PART C

INFORMATION OF FULL PROFIT INVESTMENTS LIMITED

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SCHEDULE 2

VENDOR’S WARRANTIES

The Vendor hereby warrants and represents to and undertakes with the Purchaser that each of the following statements is now and will on Completion be true and accurate:

1.

Financial and Taxation

1.1

The Completion Accounts give a true view of the state of affairs of the Group as at 31 October 2016 and of its loss for the ten months ended 31 October 2016, and make proper provision for all actual liabilities, bad or doubtful debts, taxation and proper provision for or a note of (in accordance with good accounting practice) all contingent unqualified or disputed liabilities and all capital commitments and have consistently applied the bases and policies of accounting in the unaudited balance sheet and statement of operations for the period to which the Completion Accounts have been made up and except where specified are not affected by any extraordinary exceptional or non-recurring item.  Save as set out in the Completion Accounts, the Group does not have any contingent or other liabilities.

1.2

The provision for taxation in the Completion Accounts is sufficient to cover all taxation assessed or liable to be assessed on the Group or for which the Group is then or may then be or become accountable in respect of profits, income earnings, receipts, transfers, events and transactions up to the relevant dates on which such accounts have been made up.

1.3

Antay Company has duly complied and will until Completion continue duly to comply with its obligations to account to Bolivia tax authorities and all other authorities for all amounts for which it is or may become accountable in respect of taxation.

1.4

All returns, computation and payments in connection with taxation that should have been made by a member of the Group have been made currently and on a proper basis and will until Completion continue to be so made.

1.5

Each member of the Group has duly and punctually paid all taxation which it has become liable to pay and is under no liability to pay any penalty or interest in connection with any claim for taxation.

1.6

Each of the members of the Group has fully and punctually paid all taxes, duties and levies as the same became due and payable and none of the members of the Group is or is likely to be subject to any tax penalties.

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1.7

Each member of the Group has exercised its reasonable endeavours to preserve and secure all tax benefits and refunds.

1.8

All assets of the Group of a wasting or depreciable nature are stated in the Completion Accounts after deduction of depreciation, and such depreciation being in amounts sufficient to write down such assets over their respective expected useful economic lives, and unless stated to the contrary in the Completion Accounts, depreciation is calculated on a straight line basis and a consistent depreciation policy has been adopted over all assets and there has been no change in the basis and policy of depreciation.

1.9

All accounting records, vouchers, invoices, ledgers, contracts and memoranda and all other accounting documents of each Group Company and records of all transactions thereof are in the possession of the relevant Group Company respectively and have been properly written up, kept and maintained in accordance with generally accepted accounting practice and together shows a true and fair view of the affairs and financial position of each of the Group Company.

1.10

A consistent accounting policy has been adopted by each member of the Group and there has been no material change thereof.

1.11

No member of the Group holds any security (including any guarantee or indemnity) which is not valid and enforceable against the grantor thereof in accordance with its terms.

1.12

In relation to all financing arrangements to which any member of the Group is a  party:

(a)

there has been no contravention of or non-compliance with any provision of any such document;

(b)

no steps for the enforcement of any encumbrances have been taken or threatened;

(c)

there has not been any alteration in the terms and conditions of any of the said arrangements or facilities, all of which are in full force and effect; and

(d)

nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced.

1.13

 The total amount borrowed by each member of the Group:

(a)

from its bankers does not exceed its overdraft facilities; and

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(b)

from whatsoever source does not exceed any limitation on borrowing contained in its constitutive documents or any other deed or document binding on it.

2.

  Assets

2.1

The assets of the Group are solely the property of the Group and are not subject to any encumbrance or any agreement to give or create any encumbrance including any bill of sale, hire or hire purchase agreement, conditional sale, credit sale or similar agreement.

2.2

Save for disposals in the ordinary course of its business, the assets of each member of the Group have been in the possession of, or under the control of, the Group.

2.3

The plant, machinery, vehicles and other equipment used in connection with the business of the Group are in a good and safe state of repair and condition and satisfactory working order and have been regularly and properly maintained.

2.4

The Group Companies’ stock-in-trade, stocks of raw materials, packaging materials and finished goods now held are not excessive and are adequate and in relation to the current trading requirements of the business of the Group and none of the stocks is at obsolete, show moving or inappropriate in relation to the current business of the Group; all such stock-in-trade is in good condition and capable of being sold by the relevant Group Company in the ordinary course of its business in accordance with its current price lists without rebate or allowance to a purchaser.

