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1 , ABN PROSPECTUS for two offers (collectively the Offer), namely: 1. a non-renounceable pro rata offer (Rights Issue Offer) to issue up to 34,642,856 Contributing Shares on the basis of one Contributing Share for every one Share held on the Record Date. Each Contributing Share is to be partly paid on application as to $0.03 with the unpaid amount being $0.03; and 2. an offer (Placement Offer) of up to 1,000 Shares at an issue price of $0.07 per Share. The Offer is not underwritten. Important Notice This document is important and should be read in its entirety. This Prospectus is a transaction-specific prospectus issued in accordance with section 713 of the Corporations Act If you have any queries about any part of the Prospectus, please contact your professional adviser without delay. The Contributing Shares and Shares offered by this Prospectus are speculative.

2 CONTENTS IMPORTANT NOTICES 3 PROPOSED TIMETABLE 4 1. DETAILS OF THE OFFER 5 2. ACTION REQUIRED BY SHAREHOLDERS EFFECT OF THE OFFER ADDITIONAL INFORMATION AUTHORISATION GLOSSARY OF TERMS 23

3 CORPORATE DIRECTORY Directors Mr Peter Thomas Non-Executive Chairman Mr Greg Steemson Managing Director Mr George Sakalidis Non-Executive Director Mr Gavin Rutherford Non-Executive Director CORPORATE DIRECTORY Auditors* Somes Cooke Chartered Accountants Level 1, 1304 Hay Street WEST PERTH WA 6005 Company Secretary Mr Dennis Wilkins Ms Fiona Lawe Davies Principal Place of Business 10 Walker Avenue WEST PERTH WA 6005 Telephone: Securities Exchange Listing ASX (EMU) Corporate Advisors to the Company DWCorporate Pty Ltd Ground Floor, 20 Kings Park Road WEST PERTH WA 6005 Registered Office Ground Floor 20 Kings Park Road WEST PERTH WA 6005 Share Registry* Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Telephone: Facsimile: *These parties are included for information purposes only. They have not been involved in the preparation of this Prospectus. 2

4 PROPOSED TIMETABLE IMPORTANT NOTICES Shareholders should read this document in its entirety and, if in doubt should consult their professional advisors. This Prospectus is dated 10 January 2013 and was lodged with ASIC on that date. ASIC and ASX take no responsibility for the contents of this Prospectus. The Expiry Date of the Prospectus is 13 months after the date the Prospectus was lodged with the ASIC. No Contributing Shares or Shares will be issued on the basis of this Prospectus after the Expiry Date. The Company has not determined whether to apply to ASX for Official Quotation by ASX of the Contributing Shares offered by this Prospectus but it reserves the right to do so. An application will be made to ASX within 7 days after the date of this Prospectus for the quotation of the Shares the subject of the Placement Offer under this Prospectus. In preparing this Prospectus, regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and that certain matters may reasonably be expected to be known to investors and their professional advisers. This Prospectus is a transaction specific prospectus and has been prepared in accordance with section 713 of the Corporations Act. This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all information that would be included in a prospectus for an initial public offering. No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer. Overseas Shareholders No action has been taken to permit the offer of Contributing Shares or Shares under this Prospectus in any jurisdiction outside Australia and New Zealand. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions constitutes a violation of those laws. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. Electronic Prospectus A copy of this Prospectus can be downloaded from the website of the Company at or the ASX s website. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company. Privacy If you complete an application for Contributing Shares or Shares, you will be providing personal information to the Company (directly or by the Company s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration. The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies (including the Australian Taxation Office) authorised securities brokers, print service providers, mail houses and the Company s share registry. You can access, correct and update the personal information that we hold about you. A fee may be charged for access. Access requests must be made in writing to the Company or its share registry. Collection, maintenance and disclosure of certain personal information are governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Contributing Shares or Shares, the Company may not be able to accept or process your application. 3

5 PROPOSED TIMETABLE PROPOSED TIMETABLE Announcement of Rights Issue Offer and Placement 28 December 2012 Lodgement of Appendix 3B and Prospectus 10 January 2013 Notice Rights Issue sent to Shareholders 14 January 2013 Ex Date 15 January 2013 Record Date for determining Shareholder Entitlements 21 January 2013 Opening Date of Offer and Dispatch of Prospectus and Application Form 23 January 2013 Closing Date of Offer at 5.00pm (WST) 8 February 2013 Notify ASX of Shortfall Securities 13 February 2013 Allotment and issue of Contributing Shares and Shares 18 February 2013 Dispatch of holding statements 18 February 2013 This timetable is indicative only and subject to change. The Company reserves the right to vary the above dates including the Closing Date, subject to the ASX Listing Rules and Corporations Act, without notice and regardless of whether the date so extended has passed or not. 4

