ALCIDION GROUP LIMITED — Capital/Financing Update 2012

Aug 30, 2012

NARACOOTA RESOURCES LIMITED ACN 143 142 410

ENTITLEMENT ISSUE PROSPECTUS

For a non-renounceable entitlement issue of 1 Share for every 1 Share held by those Shareholders registered at the Record Date at an issue price of $0.035 per Share to raise up to $1,663,784 (based on the number of Shares on issue as at the date of this Prospectus) (together with 1 free attaching option for every 1 Share subscribed for and issued ( New Option )) ( Offer ).

The Offer is conditionally underwritten by Patersons Securities Limited ( Underwriter ). Refer to Section 8.4.1 for details regarding the terms of the Underwriting Agreement.

IMPORTANT NOTICE

This document is important and should be read in its entirety.  If after reading this
Prospectus you have any questions about the securities being offered under this
Prospectus or any other matter, then you should consult your stockbroker, accountant or
other professional adviser.

The Shares offered by this Prospectus should be considered as speculative.

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CONTENTS

1.	CORPORATE DIRECTORY .............................................................................................. 2
2.	TIMETABLE ..................................................................................................................... 3
3.	IMPORTANT NOTES ....................................................................................................... 4
4.	DETAILS OF THE OFFER .................................................................................................. 6
5.	PURPOSE AND EFFECT OF THE OFFER ......................................................................... 11
6.	RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 16
7.	RISK FACTORS ............................................................................................................ 20
8.	ADDITIONAL INFORMATION ...................................................................................... 25
9.	DIRECTORS’ AUTHORISATION .................................................................................... 38
10.	GLOSSARY .................................................................................................................. 39

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1. CORPORATE DIRECTORY

Directors

Registered Office

Mr Steven Crabbe (Non-Executive Director)
Mr Stephen Woods (Non-Executive Director)
Mr Wayne Fernie (Finance Director)

Proposed Directors

75 King Street
PERTH   WA   6000

Telephone: + 61 8 9200 5858
Facsimile: +61 8 9486 4586

Mr George Cameron-Dow
Mr Christian Cordier
Mr Gavin Wates

Email:  enquiries@naracoota.com.au
Website: www.naracoota.com.au

Company Secretary

Mr Josh Puckridge

Share Registry*

Solicitors

Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
PERTH   WA   6000

Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
Perth  WA  6000

Telephone: 1300 787 272

Auditor

Underwriter

Stantons International
Level 2, 1 Walker Avenue
WEST PERTH   WA   6005

Patersons Securities Limited
Level 23, , 2 The Esplanade
PERTH   WA   6000

* This entity is included for information purposes only.  It has not been involved in the
preparation of this Prospectus and has not consented to being named in this Prospectus.

2. TIMETABLE

Lodgement of Prospectus with the ASIC 31 August 2012
Lodgement of Prospectus & Appendix 3B with ASX 31 August 2012
Notice sent to Shareholders 4 September 2012
Ex date 5 September 2012
Record Date for determining Entitlements 11 September 2012
Prospectus despatched to Shareholders & 13 September 2012
Company announces despatch has been
completed
Closing Date* 27 September 2012
Securities quoted on a deferred settlement basis 28 September 2012
ASX notified of under subscriptions 2 October 2012
Despatch of holding statements 5 October 2012
Quotation of Securities issued under the Offer* 8 October 2012

*The Directors may extend the Closing Date by giving at least 6 Business Days notice to
ASX prior to the Closing Date.  As such the date the Securities are expected to
commence trading on ASX may vary.

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3. IMPORTANT NOTES

This Prospectus is dated 31 August 2012 and was lodged with the ASIC on that
date.  The ASIC and its officers take no responsibility for the contents of this
Prospectus or the merits of the investment to which this Prospectus relates.

No Securities may be issued on the basis of this Prospectus later than 13 months
after the date of this Prospectus.

No person is authorised to give information or to make any representation in
connection with this Prospectus, which is not contained in the Prospectus.  Any
information or representation not so contained may not be relied on as having
been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek
professional advice where necessary.  The Shares the subject of this Prospectus
should be considered highly speculative.

Applications for Securities offered pursuant to this Prospectus can only be
submitted on an original Entitlement and Acceptance Form or Shortfall
Application Form.