2.5

No Group Company has created or granted or agreed to create or grant any security interest or other encumbrance in respect of any of its fixed assets included in the Accounts, or acquired since 31 October 2016 and none of such assets is the subject of any hire-purchase, leasing (where assets are leased to the Group Company), conditional sale or credit sale agreement.

3.

Litigation

No Group Company is engaged in (nor is any director in relation to the affairs of any Group Company engaged in) any legal proceedings (including litigation, arbitration and prosecution) and no such proceedings are pending or threatened, nor are there any facts likely to give rise to such proceedings known or which would on reasonable enquiry be known to any Group Company or their respective directors.

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4.

Company records

4.1

Each Group Company has kept and duly made up all requisite books of account (reflecting in accordance with good accounting principles all the financial transactions of the relevant Group Company), minute books, registers, records and these and all other deeds and documents (properly stamped where necessary) belonging to or which ought to be in the possession of a Group Company and its seal are in the possession of the relevant Group Company or the lender(s) to the Group Company concerned (where such documents form part of the loan or security documents for loans made to the Group or documents required to be delivered under such loan or security documents).

4.2

All accounts, books, ledgers, and other financial records of each Group Company:

(a)

have been properly maintained, are in the possession of the Company and contain due and accurate records of all matters required by law to be entered therein;

(b)

do not contain or reflect any material inaccuracies or discrepancies; and

(c)

give and reflect a true and fair view of the matters which ought to appear therein and no notice or allegation that any of the same is incorrect has been received, or if the relevant Group Company has received such notice or allegation, the incorrectness or errors have been rectified.

4.3

Without prejudice to the generality of paragraph 4.1 , the minute book of directors’ meetings and the minute book of shareholders' meetings respectively of each Group Company contain full and accurate records of all resolutions passed by the directors and the shareholders of the Group Company concerned and no resolutions have been passed by either the directors or shareholders of the Group Company concerned which are not recorded in the relevant minute books.

4.4

All documents requiring to be filed with the relevant authority or to be filed with or approved by the relevant government authorities in BVI and Bolivia (as the case may be) by each member of the Group have been properly made up, presented, filed and/or approved.

4.5

The register of members (if applicable) of each Group Company is correct, there has been no notice of any proceedings to rectify such register, and there are no circumstances which might lead to any application for its rectification.

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5.

  Properties

5.1

The particulars of all the properties (“Properties”) owned by the Group Company and/or any interest in land leased by the Group Company, and as at Completion are true and accurate and the Group Company has no other land or property of any tenure or any other interest in land, in Bolivia or elsewhere.

5.2

Construction of the Plant has been completed in accordance with the relevant construction contract and the plans and in compliance with all relevant authorisations, licenses, approvals, consents and other documents and all relevant departments of Bolivia.  The title to the Plant is good and legally and beneficially solely owned by Antay Company free from all Encumbrances and any other third party rights or interests of whatever nature and for a period of not less than the period for the Land.  Save and except the building certificate of the Plant, Antay Company has obtained all relevant title documents in respect thereof issued in the name of Antay Company with its interest duly registered at the relevant Bolivia governmental and regulatory authorities and such title documents shall be valid and subsisting and in full force and effect.  The building certificate of the Plant will be obtained within 12 months from the date of this Agreement.

5.3

The Properties

(a)

are not subject to any easements, covenants, obligations, restrictions or conditions which are of an unusual or onerous nature or which would affect the use or proposed use or continued use of the Properties by Antay Company for the purpose as an industrial plant;

(b)

do not enjoy any right easement or privilege, the withdrawal or cessation of which would adversely affect the use or proposed or continued use of which by Antay Company for the purpose set out in paragraph 5.3(a) above; or

(c)

the Properties are not likely to be affected by any of the following matters:

(i)

any closing order, demolition order or clearance order;

(ii)

any outstanding notice issued under any applicable law, statute, regulation, decree, order or legislation;

(iii)

any order or proposal publicly advertised or of which written notice has been received for the compulsory acquisition or requisition of the whole or any part thereof or the discontinuance of any use or proposed use or the removal of any building; or

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(iv)

any agreement with any public body or authority regulating the use or development or proposed use or development thereof nor is the Vendor aware of any intention on the part of the relevant government or regulatory authorities to issue such order or notice or any matter which may give rise to the issue of such order or notice.

