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1 B A N N O N L I M I T E D A C N S U P P L E M E N T A R Y P R O S P E C T U S I N I T I A L P U B L I C O F F E R I N G Section 1 Important Information This is a Supplementary Prospectus that should be read in conjunction with the prospectus dated 4 April 2012 (Original Prospectus). This Supplementary Prospectus is dated 10 May 2012 and a copy of this Supplementary Prospectus was lodged with the ASIC and ASX on that date. The ASIC and ASX do not take any responsibility for the contents of this Supplementary Prospectus. This Supplementary Prospectus and the Original Prospectus may be viewed on the Company's website. During the period of the Offer, you may obtain a paper copy of the Original Prospectus and this Supplementary Prospectus free of charge by contacting the Company. You may only apply for Shares using an Application Form attached to, or accompanied by, a complete copy of the Original Prospectus and this Supplementary Prospectus. This document is important and should be read in its entirety and in conjunction with the Original Prospectus. If you do Section 2 Purpose of Supplementary Prospectus Since lodgement of the Original Prospectus and as a result of continuing due diligence on the Kalaba Copper Project, the Company has met with the parties that own the Kalaba Copper Project, Alliance Resources Limited, Zamsort Limited and Mumena Mushinge (together the Vendors) and the Company has now entered into an option agreement (Revised Agreement) to acquire the Kalaba Copper Project directly from the Vendors rather than acquiring the Kalaba Copper Project through the agreement with Zamvale Limited detailed in section 13.3 of the Original Prospectus. As a result of the revised structure of the acquisition of the Kalaba Copper Project, the existing agreements summarised in sections 13.3 and 13.4 of the Original Prospectus have been terminated and the parties have been released from all obligations in respect of these agreements. The parties have agreed the following key commercial terms in the Revised Agreement: (a) (b) (c) The Company will be granted an option to acquire the licences comprising the Kalaba Copper Project (Kalaba Licences) for an option period of the later of six months from the date of the initial payment under the Revised Agreement and one month after the grant of the large scale mining licence to be to be granted to Zamsort Limited or Mumena Mushinge. During the option period the Company will be required to make an initial payment of US$20,000 within seven business days of the date of the Revised Agreement, followed by subsequent payments of US$100,000 within seven business days of the Company being satisfied with its due diligence investigations into the Kalaba Licences and a further US$300,000 upon the issue of the large scale mining licence (or large scale prospecting licence). The Company may exercise the option to acquire the Kalaba Copper Project at any time during the option period for consideration of: i) US$300,000 cash; ii) iii) 4,500,000 Shares; 2,250,000 Ordinary Options (refer to Annexure A for the terms and conditions of the Ordinary Options); 1

2 iv) 2,750,000 Class A Milestone Options which only vest and are only capable of exercise on delineation of a JORC Inferred Resource of 15mt at 1% Copper or Copper equivalent on the Kalaba Licences (refer to Annexure A for the terms and conditions of the Class A Milestone Options); and (d) (e) v) 5,000,000 Class B Milestone Options which only vest and are only capable of exercise on delineation of a JORC Inferred Resource of 30mt at 1% Copper or Copper equivalent on the Kalaba Licences (refer to Annexure A for the terms and conditions of the Class B Milestone Options). Completion of the acquisition is conditional on (amongst other things) the Company completing due diligence on the Kalaba Licences and the parties obtaining any governmental or other third party consents that are required. During the period of five years from the completion date of the acquisition, the Company shall issue the following Shares to the Vendors if the following milestones are met: i) on delineation of a JORC Inferred Resource of 15mt at 1% Copper or Copper equivalent on the Tenements, the Company shall issue 5,500,000 Shares; and ii) on delineation of a JORC Inferred Resource of 30mt at 1% Copper or Copper equivalent on the Tenements, the Company shall issue 10,000,000 Shares. (f) (g) During the option period, the Company will have full access to the Kalaba Licences to conduct activities. The Revised Agreement is exclusive and contains warranties standard for a transaction of this type. The Company notes that as a result of the Revised Agreement: (a) (b) (c) less cash will be paid initially by the Company; the consideration is tied to the value of the assets through the issue of shares and options that will be issued or vest on achievement of specified milestones; and completion of the acquisition is subject to shareholder approval. The Company notes as per the Original Prospectus that the exercise of the option remains subject to extensive technical and legal due diligence on the project. Conducting due diligence will require expenditure and there can be no assurance that the Company will exercise the option in respect of the Kalaba Copper Project. The Company has completed limited preliminary legal due diligence on the small scale mining licence and the large scale mining licence application. From this due diligence it appears there may be licences that overlap the area that is under application. However it is unclear how much of the licence and application are affected and whether the overlapping licences are valid. The Company, in conjunction with its legal advisors in Zambia and the Vendors, is seeking to resolve these issues. It should be noted that the grant of the large scale mining licence is a key term of the option agreement and the option will not be exercised until the uncertainty outlined above is resolved and the large scale mining licence is granted. The Company would like to emphasise that it is still undertaking due diligence on the Kalaba Copper Project and, as discussed above, some issues have been discovered. In addition, there may be further issues uncovered through due diligence investigations that may prevent the Company from exercising the option. Investors should not make an investment decision in the Company on the basis that the Company proposes to exercise the option and acquire the Kalaba Copper Project. 2

