Questions and Answers

Questions & Answers

What is the Offering?

East Asia is distributing to holders of East Asia Minerals Shares as of 5:00 p.m. on December 1, 2018, the Record Date, at no charge, transferable Rights to purchase, in aggregate, up to 188,952,761 Common Shares.

What are the exercise/ purchase terms?

Each whole Right will entitle the Holder to purchase 1.7 Common Shares at a price of U$0.1325 per whole Common Share. No fractional Common Shares will be transferable upon the exercise of any Rights, and no cash or other consideration will be paid in lieu thereof. An entitlement to a fractional Common Share will be rounded down to the next lowest whole number of Common Shares.

When are the Commencement and Expiry Times?

The Rights will be eligible for exercise commencing on January 11, 2018. Holders will need to exercise their Rights prior to 5:00 p.m. (Toronto time) on February 20, 2018. Any exercise will be irrevocable once submitted and Holders will be unable to withdraw their exercises once submitted. Rights not exercised before the Expiry Time on the Expiry Date will be void and of no value.

What are the reasons for the offer?

To increase Golden Queen’s working capital, we are offering shareholders the opportunity to participate in the Rights Offering.

Proceeds from the Rights Offering will provide capital necessary to:

  • reduce the Company’s corporate debt;
  • make the required cash contribution to Golden Queen Mining Company, LLC in connection with the joint venture;
  • fund the Company’s budgeted 2018 operating expenses; and
  • fund unallocated expenses and contingencies.

Who is Eligible to receive the Rights?

The Rights Offering is only being made in the provinces of British Columbia, Alberta, and Ontario and in the United States excluding the states of California, Ohio, Arizona, Arkansas, Minnesota and Wisconsin (all other jurisdictions being “Ineligible Jurisdictions”)

Are those in Ineligible Jurisdictions still able to participate?

If you are a resident of any Ineligible Jurisdiction, other than the states of California, Ohio, Arizona, Arkansas, Minnesota and Wisconsin in the United States, and wish to exercise Rights, you may do so only if you complete the following forms found in the Letter to Ineligible Shareholders Schedule “A” – Shareholder Information and Schedule “B” – Investor Certificate and thereby satisfy the Company that the exercise of the Rights and issuance of Common Shares in your jurisdiction of residence will not

violate securities and other applicable laws in that jurisdiction.

If you are a United States resident in the states of California, Ohio, Arizona, Arkansas, Minnesota or Wisconsin, and wish to exercise Rights, you may contact the Company at Suite 2300 – 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X2 Attention: Brenda Dayton (or by email to bdayton@goldenqueen.com). An exception may be considered on a case by case basis if you can demonstrate to the Company that the exercise of the Rights and issuance of Common Shares in your jurisdiction of residence will not violate securities and other applicable laws in that jurisdiction

What are my decision options in terms of whether or not to exercise my Rights?

There are three options for Shareholders receiving Rights in connection with the Offering:

  1. Exercise the Rights - In the case where a Shareholder chooses to exercise their Rights (which would exclude Shareholders in Ineligible Jurisdictions who are not permitted to exercise their Rights
  2. Sell the Rights - In the case where a shareholder chooses to sell their Rights (including shareholders in both Eligible Jurisdictions and Ineligible Jurisdictions), their exposure to East Asia’s existing asset base will be reduced, however such shareholder will receive cash proceeds from the sale of their Rights.
  3. Let the Rights Expire - In the case where a shareholder does nothing and lets their Rights expire, their exposure to East Asia will be reduced and any value attached to such Rights left to expire will not accrue to the shareholder.

The actual costs and benefits of each of the foregoing options will vary depending on a shareholder’s particular circumstances and there is no assurance that such benefit will accrue as stated.

Am I required to exercise all of the Rights I receive in the Offering?

No. You may exercise any number of your Rights or you may choose not to exercise any Rights. You may also seek to sell your Rights. If you choose not to exercise or sell your Rights and such Rights expire, you will not receive any value with respect to or in lieu of such Rights.

Can I buy additional Common Shares beyond my Basic Right?

Possibly. All Holders have an Additional Subscription Privilege that allows those Holders who exercise in full their Basic Right to exercise to purchase on a pro rata basis Additional Common Shares, if any, not otherwise purchased pursuant to the Basic Right by the Holders.

Will the Rights trade on a stock exchange?

The Rights are transferable during the course of the exercise period and the TSX has approved the listing of the Rights on the TSX under symbol GQM.RT. The Rights are a new issue of securities with no prior trading market, and East Asia cannot provide any assurance that an active or any trading market in the Rights will develop, that the Rights can be sold on the TSX at any time or as to the market value of the Rights.

When will I be transferred my Common Shares if I exercise my Rights?

Holders who exercise Rights will be transferred Common Shares on the closing of the Offering, which is expected to occur on or about February 20, 2018

After I exercise my Rights and send in my payment, may I withdraw or cancel my exercise of Rights?

No. All exercises of Rights are irrevocable, subject to applicable law, including statutory rights of rescission and withdrawal, even if you later learn information that you consider to be unfavourable to the exercise of your Rights. You should not exercise your Rights unless you are certain that you wish to purchase Common Shares at a price of or U$0.1325 per whole Common Share.

Are there risks in exercising my Rights?

Yes. The exercise of your Rights involves risks. Exercising your Rights involves the purchase of Common Shares. You should consider this investment as carefully as you would consider any other equity investment. Among other things, you should carefully consider the risks described under the heading “Risk Factors” in the prospectus.

.