Our Primary Strategic Investments are in Mount Gibson Iron Limited (“Mount Gibson”) (ASX: MGX), Tanami Gold NL (“Tanami Gold”) (ASX: TAM), Metals X Limited (“Metals X”) (ASX: MLX), Dragon Mining Limited (“Dragon Mining”) (HKEX: 1712) and Prodigy Gold NL (“Prodigy Gold”) (ASX: PRX), where APAC owns 38.4%, 46.3%, 23.3%, 29.7% and 29.6% respectively. They are listed and operating in Australia.

The combined net attributable profit shared from Mount Gibson, Tanami Gold, Metals X, Dragon Mining and Prodigy Gold which are accounted for as the Group’s associates for FY2025 was HK$38,097,000 (FY2024: HK$38,101,000).

During the year, APAC’s shareholding in Prodigy Gold fell from 44.3% as at 30 June 2024 to 29.6% as at 30 June 2025 as APAC chose not to participate in Prodigy Gold’s equity raising. Prodigy Gold is deconsolidated from APAC and accounted as an associate from 30 October 2024. Meanwhile, APAC’s ownership of Mount Gibson and Metals X have increased to 38.4% (from 37.3%) and 23.3% (from 22.8%) respectively as at 30 June 2025, due to cancellation of shares by Mount Gibson and Metals X.

Mount Gibson

Mount Gibson is an Australian producer of direct shipping grade iron ore products. Mount Gibson owns the Koolan Island mine off the Kimberley coast in the remote north-west of Western Australia.

Ore sales at the Koolan Island Restart Project started in April 2019 and achieved commercial production in the June quarter of 2019. The restart project had 21 million tonnes of 65.5% Fe reserves. Mount Gibson has completed a planned waste mining phase, enabling increased production from 2023 onwards.

Mount Gibson reported a net loss after tax of A$82.2 million for FY2025 from sales of 2.6 million tonnes of iron ore. Production and grades were constrained in September quarter while a necessary reconfiguration was undertaken and a new switchback was constructed in the centre of the pit, which pushed up operating costs. In addition, A$90.4 million impairment expense has been recorded in the year as a result of weak iron ore prices. Yet, operational improvement was seen since December quarter of 2024 after the reconfiguration. Production was also slightly impacted by remedial ground support activities on the central footwall and weather-related interruptions in the second half of FY2025. Operating costs and production slightly missed the Mount Gibson’s FY2025 guidance given the temporary overhangs during the year.

Sales guidance for the year ending 30 June 2026 (“FY2026”) is 3.0 million to 3.2 million tonnes. Mount Gibson’s cash and investment reserves was A$484.6 million at the end of FY2025.

The Platts IODEX 62% CFR China index traded in a relatively narrow range in FY2025, with lows near US$90 per dry metric tonne (“dmt”) in September 2024 and closing at near US$94 per dmt. In mid-August 2025, the price is around US$100 per dmt with an improvement driven by speculation on Chinese production cuts and hopes for large scale China infrastructure projects. Iron ore prices are expected to fluctuate with sentiment related to China’s economy.

Tanami Gold

APAC owns 46.3% of Tanami Gold at 30 June 2025. Tanami Gold’s principal business activity is gold exploration. It holds 50% of the Central Tanami Project and has a cash balance of A$19 million. In May 2021, Tanami Gold entered into a binding agreement with Northern Star Resources Limited (“Northern Star”) (ASX: NST) to establish a new 50-50 Joint Venture covering the Central Tanami Project (“CTPJV”). On 16 July 2025, Mount Gibson has announced reaching agreement to acquire 50% of the CTPJV plus adjacent wholly owned exploration tenements from Northern Star.

Metals X

APAC has increased its shareholding in Metals X from 22.8% as at 30 June 2024 to 23.3% as at 30 June 2025. Metals X is focused on implementing its life of mine plan at Renison mine, including the development of the high-grade Area 5 deposit. In the twelve months ended June 2025, the Renison mine produced 5,692 tonnes of tin (net 50% basis), at all-in sustaining costs of A$29,459 per tonne against a tin price of A$48,553 per tonne for imputed EBITDA of A$274 million.

