Far East Gold Unanimously Rejects Xingye Takeover Bid as Independent Expert Confirms Significant Undervaluation

Independent Expert Reaffirms Valuation Well Above Xingye's Offer Prices

Lonergan Edwards & Associates Limited reconfirmed its valuation of Far East Gold at between A$0.324 and A$0.444 per share on a controlling interest basis, with a midpoint of A$0.385 per share. This assessment remained unchanged despite Xingye’s Third and Fourth Supplementary Bidder's Statements submitted on 17 and 21 July 2026, respectively. Neither the current offer of A$0.13 per share nor the conditional offer of A$0.15 per share aligns with this valuation range.

The valuation gap is significant: the current offer price is discounted by approximately 60% to 71% compared to the assessed range, while the conditional offer price is 54% to 66% below the valuation range and 61% below the midpoint. Compared to the pre-bid three-month volume-weighted average price of about A$0.122, the conditional offer provides only a 23% premium. The Independent Expert maintains that the offer is neither fair nor reasonable, as Xingye’s supplementary information failed to materially affect this conclusion.

Non-Binding US$40 Million Proposal for Trenggalek Project Highlights Third-Party Interest

Far East Gold disclosed receipt of a non-binding, incomplete, and conditional indicative proposal from an experienced Indonesian mining party for the Trenggalek copper-gold project in East Java, valuing the asset at US$40 million. The Independent Board Committee stresses that this proposal demonstrates ongoing third-party interest in FEG’s assets, contradicting Xingye’s claims that no credible alternatives exist.

While subject to further due diligence, negotiation, and completion, this proposal underscores the committee’s view that Xingye’s offer undervalues Far East Gold and that shareholder value may be realized through strategic asset-level transactions rather than a full corporate takeover. This alternative pathway offers shareholders potential value realization beyond the current bid.

Idenburg Gold Project Progress Key Catalyst Ahead of Offer Deadline

Far East Gold’s flagship Idenburg Gold Project contains a JORC Mineral Resource Estimate of roughly 780,000 ounces of gold and is advancing toward an Indonesian Feasibility Study, a critical milestone. Completion of this study will increase FEG’s ownership stake in the project to 80%, enhancing shareholder upside and marking significant value creation.

The Independent Board Committee notes that Xingye’s offer was made opportunistically just before these 2026 value catalysts, which could substantially de-risk the project and boost investor confidence and valuation. Accepting the current A$0.13 per share offer would mean forfeiting exposure to this potential upside as the Idenburg Project reaches key development stages. The committee views the timing and pricing as opportunistic and further evidence that the offer undervalues FEG.

Considerable Uncertainty Over Xingye Achieving Conditional Offer Price by 29 July

Xingye’s conditional offer price of A$0.15 per share requires acquiring over 50% of FEG shares on a fully diluted basis by 29 July 2026 and declaring the offer unconditional. The Independent Board Committee highlights significant uncertainty about Xingye reaching this Acceptance Threshold, posing material risk to shareholders considering acceptance.

Shareholders accepting the current offer risk receiving only A$0.13 per share, missing out on the higher conditional price and continued exposure to FEG’s asset development. The conditional pricing structure creates asymmetric risk, with no guarantee the higher price will be realized. The committee emphasizes that from a risk perspective, the effective offer price is A$0.13, reinforcing its recommendation to reject the proposal and take no action.

Committee Raises Concerns Over Xingye's Supplementary Bidder's Statements

The Independent Board Committee identified multiple issues with Xingye’s Third and Fourth Supplementary Bidder's Statements dated 17 and 21 July 2026. Rather than itemize these in the update, the committee addressed them comprehensively in section 1.3 of the Second Supplementary Target's Statement, which shareholders are encouraged to review fully.

This detailed response underscores the committee’s commitment to providing shareholders with all material information for informed decision-making. The committee concluded that Xingye’s supplementary submissions do not alter the fundamental assessment that the offer undervalues the company or justify changing the rejection recommendation. Shareholders seeking detailed analysis of disagreements should consult the full Second Supplementary Target's Statement.

Valuation Range Highlights Significant Discount in Xingye’s Offer

The Independent Expert’s valuation range from A$0.324 to A$0.444 per share reflects diverse valuation methods and asset assessments. At the low end, Xingye’s A$0.13 offer represents a 60% discount; at the high end, a 71% discount. This confirms the offer is substantially below fair value even under conservative assumptions.

Comparing the conditional A$0.15 price to the valuation range reveals shortfalls of A$0.174 to A$0.294 per share. These material gaps reinforce that Xingye’s bid does not represent fair value under any reasonable scenario. The Independent Expert’s refusal to revise its opinion despite supplementary submissions confirms the valuation’s robustness.

Far East Gold’s Strategic Asset Portfolio and Value Creation Potential

Far East Gold operates a portfolio of gold and copper exploration and development projects in Indonesia, with core assets being the Idenburg Gold Project and the Trenggalek copper-gold project. These assets underpin the Independent Expert’s valuation and represent key value drivers.

The company’s strategy offers multiple shareholder value pathways, including progressing assets toward feasibility and production, project-level monetization via sales or joint ventures, and exploration upside from earlier-stage prospects. The non-binding Trenggalek proposal illustrates that value can be unlocked through strategic transactions beyond a full corporate takeover, providing shareholders alternative routes to realize asset value.

Shareholder Guidance: Reject Xingye Offer and Take No Action

The Independent Board Committee unanimously recommends all Far East Gold shareholders reject Xingye’s offer. Shareholders are advised to take no action regarding the proposal. Accepting the current A$0.13 per share offer means relinquishing potential upside as the Idenburg Project advances through 2026 development milestones.

For comprehensive information, shareholders should review the Target's Statement dated 25 June 2026, the Supplementary Target's Statement, and the Second Supplementary Target's Statement filed by FEG. These documents detail the company’s position, the Independent Expert’s valuation rationale, and reasons for rejecting Xingye’s bid. Shareholders with questions or needing assistance on voting are encouraged to contact the company or consult a qualified financial adviser.

Upcoming Milestones and Next Steps Following Second Supplementary Target's Statement

Far East Gold lodged its Second Supplementary Target's Statement on 22 July 2026 in response to Xingye’s supplementary bidder statements dated 17 and 21 July 2026. The critical upcoming date is the Acceptance Threshold deadline of 29 July 2026, by which Xingye must secure over 50% of FEG shares on a fully diluted basis to qualify for the conditional offer price of A$0.15 per share. No further milestones beyond this date were disclosed.

Shareholders should monitor FEG announcements and developments regarding Xingye’s progress toward the Acceptance Threshold. The Independent Board Committee’s recommendation to take no action remains in place. The committee will continue to communicate material updates directly to shareholders. The ongoing Trenggalek proposal and Idenburg Project’s advancement toward feasibility study completion remain key value drivers for shareholders to consider when evaluating Xingye’s bid.