3 If the Directors exercise the option, there can be no assurance that the Kalaba Copper Project will be successful. Further, part of the consideration payable to exercise the option and acquire the project is the issue of new Shares and Options. Issue of the Shares, and exercise of the Options will all dilute the shareholding of existing Shareholders. Refer to section 12 of the Original Prospectus for risks associated with investing in the Company. As part of the process of renegotiating the acquisition of the Kalaba Copper Project, the Company has also agreed to pay $15,000 in cash and issue 200,000 Shares to parties who had existing relationships with the Vendors of the Kalaba Copper Project on completion of the acquisition of the Kalaba Copper Project. As stated in the Original Prospectus, funds allocated to new project review in the use of funds table in section 6.4 of the Original Prospectus will be used for due diligence and upfront payments on the Kalaba Copper Project. If this project proceeds past due diligence, unallocated working capital may be used to acquire the project and for initial exploration on the project. Refer to section 6.4 of the Original Prospectus for further details. As a consequence of the Revised Agreement, the Company has resolved to extend the Closing Date under the Offer to 18 May Section 3 Supplementary Information Extension of the Offer The Directors have resolved to extend the Closing Date of the Offer to 18 May Completed Application Forms must be received by the Company's Share Registry by no later than 5.00pm WST on 18 May As a consequence of the extension, the Indicative Timetable of the Offer is now as follows: Lodgement of Original Prospectus with ASIC 4 April 2012 Lodgement of Supplementary Prospectus with ASIC 8 May 2012 Closing Date 5.00pm WST on 18 May 2012 Despatch of Holding Statements 6 June 2012 Expected date for listing on ASX 8 June 2012 The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice. Section 4 General All other information contained in the Original Prospectus remains unchanged. Words and phrases as defined in the Original Prospectus have a corresponding meaning in this Supplementary Prospectus. Section 5 Directors Consents and Authorisations Each Director of Bannon Limited has given and has not, at the date of this Supplementary Prospectus, withdrawn his written consent to the lodgement with the ASIC of this Supplementary Prospectus. This Supplementary Prospectus is signed for and on behalf of Bannon Limited by: Peter Pawlowitsch Director Dated 10 May

4 Annexure A Option Terms and Conditions (a) Entitlement The Options entitle the holder to subscribe for one Share upon the exercise of each Option. (b) Exercise price The exercise price of each Option will be $0.25. (c) Expiry date The expiry date of each Ordinary Option will be 7 August 2015 and the expiry date of each Class A Milestone Option and Class B Milestone Option will be 31 August (d) Exercise period The Ordinary Options are exercisable at any time on or prior to the Expiry Date. The Class A Milestone Options only vest and are only capable of exercise at any time following delineation of a JORC Inferred Resource of 15mt at 1% Copper or Copper equivalent on the Tenements and on or prior to the Expiry Date. The Class B Milestone Options only vest and are only capable of exercise at any time following delineation of a JORC Inferred Resource of 30mt at 1% Copper or Copper equivalent on the Tenements and on or prior to the Expiry Date. (e) Notice of exercise The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt. (f) Shares issued on exercise Shares issued on exercise of the Options will rank equally with the Shares of the Company. (g) Quotation of Shares on exercise Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options. (h) Timing of issue of Shares After an Option is validly exercised, the Company must as soon as possible: (i) (ii) issue the Share; and do all such acts matters and things to obtain: (A) (B) the grant of quotation for the Share on ASX no later than 5 days from the date of exercise of the Option; and receipt of cleared funds equal to the sum payable on the exercise of the Options. 4

5 (i) Participation in new issues There are no participation rights or entitlements inherent in the Options and the holder will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue. (j) Adjustment for bonus issues of Shares If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment): (i) (ii) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Option holder would have received if the Option holder had exercised the Option before the record date for the bonus issue; and no change will be made to the Exercise Price. (k) Adjustment for rights issue In respect of the Ordinary Options, if the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Ordinary Option will be reduced according to the following formula: New exercise price = O - E[P-(S+D)] N+1 O = E = P = S = D = N = the old Exercise Price of the Ordinary Option. the number of underlying Shares into which one Ordinary Option is exercisable. average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date. the subscription price of a Share under the pro rata issue. the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue). the number of Shares with rights or entitlements that must be held to receive a right to one new share. There will be no adjustment to the Class A Milestone Options and the Class B Milestone Options if the Company makes an issue of Shares pro rata to existing Shareholders, (l) Adjustments for reorganisation If there is any reconstruction of the issued share capital of the Company, the rights of the Option holder may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction. 5

6 (m) Quotation of Options The Ordinary Options will be unlisted Options at completion of the Offer. However the Company reserves the right to apply for quotation of the Ordinary Options at such time as the Company in its absolute discretion determines. Should the Company make an application for official quotation of the Ordinary Options and the ASX accepts the application for quotation of the Ordinary Options then the Ordinary Options will be listed options from the time that the ASX accepts such application. No application will be made by the Company for quotation of the Class A Milestone Options and Class B Milestone Options. (n) Options transferable The Ordinary Options are transferable subject to compliance with the Corporations Act. The Class A Milestone Options and Class B Milestone Options are non-transferable. (o) Lodgement instructions Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for Shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry. 6