Would Soul Pattinson like to add to white dam

www.excoresources.com.au
28 August 2012
Dear Fellow Shareholder
TAKE NO ACTION IN RELATION TO THE SOUL PATTINSON UNSOLICITED TAKEOVER OFFER
On 23 August 2012, Washington H. Soul Pattinson & Company Limited (
Soul Pattinson
) announced its
intention to make an unsolicited takeover offer for all of your shares in Exco at a price of 19 cents.
Your directors have now had an opportunity to consider the Soul Pattinson offer. Exco non

-executive
director, Mr Mike Spre
adborough, is a representative of Ivanhoe Australia Limited which has sold part of
its shareholding in Exco and committed to accept the Soul Pattinson offer in the absence of a superior
proposal for Ivanhoe.


For that reason, Mr Spreadborough will not be ma
king a recommendation to Exco
shareholders in relation to the Soul Pattinson offer.
For the reasons summarised on the following pages, all of the directors of Exco other than Mr
Spreadborough (referred to in this letter as the “Independent Directors”) have
unanimously
concluded that the Soul Pattinson offer is INADEQUATE
and
UNFAIR.
Your Independent Directors believe that taking control of Exco is important to Soul Pattinson in the
context of the challenges its subsidiary CopperChem faces with
a limited min
e life at the Great Australia
project
. In principle, your Independent Directors have no problem with Soul Pattinson taking control of
Exco if, and only if, minority shareholders receive a fair price for their shares.
In approximately four weeks you will re
ceive a Target’s Statement from your directors which will provide
you with all of the information you need to consider the Soul Pattinson offer. Until you receive the
Target’s Statement you should
TAKE NO ACTION IN RELATION TO YOUR EXCO SHARES.
As Soul P
attinson has now lodged its Bidder's Statement, it is entitled to purchase more shares in Exco
on market at the offer price. Accordingly, your Independent Directors think it appropriate to provide you
with a more detailed response now than they might other
wise have provided in advance of issuing the
Target's Statement because there is a risk that control of Exco
might pass to Soul Pattinson before you
have had a chance to consider relevant issues.
Furthermore, we have received strong messages of support fro
m a number of our key shareholders since
the offer was announced and you can rest assured that your Independent Directors intend to do
everything possible to ensure that this inadequate and unfair offer fails. To assist us in dealing with the
offer, we have appointed Macquarie Capital as our financial adviser and Ashurst as our legal adviser.
Your board looks forward to your continuing support .

Just saying.