5.4

All construction or development scheme and commencement of construction or development of such scheme in relation to the Properties have been approved by all the relevant governmental and regulatory authorities without payment of any additional land premium, fees or charges (other than usual and nominal application and/or handling charges) and without any onerous terms and conditions or undue delay.

5.5

The Plant is free from any mortgage, charge, lien, lease, encumbrance or any other third party rights and no agreement has been entered into in respect of any of the foregoing and Antay Company shall be entitled to transfer, mortgage, lease or dispose of the Plant without further authorisation or approval or other action by any governmental authority or other regulatory body or payment of any land costs (including but not limited to any premium or purchase moneys or other money) other than normal outgoings.

5.6

None of Bolivia government nor any competent authority has issued any notice or order which may adversely affect the right to use or the proposed use of the Properties for the purpose for which it is currently contemplated.

5.7

All requisite approvals, consents, permits, certificates of compliance, occupation permits and licenses necessary for the use of the Land as they are currently contemplated have been duly obtained and are in full force, validity and effect and there are no circumstances known or which would on reasonable enquiry be known to the Vendor which are likely to result in the forfeiture, avoidance, withdrawal or non-renewal of or restriction on or amendment to the same.

5.8

Save and except the building certificate of the Plant, all requisite approvals, consents, permits, certificates of compliance, occupation permits and licences necessary for the use of the Plant as they are currently contemplated will be duly obtained and are in full force, validity and effect and there are no circumstances known or which would on reasonable enquiry be known to the Vendor which are likely to result in the forfeiture, avoidance, withdrawal or non-renewal of or restriction on or amendment to the same.

5.9

There has been and will be no change in the terms and conditions of the title documents applicable to the Properties as a result of the transfer of the Sale Interests, which are all in full force, validity and effect.

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5.10

No default (or event which with notice or lapse of time or both will constitute a default) has occurred or is continuing under the title documents applicable to the Properties and no breach of any Bolivia laws, rules, regulations, guidelines, notices, circulars, orders, judgments, decrees or rulings of any court, government, governmental or regulatory authorities has been committed in respect of the use occupation and enjoyment of the Properties;

5.11

All covenants, obligations, stipulations, restrictions, terms and conditions affecting the Properties have been observed, performed and complied with in all respects and all outgoings of whatever nature in respect of the Properties have been duly paid; and

5.12

There is no breach of any applicable statute, regulation, decree, order or legislation as to fire precautions or public health with which the Properties are obliged to comply or any regulations with respect to the health and safety of persons working in or about the Properties.

5.13

All applicable legislation, statutory requirements, governmental or other orders, rules, directives, instruments affecting or pertaining to the use, occupation or enjoyment of the Land has been complied with in all material respects.

5.14

All applicable legislation, statutory requirements, governmental or other orders, rules, directives, instruments affecting or pertaining to the use, occupation or enjoyment of the Plant has been complied with in all material respects.

5.15

Neither the Company, Antay Company or the Vendor has received or, having made all due and careful enquiries, is aware of any notice of breach of any covenants, restrictions, stipulations, conditions and other terms affecting the Properties or is aware of any circumstances which would entitle or require any person to exercise any powers of entry and taking possession or which would otherwise terminate or restrict the possession or occupation of the Properties.

5.16

No notice, whether formal or informal, has been served or any notice of a similar nature the implementation of which would affect the occupation or enjoyment of the Properties.

5.17

All the land user’s covenants contained in the title documents applicable to the Properties have been duly performed and observed to the extent that such obligations have fallen due.

5.18

Antay Company is entitled to and has exclusive vacant possession of the Properties and no part of the Properties is subject to any lease, tenancy or licence or any agreement to grant such lease, tenancy or licence and no person other than a Group Company has a right to occupy or enter upon any of the Properties.

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5.19

Pending Completion, none of the Company and Antay Company will transfer, sell, assign or otherwise dispose of the Properties or any part thereof or any interest therein or sub-divide, lease, or in any other way deal with or part with the possession of or make any arrangement for the sharing of any of the Properties or any part thereof or any interest therein or enter into any agreement so to do without the prior written consent of the Purchaser.