Like most base metals, tin prices slumped after demand concerns after the announcement of reciprocal tariffs by the United States (“US”) in April 2025 despite peaking in early April 2025 due to supply disruption in the Democratic Republic of the Congo. Tin prices gradually recovered and remained one of the strongest base metals due to solid supply-demand fundamentals. In mid-August 2025, the tin price is circa US$33,750 per tonne. We remain comfortable with the outlook for tin due to the lack of significant supply growth, growing demand for tin from the electrification trend, and growth from semiconductors and energy storage industries.

Dragon Mining

APAC owns approximately 29.7% of Dragon Mining as at 30 June 2025.

The principal activity of Dragon Mining is gold exploration, mining, and processing in the Nordic region. Dragon Mining operates gold mines and processing facilities in Finland and Sweden. In Finland, the Vammala Production Centre consists of a conventional 300,000 tonnes per annum crushing, milling and flotation plant, the Jokisivu Gold mine, the Orivesi Gold mine which ceased production in June 2019, and the Kaapelinkulma Gold mine which ceased production in April 2021, and the Uunimäki Gold project. Annual production from Dragon Mining is in the range of 20,000 to 30,000 ounces of gold in concentrate depending on the grade of ore and gold concentrate feed. In Sweden, the operation is known as the Svartliden Production Centre, consisting of a 300,000 tonnes per annum carbon-in-leach processing plant together with the closed Svartliden Gold mine (mining completed in 2013), and the Fäboliden Gold mine where a campaign of test-mining was completed in September 2020.

On 1 April 2025, Allied Properties Resources Limited (“APRL”), a wholly-owned subsidiary of APAC announced a preconditional voluntary cash offer of HK$2.2 per share for all issued shares of Dragon Mining not owned by APRL and its concert parties. On 19 May 2025, Wah Cheong Development (B.V.I.) Limited (“Wah Cheong”), an indirect wholly-owned subsidiary of Allied Group Limited (a substantial shareholder of APAC), announced a conditional voluntary cash offer of HK$2.60 per share for all issued shares of Dragon Mining not owned by Wah Cheong and its concert parties. On 2 June 2025, APRL’s offer was withdrawn.

Prodigy Gold

APAC owns approximately 29.6% of Prodigy Gold at 30 June 2025.

Prodigy Gold is a gold exploration company listed on the ASX. It holds a large footprint of exploration tenements in the Tanami region in the Northern Territory, Australia, and a JORC (Joint Ore Resources Committee) resource of 1.03 million ounces across its Hyperion, Tregony, Buccaneer and Old Pirate projects. Some of its tenements are held in joint venture with partners such as Newmont Corporation and IGO Limited. Prodigy Gold reported a net loss after tax of A$3.5 million for FY2025. At the end of June 2025, Prodigy Gold has a cash balance of A$1.2 million. The focus of Prodigy Gold for 2025 will be exploration on the Northern Tanami project area and continue with its strategy to divest non-core assets.

Financial Assets at Fair Value through Profit or Loss

Financial assets at fair value through profit or loss comprise mainly the Group’s Resource Investment. As at 30 June 2025, APAC had significant investment representing 5% or more of the Group’s total assets in Shougang Fushan Resources Group Limited (“Shougang Fushan”) (HKEX: 639).

Significant Investment

Our investment in Shougang Fushan generated a fair value loss of HK$44,248,000 during the year with a carrying value of HK$406,577,000 as at 30 June 2025.

Shougang Fushan is a coking coal producer listed on The Stock Exchange of Hong Kong Limited. Its principal businesses are coking coal mining and the production and sales of coking coal products in China. It has three mines located in China with reserves of 54 million tonnes of raw coking coal at 31 December 2024 and during six months ended 30 June 2025 Shougang Fushan produced 2.6 million tonnes of raw coking coal and sold 1.6 million tonnes of clean coking coal.

The market capitalisation of Shougang Fushan at the end of August 2025 is around HK$14 billion. During the six months ended 30 June 2025, Shougang Fushan generated revenue of HK$2,101 million and a profit of HK$481 million and had cash and time deposits of HK$9.4 billion at 30 June 2025.

Resource Investment

The investments in this division comprise mostly minor and liquid holdings in various natural resource companies listed on major stock exchanges, including Australia, Canada, Hong Kong, the United Kingdom and the US. Our investments focus on select commodities within several commodity segments: energy, bulk commodities, base metals and precious metals.

