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Elemental Minerals Further Update on the Dingyi Proposal
PERTH, Australia, May 30, 2013 /CNW/ - Elemental Minerals Limited (ASX, TSX: ELM) ("Elemental" or "the Company") is pleased to provide a progress report in respect of the approach it has received from Dingyi Group Investment Limited ("Dingyi") in respect of an indicative, non-binding, incomplete and conditional potential transaction, the details of which were announced by Elemental on 12 April 2013 (the "Proposal").

Considerable progress has been made in relation to the Proposal including:

Dingyi has conducted extensive due diligence enquiries in relation to financial, technical, regulatory, legal and operational issues relating to the Company and its operations. These enquiries are continuing and are expected to be complete in the coming weeks. Dingyi has confirmed that it has now completed its technical due diligence review on Elemental's project and that all existing questions on that issue have been addressed to Dingyi's satisfaction;
good progress has been made in seeking to finalise definitive documentation in respect of the Proposal; and
Dingyi has confirmed that it continues to expect that if its Proposal is made, it will not be conditional upon financing or any Chinese or Australian Foreign Investment Review Board approvals.

In order to enable Elemental and Dingyi time to finalise the outstanding due diligence matters, comply with applicable Hong Kong Stock Exchange requirements and negotiate and, if terms can be finalised, execute a definitive bid implementation agreement, the parties have agreed to a mutual extension of the exclusivity period to 30 June 2013.

The Board of Elemental looks forward to continuing to work closely with Dingyi over the coming weeks to progress the Proposal.

The market will be kept informed of any material developments.

Commensurate with the extension of the exclusivity period, Pala Investments Limited together with John Ian Stalker and Fiducs Limited (an entity controlled by Mr Stalker) (the "Supportive Shareholders") have agreed to an extension of their letters of intent with Dingyi until the earlier of signing a mutually agreed pre-bid agreement or 30 June 2013. Each Supportive Shareholder has authorised Elemental to include this paragraph in this announcement.

Further details of the exclusivity and cost reimbursement deed between Elemental and Dingyi and the arrangements between Dingyi and the Supportive Shareholders are outlined in Elemental's announcement on 12 April 2013.

While the Company is working hard to progress the Proposal, it remains an indicative, non-binding and incomplete transaction, and so at this stage there can be no guarantee that it will result in a binding transaction.

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