Michelago Limited ACN 057 816 609 (No. 2), in the matter of Michelago Limited ACN 057 816 609 [2006] FCA 1636

FEDERAL COURT OF AUSTRALIA

Michelago Limited ACN 057 816 609 (No. 2), in the matter of Michelago Limited ACN 057 816 609 [2006] FCA 1636 MICHELAGO LIMITED ACN 057 816 609, IN THE MATTER OF MICHELAGO LIMITED ACN 057 816 609 NSD2091 OF 2006 EMMETT J

21 NOVEMBER 2006

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD2091 OF 2006

In the matter of Michelago Limited ACN 057 816 609 MICHELAGO LIMITED ACN 057 816 609

Plaintiff

JUDGE: EMMETT J

DATE: 21 NOVEMBER 2006

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 27 October 2006, the Court ordered, pursuant to s 411 of the Corporations Act 2001 (Cth), that Michelago Ltd ACN 057 816 609 ('the Company') convene a meeting of its members for the purpose of considering a scheme of arrangement between the members and the Company. The effect of the scheme was to merge the undertakings of the Company with that of Golden China Corporation on the basis of an exchange of shares. Shareholders in the Company were to receive one consolidated share in Golden China for every 37.5 shares held by members of the Company. 2 Golden China is currently undertaking a private placement to raise up to $4.5 million Canadian dollars. The funds intended to be generated will be used for working capital and general corporate purposes of Golden China. The capital raising is by way of a private placement of units. Each unit will comprise one Golden China share and one warrant. Each warrant will entitle the purchaser to purchaser one Golden China share at 25 cents Canadian per share. There will be terms attached to the warrants that will entitle Golden China to require holders to exercise the warrants if the average price of shares equals or exceeds 30 cents Canadian per share in any period of 15 consecutive days. As at today, the closing price of Golden China shares on the Toronto Stock Exchange was 20 cents. In the scheme booklet that was sent to shareholders, the price then current was said to be 21 cents per share. The total placement represents approximately 10 per cent of the present issued capital of Golden China. 3 The Company has informed Australian Securities and Investments Commission of the proposed placement and a proposed supplementary disclosure document that the Company intends to send to its shareholders and optionholders has been provided to the Commission. The Commission has written to the Company's solicitors, indicating that it has reviewed the supplementary document and does not currently intend to appear to make submissions or to intervene or to oppose the schemes of arrangement that are to be put before members and creditors. 4 The Company has provided evidence in the form of a supplementary report by Mr Robert Duffin, the managing director of Resource Equity Consultants Pty Limited. A report by that company is included in the scheme booklet. Mr Duffin has reported that the proposed placement of securities by Golden China does not change the conclusions set out in the report included in the scheme booklet, that the proposed schemes are in the best interests of Michelago's shareholders and listed optionholders in the absence of an alternative and more attractive proposal. There is no evidence that any such proposal is in the offing. 5 The Company has asked the Court to note the proposed further disclosure to shareholders. However, it seeks no orders. 6 Having considered the material, I am satisfied that there is no reason to depart from the views that I expressed when making the orders of 27 October 2006, that the schemes are schemes that reasonable shareholders and optionholders properly informed might accept and they are schemes that the Court would be likely to approve if agreed to by the members and optionholders. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.