On September 17, Zangge Mining (000408.SZ) announced that its board of directors had approved proposals to establish a holding company for outbound investment and to acquire a 92% stake in Kanga Potash (KP). The company will work with industrial partners to develop a large overseas potash resource, further expanding its potash reserves and improving its global resource footprint. I. Transaction structure and entities

1. Joint venture platform (registered in Singapore: Zangge United Resources Co., Ltd., tentative name)
   Zangge Mining International, a wholly owned subsidiary of a wholly owned subsidiary of Zangge Mining: 75%
   Yingcheng Chemical (Xindu Chemical), a wholly owned subsidiary of Yuntu Holdings: 25%
   Registered capital of only US$1, serving as the SPV for this acquisition Sina Finance
2. Target company: Kanga Potash (KP, registered in Mauritius, established in 2014)
   Acquisition target: 92% equity interest in KP; the original shareholder retains the remaining 8% equity Transaction consideration: US$171.05 million (approximately RMB 1.157 billion, excluding taxes and fees)
   Contribution split:
   Zangge Mining bears 75%: approximately US$128.28 million, equivalent to RMB 868 million
   Yuntu Holdings bears 25%: approximately US$42.76 million, equivalent to RMB 289 million
3. Ultimate interests
   After the transaction: Zangge Mining will indirectly hold 69% of KP, which will be consolidated into the listed company’s financial statements; Yuntu Holdings will indirectly hold 23%, and the original shareholder will retain 8%
   II. Core project assets (Republic of the Congo, Congo-Brazzaville)
   KP holds mining rights through two local subsidiaries:
4. Kanga potash mine (mining licence)
   Controlled resources 810 million tonnes, grade 17.12%
   Inferred resources 1.179 billion tonnes, grade 16.47%
   Combined average grade 16.73% Sina Finance
   Mining area: 321 km², mining licence valid until June 2047; a 25-year “Kanga Mining Convention” was signed in August 2023
   Resources (NI 43-101 standard, 2018 report): total potassium chloride 1.989 billion tonnes
5. Loango potash mine (exploration right)
   Area 286 km², exploration permit renewal is being processed; currently only an exploration right, with no proven mineable reserves.
   Project status: greenfield project, construction not yet started, no large-scale production; KP’s 2025 revenue was only US$4,880, and its net profit that year mainly came from fair value revaluation of mining rights, with no operating cash flow. III. Transaction approval status
6. Zangge Mining’s board of directors approved it on 2026-09-16; within the board’s authority, no shareholders’ meeting vote is required.
7. Pending prerequisites:
   Formal signing of the equity acquisition agreement by all parties
   Domestic: outbound investment filing, foreign exchange approval
   Overseas: Congo (Brazzaville) mining and foreign investment approvals; Mauritius company-level change approvals
   Delivery can only occur after all approvals are completed; there is a risk of approval failure Securities Daily
   IV. Strategic purpose
8. Zangge Mining: a leader in potash and lithium at the domestic Qarhan Salt Lake, this is the company’s first resource layout in Africa; it expands potash resource reserves, implements the potash-lithium dual-wheel strategy, hedges the risk of high domestic dependence on imported potash fertilizer, and opens up overseas potash production capacity supply.
9. Yuntu Holdings: a compound fertilizer leader, it locks in potash raw materials upstream, reduces raw material price volatility risk, and ensures the supply of compound fertilizer raw materials.
   V. Core risk disclosures
10. Resource risk: resource figures are estimates and do not represent mineable reserves; the NI 43-101 report is historical material, and feasibility studies and mining plans have not yet been completed, so actual extraction volumes and mining costs are uncertain.
11. Country political and legal risk: changes in Congo (Brazzaville) mining policy, taxation, labour and environmental regulations; risks related to mining right renewal and performance of the mining convention; geopolitical and exchange rate risks.
12. Huge development investment: a greenfield mine, with subsequent construction, beneficiation, port and infrastructure investment of a huge scale, high funding needs and a long construction cycle; timing of commissioning and ramp-up is uncertain.
13. Market risk: future declines in potash fertilizer prices will directly affect project returns.
14. Transaction uncertainty: a formal acquisition agreement has not yet been signed, domestic and overseas approvals are uncertain, and the transaction may be terminated.
    Zangge’s main business is potassium chloride + lithium carbonate from the Qarhan Salt Lake; domestic salt lake resources have a limited ceiling, and domestic potash resources are concentrated in Qinghai with limited resource service life. This acquisition is the second overseas potash resource layout after the Laos potash project, forming a multi-regional potash resource matrix of “domestic salt lake + Laos + Congo (Brazzaville),” and transforming the company from a single salt lake leader into a global potash resource company. Kanga has 1.989 billion tonnes of KCl resources (NI 43-101 historical report), a huge resource base, and a mining licence valid until 2047; it also comes with the Loango exploration right, offering potential for further resource expansion. The consideration for this transaction is only US$171 million, amounting to a low-price acquisition of a giant mining right; the core purpose is to lock in the mining right asset, seize the window for African potash resources, and reserve a resource base for capacity expansion over the coming decades.