6 DETAILS OF THE OFFER 1. Details of the Offer 1.1. The Rights Issue Offer and Nature of Contributing Shares The Company is making a non-renounceable pro rata offer to issue up to 34,642,856 Contributing Shares (assuming no existing Options are exercised between the lodgement date of this Prospectus and the Record Date): on the basis of one Contributing Share for every one Share held at 5:00 pm (WST) on the Record Date; and with $0.03 per Contributing Share payable on application and an unpaid amount of $0.03 per Contributing Share which may be called by the Company in one or more instalments on a date or dates as determined by the Company (provided that the day on which a call is made falls after the first anniversary of the issue of the Contributing Shares), to raise (before the costs of issue and disregarding any payments on account of the amount unpaid upon issue) up to $1,039,280. A no liability company has, by force of statute, the following distinguishing characteristics: (a) (b) (c) a holder of shares in a no liability company has (as the name suggests) no liability to pay any of the share capital, either while the company is a going concern or in its winding up; a shareholder can elect to pay a call - if a shareholder does not pay a call as and when made, the shares will be forfeited; only a company whose constitution states that its sole objects are mining purposes can be a no liability type of company. Mining purposes are defined to include the following: (1) prospecting for ores, metals or minerals; (2) obtaining, by any mode or method, ores, metals or minerals; (3) the sale or other disposal of ores, metals, minerals or other products of mining; and (4) the carrying on of any business or activity necessary for, or incidental to, any of the foregoing purposes. Quarrying operations for the sole purpose of obtaining stone for building, road making or similar purposes are specifically excluded from the definition. Subject to the foregoing, the Listing Rules and any inconsistent provisions of a company s constitution, the rights and obligations attaching to and conferred by partly paid (or contributing) shares in the issued capital of a no liability company are determined by the terms upon which they are issued. The terms of the Rights Issue Offer will create a new class of securities in the Company, being the Contributing Shares, which will, in essence, rank equally with Shares, other than as set out in Section 4.1 Upon the Contributing Shares becoming fully paid, they shall rank equally in all respects with Shares. A summary of the rights and liabilities attaching to the Contributing Shares is set out in Section 4.1 and a summary of the rights and liabilities attaching to Shares is set out in Section Purpose of the Rights Issue Offer Completion of the issue of Contributing Shares offered by this Prospectus will result in an increase in the cash on hand of up to $1,039,280 (before the payment of costs associated with the Rights Issue Offer and disregarding any payments on account of the amount unpaid upon issue ). Each Contributing Share will, upon issue, have an unpaid amount of $0.03, which amount will not be called in whole or in part until after the first anniversary of the issue of the Contributing Shares (see Section 4.1 for further details of the terms of Contributing Shares). If the Rights Issue Offer is fully subscribed and the entire amount unpaid upon issue is ultimately paid in full then that will raise an additional $1,039,280. As foreshadowed in the Company s 2012 Annual Report, its September 2012 Quarterly Report and more recently as announced to the ASX on 28 December 2012, the Company has been and is currently assessing several present or near term cash producing mining projects. While none of these opportunities has crystallised, it is the Board s intention to pursue this strategy until a project meeting the Board s criteria of early cashflow is realised. 5

7 DETAILS OF THE OFFER As announced to the ASX on 28 December 2012, the Rights Issue Offer is intended to: augment Emu s available working capital for purposes generally; place Emu in a stronger position to pursue its goal of securing a current or near term cash producing mining asset; help fund its current activity (consistent with said goal) of investigating numerous mining and development opportunities (principally in Africa) including diamond operations (including several separate, discrete and entirely unrelated primary kimberlite, tailings retreatment and alluvial operations) and tantalite exploration/development projects; provide Shareholders with what the Board believes to be a well priced leveraged opportunity to address the oft expressed concern of shareholders (at large) that placements to sophisticated and professional investors deny ordinary shareholders the opportunity to subscribe for new issues at wholesale prices thus diluting their interests; seek to avoid, within regulatory constraints, the usual pattern of the price of ordinary fully paid shares drifting down to meet the offer price; and provide a seamless, albeit limited, mechanism for future capital raising. At the date of this prospectus, the Company had $3,000,000 cash at bank. Existing funds of the Company and proceeds from the Offer are currently the only sources of funds to finance the stated objectives of the Company The Placement Offer and Nature of Shares By this Prospectus, the Company invites investors identified by the Directors to apply for up to 1,000 Shares at an issue price of $0.07 per Share payable in full on application to raise $70 (before costs of issue). All of the Shares offered under the Placement Offer will rank equally with Shares on issue at the date of this Prospectus (see Section 4.2 for further details of the terms of Shares) Purpose of the Placement Offer The Company is seeking to raise only a nominal amount of $70 (before costs of issue) under the Placement Offer. The primary purpose of the Placement Offer is to remove any trading restrictions that may have attached to the Shares issued by the Company under the Placement (which was made to Peter Thomas and Greg Steemson, two Directors of the Company, pursuant to approval granted by Shareholders at the Company s annual general meeting on 30 November 2012 and as announced to the market on 28 December 2012). Generally, section 707(3) of the Corporations Act requires a prospectus to be issued if securities are offered for sale within 12 months after their issue and the issue of those securities is without disclosure (e.g. via a prospectus) to investors under Chapter 6D of the Corporations Act. Section 708A(5) of the Corporations Act provides that a sale offer does not need disclosure to investors if: (a) (b) (c) (d) (e) the relevant securities are in a class of securities that were quoted securities at all times in the 3 months before the day on which the relevant securities were issued; trading in that class of securities on a prescribed financial market on which they were quoted was not suspended for more than a total of 5 days during the shorter of the period during which the class of securities were quoted, and the period of 12 months before the day on which the relevant securities were issued; the Company has not been exempted by ASIC from the continuous disclosure provisions at any time during the relevant period referred to in paragraph (b); the Company or any person as director or auditor of the body has not been exempted from or received an instrument of modification in relation to the financial reporting provisions at any time during the relevant period referred to in paragraph (b); and (relevantly) the Company gives the relevant market operator for the Company a notice that complies with section 708A(6) of the Corporations Act before the sale offer is made. 6

