AERIS RESOURCES LIMITED — Capital/Financing Update 2012

Sep 9, 2012

Straits Resources Limited

ABN 30 147 131 977

10 September 2012

T 000001 000 SRQ MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Dear Shareholder

Entitlement Offer – notification to shareholders

Straits Resources Limited ( Straits ) is in the process of raising approximately A$60 million through a pro rata renounceable entitlement offer ( Entitlement Offer ). Details are as announced to the Australian Securities Exchange ( ASX ) on 7 September 2012.

Under the Entitlement Offer, new Straits fully paid ordinary shares ( New Shares ) are being offered at an offer price of $0.085 per New Share, which represents a discount of 23.5% to the VWAP of Shares on the ten trading days to 30 August 2012 of $0.111 and a 17.2% discount to the Theoretical Ex-Rights Price of $0.103.[ 1]

The Entitlement Offer is being made by Straits without a prospectus in accordance with section 708AA of the Corporations Act 2001 (Cth).

The key information in connection with the Entitlement Offer and important dates are set out below for your reference.

below for your reference.
Details of the Offer	The Entitlement Offer is renounceable and is being undertaken
	on the basis of 1.55 New Shares for every Straits share held, at
	an issue price of A$0.085 per New Share.
Who will be eligibleto participate?	Shareholders who are eligible to participate in the EntitlementOffer (Eligible Shareholders) are shareholders who:
	are registered as a Straits shareholder as at 7.00pm
	(Melbourne time) on 17 September 2012 (Record
	Date);
	have a registered address in Australia, New Zealand,
	the United Kingdom, Hong Kong, Singapore or
	Germany;
	are not in the United States or acting on behalf of a
	person in the United States (except for a limited number
	of Shareholders at the Record Date that are "qualified
	institutional buyers", as defined in Rule 144A under the
	U.S. Securities Act of 1933, and have been contacted
	directly by Straits); and
	are eligible under all applicable securities laws to
	receive an offer under the Entitlement Offer.
How will fractionalentitlements becalculated?	Fractional entitlements to New Shares will be rounded up to thenearest whole number.

1 The Theoretical Ex-Rights Price is the theoretical price at which Shares should trade immediately after the Ex Date. It is a theoretical calculation only and the actual price at which Shares trade immediately after the Ex Date will depend on many factors and may not be the same as the Theoretical Ex-Rights Price.

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How many New Shareswill be issued?	Straits will allot approximately 707,620,685 New Shares underthe Entitlement Offer.
How will the NewShares be treated?	The New Shares issued will rank equally with existing shares inStraits. Straits has applied for quotation of all of the New Shareson ASX.
Can I apply for morethan my entitlementof New Shares?	Eligible Shareholders will be entitled to apply for New Shares inexcess of their entitlement (Additional New Shares).If the Entitlement Offer is oversubscribed, applications forAdditional New Shares may be scaled back in whole or part.
Is there an underwriterto the EntitlementOffer?	The Entitlement Offer is managed and fully underwrittenby Investec Bank (Australia) Limited (Investec) and issub-underwritten by Glencore Finance (Bermuda) Ltd(Glencore Finance) for up to $40 million and the balanceby a number of key existing shareholders.Investec will be paid:an underwriting fee of 2.5% of the gross proceeds receivedfrom Merricks Capital and Standard Chartered PrivateEquity;an underwriting fee of 5% of the rest of the proceeds of theEntitlement Offer; anda sub-underwriting and commitment fee of 1% of:(a) the gross amounts sub-underwritten and paid to Straitsby third parties appointed by Investec, other thanGlencore Finance; and(b) the gross amounts paid to the Company in respect ofentitlements to New Shares for which EligibleShareholders have pre-committed to subscribe inagreements with Investec.
Is there a broker to theEntitlement Offer?	Investec has been appointed as sole lead manager of theEntitlement Offer.
Are brokers who lodgeacceptances going toget a handling fee?	No handling fee will be payable to brokers for acceptanceslodged by them on behalf of Eligible Shareholders.
Is shareholderapproval required forthe Entitlement Offer?	Shareholder approval is not required for the Entitlement Offer.

