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1 Aquis to establish a listed entertainment and casino group initially holding Casino Canberra Discovery Resources Limited to acquire Aquis Canberra Pty Ltd and be renamed Aquis Entertainment Limited The Aquis Entertainment Group and Discovery Resources Limited (Discovery or the Company) are pleased to announce a transaction through which the Canberra Casino will become owned within an ASX listed structure (the Transaction). Transaction highlights: Discovery Resources Limited will change its name to Aquis Entertainment Limited (AQS). Casino Canberra to become part of an ASX listed structure via the acquisition by Discovery of all of the shares in Aquis Canberra Pty Ltd (Aquis Canberra), the holding company of Casino Canberra Limited. Aquis Canberra is currently wholly owned within the Aquis Group, which is ultimately 100% owned by Hong Kong businessman Mr Tony Fung. The Aquis Group will be issued shares in Discovery in consideration for the transfer of Aquis Canberra resulting in Aquis Group owning approximately 89% of Discovery post Transaction (on a fully diluted basis and subject to certain criteria and conditions as set out below). Casino Canberra s assets include the Canberra Casino located in the Australian Capital Territory and the accompanying casino licence (Casino). In addition to the proposed acquisition, it is also proposed that the Company will conduct an equity raising of A$2 million at A$0.20 per share (Equity Raise) by placement. There is no proposed consolidation of current Discovery shares under, or as a result of, the Transaction. The Company s Board of Directors, following completion of the Transaction, will comprise: Mr Tony Fung (Chairman); Mr Raymond Or Ching-Fai (Deputy Chairman); Mr Justin Fung (Managing Director); Mr Geoff Andres (CEO); and Mr Alex Chow (Independent Non Executive Director), subject to gaming regulatory approval. Following completion of the Transaction, the Company will seek to implement a number of initiatives including a significant redevelopment of the Canberra Casino and consideration of other potential projects in Queensland and elsewhere. The Transaction is subject to certain conditions, including Discovery shareholder approval and ACT Government gaming regulatory approvals. Page 1 of 9

2 Further details of the Transaction are set out below. The Company will also provide further details on the Transaction and Equity Raise in the notice of meeting to be sent to security holders in late April, along with an independent expert s report opining on the Transaction. For further details contact: Warren Apps, Media & Communications Co-ordinator, Casino Canberra +61 (4) Josh Puckridge, CEO Discovery Resources +61 (4) Page 2 of 9

3 TRANSACTION OVERVIEW Aquis Canberra Holdings (Aus) Pty Ltd (Aquis Canberra Holdings), a wholly owned subsidiary of the Aquis Group and Mr Tony Fung, and Discovery have entered into a binding agreement pursuant to which, subject to satisfaction of conditions precedent: 100% of Aquis Canberra Pty Ltd will be transferred to the Company; the Company will issue 163,546,925 new ordinary shares to the Aquis Group (subject to the terms described below); the Company will be renamed Aquis Entertainment Limited and the ASX ticker will change to AQS ; the board of the Company will be reconfigured as set out below; and the head office of the Company will move to the Canberra Casino offices. Separately, all 5 million options over unissued shares in the Company will also be transferred to Aquis Canberra Holdings. EQUITY RAISE In addition to the Transaction, the Company also proposes to raise A$2 million in new equity via the placement of 10 million new shares at $A0.20 per share. The placement will be made to Aquis Canberra Holdings. If necessary, the Company may raise additional funds (up to A$1 million) through the issue of new shares to the public in order to satisfy ASX re-listing requirements. CAPITAL STRUCTURE Post the Equity Raise and issue of new securities for the Transaction, the Company will have on issue: 199,266,101 shares; and 5 million options over a corresponding number of unissued shares (Options). On completion the Company is expected to have approximately A$6 million in cash at bank after estimated Transaction costs. Mr Tony Fung currently owns 17.3% of the Company (4,450,000 shares) and all of the 5 million Options via a wholly owned subsidiary, 4Js Pty Ltd. Under the terms of the proposed Transaction, Aquis Canberra Holdings (wholly owned by Mr Fung) will be issued the consideration shares in two tranches, comprising: (a) (b) 149,421,874 shares to be issued immediately on completion of the sale of Aquis Canberra; and a further 14,125,051 shares to be issued on Aquis Entertainment obtaining a notification from the relevant ACT casino regulatory agencies that it has no in-principle objection to the proposed redevelopment plans for Casino Canberra. If Aquis receives the notification referred to in (b) above prior to completion of the Transaction, all consideration shares will be issued immediately on completion. Accordingly, post the completion of the Transaction and the Equity Raise, Tony Fung and his controlled entities will hold 177,996,925 fully paid ordinary shares in the Company prior to any exercise of the Options (approximately 89.3%). Page 3 of 9

