announcement?, page-5

$2.1M CONVERTIBLE LOAN FINANCING

The Company is pleased to announce that it has executed agreements with sophisticated professional investors,, through Novus Capital Limited, in relation to the placement of $2.1 million in convertible loans.  These loans will convert to 42,000,000 convertible notes with a face value of $0.05, upon the refreshment of the company’s 15% placing ability under Listing Rule 7.1 or upon shareholders approving the issue of the convertible notes at a subsequent general meeting.

If the 15% placing ability is not refreshed at the General Meeting scheduled for 30 January 2012, investors have the option to have the loansredeemed upon giving the Company 60 days’ notice, in which time the company may call a further general meeting to approve the issue of the notes and / or arrange alternative financing to repay those investorsthat exercise their option to redeem.

The notes have the following key terms:

(1) The coupon rate is 11% per annum, payable quarterly in arrears;

(2) The principal isrepayable on 31 December  2012; and

(3) The notes convert at maturity on a 1:1 basis, but may be converted priorto maturity at the lower of: $0.05 per Share;
or 85% of the previous 10 day volume weighted average price of the Company'sshares on ASX calculated from the
date that the Company receivesthe Conversion Notice.
If the notes are issued underthe refreshed 15% placing ability, The Company willseek a ratification of the issue of these convertible notes at a subsequentshareholders meeting.
The fundsraised will be used towardsthe Company’s ongoing exploration and development program.  

The Company is continuing the preparation of the Prospectusfor the previously announced 1:7 Entitlement Issue at 1.7 cents, which willraise approximately $4.5 million and expectsto be able to make a further announcement in regard to the proposed datesin the next week.

Forfurtherinformation contact:
Chris Ritchie
Chief Financial Officer
Phone +61 3 9349 1488
[email protected]