cap raising underway, page-3

Dear All

Jacka Resources Limited - Share Placement and Rights Issue (together the “Offer”)

DJ Carmichael Pty Limited (“DJC”) has been invited to act as Joint Lead Manager to participate in a Share Placement and Rights Issue being undertaken by Jacka Resources Limited (“JKA”, “Jacka” or “the Company”).

Jacka is seeking to raise circa $2.2 million through the placement of up to 34 million fully paid ordinary shares (“Shares”) at a price of $0.065 per Share. Free attaching listed options on a 1:1 basis with a $0.13 strike price and 2 year expiry (“Attaching Options”) will also be issued. Placement Shares will be settled and issued prior to the record date for the Rights Issue and will be eligible to participate. Placement Shares will be issued immediately under the Company's 15% capacity pursuant to ASX Listing Rule 7.1 (“Placement”).

The Company will also undertake a contemporaneous underwritten non-renounceable Rights Issue on a 1:10 basis at $0.065 per Share to raise circa $2.4 million. Free attaching listed options on a 1:2 basis with the same terms as the Placement Attaching Options will also be issued (“Rights Issue”).

As an added incentive, sub-underwriters to the Rights Issue will receive an additional 1:2 listed commitment option on the same terms as the Attaching Options on the amount sub-underwritten regardless of the shortfall (“Commitment Options”) in addition to a 1.25% sub-underwriting fee.
Attaching Options and Commitment Options will be subject to shareholder approval to be sought at a general meeting to be held as soon as practicable.

The Offer will raise a total of circa $4.6 million.

The Placement is being offered at a ~24% discount to the last trade price of $0.085. Attaching Options and Commitment Options will have a Black-Scholes intrinsic value of $0.027 implying an effective entry price of $0.038.

Clients will have the ability to bid for either Placement stock, Sub-Underwriting or both, however preference will be given to those who bid for both on the basis of $1 of placement stock for every $1 of sub-underwriting stock.

Jacka Resources Limited is an oil and gas developer and explorer predominantly focussed in Africa with operations in Tunisia, Nigeria, Tanzania and Somaliland.

Investment Highlights

Significant corporate restructure
• The Board will reduce from 5 to 3 with the resignations of Justyn Wood, Stephen Brockhurst and Brett Smith (further to Scott Spencer’s recent resignation).
• The Joint Lead Managers to the Offer have endorsed the appointment of experienced company director Max Cozijn as Chairman and James Robinson as Non-Executive Director. Both have extensive corporate and oil and gas experience.
• Bob Cassie, newly appointed to the position of Managing Director, will continue in the role.
• All key management have agreed to take 10-15% pay cuts.
• Further cost saving initiatives to save a combined $500k per annum from April 2014.
• The majority of the current Board will take up their Rights Issue entitlements.

Monetisation opportunities to change the course of business and outlook
• The Company intends to monetise portfolio assets through farm-out or cash divestment to realise value and improve financial standing.
• Significant near term potential sale opportunities for Age and Somaliland blocks to improve the Company’s cash position.
• The region where the Company’s assets are located continues to be popular for investment and discoveries.
• Post completion of the Offer, repayment of debt obligations and asset divestment, the Company may emerge with circa $10 million cash.

Major catalysts expected over the next 6 months
• 1Q 2014 Board restructure
• 1Q/2Q 2014 Repayment of debt obligations
• 2Q/3Q 2014 Asset divestments or farm-out

Funds raised via the Offer will be utilised as follows:

Purpose


Amount ($m)

Repayment of Jacka's immediate debt obligations


~1.7

Working capital and other costs to relist JKA


~2.9

Total


~4.6



An indicative timetable for the Offer is set out below.

Event


2014

Commitment bids due


5.00pm AWST Monday 24 March

Acceptances returned


Tuesday 25 March

Placement settlement funds due


9.00am AWST Friday 28 March

Placement Shares issued


Monday 31 March

Rights Shortfall notification date


Early May