Resource Investment posted a fair value gain of HK$338,149,000 in FY2025 (FY2024: HK$364,260,000), which after accounting for segment-related dividends and other investment income and expenses, resulted in a segment profit of HK$342,743,000 (FY2024: HK$403,722,000).

Our Resource Investment division includes, among other investing strategies, the two resource portfolios announced in August 2016, with an additional natural resource-focused strategy subsequently established and focused on large caps and specialist opportunities. The aim of the portfolios is to produce a positive return using the Company’s funds as well as to create a track record to attract potential third-party investments in the future. These various portfolios are managed under the Resource Investment segment of the Company, which is separate from the Company’s large strategic stakes. Our portfolios have a global long-only mandate (cannot short stocks) and strict parameters on market capitalisation, liquidity, development stage (exploration through to production) and jurisdiction to manage risk.

Small and Mid-Cap Mining Portfolio

This portfolio is focused on investments in small and mid-cap companies involved in the exploration, development and production of battery metals, base metals, precious metals, uranium, bulks and other hard rock commodities. Managed by the same portfolio manager since its inception on 1 October 2016, the Small and Mid-Cap Mining Portfolio has delivered a return of 751% in the 8.75 years to 30 June 2025. This represents a significant outperformance of 724% against its benchmark (currency adjusted equal weighting of the ASX 200 Smallcap Resources, FTSE AIM All Share Basic Resources and TSX Venture Composite), which returned 27% over the same period.

A full breakdown of the Small and Midcap Mining Portfolio’s annual performance against its benchmark is presented in the table below.

The strategy delivered a period of strong positive performance for the year ended 30 June 2025, driven by a broad recovery in commodity markets during the first half of calendar year 2025. This resurgence was underpinned by easing monetary policies in major economies, which stimulated industrial activity and capital investment, in turn boosting demand for raw materials. The portfolio benefited from this improved macroeconomic backdrop, with a notable reversal of the headwinds experienced in late 2024.

A key driver of the portfolio’s outperformance was its significant outsized positioning in the gold sector with a circa 40-70% weighting since early 2024. This tactical decision was based on a positive outlook for gold – given elevated central bank buying, elevated geopolitical uncertainty, rising investor demand and the more recent dedollarisation trend – and has proven highly effective, especially as investors increasingly recognised significantly improved margins and cash flow generation by gold mining companies. Top contributors to portfolio returns were predominantly gold-focused companies, including Kingsgate Consolidated, Heliostar Metals, Discovery Metals, Resolute Mining, Meeka Metals, Orezone Gold, Thesis Gold and Greatland Resources.

Conversely, a number of holdings acted as a drag on portfolio returns. The top detractors were generally dragged down by weak underlying commodity prices and included Coronado Global Resources (metallurgical coal), Q2 Metals (lithium), Meteoric Resources and Viridis Metals and Minerals (rare earths). Other poor performers were negatively impacted by weak operational results and downgraded guidance, like Galiano Gold and Ora Banda. However, looking forward to the financial year ending 30 June 2026, a number of these past underperformers are now looking more positive, with share prices turning higher, and this has underpinned a positive start to the new financial year for the Small and Mid-Cap Mining Portfolio.

Energy Portfolio

This portfolio is primarily focused on the oil, gas, power and renewables sectors. At the end of 2019, the mandate for this portfolio was expanded to include investments in renewables, and with a broader sector of investments, from February 2020 (before the full impact of the Covid-19 Pandemic) to August 2025, the Energy Portfolio has generated a return on investment of 140%.

The investment choices in the Energy Portfolio are selected through a combination of fundamental bottom up valuation and analysis of the prospects for different sectors. During the early days of the COVID-19 pandemic, the investments were focused in companies in the green energy sector given that the low interest rate environment was supportive of stocks with significant growth potential. Recently equities across almost all sectors were jostled by concerns related to “Liberation Day” in early April 2025 when markets were shocked by the large US tariffs proposed. In the year ending 30 June 2025, we focused on companies that support base load power (predominantly natural gas in select countries and uranium) given growing demand for power in the US and a strong equity market focus on names exposed to artificial intelligent (“AI”) power demand. At the same time, we reduced oil exposure, given concerns of slow US growth in the event of new tariffs being implemented, although we subsequently saw lots of volatility related to military attacks on Iran. We have had essentially no investments in the renewables sub-sector in FY2025 given our concerns on weak sentiment in the event that significant Inflation Reduction Act policies were reversed by President Trump. We remain cautious on the outlook for oil given OPEC+ has made significant additions to the global market by unwinding production cuts. The energy transition continues, and we are becoming cautiously optimistic given the reduction in policy uncertainty in August and after a significant sell off in the last twelve months.