4 See Appendix A for an approximate pro-forma balance sheet of AQS post completion of the Transaction. SHAREHOLDER LOANS Entities controlled by Mr Fung have granted loans to Aquis Canberra in order to fund the working requirements of Canberra Casino (refer to the pro forma balance sheet in Appendix A for further details). In addition, Aquis Canberra will be permitted to seek further debt financing from Mr Fung and his controlled entities up to a maximum of $10 million (or such greater amount as agreed to by Discovery) in order to fund the working capital requirements and the short term redevelopment costs of the Canberra Casino. In the event that additional funding is required by Aquis Canberra where redevelopment must be undertaken at the Canberra Casino as a matter of urgency, such amounts will not be included in determining the permitted aggregate value of the loans. THE CANBERRA CASINO The Canberra Casino began operating in It is located on Binara Street, Canberra in the Australian Capital Territory. The Casino was formerly owned by Casinos Austria and was purchased by Aquis in December The Canberra Casino currently has 39 gaming tables and 2 bars. The casino licence fees have been pre-paid for 5 years. Historical earnings of the Casino for the last four years are as follows: Income statement AUD AUD AUD Revenue $19,450,786 $17,792,483 $17,762,070 $15,927,650 Other Income $50,682 $38,595 $30,365 $17,613 Total Revenue $19,501,468 $17,831,078 $17,792,435 $15,945,263* Employee benefits expense $13,010,006 $12,513,455 $12,664,294 $11,585, Casino Tax $2,064,957 $1,919,036 $1,931,449 $1,731, Licence Fee $818,642 $839,757 $854,061 $876, Other Expenses $2,913,516 $2,687,866 $2,644,519 $2,537, EBITDA $694,347 -$129,036 -$301,888 -$786,688.00* Depreciation and Amortization $562,527 $565,788 $523,539 $452, Impairment $ - $5,540,110 $1,511,585 $ - Profit Before Tax $131,820 -$6,234,934 -$2,337,012 -$1,239,010.00* Income Tax $82,001 -$614,662 -$226,802 -$16, Page 4 of 9

5 * 2014 figures stated above have been adjusted to remove the impact of a one-off item being the forgiveness of a $6.7 million shareholder loan to Casino Canberra by the previous owner, Casinos Austria. The 2014 full audited financial statements for Casino Canberra Limited reflect the impact of this item. All periods are year ending 31 December. The above numbers are based on Casino Canberra s audited financial statements. See Appendix A for other historical financials of the Casino. VALUE PROPOSITION & USE OF CAPITAL RAISE The incoming board of directors (set out below) has identified areas that will be focused on to maximise the Casino s performance going forward. Venue Refurbishment: It is proposed that a significant property and facilities upgrade will be undertaken to refurbish and renovate the Canberra Casino s current buildings and gaming facilities. VIP Gaming: The Casino will undertake a review of its operations with the aim of attracting international and domestic VIP gaming clientele. Initiatives being considered include increasing the Casino s betting limits to attract larger, higher margin clientele, extending trading hours and changes to the gaming options on offer at the Casino. The above matters are subject to ACT gaming regulatory approvals where necessary and subject to further financing at the appropriate time. Aquis sees considerable potential in pursuing the development of Canberra Casino. It is expected that, if successful, these initiatives will contribute to a major financial re-rating to the Casino s performance. The Transaction and new corporate structure will provide additional flexibility for funding options to facilitate these initiatives. Separate to its initiatives in Canberra the Company will seek to pursue other gaming and entertainment opportunities in Queensland and elsewhere. POST TRANSACTION BOARD The Board of Directors post the completion of the Transaction is proposed as follows: Tony Fung - Mr Tony Fung is the ultimate owner and controller of the Aquis Group. He has significant experience in corporate finance and company administration, including running Sun Hung Kai & Co. Ltd, a leading Hong Kong-based non-bank financial and securities holding company. Mr Fung has significant property investments in Hong Kong and also in Australia. Raymond Or Ching-Fai - Mr Or Ching-Fai is chairman and chief executive of China Strategic Holdings Limited. Mr Or has had a long career in banking and insurance including as the Chairman of HSBC Insurance Limited, Vice-Chairman and Chief Executive of Hang Seng Bank, Chairman of Hang Seng Insurance Co Limited and currently he is a director of Industrial and Commercial Bank of China Limited. Mr Or was previously a director of Cathay Pacific Airways Limited and Hutchison Whampoa Limited. He was (among other roles) the Vice President and a Council Member of the Hong Kong Institute of Bankers. He has a bachelor s degree in economics and psychology from the University of Hong Kong. Justin Fung - Mr Justin Fung is Mr Tony Fung s son. He is the managing director of the Canberra Casino. He is an Australian resident and represents the Fung family s interests in Australia. He plays a lead role in day to day operational, management and strategic decisions of the Aquis Group. Mr Fung has an arts degree from Duke University, North Carolina and a law Page 5 of 9