8 DETAILS OF THE OFFER The Company was suspended from 4 April 2012 to 22 May 2012 (inclusive) to allow the Company to re-comply with Chapters 1 and 2 of the Listing Rules due to a proposed change in activities, details of which are referred to in the Notice of General Meeting dated 6 March However, despite the Board s continuing confidence in the Hillgrove asset which comprised the proposed transaction which was to change the Company s activities, the transaction was terminated and the Company s securities were reinstated for quotation on the ASX. Please refer to ASX Release dated 22 May 2012 for more information. Accordingly, the Company has been suspended for more than 5 days during the past 12 months and may therefore not rely on section 708A(5) of the Corporations Act. However, further and relevantly, section 708A(11) of the Corporations Act provides that a sale offer does not need disclosure to investors if: (a) (b) (c) the relevant securities are in a class of securities that are quoted securities of the body; and either: (i) a prospectus is lodged with ASIC on or after the day on which the relevant securities were issued but before the day on which the sale offer is made; or (ii) a prospectus is lodged with ASIC before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are still open for acceptance on the day on which the relevant securities were issued; and the prospectus is for an offer of securities issued by the body that are in the same class of securities as the relevant securities. The purpose of the Placement Offer is therefore to comply with section 708A(11) and to remove any trading restrictions on the sale of any Shares issued by the Company under the Placement Your Entitlement under the Rights Issue Offer Eligible Shareholders (being those Shareholders who are on the Company s share register at 5.00pm (WST) on the Record Date, being 21 January 2013) will receive rights to acquire one Contributing Share for every one Share held. The Entitlement of Eligible Shareholders is shown on the Entitlement and Acceptance Form sent to them with this Prospectus. Your Entitlement may be accepted in whole or in part prior to the Closing Date subject to the rights of the Company to extend the Offer period. Instructions for accepting your Entitlement are set out in Section 2 and on the Entitlement and Acceptance Form which accompanies this Prospectus How to Apply for the Placement Offer An application for Shares pursuant to the Placement Offer must only be made by investors at the direction of the Company and must be made using the relevant Application Form. The Directors reserve the right to issue Shares pursuant to the Placement Offer at their absolute discretion. Accordingly, do not submit an Application Form in respect of the Placement Offer unless directed to do so by the Directors. Payment for Shares pursuant to the Placement Offer must be made in full at the issue price of $0.07 per Share. Completed Application Forms must be mailed or delivered to the Company to the address set out on the Application Form by no later than 5.00pm (WST) on the Closing Date No Rights Trading The Rights Issue Offer is non-renounceable, and therefore the Entitlements are not transferable and cannot be traded on the ASX or any other exchange or privately transferred. If you do not take up all or part of your Entitlement to Contributing Shares under the Rights Issue Offer by the Closing Date, the Rights Issue Offer to you will lapse Shortfall Securities The Directors do not intend to issue any Shortfall Securities. 7