Precious Metals

The Precious Metals segment (majority gold exposure) generated a net fair value gain of HK$510,007,000 in FY2025. As at 30 June 2025, the carrying value of the Precious Metals segment was HK$1,045,084,000 (As at 30 June 2024: HK$686,052,000). Our largest gold investment in the Resource Investment division is in Northern Star (ASX: NST) which generated a fair value gain of HK$34,311,000 with a carrying value as at 30 June 2025 of HK$95,186,000. We also own Kingsgate Consolidated Ltd (ASX: KCN) which generated a fair value gain of HK$28,450,000 with a carrying value as at 30 June 2025 of HK$51,026,000. Northern Star is the largest gold company in Australia and owns high-grade underground mines in Western Australia and Alaska. It operates three gold production centres, namely Kalgoorlie and Yandal in Western Australia and Pogo in Alaska, and the Hemi Development Project, located in the Pilbara region of Western Australia. In FY2025, its production was 1,618,000 ounces of gold, and it generated a net mine cash flow of A$1,189 million. In FY2026, its production target is 1,700,000 – 1,850,000 ounces.

The gold price had a strong rally in FY2025 from approximately US$2,300 per ounce and reached a high of US$3,500 per ounce before closing around US$3,300 per ounce. The strength in gold prices has been a surprise given the high interest rate in the US, and there is speculation that it has been driven by central bank purchases, safe haven demand amid worries on geopolitical tensions and expectations that global monetary policies would loosen.

Bulk Commodities

The Bulk Commodities segment generated a fair value loss of HK$96,039,000 in FY2025. As at 30 June 2025, the carrying value was HK$492,600,000 (As at 30 June 2024: HK$584,717,000). Our largest investment in this segment during FY2025 is in Shougang Fushan (HKEX: 639), which generated a fair value loss of HK$44,248,000 and had a carrying value as at 30 June 2025 of HK$406,577,000.

Base Metals

The Base Metals segment (a mix of copper, nickel, zinc, aluminium, tin and cobalt companies) delivered a fair value loss of HK$2,286,000 in FY2025. During the year, base metal prices were mixed, with copper prices up 2.8%, nickel prices down 11.9%, and zinc prices down 4.8%. The Base Metals segment includes our investment in Lundin Mining Corp (TSE: LUN) which had a carrying value as at 30 June 2025 of HK$28,763,000.

Energy

The Energy segment (mix of oil and gas, uranium and renewables) had a fair value loss of HK$26,350,000 and a carrying value of HK$163,539,000 in FY2025 (As at 30 June 2024: HK$232,734,000). Our significant energy investments include Paladin Energy Limited (ASX: PDN), which generated a fair value loss of HK$1,398,000 and had a carrying value as at 30 June 2025 of HK$52,797,000.

Others

We also have a fair value loss of HK$47,054,000 from the remaining commodity (diamonds, manganese, rare earths, lithium and mineral sands among others) and non-commodity investments in FY2025 and had a carrying value as at 30 June 2025 of HK$113,034,000 (As at 30 June 2024: HK$132,289,000).

Commodity Business

We have an iron ore offtake at Koolan Island, and we continue to look for new offtake opportunities across a range of commodities. For FY2025, our Commodity Business generated a segment loss of HK$8,046,000 (FY2024: Profit of HK$84,031,000) as a result of weak iron ore prices.

Principal Investment and Financial Services

The Principal Investment and Financial Services segment, which covers the income generated from loan receivables and other financial assets. For FY2025, this segment recognized a profit of HK$7,172,000 (FY2024: HK$38,531,000).

Money Lending

Business Model and Customer Profile

The Group provides both secured and unsecured term loans to its customers under its Principal Investment and Financial Services segment. Money lending activities diversifies the income stream and business risks of the Group, and generates a stable return with the Group’s available financial resources on hand from time to time. The Group mainly financed its money lending business by its internal resources.

