Itochu Agreement

Greetings,

Itochu has six months from the completion of legal proceedings to exercise its right to subscribe for a 14.9% shareholding in AGS or ACE at a 10% discount to the 2 month VWAP ruling at the time of conversion.

My understanding is that all legal proceedings, against GA/H/Q ceased on, or about 30 June. Itochu have, therefore until 31/12/14, or thereabouts, to exercise this right.

The transaction was approved by shareholders in August 2012 but it is not clear to me whether this approval covered to issue of the required number of shares in AGS. At present AGS has approx 315 million shares on issue and 14.9% equates to just over 500 million shares. If this issue does require further Shareholder approval it would have to be sought, and given, at the next AGM.

It seems to me that Itochu is in the box seat as they can delay notice of exercise until AGS announces the result of the sale of their 25% in the B4M project, due before the AGM, and gain the advantage of a relatively short period of an (any?) increased sp affecting the VWAP they will have to pay.

We, Shareholders, are not privy to the detail of the Agreement which should spell out how long AGS has to vest the shares in Itochu and, therefore, the time lapse before Itochu could sell their new shares on the market (or hold for the sale "pay out"). I doubt that Itochu would be prepared to wait until after the 2015 AGM.

In my view the proximity of the expected sale agreement, the date of the AGM and the expiry of Itochu's right raises serious problems for the AGS Board. Do they, for instance, back date the eligibility for any payout to shut out those purchasing shares after the announcement ? Another possibility, amongst many, is to seek a Suspension from the date of the sale announcement until any payout is completed.

Itochu has the right to appoint a Director to the AGS Board and it is not unreasonable to think that they will be far better informed of the true AGS situation than private shareholders. Any move by Itochu to exercise their right may be the first valid indication of the state of our B4M Project sale.

Alternative view, of more than one line, welcomed.

Best wishes,