5.20

There is no outstanding monetary claim or liability, contingent or otherwise, affecting the Properties;

5.21

The Properties are not subject to the payment of any outgoings other than the usual rent and rates and other normal outgoings

5.22

There is no dispute in relation to the Properties with any governmental or local authority, superior lessor, tenant or licensee or with the owner or occupier of any adjoining or neighbouring property or any other party, and there are no circumstances known to the Vendor, having made all due and careful enquiries, likely to give rise to any such dispute.

5.23

The use or proposed use of the Properties is the lawful permitted use and is in compliance with the provisions, covenants, terms and conditions of any conditions and any regulations in force relating to the Properties and no person has violated any laws or regulations of Bolivia relating to land or construction in Bolivia.

5.24

The Properties are not subject to any notice or order given by any Bolivia governmental or other authority which would adversely affect the Properties or any part thereof and the Vendor is not aware of any facts, matters or any notice or order served by any governmental or other authority which may adversely affect the right of the Group to use the Properties for the purpose as an industrial factory.

5.25

The Vendor is not aware of any matter or things which materially and adversely affect the Properties or which may subject the owner or occupier thereof to any material charge or liability or which should be revealed to the Purchaser.

5.26

There is no obligation to reinstate the Properties by removing or dismantling any alteration made to it by the Company or Antay Company or any other person.

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5.27

Any land costs, including but not limited to any premium, purchase moneys, land use management and construction fees, rent, levies, charges, duties, taxes and imposts or other money payable relating to the Properties has been paid in full and the covenants terms and conditions relating to any part of the Properties have been paid, observed and performed in accordance with the terms of such covenants terms and conditions in all material respects, and no amount is due or payable by any Group Company or any other person in respect of the Properties.

5.28

The construction or development scheme and commencement of construction or of such scheme in relation to the Plant have been approved by all the relevant governmental and regulatory authorities without payment of any additional land premium, fees or charges (other than usual and nominal application and/or handling charges) and without any onerous terms and conditions or undue delay. Construction of the Plant has been completed and the Plant is in good condition and fit for use and occupation as an industrial factory in accordance with the Construction Contract and the Plans and in compliance with all relevant authorisations, licenses, approvals, consents and other documents and all relevant departments of Bolivia and all relevant approvals, consents, permits, certificates of compliance, occupation permits, and/or licence(s) for commencing operation of the Plant has been issued by the applicable Bolivia governmental and regulatory authorities.

5.29

There is no unauthorised or illegal structure or alteration erected or constructed or in the process of being erected or constructed in the Properties or any part thereof.

5.30

The Properties have at all material times been and are at the date hereof fully insured to their full replacement value against fire and other risks normally insured against by companies carrying on similar businesses or owning property of a similar nature to those of the member of the Group and each of the member of the Group has at all material times been and is at the date of this Agreement adequately covered against all legal liability and risks normally insured against by such companies.

5.31

All premiums due on the insurance policies have been duly paid and all such policies are valid and in force and (so far as the Vendor is aware) there are no circumstances which might lead to any liability under such insurance being avoided by the insurers or the premiums being increased and there is no claim outstanding under such policy nor is the Vendor aware of any circumstances likely to give rise to a claim or cause an application for renewal of such policy to be refused.

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5.32

Save and except the Properties, the Group does not have any leased or owned properties.

6.

Intellectual property rights

6.1

All trademarks, designs, copyrights, knowhow, technologies, business names and other intellectual property rights used and proposed to be used by each of the Group Company in connection with their respective businesses are vested in and beneficially owned by the Group and is not used, claimed or opposed by any other person and either (i) are registered in their names as sole proprietor(s); or (ii) are in their sole beneficial ownership; or (iii) are used under valid licenses granted by the proprietor(s) or beneficial owner(s) thereof and such licenses are in force and have not been revoked or terminated and, in each case, no license or registered user or other right has been granted or agreed to be granted to any third party in respect thereof.

6.2

The business of each Group Company as now carried on do not, and are not likely to, infringe any intellectual or industrial property right of any other person (or would not do so if the same were valid) and all licenses to any Group Company in respect of such protection are in full force and effect.  The Vendor or the Group has not received any claims from any third parties alleging the operations or business of any of the Group Companies have infringed the intellectual property rights held or owned by such third parties; and no claims have been made and no applications are pending which if pursued or granted may materially and adversely affect the relevant Group Company or its business.

