Xinjiang Xinxin Mining Industry : PROPOSED ADOPTION OF H SHARE APPRECIATION RIGHTS INCENTIVE PLAN

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.

Xinjiang Xinxin Mining Industry Co., Ltd.*

อᖛอ㒥ᘤٰุ΅Ϟࠢʮ̡

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock code: 3833)

PROPOSED ADOPTION OF H SHARE APPRECIATION

RIGHTS INCENTIVE PLAN

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Plan was considered and approved by the Board on 26 March 2021. The Plan will be submitted to the SASAC and the general meeting of the Shareholders for consideration and approval respectively.

Since the Plan does not involve the grant of options in relation to new shares or other new securities of the Company or any of its subsidiaries, the Plan is not subject to the requirements under Chapter 17 of the Listing Rules.

The Plan is drafted in Chinese and the English version is an unofficial translation and for reference only. In case of any discrepancy between the Chinese and the English versions, the Chinese version shall prevail.

The Board hereby emphasises that the Plan is subject to the approval of the SASAC and the general meeting of the Shareholders, and the fulfillment of the conditions of the Grant. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

PROPOSED ADOPTION OF THE PLAN

A summary of the principal terms of the Plan is set out below:Incentive instrument:

The Plan uses Share Appreciation Rights as an incentive instrument. Subject to the satisfaction of the exercise conditions and the exercise arrangement, for each Share Appreciation Right, the Grantees have the right to receive cash payments for the difference between the closing price at the exercise date of the Share Appreciation Rights over the exercise price per H Share of the Company. No Grantees will practically own the shares or have rights relating to share ownership such as voting right, allotment and dividend rights. The Share Appreciation Rights shall not be transferred or used for securing or repaying debts, etc.

Conditions for the entry into force of the Plan:

The entry into force of the Plan is subject to the fulfillment of the following conditions: (1) review and approval by the SASAC; and (2) review and approval by the general meeting of the Shareholders.

Effective term:

Unless early termination according to the provisions of the Plan, the Plan is valid for a term of ten (10) years commencing from the date of approval in the general meeting of the Shareholders.

Participants:

Participants include the senior management of the Company and other core personnel identified by the Company, excluding (1) those who have not worked in the Company or its subsidiaries or are not part of the Company or its subsidiaries; (2) independent non-executive Directors and supervisors of the Company; (3) any shareholder or de facto controller who individually or jointly holds more than 5% shares of the Company and his/her spouse, parents and children; and (4) those prohibited from being Participants as stipulated by the SASAC.

Number of Share

Appreciation Rights to be granted:

The total number of underlying shares in relation to the Share Appreciation Rights to be granted during the term of the Plan shall not exceed 66,000,000 shares, representing approximately 2.99% of the total issued share capital of the Company as at the date of this announcement.

The Grant Date:Conditions for the grant of Share Appreciation Rights:

The Grant Date of the Plan shall be determined by the Board in accordance with the provisions of the Plan after review and approval of the Plan by the SASAC and the general meeting of the Shareholders and subject to the satisfaction of the conditions of the Grant pursuant to the Plan. The Grant Date shall be a trading day. The Share Appreciation Rights shall not be granted particularly within one month before the following dates: (1) the date of the Board meeting for the approval of the annual, interim or quarterly results of the Company; and (2) the deadline by which the Company publishes its annual, interim or quarterly results announcement pursuant to the Listing Rules.

Such limitation ends on the date of the publication of the results announcement of the Company. The restricted grant period will include the period of delay in the publication of the results of the Company.

The Company may grant the Share Appreciation Rights to the Participants upon satisfaction of the following conditions by the Company and the Participants:

None of the following events occur to the Company:

• (1) issuance of an adverse opinion or a disclaimer of opinion by a certified public accountant on financial and accounting reports for the most recent accounting year;

• (2) administrative punishment by regulatory authorities due to major non-compliance of laws and regulations during the most recent year; and

• (3) such other circumstances in which the Plan shall not be implemented, as determined by the Stock Exchange.

