Asaplus Resources : Response to ASX Query Letter

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	Telephone: [phone]
Registration No. 201210180E	E-Mail: [e-mail]
	60 Paya Lebar Road #08-55
	Paya Lebar Square
	Singapore 409051

6 June 2022

Stephanie Patchell

Adviser, Listings Compliance (Perth)

Australia Securities Exchange

Dear Stephanie

RESPONSE TO QUERY LETTER

1. We refer to the query letter dated 27 May 2022 addressed to the Company, and are pleased to provide our response in the attached Appendix A.
2. Please let us know if you required further information.

Yours faithfully

For and on behalf of

ASAPLUS RESOURCES LIMITED

DING Poi Bor

Managing director

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APPENDIX A

Unless otherwise defined or the context otherwise permit, capitalized terms used in this Appendix 1 shall have the same meanings given to them in the query letter dated 27 May 2022 from ASX to the Company

Q1 Does AJY expect that it will continue to have the current level of negative operating cash flows for the time being and, if not, why not?

• AJY expects that it will continue to have the current level of negative operating cash flows for the next two quarters.

Q2 Has AJY taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? In answering this question, please comment specifically on the current status of the non-renounceable rights issue AJY indicated it was considering as disclosed at paragraph 8.8.2 of the Appendix 5B.

• AJY expects to launch the non-renounceable rights issue (the Rights Issue) it disclosed at paragraph 8.8.2 of the Appendix 5B by 30 June 2022. The Company is cautiously optimistic that the Rights Issue will be reasonably successful as DING Poi Bor, the controller of the Company who currently holds 29,500,000 shares representing 21.69% of AJY's issued capital, has indicated that he will subscribe for his entitlement in full.
  Pending completion of the Rights Issue, the controller has undertaken to provide continuing financial support for the Company as and when it needs it.

Q3 Does AJY expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

• AJY expects to be able to continue its operations and to meet its business objectives, and make this statement on the following bases:
• 1. its Beikeng Mine is expected to commence operations at a commercial scale within the next three quarters; and
  2. it expects to have the funds to continue it operations until the Beikeng Mine commence commercial operations. Please also refer to the answer to Q2 above.

Q4 Is AJY able to confirm that in the Directors' Opinion the Half-Year Report:

1. comply with the relevant Accounting Standards; and
2. give a true and fair view of AJY's financial performance and position?

• AJY confirms that in the Directors' opinion, the Half-Year Report:
• 1. comply with the relevant Accounting Standards; and
  2. give a true and fair view of AJY's financial performance and position.

Q5 Does AJY consider that the financial condition of AJY is sufficient to warrant continued listing on ASX as required under Listing Rule 12.2? In answering this question, please also explain the basis for this conclusion, taking into consideration AJY's negative working capital of $3,589,779 and net liabilities position of $898,106.

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• Yes, AJY considers that its financial condition is sufficient to warrant continued listing on ASX as required under Listing Rule 12.2. The bases for making this statement are:
• 1. a substantial portion of its liabilities are owed by Datian Huayu Mining Co., Limited (Datian Huayu), its wholly-owned subsidiary which is pending completion of its disposal. As of 31 December 2021, Datian Huayu's total liabilities amounted to approximately $3,170,000. AJY did not provide any guarantee nor enforceable comfort letter in relation to these liabilities owed by Datian Huayu;
  2. a substantial portion of its liabilities which are not owed by Datian Huayu, are owed to its controller and an unrelated creditor (the Creditor);
  3. the liabilities owed by Datian Huayu will cease to be the liabilities of AJY when its disposal is completed. Completion of this disposal is scheduled to take place on 9 June 2022, and AJY will make an announcement after it occurs;
  4. AJY has requested the controller, and the controller has indicated his willingness, to convert sums owed to him into equity of AJY. AJY will also seek the Creditor's agreement to similarly convert the debt due to it into equity of AJY. These debt-to- equity conversions will be subject to shareholders' approval at an extraordinary general meeting; and
  5. as referred to in the answer to Q3, its Beikeng Mine is expected to commence commercial operations within the next three quarters.

Q6 If the answer to question 5 is "No", please explain what steps AJY has taken, or proposes to take, to warrant continued listing on ASX under the requirements of Listing Rule 12.2.

• Not applicable.

Q7 In relation to the Half-Year Report, did the Board receive the CFO and CEO declaration, as described in section 4.2 of AJY's Replacement Corporate Governance Disclosure, that in the opinion of the CFO and CEO, the financial records of AJY have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of AJY and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively?