6 degree from Loyola University, Los Angeles and has previously worked in the Fung family s property/development businesses. Geoff Andres Mr Geoff Andres is a senior and experienced international casino executive. He was most recently the Senior Vice-President and General Manager of Sands Macau where he was responsible for driving a significant redevelopment program across the 289 room five star resort. He has worked at senior levels across major gaming and entertainment brands in the US and Macau for more than 20 years. Alex Chow Mr Chow Yu Chun, Alexander, aged 68, is a senior non-executive director with over 35 years of experience in commercial, financial and investment management in Hong Kong and Mainland China. He has served as an lndependent Non-executive Director of Top Form International Limited since February 1993 and is a Certified Public Accountant of the Hong Kong lnstitute of Certified Public Accountants. Mr. Chow is also currently an independent non-executive director of Playmates Toys Limited, China Strategic Holdings Limited and Symphony Holdings Ltd, each of which are listed on the Hong Kong Stock Exchange. Mr. Chow was previously a non-executive director of New World China Land Limited (also Hong Kong Stock Exchange listed), until his resignation in December EXISTING BOARD Subject to shareholder approval (if required), Non-Executive Chairman Tony Adcock and Non- Executive Director Tom Pickett will be paid a sum of $50,000 each in consideration for them resigning as directors and Mr Josh Puckridge will be paid a sum of $200,000 in consideration for his assistance in implementing the Transaction. CONDITIONS PRECEDENT TO COMPLETION The Transaction is conditional on various Conditions Precedent including: current Discovery shareholders approving the Transaction. Mr Fung/4Js Pty Ltd will not be entitled to vote on such resolution; no material adverse change occurring in respect of Aquis Canberra or Discovery; ACT government casino licensing regulatory approvals being obtained; Discovery lodging a Prospectus as required under the ASX Listing Rules; ASX approvals; the Independent Expert engaged to opine on the Transaction determining that the Transaction is reasonable to Discovery shareholders; and Discovery disposes of its Namibian subsidiary and all its interests in mining tenements in Namibia. INDICATIVE TIMELINE TO COMPLETION Notice of Meeting (and expert s report) sent to shareholders Late April 2015 Lodgement of Prospectus Mid May 2015 Shareholder Meeting Late May 2015 Page 6 of 9

7 Settlement of Equity Raise Early June 2015 Completion of all CPs Early June 2015 Settlement Early June 2015 For further details contact: Warren Apps, Media & Communications Co-ordinator, Casino Canberra +61 (4) Josh Puckridge, CEO Discovery Resources +61 (4) Page 7 of 9

8 APPENDIX A Unaudited Pro-forma Balance Sheet at 31 March 2015 NOTES PRO-FORMA AUD Assets Cash and cash equivalents 1 $9,203,339 Trade and other receivables $266,238 Inventories 2 $137,933 Prepayments $4,665,112 Other $86,153 Total Current Assets $14,358,775 Property, plant and equipment $3,181,287 Intangible assets $1,964,308 Deferred tax assets $3,045,155 Total Assets $22,549,525 Liabilities Trade and other payables -$1,035,403 Accruals 3 -$492,690 Interest bearing liabilities - Aquis loan 4 -$2,025,753 Short term provisions - Annual leave -$638,751 Total Current Liabilities -$4,192,597 Non-interest bearing liabilities - ACH (Aus) 5 -$13,750,000 Long-term provisions - Long service leave -$706,970 Total Liabilities -$18,649,567 NET ASSETS $3,899,958 Equity Issued capital 6 $37,437,161 Total Contributed Equity $37,437,161 Option Reserve $127,713 Accumulated loss 7 -$33,664,916 TOTAL EQUITY $3,899,958 Page 8 of 9

9 NOTES TO THE UNAUDITED PRO-FORMA BALANCE SHEET NOTE 1 Cash and cash equivalents consist of: Cash at bank $7,943,333 Cash desk $775,803 Other $32,721 Unbanked drop $191,624 Unbanked revenue $259,858 $9,203,339 NOTE 2 Inventories consist of: Beverages $36,270 Chips & cards $96,355 Other $5,308 $137,933 NOTE 3 Accruals consist of: Casino tax $175,368 Salaries and wages $317,322 $492,690 NOTE 4 The loan is unsecured, bears interest at 10% p.a. and is repayable within 6 months of a written demand by the lender. NOTE 5 Aquis Canberra Pty Ltd has a loan from Aquis Canberra Holdings (Aus) Pty Ltd for a total amount of $13.75m, made up of $6m for the acquisition of the casino, $3.75m of equity contributed to Casino Canberra and $4.5m for upfront licence fees paid. The loan is unsecured, interest free and has no fixed terms of repayment. NOTE 6 Reconciliation of ordinary shares on issue: Number $ Pre-transaction 25,719,176 2,727,776 Issue of shares pursuant SPA (deemed value of $0.20 per share) 163,546,925 32,709,385 Share placement 10,000,000 2,000,000 At end of year 199,266,101 37,437,161 NOTE 7 Included in the accumulated loss, for the purposes of this pro-forma balance sheet, is a net gain of $7,290,695 arising from the elimination on consolidation of Aquis Canberra Pty Ltd s investment in Canberra Casino. Page 9 of 9