9 DETAILS OF THE OFFER 1.9. Opening and Closing Dates The Opening Date of the Offer will be 23 January 2013 and the Closing Date will be 5.00 pm WST (2.00pm (WST) for BPAY ) on 8 February Subject to the requirements of the Listing Rules, the Directors reserve the right to close the Offer early or extend the Closing Date (as the case may be) Dilution consequent upon the Offer Shareholders who take up their Entitlement in full will not have their percentage holding in the Company diluted as a result of the Rights Issue Offer. Shareholders who do not take up their Entitlement in full will have their percentage holding in the Company diluted as a result of the Rights Issue Offer. Dilution as a consequence of the Placement Offer will be infinitesimal. Refer to Section 3.1 of this Prospectus for further details in relation to the proposed capital structure following completion of the Offer Allotment and Application Money A Contributing Share or Share will only be issued after the Application Money in respect of that security has been received. The expected date for the issue of Contributing Shares and Shares appears in the proposed timetable at page 4 of this Prospectus. All Application Money received before Contributing Shares and Shares are issued will be held in a special purpose account for the purpose of depositing Application Money. After any Application Money is refunded (if required) and Contributing Shares and Shares are issued to Applicants, the balance of funds in the account plus accrued interest will be for the benefit of the Company Minimum Subscription There is no minimum subscription for the Offer Underwriter The Offer is not underwritten ASX quotation CHESS The Contributing Shares will constitute a new class of unlisted security. Upon the Contributing Shares becoming fully paid they will form part of the same class of fully paid ordinary shares already quoted on the ASX and the Company will make application for them to be quoted on the ASX. The Shares issued pursuant to the Placement Offer will form part of the same class of fully paid ordinary shares already quoted on the ASX. Application for the Official Quotation of the Shares pursuant to the Placement Offer will be made within 7 days after the date of this Prospectus. If permission is not granted by ASX for Official Quotation, within 3 months after the date of this Prospectus (or such period as varied by ASIC), the Company will not issue any Shares and will repay, as soon as practicable, without interest, all Application Money received in respect of the Placement Offer pursuant to this Prospectus in full. The fact that ASX may agree to grant Official Quotation of the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares. Depending upon the likely impact of any proposed acquisition upon the nature or scale of the Company s activities, Listing Rule 11 may be invoked the consequences of which are in the discretion of the ASX but include the quotation of the Company s securities being suspended and the Company having to meet the requirements in Chapters 1 and 2 of the Listing Rules as if the Company were applying for admission to the official list which the Company could avoid by voluntarily removing itself from the official list. The Rights Issue Offer is not contingent on the continuing quotation of the Company s securities. The Company will not be issuing share certificates. The Company is a participant in CHESS for those investors who have a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation. 8

10 DETAILS OF THE OFFER Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with separate statements (similar to a bank account statement) that set out the number of Contributing Shares issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month Market price of Shares The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX. The highest, lowest and last market sale prices of the Company s existing Shares on the ASX during three months immediately preceding the lodgement of this Prospectus with ASIC and the respective dates of those sales were: 3 months high 3 month low Last market sale price Shares $0.078 on 14 December 2012 $0.065 on October & 2 12 November 2012 $0.074 on 10 January Major activities and financial information A summary of the major activities and financial information relating to the Company for the financial year ended 30 June 2012 is in the Annual Financial Report which was lodged with ASX on 1 October The Company's continuous disclosure notices (i.e. ASX announcements) since 1 October 2012 provide information on the major activities and financial information relating to the Company since the financial year ended 30 June 2012 and are listed in Section 4.4. Copies of these documents are available free of charge from the Company. Directors strongly recommend that Shareholders and investors review these and all other announcements prior to deciding whether or not to participate in the Offer Enquiries concerning Prospectus Enquiries should be directed to the Company Secretary by telephone on (08) You can also contact your stockbroker or professional adviser with any queries in relation to the Offer. 9

11 ACTION REQUIRED BY SHAREHOLDERS 2. Action required by Shareholders 2.1. What Eligible Shareholders may do: The number of Contributing Shares to which Eligible Shareholders are entitled (your Entitlement) is shown on the Entitlement and Acceptance Form accompanying this Prospectus. If you do not take up your Entitlement, then your percentage holding in the Company will be diluted. As an Eligible Shareholder, you may: take up all of your Entitlement (refer to Section 2.2); take up part of your Entitlement and allow the balance to lapse (refer to Section 2.3); allow all of your Entitlement to lapse (refer to Section 2.4) If you wish to take up all of your Entitlement If you wish to take up all of your Entitlement, complete the accompanying Entitlement and Acceptance Form for Contributing Shares in accordance with the instructions set out in that form and arrange for payment of the Application Money in accordance with Section 2.5. If you elect to pay by BPay, you do not need to return the Entitlement and Acceptance Form but you will be deemed to have accepted your Entitlements upon receipt of the BPay payment Taking up part of your Entitlement and allowing the balance to lapse If you wish to take up part of your Entitlement and allow the balance to lapse, complete the accompanying Entitlement and Acceptance Form by filling out the number of Contributing Shares you wish to take up and arrange for payment for the Application Money (calculated at $0.03 per Contributing Share accepted) in accordance with Section 2.5. If you take no further action, the balance of your Entitlement will lapse If you do not wish to accept any of your Entitlement If you do not wish to accept any of your Entitlement, you are not obliged to do anything. The number of Shares you hold as at the Record Date and the rights attached to those Shares will not be affected should you choose not to accept any of your Entitlement but you will receive no Contributing Shares. It is therefore important that, if you wish to receive all or part of your Entitlement, you take action to accept your Entitlement in accordance with the instructions above and on the back of the accompanying Entitlement and Acceptance Form Payment The amount payable on application in respect of each Contributing Share is $0.03 per Contributing Share. You may pay the Application Money by BPay or cheque. The unpaid amount of $0.03 per Contributing Share may be called by the Company in one or more instalments on a date or dates as determined by the Company (provided that the day on which a call is made falls after the first anniversary of the issue of the Contributing Shares) see Section 4.1 for more information on the rights and liabilities attaching to the Contributing Shares. THERE IS NO OBLIGATION TO PAY ANY UNPAID AMOUNT but failure to meet any call will result in the Contributing Shares being forfeited. Completed Entitlement and Acceptance Forms must be accompanied by a cheque in Australian dollars, crossed Not Negotiable and made payable to Emu Nickel NL and lodged and received at the Company s share registry (by delivery or by post) no later than 5.00pm (WST) on the Closing Date: By delivery Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 By Post Security Transfer Registrars Pty Ltd PO Box 535 APPLECROSS WA