None of the following events occur to a Participant:

(1)being publicly denounced, or declared as an unqualified candidate by the Stock Exchange during the most recent three years;

• (2) administrative punishment by regulatory authorities due to major non-compliance of laws and regulations during the most recent three years; and

• (3) the result of the performance appraisal for the previous financial year before the Grant being below "basically competent".

Exercise price:

The exercise price of Share Appreciation Rights granted under the Plan is the highest of the following three prices:

• (1) the closing price of the H Shares of the Company as stated in the daily quotation sheet of the Stock Exchange on the Grant Date;

• (2) the average closing price of H Shares of the Company as stated in the daily quotation sheet of the Stock Exchange for five consecutive trading days immediately prior to the Grant Date; and

• (3) the nominal value of the H Shares of the Company.

Restricted exercise periods All Grantees under the Plan shall not exercise their and exercise arrangements: Share Appreciation Rights within two years from the

Grant Date. The proportion of the Share Appreciation Rights which shall become exercisable is subject to conditions and in principle shall be:

• (1) not exceeding 33% of the Share Appreciation Rights granted to each Grantee will vest from the first trading day after 24 months from the date of completion of the Grant up to the last trading day within 36 months from the date of completion of the Grant (the "First Transcription Period");

• (2) not exceeding 33% of the Share Appreciation Rights granted to each Grantee will vest from the first trading day after 36 months up to the last trading day within 48 months from the date of completion of the Grant (the "Second Transcription Period"); and

(3)not exceeding 34% of the Share Appreciation Rights granted to each Grantee will vest from the first trading day after 48 months from the completion of the Grant up to the last trading day within 60 months from the date of completion of the Grant (the "Third Transcription Period").

Only vested Share Appreciation Rights can be exercised, while unvested portions shall not be exercised.

During the exercising process, the exercise date shall be deferred in the event the Grantee wishes to exercise the Share Appreciation Rights on the following dates:

(1) the date of the Board meeting for the approval of the annual, interim or quarterly results of the Company; and (2) the deadline by which the Company publishes its annual, interim or quarterly results pursuant to the Listing Rules.

Such limitation ends on the date of the publication of the results announcement of the Company. The restricted exercise period will include the period of delay in the publication of the results of the Company.

The exercise period of the Plan is valid for five years from the Grant Date, and unexercised right will then automatically lapse and cannot be exercised retrospectively.

Conditions for the exercise of Share Appreciation Rights:

Subject to the restricted exercise periods and exercise arrangements stated above, the Share Appreciation Rights can be exercised upon satisfaction of the following conditions by the Company and the Grantees:

None of the following events occur to the Company:

(1) issuance of an adverse opinion or a disclaimer of opinion by a certified public accountant on financial and accounting reports for the most recent accounting year;

(2)administrative punishment by regulatory authorities due to major non-compliance of laws and regulations during the most recent year; and

(3) such other circumstances in which the Plan shall not be implemented, as determined by the Stock Exchange.

None of the following events occur to a Grantee:

• (1) being publicly denounced, or declared as an unqualified candidate by the Stock Exchange during the most recent three years;

• (2) administrative punishment by regulatory authorities due to major non-compliance of laws and regulations during the most recent three years; and

• (3) the result of the performance appraisal for the previous financial year before exercising being below "basically competent".

The following performance target level conditions are met:

First Transcription Period

The rate of cash return on net assets for the financial year ending 31 December 2021 shall not be lower than 11%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise; compared against the performance of the financial year ended 31 December 2020, the growth rate of net profit for the financial year ending 31 December 2021 shall not be lower than 16%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise or, the operating profit margin for the financial year ending 31 December 2021 shall not be lower than 8%.

Second Transcription Period

The rate of cash return on net assets for the financial year ending 31 December 2022 shall not be lower than 12%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise; compared against the performance of the financial year ended 31 December 2020, the growth rate of net profit for the financial year ending 31 December 2022 shall not be lower than 30%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise; the operating profit margin for the financial year ending 31 December 2022 shall not be lower than 9%.

Third Transcription Period

The rate of cash return on net assets for the financial year ending 31 December 2023 shall not be lower than 13%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise; compared against the performance of the financial year ended 31 December 2020, the growth rate of net profit for the financial year ending 31 December 2023 shall not be lower than 45%, and shall not be lower than the average industry level or the 75th percentile level of that of the benchmarking enterprise; the operating profit margin for the financial year ending 31 December 2023 shall not be lower than 10%.

