re: Ann: Cornerstone Investor standstill obli... ASX...

re: Ann: Cornerstone Investor standstill obli... ASX ANNOUNCEMENT
26 May 2010

Cornerstone Investor standstill obligation is lifted


Under the Placement Agreement dated 26 May 2009, between PanAust Limited and
Guangdong Rising Assets Management Co Ltd (GRAM), it was agreed that GRAM would not acquire more than an additional 1% shareholding in PanAust in the 12‐month period
following completion of the transaction. This standstill obligation was subject to a limited
number of exceptions.
Twelve months have elapsed since the original entry into the Placement Agreement and as contemplated by one of the exceptions, the PanAust directors, other than Zezhong Li (the GRAM nominated director), have agreed to lift the standstill obligation. Accordingly, GRAM is now able to acquire more PanAust shares on market.
It should be noted that:
GRAM currently has a 19.8% interest in PanAust shares and GRAM did not exercise
its right under the Placement Agreement to acquire an additional 1% of PanAust�s
shares during the standstill period.

GRAM currently has one nominated director on the Board of PanAust. If GRAM
increases its holding to 25% of the issued capital of the Company, this will trigger a right for GRAM to nominate a further director. However, the Placement Agreement provides that the Chairman and a majority of the Board of Directors of PanAust must continue to be independent non‐executive directors.

At the time of its initial investment, GRAM obtained advice from the Foreign
Investment Review Board that the Australian government had no objection to GRAM acquiring up to a 25% interest in PanAust.