12 ACTION REQUIRED BY SHAREHOLDERS If you elect to pay via BPAY, then you must follow the instructions for BPAY on the Entitlement and Acceptance Form and it is your responsibility to ensure that funds submitted through BPAY are received by 2.00 pm (WST) on the Closing Date. The Company shall not be responsible for any postal or delivery delays or delay in the receipt of the BPAY payment Application Form is binding A completed and lodged Application Form constitutes a binding offer to acquire Contributing Shares or Shares on the terms and conditions set out in this Prospectus and, once lodged, cannot be withdrawn. If the Application Form is not completed correctly, it may still be treated as a valid application for Contributing Shares or Shares. The Directors decision whether to treat an acceptance as valid and how to construe, amend or complete the Application Form is final. By completing and returning your Entitlement and Acceptance Form with the requisite Application Money, you will be deemed to have represented and warranted on behalf of yourself or each person on whose account you are acting that the law in your place of residence and/or where you have been given the Prospectus, does not prohibit you from being given the Prospectus and that you: agree to be bound by the terms of the Rights Issue Offer; declare that all details and statements in the Entitlement and Acceptance Form are complete and accurate; declare that you are over 18 years of age and have full legal capacity and power to perform all your rights and obligations under the Entitlement and Acceptance Form; authorise the Company and its respective officers or agents, to do anything on your behalf necessary for the Contributing Shares to be issued to you, including to act on instructions of the Company s share registry upon using the contact details set out in the Entitlement and Acceptance Form; acknowledge that the information contained in, or accompanying, the Prospectus is not investment or financial product advice or a recommendation that Contributing Shares are suitable for you given your investment objectives, financial situation or particular needs; acknowledge that the Contributing Shares have not, and will not be, registered under the securities laws in any other jurisdictions outside Australia and New Zealand and accordingly, the Contributing Shares may not be offered, sold or otherwise transferred except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of applicable securities laws in particular the US Securities Act; and agree that the Company makes no express or implied representation or warranty in relation to the Company, this Prospectus or the Offer save as expressly provided in this Prospectus or as required by law. 11

13 EFFECT OF THE OFFER 3. Effect of the Offer 3.1 Effect of the Offer on capital structure On the basis of the assumptions set out immediately following the below table, the effect of the Offer on the Company s capital structure will, upon the closure of the Offer, be: Shares Unlisted Options 1 Securities currently on issue 34,642,670 5,520,319 0 Contributing Shares Securities offered under this Prospectus 2 1, ,642,670 Securities on issue on completion of the Offer 2 34,643,670 5,520,319 34,642,670 Assumptions: 1. no Options (see below table for details of Options) are converted; 2. the Offer is fully subscribed; and 3. no existing convertible securities are converted or additional securities issued. Options Number Options exercisable at $ on or before 27 February ,596,435 Options exercisable at $ on or before 22 December ,148 Options exercisable at $ on or before 21 December ,736 Total Options on issue 5,520,319 If the unpaid amount in respect of the Contributing Shares is fully called and paid up and the above assumptions prevail subject to the further assumption that only the 27 February 2013 Unlisted Options have then lapsed, the Company s capital structure will then be: Shares Unlisted Options Contributing Shares Securities on issue 69,286, , Statement of Financial Position The pro-forma statement of financial position is based on the management prepared statement of financial position at 9 January 2013 (unaudited). Actual Proforma Current Assets Cash and cash equivalents 3,022,094 4,050,779 Trade and other receivables 50,169 50,169 Other assets prepayments 8,904 8,904 3,081,167 4,109,852 Non-Current Assets Property, plant and equipment 8,305 8,305 Other financial assets 107, , , ,205 12

14 EFFECT OF THE OFFER Total Assets 3,197,372 4,226,057 Current Liabilities Trade and other payables 108, , , ,216 Net Assets 3,089,156 4,117,841 Equity Contributed equity 9,315,929 10,344,614 Reserves 222, ,950 Accumulated losses (6,449,723) (6,449,723) 3,089,156 4,117,841 The Pro-Forma Statement of Financial Position includes the following adjustments: (a) Entitlements issue of 34,642,856 Contributing Shares on a 1 for 1 basis and allowing only for the amount of $0.03 per Contribution Share payable on application; (b) Placement of 1,000 Shares at an issue price of $0.07 each; and (c) Cash costs of issue of $10, Dividend policy The Board intends to distribute to Shareholders all funds surplus (if any and for so long as any such surplus be significant) to the Company's investment and operating requirements (as determined by the Board) subject always to: (d) (e) (f) (g) availability of distributable profits (if any); solvency requirements; banking or other funding covenants by which the Company is bound from time to time; and acquisitive and organic growth opportunities. 13