Note 1: The rate of cash return on net assets refers to the annual

EBITDA value/weighted average return on net assets. EBITDA refers to the total profit plus financial expenses plus current depreciation and amortisation. The average industry level in relation to the rate of return on net assets refers to the arithmetic average of the corresponding annual performance indicators of the "Manufacturing of Non-ferrous Metal Smelting and Rolling Processing Industry" pursuant to the China Securities Regulatory Commission's industry classification. The average industry level in relation to the growth rate of net profit refers to the average net profit of the "Manufacturing of Non-ferrous Metal Smelting and Rolling Processing Industry" for the assessment year/the sum of the average net profit of the industry for the financial years ended 31 December 2019 and 2020/2) -1.

Note 2: If major changes occur in the principal business of listed companies in the same industry during the annual assessment process, the relevant samples shall be deleted or replaced by the Board in accordance with the authorisation of the general meeting of the Shareholders.

If a listed company in the same industry is involved in a major acquisition, the effect of such matters on the net profit of the listed company in the same industry shall be excluded.

If the above performance conditions are met, the Share Appreciation Rights exercisable during the relevant transcription period can be exercised in accordance with the following principles:

• (1) 100% of the Share Appreciation Rights for the relevant period shall be exercisable if the performance appraisal of such Grantee for the previous financial year is outstanding or competent;

• (2) 60% of the Share Appreciation Rights for the relevant period shall be exercisable, if the performance appraisal of such Grantee for the previous financial year is basically competent; and

• (3) all Share Appreciation Rights for the relevant period shall be cancelled if the performance appraisal of such Grantee for the previous financial year is below basically competent.

PROPOSED GRANTEES

• (1) Mr. Qi Xinhui, being an executive Director, general manager of the Company and the Company's deputy secretary of the Party Committee;

• (2) Mr. Yu Wenjiang, being the deputy general manager of the Company and the Company's secretary of the Party Committee;

• (3) Mr. Meng Guangzhi, being the Company's deputy secretary of the Party Committee and the secretary of the Commission for Discipline Inspection;

• (4) Mr. Dong Guoqing, being a member of the Party Committee and the deputy general manager of the Company;

• (5) Ӎ࣬йд • Ўɢ˝Ϩ , being a member of the Party Committee and the chairman of the labour union;

• (6) Mr. Zhu Lingxiao, being a member of the Party Committee and the deputy general manager of the Company;

• (7) Mr. Li Jiangping, being a member of the Party Committee;

• (8) Mr. He Hongfeng, being the chief financial officer of the Company;

• (9) Mr. Li Zhenzhen, being joint company secretary of the Company; and

• (10) Mr. Guo Zhenhai, being a secretary of the Party Committee and a general manager of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (11) Mr. Jiang Xiao, being a deputy secretary of the Party Committee and the secretary of the Commission for Discipline Inspection of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (12) Mr. Wang Xiao, being a deputy general manager of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (13) Mr. Liu Dongfeng, being a deputy general manager and the chairman of the labour union of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (14) Mr. Pan Yuzhong, being a deputy general manager of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (15) Mr. Han Yubao, being a deputy general manager of Xinjiang Yakesi Resources Co., Ltd., a subsidiary of the Company;

• (16) Mr. Yang Wei, being a deputy secretary of the Party Committee and a general manager of Hami Hexin Mining Company Limited, a joint venture of the Company;

• (17) Mr. Li Mingyu, being a deputy general manager of Hami Hexin Mining Company Limited, a joint venture of the Company;

• (18) Mr. Du Zhifeng, being a secretary of the Party Committee and a deputy plant manager of the Fukang Refinery, a subsidiary of the Company;

• (19) ˝۞൯౤ဏ • ˝༺Ϩ , being a deputy secretary of the Party Committee and the secretary of the Commission for Discipline Inspection of the Fukang Refinery, a subsidiary of the Company;

• (20) Mr. Wang Chunhai, being a deputy plant manager and the chairman of the labour union of the Fukang Refinery, a subsidiary of the Company;