6.3

No Group Company has (otherwise than in the ordinary and normal course of business) disclosed, or permitted to be disclosed, or undertaken or arranged to disclose, to any person other than the Purchaser any of its know-how, trade secrets, confidential information, price lists or lists of customers or suppliers.

7.

The Group and the law

7.1

Each of the Group Companies has conducted its business in all material respects in accordance with all applicable laws and regulations in the jurisdictions that it was incorporated or established respectively and there is no order, decree or judgment of any court or any governmental agency in the jurisdictions that it was incorporated or established respectively or outstanding against the Group or which may have a material adverse effect upon the assets or business of any member of the Group.

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7.2

Save as safe production permit and environmental protection certification which will be granted to the Group Company on or before September 30, 2008, all necessary licenses, consents, registrations, authorities, permits and authorities (public and private) have been obtained by each member of the Group to enable each member of the Group to commence commercial production of the smelting facilities, to carry on its business effectively in the places and in the manner in which such business is now carried on and to comply with all applicable environmental, public health and safety and employee health and safety laws and regulations and all such licenses, consents, permits and authorities are valid and subsisting and the Vendor knows of no reason why any of them should be suspended, cancelled or revoked or should not be renewed or reissued upon or prior to their expiry.

7.3

Neither any Group Company nor any of their officers, agents or employees (during the course of their duties in relation to the Company) have committed, or omitted to do, any act or thing the commission or omission of which is, or could be, in contravention of any ordinance, order, regulation, enactment, statute or the like in Bolivia, or elsewhere which is punishable by fine or other penalty.

7.4

No order has been made or petition presented or resolution passed for the winding up of any member of the Group, nor has any distress, execution or other process been levied against any member of the Group.

7.5

The Group Companies have complied with all applicable environmental, public health and safety and employee health and safety laws and regulations.

8.

The business

8.1

There is not now outstanding any contract or arrangement to which any Group Company is a party and in which the Vendor, or any director of any Group Company, is nor has been interested, whether directly or indirectly.

8.2

Since 31 October 2016:

(a)

each of the Group Companies has carried on its business in the ordinary and usual course and without having entered into any material transaction, assumed any material liability or made any material payment not provided for in the Completion Accounts which is not in the ordinary course of its business or suffered any material adverse interruption or alteration in the nature, scope or manner of its business;

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(b)

each of the Group Companies has paid its creditors within the time agreed with such creditors and there are not debts outstanding by the Company which have been due for more than six months;

(c)

none of the Group Companies has entered into, or agreed to enter into, any capital commitments;

(d)

no share or loan capital has been issued or agreed to be issued by the respective companies;

(e)

no distribution of capital or income has been declared, made or paid in respect of any share capital of any Group Company and (excluding fluctuations in overdrawn current accounts with bankers) no loan or loan capital of any Group Company has been repaid in whole or part or has become liable to be repaid; and

(f)

no unusual trade discounts or other special terms have been incorporated into any contract entered by any of the Group Companies inconsistent with the previous practice of the Group.

8.3

No one is entitled to receive from any Group Company any founder’s fee, brokerage, or other commission in connection with the purchase of the Sale Interests.

8.4

The acquisition of the Sale Interests by the Purchaser and compliance with the terms of this Agreement will not:

(a)

cause any Group Company to lose the benefit of any right or privilege it presently enjoys or cause any person who normally does business with the Group not to continue to do so on the same basis as previously;

(b)

relieve any person of any obligation to the Group (whether contractual or otherwise) or enable any person to determine any such obligation or any right or benefit enjoyed by the Group or to exercise any right whether under an agreement with or otherwise in respect of any of them;

(c)

result in any present or future indebtedness of the Group becoming due or capable of being declared due and payable prior to its stated maturity;

(d)

give rise to or cause to become exercisable any right of pre-emption;

(e)

adversely affect the Group’s relationships with its clients, customers, suppliers or employees;

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(f)

result in any revocation or suspension of any licenses permit or consent held by or granted to any member of the Group; or

(g)

the termination of any contract to which any member of the Group is a party.

9.