15 ADDITIONAL INFORMATION 4. Additional information 4.1 Rights and liabilities attaching to Contributing Shares The Contributing Shares will rank equally with Shares on issue subject to the following: Amounts paid & unpaid: No liability: Earliest Call: Capital reorganisation: Rights: Payment before a Call: Each Contributing Share: a) is issued in consideration of the sum of $0.03; and b) has an unpaid amount of a further $0.03. Holders have no obligation to meet a call ( Call ) made by the Company for the payment of any of the unpaid amount; however, non-payment of a properly made call will result in the forfeiture of the relevant Contributing Shares. The Company shall not make a Call unless the day on which the call is made falls after the 1 st anniversary of the issue of the Contributing Share or such later date or dates as determined by the Board from time to time in its absolute discretion. If there is a re-organisation of the issued capital of the Company (including, but not limited to, a consolidation, subdivision, cancellation, reduction or return of capital): a) the number of Contributing Shares must be reorganised in the same proportion as all other classes of shares on issue; and b) the re-organisation must not involve a cancellation or reduction of the total amount payable and unpaid by holders of Contributing Shares. Irrespective of whether the Company has made a Call for the payment of all or any of the unpaid amount, each Contributing Share: a) carries the right to participate in new issues (except bonus issues) of securities made to holders of Shares as if the Contributing Shares were fully paid Shares; b) carries the right to participate in bonus issues of securities in the proportion which the amount paid (or, if applicable, aggregate of amounts paid) (not credited) bears to the total of the amounts paid and payable and each holder ( Holder ) of a Contributing Share will be notified by the Company of any proposed bonus issue of securities at least 7 days prior to the record date for any such issue; c) entitles the Holder to (i) exercise voting rights on a pro-rata basis in the proportion which the amount (or, if applicable, aggregate of amounts) paid bears to the total of the amounts paid and payable; and (ii) fully participate in dividends as if the Contributing Shares were a fully paid Share; d) is freely transferable; e) upon being paid up in full shall rank equally in all respects with Shares then on issue and the Company shall promptly apply for them to be listed on the ASX (and each or any other exchange on which shares of the Company are traded). A Holder may pay up the whole of the amount remaining unpaid at any time PROVIDED THAT they may only do so in parcels: a) of not less than 50,000; or b) of less than 50,000 if the parcel has been held by the holder since its issue, it represents the Holder s entire holding of Contributing Shares and the Holder has not previously paid up any Contributing Shares; otherwise no amount unpaid may be paid in advance of a Call without the leave of the Board (which leave may be granted with or without reason and either with or without conditions) - the Board shall have no obligation to consider any application for leave. The Company shall not be obliged to process payments without a Call more than once every three months. 14

16 ADDITIONAL INFORMATION Listing of Contributing Shares: Compliance with Listing Rules: Interpretation: Subject to the foregoing, if a Holder tenders all or part of the amount remaining unpaid on a Contributing Share other than in satisfaction of a Call: a) the rights attaching to the Contributing Share will not change (including the amounts paid and unpaid); and b) the amount tendered will, at the election of the Company, either be returned or retained as a non interest bearing loan repayable only upon and to the extent of a Call being made then the repayment shall be made by the Company to itself in satisfaction of the Call to that extent. The Company may apply to list the Contributing Shares at its election and shall do so upon request in that regard being made by a Holder(s) of 5% or more of the outstanding Contributing Shares PROVIDED THAT the conditions to listing the same (save for the application that they be listed) have been met. For so long as the Company is admitted to the official list of ASX, the following paramount provisions will apply: a) notwithstanding anything contained in these terms of issue, if the ASX listing rules (in the form and context in which they exist as at the date the first Contributing Share is issued) ( Existing Rules ) prohibit an act from being done, the act shall not be done; b) nothing contained in these terms of issue prevent an act being done that the Existing Rules require to be done; c) if the Existing Rules require an act to be done or not be done, authority is given for that act to be done or not done as the case may be; d) if the Existing Rules require these terms of issue to contain a provision and it does not contain such a provision, these terms of issue are deemed to contain such a provision; e) if the Existing Rules require these terms of issue not to contain a provision and it contains such a provision, these terms of issue are deemed not to contain that provision; and f) if any provision of these terms of issue is inconsistent with the Existing Rules, these terms of issue are deemed not to contain that provision to the extent of the inconsistency. The Contributing Shares are subject to the terms of the Constitution but if there is any inconsistency between the Constitution and these terms of issue, then to the maximum extent permitted by law, these terms of issue will prevail. 4.2 Rights and liabilities attaching to Shares (a) (b) (c) General A summary of the more significant rights and liabilities attaching to Shares is set out below. The rights attaching to the Shares arise from a combination of the Company's Constitution, statute and general law. The Constitution has been lodged with ASIC. A copy of the Company s Constitution is available for inspection at the Company s registered office during normal business hours. Reports and Notices Shareholders are entitled to receive all notices, reports, accounts and other documents required to be furnished to shareholders under the Company's Constitution, the Corporations Act and the Listing Rules. General Meetings Directors may call a meeting of members whenever they think fit. Members may call a meeting as 15

