QGX Ltd.

QGX Ltd.

August 11, 2008 16:17 ET

Take-Over Bid Circular and Directors' Circular Mailed in Respect of Cdn$5.00 Offer Per Share for QGX Ltd.

WATERDOWN, ONTARIO--(Marketwire - Aug. 11, 2008) - QGX Ltd. (TSX:QGX) ("QGX") and Mongolia Holdings Corp. (the "Offeror"), an indirect subsidiary of Kerry Holdings Limited ("Kerry"), are pleased to announce that the Offeror's formal bid circular in respect of the offer to acquire the outstanding common shares of QGX at a price of Cdn$5.00 in cash per share has been mailed to QGX's registered shareholders. QGX has also mailed its directors' circular recommending that QGX's shareholders accept the offer and tender their shares to the offer.

On July 22, 2008, QGX announced the Offeror's intention to make a supported take-over bid for QGX, valuing the total common share capital of QGX at approximately Cdn$259 million. The offer represents a 32% premium to QGX's volume weighted average closing price on the Toronto Stock Exchange for the 20 trading days ended July 21, 2008 and a premium of 52% to the last closing price of the QGX common shares before QGX announced its was exploring strategic alternatives on February 12, 2008.

The offer is open for acceptance until midnight (Vancouver time) on Monday, September 15, 2008, unless extended or withdrawn.

Certain shareholders of QGX, including the directors and officers of QGX, representing approximately 43% of the issued and outstanding common shares of QGX on a fully diluted basis, have agreed to tender their shares to the offer, subject to certain exceptions and have entered into lock-up agreements evidencing such commitment. The support agreement entered into among QGX, Kerry, MCS Holding LLC and the Offeror in respect of the offer provides for, among other things, a non-solicitation covenant on the part of QGX, subject to customary "fiduciary out" provisions that entitle QGX to consider and accept a superior proposal, a right in favor of the Offeror to match any superior proposal and the payment to the Offeror of Cdn$9.1 million if the transaction is not completed as a result of a superior proposal.

Full particulars of the offer are set out in the offer and circular filed by the Offeror and the directors' circular filed by QGX. These documents are available on the Canadian Securities Administrators website at www.sedar.com and on the QGX website at www.qgxgold.com.

About Kerry Holdings Limited

Kerry is a private investment holding company incorporated in Hong Kong. It is a member of the Kuok Group of companies which has diversified businesses throughout the Asia Pacific Region in commodities trading, sugar refining, property ownership and development, hotel ownership and management, warehousing, shipping and transportation, plantations, media, entertainment and leisure facilities. Kerry is a substantial shareholder of Kerry Properties Limited, Shangri-La Asia Limited and SCMP Group Limited, each of which are listed on the Hong Kong Stock Exchange.

About MCS Holding LLC

Founded in 1993, MCS is one of Mongolia's leading enterprises in six major industries, including energy and infrastructure, information technologies, beverages, property development, cashmere processing and mining. MCS is one of the largest private sector companies in Mongolia, with over 3,200 employees as of June 2008.

About QGX Ltd.

QGX is a Canadian-based company that has been exploring for mineral deposits in Mongolia since 1994. QGX's two most advanced properties are the Baruun Naran and the Golden Hills projects. QGX announced in August 2007 an independent NI 43-101 resource for coking and thermal coal at Baruun Naran comprised of 93.3 Mt of measured, 159.6 Mt of indicated (252.9 Mt contained in measured and indicated) and 11.1 Mt of inferred resources. In April 2007, QGX filed an independent NI 43-101 report outlining a positive preliminary economic assessment for its copper-gold-silver project at Golden Hills. Barrick Gold Corp. holds an approximate 9% equity interest in QGX as part of a strategic relationship between the two companies.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • QGX Ltd.
    David Anderson
    Executive Chairman
    (905) 689-9442
    QGX Ltd.
    Paul Zweng
    President and Chief Executive Officer
    (925) 855-0505
    Website: www.qgxgold.com