This Prospectus is a transaction specific prospectus for an offer of continuously
quoted securities (as defined in the Corporations Act) and has been prepared in
accordance with section 713 of the Corporations Act.  It does not contain the
same level of disclosure as an initial public offering prospectus.  In making
representations in this Prospectus regard has been had to the fact that the
Company is a disclosing entity for the purposes of the Corporations Act and
certain matters may reasonably be expected to be known to investors and
professional advisers whom potential investors may consult.

3.1

Risk factors

Potential investors should be aware that subscribing for Securities in the
Company involves a number of risks.  The key risk factors of which investors
should be aware are set out in Section 4 of this Prospectus.  These risks together
with other general risks applicable to all investments in listed securities not
specifically referred to, may affect the value of the Shares in the future.
Accordingly, an investment in the Company should be considered highly
speculative.  Investors should consider consulting their professional advisers
before deciding whether to apply for Securities pursuant to this Prospectus.

3.2

Forward-looking statements

This Prospectus contains forward-looking statements which are identified by
words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or
‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and
operating conditions, and on a number of assumptions regarding future events
and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties, assumptions and other
important factors, many of which are beyond the control of our Company, the
Directors and our management.

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We cannot and do not give any assurance that the results, performance or
achievements expressed or implied by the forward-looking statements
contained in this prospectus will actually occur and investors are cautioned not
to place undue reliance on these forward-looking statements.

We have no intention to update or revise forward-looking statements, or to
publish prospective financial information in the future, regardless of whether new
information, future events or any other factors affect the information contained
in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could
cause our actual results to differ materially from the results expressed or
anticipated in these statements.  These risk factors are set out in Section 7 of this
Prospectus.

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4. DETAILS OF THE OFFER

4.1 The Offer

The Offer is being made as a non-renounceable entitlement issue of 1 Share for
every 1 Share held by Shareholders registered at the Record Date at an issue
price of $0.035 per Share (together with 1 free attaching New Option for every 1
Share subscribed for and issued).  Fractional entitlements will be rounded up to
the nearest whole number.

Based on the capital structure of the Company as at the date of this Prospectus,
(and assuming no existing Options are exercised prior to the Record Date) a
maximum of 47,536,676 Shares and 47,536,676 New Options will be issued
pursuant to this Offer to raise up to $1,663,784.  No funds will be raised from the
issue of the New Options.

As at the date of this Prospectus the Company has 5,000,000 Options on issue all
of which may be exercised prior to the Record Date in order to participate in the
Offer.  Please refer to Section 5.5 of this Prospectus for information on the
exercise price and expiry date of the Options on issue.

All of the Shares offered under this Prospectus will rank equally with the Shares on
issue at the date of this Prospectus.  Please refer to Section 6 for further
information regarding the rights and liabilities attaching to the Shares.

All of the New Options offered under this Prospectus will be issued on the terms
and conditions set out in Section 6.2 of this Prospectus.

All Shares issued on conversion of the New Options will rank equally with the
Shares on issue at the date of this Prospectus.

The purpose of the Offer and the intended use of funds raised are set out in
Section 5.1 of this Prospectus.

4.2 Minimum subscription

As the Offer is fully underwritten, there is no minimum subscription under the
Offer.

4.3 Acceptance

Your acceptance of the Offer must be made on the Entitlement and
Acceptance Form accompanying this Prospectus.  Your acceptance must not
exceed your Entitlement as shown on that form.  If it does, your acceptance will
be deemed to be for the maximum Entitlement.

You may participate in the Offer as follows:

• (a) if you wish to accept your full Entitlement:

• (i) complete the Entitlement and Acceptance Form; and

• (ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the amount indicated on the Entitlement and Acceptance Form; or

• (b) if you only wish to accept part of your Entitlement:

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• (i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and

• (ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the appropriate application monies (at $0.035 per Share); or

• (c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

The Offer is non-renounceable.  Accordingly, a Shareholder may not sell or
transfer all or part of their Entitlement.

1 New Option with an exercise price of $0.09 and an expiry date of 30
September 2015 will be issued for every 1 Share  subscribed for and issued under
the Offer.

4.4 Payment by cheque/bank draft

All cheques must be drawn on an Australian bank or bank draft made payable
in Australian currency to “Naracoota Resources Ltd – Entitlement Issue Account”
and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form and cheque must reach the
Company’s share registry no later than 5.00pm WST on the Closing Date.