17 ADDITIONAL INFORMATION (d) (e) (f) (g) (h) (i) provided by the Corporations Act. All members are entitled to a notice of meeting. A quorum for a meeting of members is 2 eligible voters. The Company will hold annual general meetings in accordance with the Corporations Act and the Listing Rules. Shareholders are entitled to be present in person, or by proxy, attorney or representative (in the case of a company) to speak and to vote at general meetings of the Company. Voting Subject to any rights or restrictions at the time being attached to any class or classes of shares, at a general meeting of the Company on a show of hands, every ordinary Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote. Upon a poll, every Shareholder present in person, or by proxy, attorney or representative (in the case of a company) has one vote for any Share held by the Shareholder and a fraction of a vote for each partly paid share held by the Shareholder (with the fraction being in the proportion that the amount paid up bears to the total of the amounts paid and unpaid. In the case of an equality of votes, the chairperson has a casting vote. A poll may be demanded by the chairperson of the meeting, any 5 Shareholders entitled to vote in person, by any one or more Shareholders holding not less than 10% of the total voting rights of all votes that may be cast on the resolution, or by any one or more Shareholders holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. Dividends The Company may pay dividends as the Directors resolve but only out of profits of the Company. The Directors may determine the amount, method and time for payment of the dividend. Winding Up Subject to the Corporations Act, the Listing Rules and any rights or restrictions attached to a class of shares, on a winding up of the Company, any surplus must be divided among the Shareholders in the proportion to the shares held by them. Subject to any rights or restrictions attached to a class of Shares, on a winding up of the Company, the liquidator may, with the sanction of a special resolution of the Shareholders: (i) (ii) distribute among Shareholders in kind the whole or any part of the property of the Company; and vest the whole or any part of the assets of the Company in a trustee upon such trust for the benefit of the members. Transfer of Shares Generally, Shares in the Company are freely transferable, subject to formal requirements, and to the registration of the transfer not resulting in a contravention of, or failure to observe, the provisions of a law of Australia. Issue of Further Shares The Directors may, subject to any restrictions imposed by the Constitution and the Corporations Act, allot, issue and grant Options over further Shares, on such terms and conditions as they see fit. Directors The existing Directors may appoint a new Director to fill a casual vacancy or as an addition to the Board, but so that the total number of Directors does not at any time exceed 10. Any such Director must retire at the next following annual general meeting of the Company (at which meeting he or she may be eligible for election as a Director). The Constitution contains provisions relating to the rotation and election of directors. No Director may hold office later than the third annual general meeting after his or her appointment or election without submitting himself or herself for re-election. 16

18 ADDITIONAL INFORMATION (j) (k) (l) Variation of Shares and Rights Attaching to Shares Subject to the Corporations Act, the Company may, with the sanction of special resolution passed at a meeting of shareholders or with the written consent of holders of three quarters of the issued shares, vary the rights and privileges attached to any class of shares. Changes to the Constitution The Company s Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given. Listing Rules Provided the Company remains admitted to the Official List of the Australian Stock Exchange Ltd, then despite anything in the Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. If as a result of an amendment to the Listing Rules, there is an inconsistency between the Constitution and the Listing Rules, the Company shall, subject to the Corporations Act, do all things necessary to change the Constitution to remove the inconsistency as soon as possible and in any event, at the first general meeting of the Company held after the date on which the relevant amendment the Listing Rules comes into operation. 4.3 Nature of this Prospectus This Prospectus is a transaction specific prospectus to which the special content rules in section 713 of the Corporations Act apply. This enables listed disclosing entities, such as the Company, to issue a prospectus for continuously quoted securities and options to acquire continuously quoted securities with modified disclosure requirements if they satisfy certain requirements. This Rights Issue Offer is not for continuously quoted securities, however, ASIC has made an instrument under section 741(1)(a) to exempt the Company from having to comply with section 710 of the Corporations Act in relation to a rights issue of partly paid ordinary shares (on terms substantially the same as terms provided to ASIC in correspondence), on the condition, amongst others, that the offer is made pursuant to a transaction specific prospectus lodged with ASIC. Please refer to Sections 1.2 and 1.4 for the purpose of the issue of this Prospectus. The information in this Prospectus principally concerns the terms and conditions of the Offer and the information reasonably necessary to make an informed assessment of: (a) the effect of the Offer on the Company; and (b) the rights and liabilities attaching to the Contributing Shares and Shares offered pursuant to this Prospectus. This Prospectus is intended to be read in conjunction with publicly available information in relation to the Company which has been notified to ASX and does not include all of the information included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Shareholders should therefore also have regard to the other publicly available information in relation to the Company before making a decision on whether or not to invest in the Company. 4.4 Copies of documents Copies of documents lodged by the Company in connection with its reporting and disclosure obligations may be obtained from, or inspected at, an office of ASIC. The Company will provide free of charge to any person who requests it, a copy of: (a) the Annual Financial Report of the Company for the year ended 30 June 2012, being the last financial year for which an annual financial report has been lodged with ASIC in relation to the Company before the issue of this Prospectus; and 17