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Can I trade my rights?	As this is a renounceable offer, you will be entitled to tradeyour rights.
	Rights trading will begin on 11 September 2012 and end on
	26 September 2012.
	If you wish to sell all or some of your Entitlements on ASX,
	provide instructions to your stockbroker as soon as possible.
	You may also sell part only of your entitlements through a broker
	and accept the balance. To do this, complete and return the
	Entitlement and Acceptance Form with the Issue Price for the
	number of New Shares you wish to accept and contact your
	broker in relation to those you wish to sell.
	You will also be able to dispose of your entitlements without a
	broker by using a standard renunciation and transfer form
	obtainable from a broker or Straits’ share registry,
	Computershare Investor Services Pty Ltd (if your Shares are on
	the issuer sponsored subregister). If your Shares are on the
	CHESS subregister, contact your stockbroker for further
	instructions.
What will the funds	The funds raised from the Entitlement Offer will be used by
raised be used for?	Straits to:
	pay existing creditors (including repaying the Glencore
	Facility announced on 7 September 2012) and return to
	normal payment terms (approximately $25 million);
	fund the development of Mt Muro through waste stripping
	activities (approximately $20 million); and
	provide working capital for Straits and pay the costs of the
	Entitlement Offer (approximately $15 million).

The Entitlement Offer provides an equitable way for Straits to raise funds from existing shareholders.

Full details of the Entitlement Offer are set out in an offer document which was released to ASX on 7 September 2012 and is expected to be despatched to shareholders on or about 19 September 2012 ( Offer Document ).

The Offer Document is available on Straits’ website (www.straits.com.au) and on ASX’s company announcements platform (accessible at www.asx.com.au).

The important dates for the Offer are:

The important dates for the Offer are:
Ex date – Shares trade without an entitlement to participate in theEntitlement Offer	11 September 2012
Record Date to determine entitlements (7.00pm Melbourne time)	17 September 2012
Anticipated date for despatch of the Offer Document and Entitlementand Acceptance Forms to Eligible Shareholders	19 September 2012
Offer opens	19 September 2012
New Shares quoted on a deferred settlement basis	27 September 2012
Offer closes (5.00pm Melbourne time) – last date for lodgementof Entitlement and Acceptance Forms and payment in full	4 October 2012

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New Shares allotted	12 October 2012
Normal trading of New Shares commences on ASX	15 October 2012

Eligible Shareholders who wish to subscribe for New Shares will need to use the Entitlement and Acceptance Form that accompanies the Offer Document in accordance with the instructions printed on that form. Eligible Shareholders should read the Offer Document carefully before deciding whether to subscribe for New Shares.

Important notice to foreign shareholders

Shareholders with a registered address outside Australia, New Zealand, the United Kingdom, Hong Kong, Singapore and Germany on the Record Date ( Ineligible Shareholders ) are not eligible to participate in the Offer.

Straits has determined, pursuant to Listing Rule 7.7.1(a) of the ASX Listing Rules, that it would be unreasonable to make offers to shareholders in all countries in connection with the Offer.

Straits has determined that it is unreasonable to extend the Offer to Ineligible Shareholders after considering:

• the legal limitations in some countries;

• the cost of complying with legal and regulatory requirements outside Australia, New Zealand, the United Kingdom, Hong Kong, Singapore and Germany;

• the number of Ineligible Shareholders; and

• the number and value of New Shares which could be offered to Ineligible Shareholders.

In addition, Shareholders in the United States are not eligible to participate in the Entitlement Offer, even if they hold their shares through a nominee or other agent with a registered address in Australia, New Zealand, the United Kingdom, Hong Kong, Singapore or Germany (unless they have been contacted directly by Straits and invited to participate in the Entitlement Offer).

Further information

If you have any questions, please call the Offer Information Line on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) at any time between 8.30am and 5.30pm (Melbourne time) on any business day until 4 October 2012, or consult your stockbroker, accountant or other professional advisor.

Yours faithfully

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Matthew Smith

Acting Chief Financial Officer and Company Secretary

This letter does not constitute an offer to sell, or the solicitation of an offer to buy, securities in the United States or in any other jurisdiction in which such an offer or sale would be illegal. This letter may not be distributed or released in the United States. No action has been or will be taken to register, qualify or otherwise permit a public offering of the securities referred to in this letter in any jurisdiction outside Australia. In particular, neither the entitlements nor the New Shares to be offered and sold in the Entitlement Offer have been, and none of them will be, registered under the U.S. Securities Act of 1933 (the “Securities Act”) or the securities laws of any state or other jurisdiction of the United States. Accordingly, the entitlements may not be taken up or exercised by, and the New Shares may not be offered or sold, directly or indirectly, to, any person in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws.

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