• (21) Mr. Ma Yuxin, being the chief engineer of the Fukang Refinery, a subsidiary of the Company;

• (22) Mr. Zhang Yufei, being the deputy plant manager of the Fukang Refinery, a subsidiary of the Company;

• (23) Mr. Liu Qingli, being the deputy secretary of the Party Committee and the secretary of the Commission for Discipline Inspection of Xinjiang Kalatongke Mining Industry Company Limited, a subsidiary of the Company;

• (24) Mr. Zhao Jingbo, being the deputy general manager of Xinjiang Kalatongke Mining Industry Company Limited, a subsidiary of the Company;

• (25) Mr. Chen Yin, being the deputy general manager of Xinjiang Kalatongke Mining Industry Company Limited, a subsidiary of the Company;

• (26) Mr. Xiao Yuwu, being the chairman of the labour union of Xinjiang Kalatongke Mining Industry Company Limited, a subsidiary of the Company; and

• (27) core personnel of the Company, with a total of not exceeding 154 personnel.

In summary, the total number of Grantees under the Plan is not more than 180 personnel, details are as follows:

Approximate	Approximate
proportion of	proportion
Share	of underlying
Appreciation	shares under
Rights to	the Share
be granted to	Appreciation
such Grantee(s)	Rights to be
to the total	granted to such
Number	number of Share	Grantee(s) to
of the Share	Appreciation	the total
Number of	Appreciation	Rights to be	issued share
Name/Category	Participant(s)	Rights to be	granted pursuant	capital of the
of Grantee	involved	granted	to the plan	Company
(in 10,000
shares)
Mr. Qi Xinhui	1	150	2.27%	0.07%
Mr. Yu Wenjiang	1	150	2.27%	0.07%
Mr. Meng Guangzhi	1	120	1.82%	0.05%
Mr. Dong Guoqing	1	120	1.82%	0.05%
Ӎ࣬йд • Ўɢ˝Ϩ	1	120	1.82%	0.05%
Mr. Zhu Lingxiao	1	120	1.82%	0.05%
Mr. Li Jiangping	1	120	1.82%	0.05%
Mr. He Hongfeng	1	128	1.94%	0.06%
Mr. Li zhenzhen	1	90	1.36%	0.04%
Mr. Guo Zhenhai	1	112.5	1.70%	0.05%
Mr. Jiang Xiao	1	90	1.36%	0.04%
Mr. Wang Xiao	1	90	1.36%	0.04%
Mr. Liu Dongfeng	1	90	1.36%	0.04%
Approximate	Approximate
proportion of	proportion
Share	of underlying
Appreciation	shares under
Rights to	the Share
be granted to	Appreciation
such Grantee(s)	Rights to be
to the total	granted to such
Number	number of Share	Grantee(s) to
of the Share	Appreciation	the total
Number of	Appreciation	Rights to be	issued share
Name/Category	Participant(s)	Rights to be	granted pursuant	capital of the
of Grantee	involved	granted	to the plan	Company
(in 10,000
shares)
Mr. Pan Yuzhong	1	90	1.36%	0.04%
Mr. Han Yubao	1	90	1.36%	0.04%
Mr. Yang Wei	1	97.5	1.48%	0.04%
Mr. Li Mingyu	1	78	1.18%	0.04%
Mr. Du Zhifeng	1	105	1.59%	0.05%
˝۞൯౤ဏ • ˝༺Ϩ	1	84	1.27%	0.04%
Mr. Wang Chunhai	1	84	1.27%	0.04%
Mr. Ma Yuxin	1	84	1.27%	0.04%
Mr. Zhang Yufei	1	84	1.27%	0.04%
Mr. Liu Qingli	1	101.25	1.53%	0.05%
Mr. Zhao Jingbo	1	90	1.36%	0.04%
Mr. Chen Yin	1	101.25	1.53%	0.05%
Mr. Xiao Yuwu	1	90	1.36%	0.04%
Core personnels	154	3,920.5	59.40%	1.77%
Total	180	6,600	100%	2.99%

The expected return of the equity incentive granted to each Grantee shall be limited to within 40% of the total annual salary level of such Grantee at the time of the Grant.