19 ADDITIONAL INFORMATION (b) the following continuous disclosure notices given by the Company to notify ASX of information relating to the Company during the period from the date of lodgement of the Annual Financial Report referred to in paragraph (a) and before the date of issue of this Prospectus: Date Lodged Subject of Announcement 04/01/2013 Appendix 3Y x2 04/01/2013 Appendix 3B 28/12/2012 Issue to Directors and Proposed Rights Issue 19/12/2012 Details of Company Address 19/12/2012 Appointment of Non-Executive Director and Company Secretary 13/12/2012 Initial Director s Interest Notice 06/12/2012 Proposed Sale of Small Share Parcels 03/12/2012 Ceasing to be a substantial holder 30/11/2012 Results of Meeting 29/11/2012 Change of Director s Interest Notice 29/11/2012 Change of Director s Interest Notice 31/10/2012 Quarterly Cashflow Report 31/10/2012 Quarterly Activities Report 29/10/2012 Notice of Annual General Meeting/Proxy Form 01/10/2012 Full Year Statutory Accounts The following documents are available for inspection throughout the application period of this Prospectus during normal business hours at the registered office of the Company (details are provided in the Corporate Directory): (i) (ii) (iii) this Prospectus; Constitution; and the consents referred to in Section 4.10 and the consents provided by the Directors to the issue of this Prospectus. 4.5 Information excluded from continuous disclosure notices Other than as disclosed in this Prospectus there is no information which has been excluded from a continuous disclosure notice in in reliance upon an exception provided for by the Listing Rules. 4.6 Determination by ASIC ASIC has not made a determination which would prevent the Company from relying on section 713 of the Corporations Act in issuing the Contributing Shares and Shares under this Prospectus. 18

20 ADDITIONAL INFORMATION 4.7 Directors' interests The information set out below and elsewhere in this Prospectus is provided for the purpose of section 711 of the Corporations Act. (a) Directors Holdings Notes: Set out in the table below are details of Directors' relevant interests in the securities of the Company at the date of this Prospectus. The Directors, other than Mr Sakalidis, intend to take up their full Entitlement under the Rights Issue Offer. Mr Sakalidis intends to take up his Entitlement to the fullest extent his financial circumstances allow. Director No of Shares 1 No. of Options Entitlement to Subscribe for Contributing Shares 2 Peter Thomas 4,698, ,585 4,698,996 Greg Steemson 4,487,208 4 Nil 4,487,208 George Sakalidis 2,122, ,172,392 2,122,479 Gavin Rutherford 79,978 6 Nil 79, Held directly or indirectly by the Director or a related party of the Director. 2. Entitlement to subscribe for Contributing Shares that will be held directly or indirectly assuming no existing Options held are exercised before the Record Date. 3. 4,627,906 Shares are held by the Waterford Retirement Plan of which PS Thomas is one of two trustees and beneficiaries & 33,589 Shares are held by a private company by reason of his being the sole director thereof. 4. Held by the GH Steemson Family Superannuation Fund of which GH Steemson is one of two trustees and beneficiaries ,050 Shares are held by Leeman Pty Ltd a company controlled by G Sakalidis & 55,617 Shares are held indirectly by the Sakalidis Superannuation Fund of which G Sakalidis is one of two trustees and beneficiaries. 6. Held by The Gavelle Super Fund A/C of which GAR Rutherford is one of two trustees and beneficiaries. (b) Fees and Benefits - Directors No portion of any amount paid or agreed to be paid by anyone to any director was paid or payable in connection with the formation or promotion of the Company or the Offer. Further no such amount is capable of being apportioned as having been paid or payable in connection with the formation or promotion of the Company or the Offer. Accordingly, as it is the duty of every director to promote the Company and each director has been involved in the process of the making of the Offer, this Prospectus discloses all amounts any portion of which could conceivably have been apportioned in any degree as having any of the relevant connections. From the time of incorporation of the Company it has paid or provided to the Directors of the Company (at the date of this Prospectus) and their associates as follows: (i) Mr Steemson s associated company, Steemson Geoscience Pty Ltd the aggregate sum of $214,050 on account the provision of Mr Steemson s ad hoc services (including his service as a director to the date the managing directors agreement came into effect); (ii) the above amount includes entitlements and payments under the managing directors contract which came into force on 1 December 2012; (iii) Mr Rutherford (appointed 6 December 2012) has not been but is entitled to be paid the aggregate sum of $2,329 on account of directors fees; (iv) Mr Thomas (a founding director of the Company) has been paid on account of directors fees the aggregate sum of $279,047 (including superannuation at the required statutory rate); (v) Mr Thomas has been paid $167,671 fees for special exertion services; 19