PERE.L Regulatory News (PERE)

China Africa Resources PLC

11 January 2017

China Africa Resources plc

("China Africa" or the "Company")

Completion of In-Specie Distribution Process

China Africa Resources plc (LON:CAF) the London Stock Exchange AIM listed natural resource exploration and development company is pleased to announce it has today completed the process for the in-specie distribution of China Africa Resources Namibia (Pty) Ltd ("CARN"), as approved by Shareholders at the Company's General Meeting on 14 December 2016.

The in-specie distribution means shareholders will receive shares in CARN in direct proportion to their percentage holding in China Africa Resources plc at close of business on 14 December 2016, the transaction record date.

Holders of China Africa Resources plc share certificates will receive their certificates in CARN by post shortly. Those shareholders who held China Africa Resources plc shares in nominee accounts should receive their CARN allocation through their nominee provider shortly. Any questions in relation to the allocation process should be addressed to your stockbroker through which the nominee account is held.

Shareholders wishing to read more in relation to the transaction should refer to the Company's announcement of 21 November 2016. As previously outlined within the 21 November 2016 circular and approved by shareholders at the General Meeting on 14 December 2016, China Africa Resources is now a Rule 15 cash shell with six months to complete a Reverse Takeover transaction.

For readers wishing to learn more about AIM rules relating to reverse takeovers we would suggest a review of the AIM Rules for Companies handbook (July 2016) which can be accessed through the following link:

http://www.lseg.com/sites/default/files/content/documents/aim/AIM_Rules_for_Companies_July16.pdf

In the process of becoming a Rule 15 cash shell the Company stated an investing policy within the circular of 21 November 2016 and this investing policy is reproduced at the bottom of this announcement and can be viewed directly on the Company website through the following link:

http://www.chinaafricares.com/about-us/investing-policy1

For further information on the Company, visit: http://www.chinaafricares.com/.

China Africa Resources Investing Policy:

The Board proposes to invest in and/or acquire companies and/or projects within the natural resource sector but with a particular interest in opportunities in the energy metal and minerals sector and with a key focus on opportunities in respect of uranium, lithium, cobalt, copper and coal. Each commodity has a specific relevance to the Energy space in terms of power generation, storage and distribution.

The Board considers that, as evidenced by the financial support provided by the new investors for the proposals outlined there is a strong demand for energy metal and mineral opportunities on London's AIM.

The Board will not be limited to a specific geographic focus. In selecting investment opportunities, the Board will focus on businesses, assets and/or projects that are available at attractive valuations and hold opportunities to unlock embedded value or where, through efficient and focused work, there is the prospect of adding considerable value to each project, for the benefit of shareholders.

Where appropriate, the new Board may seek to invest in businesses where it may influence the business at a board level, add their expertise to the management of the business, and utilise their industry relationships and access to finance.

The Company's interests in a proposed investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The proposed investments may be in quoted or unquoted companies; be made by direct acquisitions or farm-ins; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures, joint ventures or direct or indirect interests in assets or projects. The new Board may focus on investments where intrinsic value can be achieved from the restructuring of investments or merger of complementary businesses.

The Board expects that investments will typically be held for the medium to long term, although short term disposal of assets cannot be ruled out if there is an opportunity to generate an attractive return for Shareholders. The new Board will place no minimum or maximum limit on the length of time that any investment may be held.

The Board will conduct initial due diligence appraisals of potential businesses or projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist.

The Board believes it has a broad range of contacts through which it is likely to identify various opportunities which may prove suitable. The new Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence.

The Company will not have a separate investment manager. The Board proposes to carry out a comprehensive and thorough project review process in which all material aspects of a potential project or business will be subject to rigorous due diligence, as appropriate. Due to the nature of the sector in which the Company is focused the Company expects a focus on capital returns over the medium to long term. Should opportunities arise for an early cash return to investors, this will be considered by the Board.

It is emphasised that there is no certainty that the Company will be able to secure an acquisition or Reverse Takeover as set out above.