• The Board received the CFO and CEO declaration, as described in section 4.2 of AJY's Replacement Corporate Governance Disclosure, in relation to the Half-Year Report.

Q8 If the answer to Question 7 is 'no', why did the Board not receive the CEO and CFO declaration as described in section 4.2 of AJY's Replacement Corporate Governance Disclosure?

• Not applicable.

Q9 What enquiries did the Board make of management to satisfy itself that the financial records of AJY have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of AJY?

• The Board meets regularly with management to receive feedbacks and reports and, where so required, seek answers to material transactions to satisfy itself that the financial records of AJY have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of AJY.

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Q10 Given the Auditor has raised a material uncertainty whether the AJY can continue as a going concern and as of 31 December 2021 AJY had cash and cash equivalents of $218,312 and total current liabilities of $5,953,922, on what basis do the directors consider that AJY is a going concern?

• Please refer to the answer to Q5, in particular, the matters explained in paragraphs (a) and
  (c). AJY expects that the financial statements for the year ended 30 June 2022 will reflect that liabilities previously owed by Datian Huayu will no longer be liabilities of AJY. Additionally, directors also believe that AJY is a going concern because the controller and the Creditor have indicated to AJY that they will not demand payment of the debts owed to them until such time when it is able to repay these debts, subject to these debts not being converted to equity as referred to in paragraph (d) of the answer to Q3.

Q11 Please also provide any other information that AJY considers may be relevant to ASX forming an opinion on whether AJY is complying with Listing Rule 12.2 that a listed entity's financial condition must, in ASX's opinion, be adequate to warrant the continued quotation of its securities and its continued listing.

• AJY believes that all relevant information has been provided to ASX in this response to query letter and/or has been otherwise publicly disclosed.

Q12 Please confirm that AJY is complying with Listing Rule 3.1 and that there is no information about its financial condition that should be given to ASX in accordance with that rule that has not already been released to the market.

• The Company confirms that it is complying with Listing Rule 3.1.

Q13 Please confirm that AJY's responses to the questions above have been authorised and approved under its published continuous disclosure policy or otherwise by its board or an officer of AJY with delegated authority from the board to respond to ASX on disclosure matters.

• AJY confirms that its response to the query letter have been approved and issued by DING Poi Bor, who is the officer with delegated authority from the board to respond to ASX on disclosure matters.

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27 May 2022

Reference: 53086

Ms Swapna Keskar

Asaplus Resources Limited

By email: [e-mail]

Dear Ms Keskar

Asaplus Resources Limited ('AJY'): Query - Financial Condition

ASX refers to the following:

1. AJY's Appendix 5B quarterly report for the period ended 31 March 2022 lodged with ASX Market Announcements Platform ('MAP') on 29 April 2022 (the 'Appendix 5B'), which included the following disclosure at section 8.8.2:

"8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

Answer: The entity is considering a non-underwritten,non-renounceable rights issue to raise additional funds to speed up the development of the mine at its tenement. As this proposal is still at the preliminary stage, directors are not able to assess the likelihood of its success should the entity proceed with this proposal."

1. The financing facilities of $4,750,800 available to AJY as disclosed in section 7 of the Appendix 5B and the amount drawn down at quarter end of $4,096,686.
2. AJY's half-year report for the half-year ended 31 March 2022 lodged with ASX Market Announcements Platform and released on 16 March 2022 ('Half-Year Report').
3. The Independent Auditor's Report attached to the Half-Year Report ('Auditor's Report') which contains the following emphasis of matter:

"We draw attention to Note 3 of the financial statements, which highlights that the Group incurred a net loss of A$313,849 during the interim period ended 31 December 2021 and as at 31 December 2021, the Company's current liabilities exceeded its current assets by A$3,589,779. This indicates that a material uncertainty exist that may cash doubt on the Company's ability to continue as a going concern."

1. The following disclosures in the Half Year Report regarding AJY's financial position as at 31 December 2021:
2. 1. Current assets: $2,364,143
   2. Total assets: $5,055,816
   3. Current liabilities: $5,953,922
   4. Total liabilities: $5,953,922
3. AJY's Replacement Corporate Governance Statement for 2021 lodged on the ASX Market Announcements Platform on 31 March 2022 which provides confirmation that AJY complies with recommendation 4.2 of the ASX Corporate Governance Principles and Recommendations which states:

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