The Group’s contracts

9.1

All documents to which the Company and any other Group Company is a party and other documents owned by or which ought to be in the possession of the Group have been properly stamped (if required) and are in the Group's possession and true and complete copies thereof have been delivered to the Purchaser’s agents.

9.2

No Group Company is a party to any agreement, transaction, obligation, commitment, understanding, arrangement or liability which:

(a)

is incapable of complete performance in accordance with its terms within six months after the date on which it was entered into or undertaken;

(b)

is known or is likely to result in a loss to the Group on completion of performance;

(c)

cannot readily be fulfilled or performed by the member of the Group on time without undue or unusual expenditure of money and effort;

(d)

involves or is likely to involve obligations, restrictions, expenditure or receipts of an unusual, onerous or exceptional nature;

(e)

is a lease or a contract for hire or rent, hire purchase or purchase by way of credit sale or periodical payment;

(f)

is a contract with any trade union or body or organisation representing the Company's employees;

(g)

requires an aggregate consideration payable by the Company in excess of USD100,000;

(h)

is a contract for services (other than normal office services);

(i)

requires the Company or any of its subsidiaries to pay any commission, founders’ fee, royalty or the like;

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(j)

in any way restricts the Group’s freedom to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit; or

(k)

is in any way otherwise than in the ordinary and proper course of the Group’s business.

9.3

No Group Company is a party to any agreement under which the Group Company or any other party is in default, being a default which is material in relation to the financial or trading position or prospects of the Group nor are there any circumstances likely to give rise to such a default.

9.4

Save and except the Shareholder’s Loan in the amount of USD1,441,129 and the amounts due to related companies as disclosed in the Completion Accounts, there is no outstanding indebtedness or other liability (actual or contingent) owing by any Group Company to the Vendor or its associates, or any director of a Group Company or any person connected with the Vendor or with any such director nor is there any indebtedness owing to a Group Company by any such person nor has any person given any guarantee of or security for any overdraft, loan or loan facility granted to the Company or a subsidiary of the Company.

9.5

There are in force no powers of attorney given by a Group Company.  No person, as agent or otherwise, is entitled or authorised to bind or commit a member of the Group to any obligation not in the ordinary course of the Group’s business.

10.

The Group and its bankers

10.1

The total amount borrowed by the Group from its bankers does not exceed any limits granted under any relevant facilities and the total amount borrowed by any Group Company from whatsoever source does not exceed any limitation on its borrowing power contained in its articles of association, or other corporate documents or in any debenture or loan stock deed or other instrument.

10.2

None of the Vendor or any Group Company has done anything whereby the continuance in full force and effect of any overdrafts, loans or finance facilities extended to the Group might be affected or prejudiced.

11.

The Group and its employees

11.1

There is no outstanding contract of service between the Group and any of its directors, officers or employees which is not terminable by the Group without compensation by three months’ notice given at any time and there are no claims pending or threatened, or capable of arising against any member of the Group, by any employee or third party, in respect of any accident or injury not fully covered by the insurance.

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11.2

As regards any scheme which the Group is or may become obliged to join or subscribe under any applicable law or regulations, there is no scheme or fund in respect of retirement, pension, health insurance, housing, bonus, incentive, share option or other benefits to directors, officers, staff, employees or any other party to which any of the members of the Group is a party or in respect of which there is any obligation or liability, present or future, actual or contingent.

12.

Investments, associations and branches

12.1

The Company is not the holder or beneficial owner of and has not agreed to acquire any class of shares or other capital of any other company or corporation (whether established or incorporated in Bolivia or elsewhere) other than Easy Gain Investments Limited, Full Profit Investments Limited, and Antay Company.

12.2

100% of the equity interests of the Antay Company are directly and wholly owned by the Company and is free from any liens, charges, equities, encumbrances or interests in favour of any other person.

12.3

No Group Company is or has agreed to become a member of any partnership, joint venture, consortium or other unincorporated association. None of the Group Companies has granted any right to call for the issue of or agreed to issue at any time after Completion any share or loan or registered capital.  And that none of the members of the Group is under any contract, options, warrants or any other obligations regarding any part of its capital, issued or unissued, or for the issue of any shares, debentures, warrants, options, or other similar securities or has agreed to acquire any share or interest or loan capital in any company.

13.