4.5 Payment by BPAY®

For payment by BPAY®, please follow the instructions on the Entitlement and
Acceptance Form. You can only make a payment via BPAY® if you are the
holder of an account with an Australian financial institution that supports BPAY®
transactions. Please note that should you choose to pay by BPAY®:

• (a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and

• (b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 4.00pm (WST) on the Closing Date. You should be aware that your financial institution may implement either cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment. Any application monies received for more than your final allocation of Shares (only where the amount is $1.00 or greater) will be refunded. No interest will be paid on any application monies received or refunded.

4.6

Underwriting

The Offer is conditionally underwritten by the Underwriter.  Refer to Section 8.4.1
of this Prospectus for details of the terms of the underwriting.

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4.7 Effect on control of the Company

As at the date of this Prospectus, the Underwriter holds a relevant interest in no
Shares giving it no voting power in the Company.

The Underwriter has agreed to fully underwrite the Offer pursuant to the terms of
the Underwriting Agreement. As a term of the Underwriting Agreement, the
Underwriter’s obligations are conditional on the Offer being fully sub-
underwritten.

In the event that the Offer is not fully subscribed (including through applications
for Shortfall Shares), a Shortfall will result and the Underwriter will be entitled to
procure subscription for some or all of that Shortfall from third parties (such as
sub-underwriters) or will subscribe for some or all of that Shortfall on its own
account. At the date of this Prospectus it is not possible to confirm whether there
will be any Shortfall Shares, as this will depend on whether Shareholders accept
their Entitlement under the Offer.

As the Underwriter’s obligations are fully sub-underwritten, unless all of the sub-
underwriting agreements are terminated, in which case the Underwriter will likely
terminate the Underwriting Agreement, the Underwriter does not intend to hold
any voting power in the Company following the Offer.

Shareholders should also note that if they do not participate in the Offer, their
holdings are likely to be diluted by approximately 50% (as compared to their
holdings and number of Shares on issue as at the date of the Prospectus) after
the completion of the Offer. Examples of how the dilution may impact
Shareholders assuming no Options have been exercised is set out in the table
below:

Holder	Holding as at Record date	% at Record Date	Entitlements under the Offer	Holdings if Offer not taken Up	% post Offer
Shareholder 1	10,000,000	21.04%	10,000,000	10,000,000	10.52%
Shareholder 2	5,000,000	10.52%	5,000,000	5,000,000	5.26%
Shareholder 3	1,500,000	3.16%	1,500,000	1,500,000	1.58%
Shareholder 4	400,000	0.84%	400,000	400,000	0.42%
Shareholder 5	50,000	0.11%	50,000	50,000	0.05%
Total	47,536,676				95,073,352

Notes:

1. The dilutionary effect shown in the table is the maximum percentage on the
assumption that those Entitlements not accepted are placed under the Shortfall
Offer.  In the event all Entitlements are not accepted and some or all of the resulting
Shortfall was not subsequently placed, the dilution effect for each Shareholder not
accepting their Entitlement would be a lesser percentage.

4.8 Shortfall Offer

Any Entitlement not taken up pursuant to the Offer will form the Shortfall Offer.

The Shortfall Offer is a separate offer made pursuant to this Prospectus and will
remain open for up to three months following the Closing Date.  The issue price
for each Share to be issued under the Shortfall Offer shall be $0.035 being the
price at which Shares have been offered under the Offer.

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The Directors reserve the right to issue Shortfall Securities at their absolute
discretion.  Accordingly, do not apply for Shortfall Securities unless instructed to
do so by the Directors.

4.9

ASX listing

Application for Official Quotation of the Securities offered pursuant to this
Prospectus will be made in accordance with the timetable set out at the
commencement of this Prospectus.  If ASX does not grant Official Quotation of
the Securities offered pursuant to this Prospectus before the expiration of 3
months after the date of issue of the Prospectus, (or such period as varied by the
ASIC), the Company will not issue any Securities and will repay all application
monies for the Securities within the time prescribed under the Corporations Act,
without interest.

The fact that ASX may grant Official Quotation to the Securities is not to be
taken in any way as an indication of the merits of the Company or the Securities
now offered for subscription.

4.10 Allotment

Securities issued pursuant to the Offer will be allotted in accordance with the
ASX Listing Rules and timetable set out at the commencement of this Prospectus.

