Mongolia Energy : RENEWAL OF TENANCY AGREEMENT

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.

MONGOLIA ENERGY CORPORATION LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 276)

ANNOUNCEMENT

RENEWAL OF TENANCY AGREEMENT

CONNECTED TRANSACTION

A wholly-owned subsidiary of the Company renewed the office Tenancy Agreement as tenant on 3 May 2021 with the Landlord for a term of two years at a monthly rent of HK$319,207 from 8 May 2021 to 7 May 2023.

The Landlord is an investment holding company wholly and beneficially owned by Mr. Lo, who is a connected person of the Company. The Company will recognize the tenancy as right-of-use asset under HKFRS 16. In this connection, the Tenancy Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios relevant to this transaction are below 5%, the Tenancy Agreement is subject to the reporting and announcement requirements but exempt from the independent shareholders' approval under Chapter 14A of the Listing Rules.

The terms of the Tenancy Agreement were reached after arm's length negotiation between the Tenant and the Landlord. The rent payable by the Tenant is in line with the prevailing market rent as advised by a professional property valuer who is an Independent Third Party. The Board (including the independent non-executive Directors but excluding Mr. Lo, Mr. Rex Lo and Mr. Chris Lo who have been abstained from voting in the Board meeting) considers that the Tenancy Agreement was entered into in the ordinary and usual course of business of the Group, and the terms of the Tenancy Agreement are on normal commercial terms, fair and reasonable, and in the interests of the Company and the shareholders of the Company as a whole.

1. THE TENANCY AGREEMENT

1. Background

A wholly-owned subsidiary of the Company renewed the office Tenancy Agreement as tenant on 3 May 2021 with the Landlord for a term of two years. The Office Premises have been used as the principal place of business of the Company in Hong Kong.

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2. Principal terms of the Tenancy Agreement

Date

3 May 2021

Parties
Landord	:	Cambo Management Limited
Tenant	:	Mongolia Energy Corporation (HK) Limited, a wholly-owned subsidiary
		of the Company

Office Premises

Address: 17/F., 118 Connaught Road West, Hong Kong.

Term and commencement date

A term of two years commencing on 8 May 2021 and ending on 7 May 2023.

Rental amount

HK$319,207 per calendar month (exclusive of rates, government rent, management fees and all other outgoings) payable monthly in advance by the Tenant.

One month's rental and management fee deposit to the Landlord is required under the Tenancy Agreement.

1. REASONS FOR THE TRANSACTION

The Group is principally engaged in the operation of the Khushuut Coal Mine in Mongolia.

The old tenancy agreement for the Office Premises is going to expire on 7 May 2021. Renewal of the tenancy would save the Group from relocation expenses and administrative inconvenience. The monthly rent of the Office Premises under the Tenancy Agreement was determined after arm's length negotiations between the Tenant and the Landlord with reference to the prevailing market rent. The rent payable by the Tenant is in line with the prevailing market rent as advised by a professional valuer who is an Independent Third Party.

Based on the aforesaid, the Board (including the independent non-executive Directors but excluding Mr. Lo, Mr. Rex Lo and Mr. Chris Lo who have been abstained from voting in the Board meeting) considers that the Tenancy Agreement was entered into in the ordinary and usual course of business of the Group, and the terms of the Tenancy Agreement are on normal commercial terms, fair and reasonable, and in the interests of the Company and the shareholders of the Company as a whole.

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1. IMPLICATIONS UNDER THE LISTING RULES

1. The Landlord
   The Landlord is an investment holding company wholly and beneficially owned by Mr. Lo, who is a substantial shareholder, an executive director and chairman of the Company. Therefore, Mr. Lo is a connected person of the Company. The Company will recognize the tenancy as right-of-use asset under HKFRS 16. The Tenancy Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules.
2. Requirements under the Listing Rules
   Based on the management accounts of the Group, the recognition of the right-of- use asset under the transaction is approximately HK$7,105,000. As the applicable percentage ratios relevant to this transaction are below 5%, the Tenancy Agreement is subject to the reporting and announcement but exempt from the independent shareholders' approval under Chapter 14A of the Listing Rules.

1. DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"Board"	the board of Directors
"Company"	Mongolia Energy Corporation Limited, a company
	incorporated in Bermuda with limited liability
	whose issued shares are listed on the Stock
	Exchange
"connected person(s)"	has the same meaning ascribed thereto under the
	Listing Rules
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries
"HK" or "Hong Kong"	the Hong Kong Special Administrative Region of
	the PRC
"HK$"	Hong Kong dollars, the lawful currency of Hong
	Kong
"HKFRS"	Hong Kong Financial Reporting Standards
"Independent Third Party"	a third party which, together with its beneficial
	owner(s) (if any) and to the best of the Directors'
	knowledge, information and belief after having
	made all reasonable enquiries, is independent of the
	Company and its connected persons

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"Landlord"

"Listing Rules"

"Mr. Lo"

"Mr. Chris Lo"

"Mr. Rex Lo"

"Office Premises"

"percentage ratios"

"Stock Exchange"

"Tenancy Agreement"

"Tenant"

"%"

Hong Kong, 3 May 2021

Cambo Management Limited, a company incorporated in Hong Kong with limited liability, and is wholly and beneficially owned by Mr. Lo

the Rules Governing the Listing of Securities on the Stock Exchange

Mr. Lo Lin Shing, Simon, a substantial shareholder, an executive Director, the chairman of the Company and the father of Mr. Rex Lo and Mr. Chris Lo

Mr. Lo, Chris Cze Wai, an executive Director of the Company and the son of Mr. Lo

Mr. Lo, Rex Cze Kei, an executive Director of the Company and the son of Mr. Lo

Portion of Seventeenth Floor, 118 Connaught Road West, Hong Kong

shall have the meaning as ascribed to it under Chapter 14 of the Listing Rules

The Stock Exchange of Hong Kong Limited

the tenancy agreement entered into between the Tenant and the Landlord on 3 May 2021 in respect of the Office Premises

Mongolia Energy Corporation (HK) Limited, a wholly-owned subsidiary of the Company

per cent

By order of the Board

Mongolia Energy Corporation Limited

Tang Chi Kei

Company Secretary

As at the date of this announcement, the Board comprises eight Directors, including Mr. Lo Lin Shing, Simon, Ms. Yvette Ong, Mr. Lo, Rex Cze Kei and Mr. Lo, Chris Cze Wai as executive Directors, Mr. To Hin Tsun, Gerald as non-executive Director, and Mr. Tsui Hing Chuen, William JP, Mr. Lau Wai Piu, and Mr. Lee Kee Wai, Frank as independent non-executive Directors.

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