Insurance

13.1

The Group has maintained insurance covers in respect of all risks and up to an extent that may reasonably be expected of a prudent businessman operating a business similar to that of the Group.

13.2

All insurance policies taken out by the Group are valid, binding, in full force and effect and not voidable.  There are no circumstances which might lead to any liability under any such insurance policies being avoided by the insurers or the premiums being increased and there is no claim outstanding under any such policy nor are there any circumstances likely to give rise to a claim.

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14.

Events since 31 October 2016

14.1

Since 31 October 2016,

(a)

there has been no material adverse change in the financial condition or prospects of any of the members of the Group and each of the members of the Group has entered into transactions and incurred liabilities only in the ordinary course of business;

(b)

no resolution of any of the members of the Group in general meeting has been passed other than resolutions relating to the business of an annual general meeting which was not special business;

(c)

no Group Company has declared, paid or made or is proposing to declare, pay or make any dividend or other distribution;

(d)

the financial year end of each of the members of the Group has continued to be and has not changed from 31 December;

(e)

no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness prior to its normal maturity date;

(f)

the business of each of the members of the Group has been carried on in the ordinary and usual course and in the same manner (including nature and scope) as in the past, no fixed asset or stock has been written up nor any debt written off, no stock has notionally depreciated, become obsolete or lost value and no material change has occurred in the level of stock and no unusual or abnormal contract has been entered into by any of the members of the Group;

(g)

save and except the acquisition of the Antay Company by the Company, no asset of any of the members of the Group has been acquired or disposed of, or has been agreed to be acquired or disposed of, otherwise than in the ordinary course of business and there has been no disposal or parting with possession of any of its property, assets (including know-how) or stock in trade or any payments by any of the members of the Group, and no contract involving expenditure by it on capital account has been entered into by any of the members of the Group, and no liability has been created or has otherwise arisen (other than in the ordinary course of business as previously carried on);

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(h)

there has been no disposal of any asset (including stock) or supply of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any property whether tangible or intangible) in circumstances where the consideration actually received or receivable for such disposal or supply was less than the consideration which could be deemed to have been received for taxation purposes;

(i)

no event has occurred which gives rise to a taxation liability to any of the members of the Group or deemed (as opposed to actual) income, profits or gains or which results in the relevant company becoming liable to pay or bear a tax liability directly or primarily chargeable against or attributable to another person, firm or company;

(j)

no remuneration (including bonuses) or benefit payable to any officer or employee of any of the members of the Group has been increased nor has any of the members of the Group undertaken any obligation to increase any such remuneration at any future date with or without retrospective effect; and

(k)

such book debts shown in the Completion Accounts and all other book debts arising since such time which have been realised since 31 October 2016 have been realised at amounts not less than those shown in the Completion Accounts or, in the case of subsequently arising book debts, their face amount, and no indication has been received that any debt now owing to any of the companies is bad or doubtful.

15.

General

15.1

All information contained in this Agreement (including the matters stated in the Recitals and Schedules) or in the documents referred to herein and therein and all other information concerning the Group and/or any part or parts of its business operations assets and liabilities (actual or contingent) supplied in the course of the negotiations leading to this Agreement to the Purchaser or the Purchaser’s agents was when given true, complete and accurate in all respects and there is no fact or matter which has not been disclosed which renders any such information or documents untrue, inaccurate or misleading at the date of this Agreement or which if disclosed might reasonably be expected to influence adversely the Purchaser’s decision to purchase the Sale Interests on the terms of this Agreement.

15.2

The Vendor has full power, capacity and right to enter into and perform its obligations under this Agreement without any further sanction or consent by any other parties and has taken all necessary actions to authorise the execution and completion of this Agreement by it and the performance of its obligations hereunder. This Agreement will, when executed, constitute legal, valid and binding obligations on the Vendor in accordance with its terms.

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EXECUTION PAGE

AS WITNESS the parties hereto have executed this Agreement the day and year first above written.

THE VENDOR

SIGNED by Li Feilie

)

)

for and on behalf of

)

)

FEISHANG HESHENG INVESTMENT LIMITED

)

)

in the presence of:  Hu Longxiu

)

PURCHASER

SIGNED by Wong Wah On Edward

)

)

for and on behalf of

)

)

CHINA NATURAL RESOURCES, INC.

)

)

in the presence of:  Yue Ming Wai Bonaventure

)

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