The Group does not set a specific target for the industry, business or level of annual revenue to corporate borrowers. The customers of the Group’s lending business were referred to the Group through its corporate or business networks. For FY2025, customers of the Group’s lending business included Hong Kong listed companies for secured and unsecured loans.

Outstanding loan receivables net of loss allowances as at 30 June 2025 amounted to approximately HK$83,578,000 (As at 30 June 2024: HK$88,563,000). During the year, the Group has provided for impairment losses on its loan receivables of approximately HK$4,267,000 (FY2024: Impairment losses written back of HK$24,086,000). Details of each of the loans outstanding as at 30 June 2025 are disclosed in note 20 to the consolidated financial statements.

Risk Management Policies

The Group adopts a thorough credit assessment and approval process, and will assess and approve each loan transaction on a case-by-case basis. The finance department of the Group (the “Finance Department”) is responsible for conducting a background check on the prospective borrower in compliance with the applicable laws and regulations, reviewing the background and financial strength of such borrower and where applicable, the guarantor, and enquiring the prospective borrower about the purpose of the loan and the expected source of funds for loan repayment. To support its analysis, the Group will obtain corporate documents, financial statements and search reports of the borrower and/or the guarantor, and thereafter, assess the credit risk of the loan and negotiate the terms thereof after considering (i) the background and financial position of the borrower or the guarantor (if applicable), including net asset value and gearing ratio; and (ii) the value of the securities, if any.

Each loan transaction will be approved by either the Board, or if the loan principal does not exceed the threshold set by the Board, by the executive committee of the Board.

The Finance Department monitors the loan and interest repayment regularly and reviews the annual financial statements of the borrowers and guarantors (if applicable). It would promptly report to the chief executive or chief financial officer of the Group for any delay or default in repayment upon maturity, who would then formulate plans for loan collection, including but not limited to requesting for additional securities or initiating legal actions.

Loan Impairment Policies

The Company adopts expected credit loss allowances (“ECLs”) according to the requirements of Hong Kong Financial Reporting Standard 9 issued by the Hong Kong Institute of Certified Public Accountants. Accordingly, it shall review the recoverable amount of each loan at the end of each reporting period to ensure that adequate impairment losses are made. The Group applies a general approach on loan receivables to assess for the ECLs.

Assessment is done based on the Group’s historical credit loss experience, adjusted for factors that are specific to the borrower. In order to measure the ECLs of loan receivables, the Group will apply a credit rating for each of its borrowers by reference to each borrower’s past default records, current past due exposure, an analysis of its current financial position, likelihood or risk of a default, an assessment on any significant increase in credit risk, and fair value of collaterals (if any), and adjust for forward looking information that is available without undue cost or effort, such as the current and forecasted global economy and the general economic conditions of the industry in which the borrower operates.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying any significant increase in credit risk before the loan amount becomes past due.

Forward Looking Observations

A complex global economic outlook in FY2026 is anticipated, with fluctuations in US trade policies, intensifying geopolitical tensions and decelerating global growth. While the US economy has shown resilience, there is still uncertainty on the effect of US tariffs on inflation and demand, leading to difficulties in an interest rate cut decision. Meanwhile, the structural challenges of China persist without large scale stimulus, particularly in the property sector, with prices continue to fall this year, and China Producer Prices have deflated for 34-months, which contribute to subdued domestic demand. We believe that precious metals investment demand will continue to be strong, amid uncertainty around global economy and rising US debt levels. At the same time, we see opportunities in select commodities that are long-term beneficiaries of secular trends such as energy transition and increasing AI activity. We remain selective with our investments in the near term and continue to look for high-quality opportunities that will generate attractive returns over the long run. Our mining and energy investment portfolios are the platform for future mining and energy investments. Our largest investment is in Mount Gibson, which has successfully ramped up production at the Koolan Island mine and is now generating significant free cash flow over the remaining two years of mine life. On 16 July 2025, Mount Gibson has announced reaching agreement to acquire 50% of the CTPJV plus adjacent wholly owned exploration tenements from Northern Star. The acquisition provides Mount Gibson with an opportunity to leverage the success of its Koolan Island iron ore operation to establish the foundations of a gold production business.