China Silver : Major Transaction and Deemed Disposal in Relation to the ProposedSpin-Off and Separate Listing

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Silver Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

The implementation of the Proposed Spin-Off and the Global Offering (each as defined herein) is subject to, among other things, the Stock Exchange granting approval for the listing of, and permission to deal in, all of the CSMall Shares (as defined herein). There is no certainty as to whether, and if so when, the Proposed Spin-Off and the Global Offering will take place. Accordingly, shareholders, holders of other securities of the Company and potential investors in the securities of the Company should exercise caution when dealing in or investing in the shares or other securities of the Company.

This circular is for information purposes only and does not constitute an invitation or offer, for securities of the Company.

中 國 白 銀 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 815)

A letter from the Board is set out on pages 7 to 23 of this circular. A letter from the Independent Board Committee is set out on page 24 of this circular. A letter from Somerley, the Independent Financial Adviser to the Independent Board Committee and the Shareholders, containing its advice in relation to the Proposed Spin-Off is set out on pages 25 to 45 of this circular.

A notice convening the EGM to be held on 15 December 2017 and a form of proxy for use at the EGM is enclosed herein. Whether or not you are able to attend the meeting, please complete and return the accompanying form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time appointed for the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

28 November 2017

Page

EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

LETTER FROM THE INDEPENDENT BOARD COMMITTEE 24

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER 25

APPENDIX I - FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . I-1

APPENDIX II - GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

APPENDIX III - NOTICE OF THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

EVENTS 2017

Despatch of circular and notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 28 November Latest time for lodging transfers of Shares in order to be

entitled to attend and vote at the EGM . . . . . . . . . . . . . . . . . . 4:30 p.m., Monday, 11 December

Latest time for return of proxy forms in respect

of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2:30 p.m., Wednesday, 13 December

Closure of the register of members of the Company for determining the entitlements to attend and vote at the

EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 12 December to

Friday, 15 December EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2:30 p.m., Friday, 15 December

Announcement of the results of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 15 December

Register of members of the Company re-opens . . . . . . . . . . . . . . . . . . . . . . Monday, 18 December Last day for dealing in Shares cum-entitlement to the

Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 18 December

First day for dealing in Shares ex-entitlement to the

Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 19 December

Latest time for lodging transfers of Shares to qualify for

the Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m., Wednesday, 20 December

Closure of the register of members of the Company for

determining entitlement to the Distribution. . . . . . . . . . . . . . . . . . . . . Thursday, 21 December to

Friday, 22 December

Record Date for determining the entitlement to the

Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 22 December

Register of members of the Company re-opens . . . . . . . . . . . . . . . . . . . . Wednesday, 27 December

2018

Completion and despatch of share certificates of the

CSMall Shares to the Qualifying Shareholders . . . . . . . . . . . . . . . . . . . . . Wednesday, 3 January

Despatch of cheques for cash entitlements to the Overseas Excluded Shareholders pursuant to the

Distribution on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 22 January

All times refer to Hong Kong time. Please note that the expected timetable above is indicative only and may be extended or varied. If there is any change to the expected timetable above, the Company will publish an announcement as soon as possible.

In this circular, unless the context requires otherwise, the following expressions shall have the following meanings:

"Applicable Percentage Ratios" the percentage ratios stipulated in Rule 14.07 of the Listing

Rules as applicable to the Proposed Spin-Off, as more particularly described in the section headed "Implications under the Listing Rules" of this circular

"Application Proof" the redacted form of application proof of CSMall's listing

document

"associate(s)" has the meaning ascribed thereto in the Listing Rules

"Baiyin Town" Baiyin Town (Shanghai) Cultural Industry Company Limited* (白銀小鎮(上海)文化產業有限公司), a limited liability company established in the PRC on 10 November 2016 and a wholly-owned subsidiary of CSMall

"Best Conduct" Best Conduct Investments Limited, a company incorporated in the BVI on 21 September 2007 and held as to 70% by Mr. SHI Jinglei (石勁磊) and 30% by Mr. HUANG Yuanzhe (黃遠哲)

"Blaze Loop" Blaze Loop Limited, a company incorporated in the British Virgin Islands with limited liability

"Board" the board of Directors

"business day" a day (other than a Saturday or a Sunday) on which banks in Hong Kong are open for normal banking business

"BVI" the British Virgin Islands

"Caitong Funds SPC" Caitong Funds SPC (on behalf of and for the benefit of

Caitong Pine Ocean New Economy Fund SP), a segregated portfolio company incorporated in the Cayman Islands on 21 October 2013 and managed by Caitong International Asset Management Co., Limited

"CEO" chief executive officer

"China Silver Jewellery" China Silver Jewellery Group Limited (中國白銀珠寶集團有

限公司) (formerly known as China Silver Group Co., Limited (中國白銀集團有限公司) before 11 September 2012), a limited liability company established in Hong Kong on 23 November 2011 and a wholly-owned subsidiary of CSMall

"close associate(s)" has the meaning ascribed thereto in the Listing Rules