ADVANCE METALS LIMITED — Capital/Financing Update 2016

Aug 1, 2016

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2 August 2016

ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

ASX Market Announcement – For immediate release

SUCCESSFUL CLOSURE OF IMAGINE IM SHARE EXCHANGE

Pacific American Coal Limited (ASX: PAK , the Company ) is pleased to advise that the Company’s second 20% investment in Imagine Intelligent Materials ( Imagine IM ) has successfully closed.

Background

On 2 June 2016, PAK advised that the Company finalised its 20% acquisition of Imagine IM’s shares for $1,250,000 cash ( Initial Acquisition ). As disclosed on 21 March 2016, PAK proceeded to acquire additional shares in Imagine IM, comprising a further 20% of Imagine IM’s shares from Imagine IM's existing shareholders ( Vendors ) in consideration for the issue of PAK shares to the Vendors ( Share Exchange ).

At the Company members’ meeting held 5 May 2016, PAK’s members approved the issue and allotment of up to 26,100,000 PAK shares. This approval expires 5 August 2016.

Correction to PAK’s June 2016 Quarterly Report

The Company’s June 2016 Quarterly Report released 29 July 2016 stated “As recently announced, PAK is finalising an additional 20% acquisition in Imagine IM through a share swap, due for completion in July 2017.” July 2016 should have been reported as when completion due.

Successful Closure of Imagine IM Share Exchange

The Share Exchange has successfully closed, with PAK achieving a further 20% of Imagine IM’s shares.

Effective today, Imagine IM is PAK’s 40% associate.

Vendors are being issued and allotted 26,099,987 PAK ordinary fully paid shares for consideration of 783,766 Imagine IM ordinary fully paid shares.

For further information please contact:

Mark Syke s - Chief Executive Officer or Ian Morgan - Company Secretary

Pacific American Coal Limited - Tel: +61 (2) 9252-5300, Fax: +61 (2) 9252-8400

More details are available on PAK‘s website: www.pamcoal.com

Pacific American Coal Limited ABN 83 127 131 604

Level 14, 52 Phillip Street, Sydney NSW 2000. GPO Box 3486, Sydney NSW 2001 www.pamcoal.com

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

PACIFIC AMERICAN COAL LIMITED

ABN

83 127 131 604

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to Ordinary fully paid shares be issued 2 Number of[+] securities issued or 26,099,987 to be issued (if known) or maximum number which may be issued 3 Principal terms of the Ordinary fully paid shares +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the[+] securities rank Yes equally in all respects from the[+] issue date with an existing +class of quoted[+] securities? If the additional +securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or $0.048 each share consideration 6 Purpose of the issue (If issued as Consideration for 783,866 ordinary fully paid consideration for the shares in Imagine Intelligent Materials Pty Ltd acquisition of assets, ACN 169 015 847. clearly identify those assets) 6a Is the entity an[+] eligible Yes entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security 5 May 2016 holder resolution under rule 7.1A was passed

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

	Appendix 3 New issue announcemen
6c Number of +securities issued without security holder approval under rule 7.1 6d Number of +securities issued with security holder approval under rule 7.1A 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non- cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements	Nil
	Nil
	26,099,987 shares (up to 26,100,000 shares approved) approved at a members’ general meeting held on 5 May 2016.
	Nil
	Not applicable
	Not applicable
	Refer Annexure 1

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

7 +Issue dates 2 August 2016 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and[+] class of all +securities quoted on ASX ( including the 118,830,884 Ordinary fully paid shares +securities in section 2 if Options - each acquire one applicable) Share, exercisable at 25 cents each on or before 31 38,796,084 December 2017

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number +Class
	23,475,002 Ordinary fully paid shares (ASX Mandatory Escrowed for 24 months commencing 16 February2015)
	14,587,505 Options - each acquire one Share, exercisable at 25 cents each on or before 31 December 2017 (ASX Mandatory Escrowed for 24 months commencing 16 February2015)
	There has been no change to the dividend policy.

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

ppendix 3B ew issue announcement
20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance?	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

Not applicable

• 33 +Issue date

Not applicable

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a)  +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of[+] securities for which Not applicable +quotation is sought 39 +Class of +securities for which Not applicable quotation is sought 40 Do the[+] securities rank equally in Not applicable all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation Not applicable now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) 42 Number and +class of all Not applicable +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 2 August 2016 ( ~~Director~~ /Company secretary) Print name: Ian Morgan

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid
+ ordinary securities on issue 12
months before the [+] issue date or
date of agreement to issue 82,367,602
Members’ General
Add the following:
Meeting Date Number
• Number of fully paid [+] ordinary
securities issued in that 12
month period under an
exception in rule 7.2
• Number of fully paid [+] ordinary
securities issued in that 12
month period with shareholder 5 May 2016 638,297
approval
5 May 2016 33,000,000
• Number of partly paid [+] ordinary
securities that became fully paid
in that 12 month period 2 August 2016 26,099,987
Note:
• Include only ordinary securities
here – other classes of equity
securities cannot be added
• Include here (if applicable) the
securities the subject of the
Appendix 3B to which this form
is annexed
• It may be useful to set out
issues of securities on different
dates as separate line items
Total 59,738,284
Subtract the number of fully paid
+ ordinary securities cancelled
during that 12 month period Nil
“A” 142,105,886
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”
“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 21,315,882
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1
that has already been used
Insert number of [+] equity securities issued Issue Date Number
or agreed to be issued in that 12 month
period not counting those issued:
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under rule
7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
“C” 25 May 2016 200,000
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining
placement capacity under rule 7.1
“A” x 0.15
Note: number must be same as shown in
Step 2 21,315,882
Subtract “C”
Note: number must be same as shown in
Step 3 200,000
Total [“A” x 0.15] – “C” 21,115,882
[Note: this is the remaining placement
capacity under rule 7.1]
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

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Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
“A”
Note: number must be same as shown in
Step 1 of Part 1 142,105,886
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10 14,210,588
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
Insert number of [+] equity securities issued
or agreed to be issued in that 12 month
period under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
“E” Nil
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement	Appendix 3B New issue announcement
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	14,210,588
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	14,210,588 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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