The Company will issue further announcement when the Share Appreciation Rights are officially granted.

Reasons for the adoption of the plan

In order to improve a sound incentive and constraint mechanism, and effectively stimulate the management and core team, the Company formulated the Plan in accordance with the Provisional Measures on Implementation of Equity Incentive Schemes by State-Controlled (Overseas) Listed Companies (Guo Zi Wei Fen Pei [2006]

No.8)( ਷Ϟછٰɪ̹ʮ̡€ྤ̮ྼٰ݄ᛆዧᎸ༊Б፬ج'਷༟೯ʱৣ [2006]8

໮and the "Working Guidelines for the Implementation of Equity Incentive by Listed Companies Controlled by Central Enterprises" ( ʕ̯Άุછٰɪ̹ʮ̡ྼٰ݄ ᛆዧᎸʈЪܸˏ' (Guo Zi Kao Fen [2020] No. 178) of the SASAC, Listing Rules and other relevant laws and regulations.

The Company expects to:

• (1) form a mechanism for benefit and risk sharing among Shareholders, the Company and employees;

• (2) fully mobilise the enthusiasm of senior management and core personnels of the Company; and

• (3) attract and retain excellent management and business personnel to ensure the long-term development of the Company.

The Board believes that the proposed terms and conditions of the Plan are fair and reasonable and are in the interests of the Company and Shareholders as a whole.

GENERAL INFORMATION

The Plan will be submitted to the general meeting of the Shareholders as an ordinary resolution for Shareholders' review and approval. The Company will despatch, among other things, a circular containing details of the Plan as soon as practicable.

The Plan is drafted in Chinese and the English version is an unofficial translation and for reference only. In case of any discrepancy between the Chinese and the English versions, the Chinese version shall prevail.

The Board hereby emphasises that the Plan is subject to the approval of the SASAC and the general meeting of the Shareholders, and the fulfillment of the conditions of the Grant. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms and expressions have the meanings set forth below:

"Board"	the board of Directors
"Company"	Xinjiang Xinxin Mining Industry Co., Ltd.*
"Director(s)"	director(s) of the Company
"Grant"	grant of Share Appreciation Rights to the Participants
pursuant to the Plan
"Grantees"	person(s) who is (are) proposed to be granted the Share
Appreciation Rights pursuant to the Plan
"Grant Date"	the date of grant of Share Appreciation Rights to the
Participants pursuant to the Plan
"H Share(s)"	overseas listed foreign share (s) in the ordinary share capital
of the Company with a nominal value of RMB0.25 each
subscribed for and traded in Hong Kong dollars and listed on
the Stock Exchange
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"Participant(s)"	person(s) who is/(are) eligible to receive the Share
Appreciation Rights pursuant to the Plan
"Plan"	the H share appreciation rights incentive plan of the Company
"PRC"	the People's Republic of China, excluding, for the purpose
of this announcement only, Hong Kong, Macau Special
Administrative Region of the PRC and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"SASAC"	State-owned Assets Supervision and Administration
Commission of Xinjiang Uyghur Autonomous Region

"Share Appreciation

Right(s)"

the H share appreciation right(s) under the Plan, entitling a Grantee to obtain a virtual right to enjoy the gains from the appreciation of the H shares without actually trading the shares of the Company, for each Share Appreciation Right, a Grantee has the right to receive cash payments for the difference between the closing price at the exercise date over the exercise price per H share of the Company, subject to the satisfaction of the exercise conditions and the exercise arrangement

"Shareholder(s)"

shareholder(s) of the Company

"Stock Exchange"

The Stock Exchange of Hong Kong Limited

By Order of the Board

Xinjiang Xinxin Mining Industry Co., Ltd.*

Li Zhen Zhen, Lam Cheuk Fai

Joint Company Secretaries

Xinjiang, the PRC 26 March 2021

As at the date of this announcement, the executive Director is Mr. Qi Xinhui; the non-executive Directors are Mr. Zhang Guohua, Mr. Zhou Chuanyou, Mr. Guo Quan and Mr. Hu Chengye; and the independent non-executive Directors are Mr. Hu Benyuan, Mr. Wang Qingming and Mr. Lee Tao Wai.

* For identification purpose only