

Self-produced products

- Vanadium-bearing and ordinary

iron concentrates880.2 530.9

- High-grade titanium concentrates 33.1 48.9

Others

- Rendering of processing services

for an independent third party*- 724.8

- Sale of raw ore to an independent

third party*- 3,387.6

8

• Trading of steels and coals as part of

the diversification plans despite thin

margins amidst market condition

• Commenced to sell raw ore together

with rendering of processing services

for an independent third party

Business Diversification

* During the year, the group sold raw ore to an independent third party and processed vanadium-bearing iron concentrates for an independent third party.

For accounting purpose, the sale of raw ore and processing of vanadium-bearing iron concentrates for this same independent third party were treated as

“Sale of self-produced products – vanadium-bearing iron concentrates”.

Mancala Holdings Acquisition

The group has been proactively looking for ways to

improve production efficiency and assets utilisation

On 30 December 2016, the group entered into a sale

and purchase agreement with Sapphire Corporation to

purchase 49% equity interest in Mancala Holdings at an

aggregate consideration of HK$38.2 million, which

included:

Benefits of the transaction:

Enable the group to gain access to the technical

expertise, experience and knowledge in

internationally recognised standards

Develop into a new but related business outside

China and explore opportunities for strategic

collaborations, joint mine development and

innovative mining methods

The acquisition was completed on 28 February 2017

9

Cash consideration

HK$3.2 million

Consideration shares

in aggregate value of

HK$35 million at issue

price of HK$0.365 per

share

Shareholding Structure

MHPL

(Australia)

32%

100%

49%

Other InvestorThe CompanySapphire

Corporation

19%

100%

Mancala Holdings

(Cayman Islands)

MMP

(Australia)

MMS

(Australia)

Spectrum

Resources

(Australia)

MCL*

(Vietnam)

100%

MPL

(Australia)

100% 100%

MAL

(HK)

100%

49%

Exchangeable Notes

Investment in Indonesian MineExchangeable notes of US$30 million

25 Nov 2014Original maturity date

2 Dec 20141st time default of exchangeable notes

31 Dec 2014

Maturity date postponed to 25 Mar 2015

25 Mar 2015

Maturity date (extended)

1 Apr 20152nd time default of exchangeable notes

28 Jul 2015

Maturity date postponed to 25 Aug 2015

25 Aug 2015

Maturity date (further extended)

2 Sep 2015

3rd time default of exchangeable notes

• Carrying value for exchangeable notes was

approximately RMB109.6 million as at 31

December 2016

• Fair value loss on the exchangeable notes was

approximately RMB111.6 million for FY 2016

10

• Management has permanently ceased the

production of the Heigutian processing plant:

due to limited opportunity to optimise the

plant’s capacity utilisation; and

decided to either dispose of the plant and

equipment on a piecemeal basis or the

Heigutian processing plant in its entirety

• The group remains committed to the existing

disposal plans on the Heigutian processing

plant

• As at 31 December 2016, the classification of

the Heigutian processing plant as assets held

for sale remained unchanged and continued

to be recorded at fair value less cost to sell,

amounting to RMB300 million

Assets Held for Sale – Heigutian Processing Plant

Updates on Exchangeable Notes and

Assets Held for Sale

FY 2015

(RMB mm)

FY 2016

(RMB mm)

Revenue 516.4 1,833.3

Gross profit/(loss) (23.2) 42.4

Gross profit/(loss) margin (4.5%) 2.3%

Impairment losses (551.8) (528.4)

Fair value loss on financial assets at fair value through profit or loss (69.0) (111.6)

LBIT (948.3) (745.2)

LBITDA (839.6) (654.5)

Loss before tax (1,010.5) (802.4)

Income tax credit/(expense) (102.7) 2.9

Loss and total comprehensive loss attributable to owners of the

Company (“net loss”)(1,105.5) (773.7)

(RMB) (RMB)

Basic and diluted loss per share (1) (0.53) (0.37)

Note:(1) Weighted average number of shares of 2,075,000,000 in issue

11

Financial Performance Overview

274.3

432.9

72.2

33.1

240.9

169.9

1,126.4

FY 2015 FY 2016

Self-produced products

Trading of iron products

Trading of coals

Trading of steels

1,833.3

Gross Profit/(Loss)

(RMB mm)

(23.2)

42.4

FY 2015 FY 2016

Major Revenue - Trading of Steels and Coals

(RMB mm)

516.4

12

Major Revenue Contribution from

Trading of Steels and Coals

(RMB mm)

Loss and Total Comprehensive Loss Attributable to

Owners of the Company

(RMB mm)

(102.7)

2.9

FY 2015 FY 2016

(RMB mm)

1,105.5

773.7

FY 2015 FY 2016

Income Tax Credit/(Expense)

Selling & Distribution and Administrative Expenses

111.0%

6.7%

13

258.3185.2

35.7 200.015.3

181.9 64.9

60.6

78.3

FY 2015 FY 2016

Assets held for sale

Trade receivables

Goodwill

Intangible assets

Property, plant andequipment

528.4

(RMB mm)

Impairment Losses

53.8 76.3

197.7

72.0

FY 2015 FY 2016

Selling & distribution expenses Administrative expenses

Total SD&A expenses as % of revenue%

Lower Expenses and Net Loss

551.848.7%

8.1%

Business Presence and Outlook

14

11

Heigutian processing plant

Xiushuihe processing plant

Maoling processing plant

Maoling-Yanglongshan mine

Xiushuihe mine

Iron pelletising plant

Hailong processing plant

Baicao processing plant

Baicao mine

Yangqueqing mine

Cizhuqing mine

Haibaodang mine

Shigou gypsum mine

15

Business Presence in China

1

2

3

4

5

6

7

8

9

12

13

11

10

• “Three-Year Action Plan of

Major Construction Projects

in Transportation

Infrastructure” published in

May 2016 to enhance

infrastructure investments

• Encourages domestic steel

producers to “go global” and

ride on opportunities of the

Belt and Road Initiative to

boost demand and reduce

excessive supply

• Carried out in the Central

Economic Work Conference

in 2015 and the reform will

continue unabated in 2017

• Aim to rebalance the supply

and demand discrepancy

• Target to reduce

approximately 50 Mt steel

production capacity in 2017

Supply-side Structural

Reform

State Council of the PRC

• Adhere to the national

policies and further

implement measures to

phase out excessive steel

capacities

• Proactively carry out

preferential policies and

administrative measures to

handle zombie enterprises

properly

Sichuan Government

Government Policies to Facilitate Healthy Development of the Steel Industry

16

Measures to Narrow Loss and Achieve Sustainable Development

17

Mancala Holdings acquisition:

(i) Enable the group to gain access to expertise and

knowledge at internationally recognised levels

(ii) Jointly explore opportunities for strategic

collaborations, mine development and

innovative mining methods

Scale back

capacities

Streamline

loss-making

operations

Keep cost control

discipline

Further improve production

efficiency to cut down

segmental losses

Rationalise

under-utilised assets and

improve assets utilisation

Adopt asset-light

strategies and

optimise

resources

Contact

Cornerstones Communications Limited

Kylie Yeung / Sara Qian

Tel: 2903 9293 / 2903 9282

Fax: 2887 1712

E-mail: ir@chinavtmmining.com

Thank you！

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