Securities issued pursuant to the Shortfall Offer will be allotted on a progressive
basis.  Where the number of Shares issued is less than the number applied for, or
where no allotment is made surplus application monies will be refunded without
any interest to the Applicant as soon as practicable after the closing date of the
Shortfall Offer.

Pending the allotment and issue of the Securities or payment of refunds pursuant
to this Prospectus, all application monies will be held by the Company in trust for
the Applicants in a separate bank account as required by the Corporations Act.
The Company, however, will be entitled to retain all interest that accrues on the
bank account and each Applicant waives the right to claim interest.

Holding statements for Securities issued under the Offer will be mailed in
accordance with the ASX Listing Rules and timetable set out at the
commencement of this Prospectus and for Shortfall Securities issued under the
Shortfall Offer as soon as practicable after their issue.

4.11 Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place or
jurisdiction in which, or to any person to whom, it would not be lawful to make
such an offer or to issue this Prospectus.

It is not practicable for the Company to comply with the securities laws of
overseas jurisdictions having regard to the number of overseas Shareholders, the
number and value of Shares these Shareholders would be offered and the cost
of complying with regulatory requirements in each relevant jurisdiction.
Accordingly, the Offer is not being extended and Shares will not be issued to
Shareholders with a registered address which is outside Australia or
New Zealand.

The Offer is being made in New Zealand pursuant to the Securities act (Overseas
Companies) Exemption Notice 2002.

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Shareholders resident in Australia or New Zealand holding Shares on behalf of
persons who are resident overseas are responsible for ensuring that taking up an
Entitlement under the Offer does not breach regulations in the relevant overseas
jurisdiction. Return of a duly completed Entitlement and Acceptance Form will
be taken by the Company to constitute a representation that there has been no
breach of those regulations.

4.12 Placement

As announced to ASX on 30 August 2012, the Company also intends on undertaking a placement of 42,857,142 Shares in order to raise (approximately) a further $1,500,000 ( Placement ). The Placement is subject to prior Shareholder approval being granted at a general meeting of the Company’s Shareholders to be held on a date after the date of this Prospectus. The Shareholders’ meeting is expected to be held in early October.

Fleming SG Capital Pty Ltd ( Fleming ) as Corporate Authorised Representative (Rep No 345960) of St George Capital Pty Ltd (AFSL 300641) and manager of the Fleming SG Special Opportunities Fund ( SG Fund ) has agreed with the Company to take up 27,500,000 Shares under the Placement. This will result in Fleming holding a relevant interest in approximately 19.94% of the issued capital of the Company after completion of Offer and the Placement. Further details in respect of the SG Fund are set out in Section 8.4.

4.13 Enquiries

Any questions concerning the Offer should be directed to Josh Puckridge,
Company Secretary, on +61 8 9200 5858.

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5. PURPOSE AND EFFECT OF THE OFFER

5.1 Background

On 30 August 2012, the Company announced a proposed capital raising pursuant to which the Company intends undertaking a placement of 42,857,142 Shares at an issue price of $0.035 to raise approximately $1,500,000 (before costs) ( Placement ) as well as undertaking this Offer.

As set out in the announcement, upon completion of the Placement and the
Offer, the Directors as at the date of this Prospectus will resign and be replaced
by Messrs George Cameron-Dow, Christian Cordier and Gavin Wates.

The Offer is not conditional on the Placement or on any Shareholder approvals.

5.2 Purpose of the Offer and the Placement

The purpose of the Offer is to raise up to $1,663,784.  No funds will be raised from
the issue of the New Options.

The funds raised from the Offer are planned to be used in accordance with the
table set out below:

Item	Proceeds of the Offer	Amount Raised ($)	%
1.	Ongoing exploration at the Company’s existing projects1	900,000	54.1%
2.	Expenses of the Offer2	200,000	11.1%
3.	Working capital	563,784	34.8%
	Total	1,663,784	100%

Notes:

1. As at the date of this Prospectus, the Proposed Directors intend to continue the previously planned exploration programmes at the Company’s Horseshoe and Fraser Range projects. The amount expended and the manner of that expenditure is subject to change as the Proposed Directors consider the previous exploration data available to the Company and ascertain the best way to expend the Company’s funds in the best interests of Shareholders.

2. Refer to Section 8.8 of this Prospectus for further details relating to the estimated expenses of the Offer.

In addition to the Offer, the Company will also be seeking Shareholder approval
to undertake the Placement. In the event that the Placement is also fully
subscribed, the Company will raise a further $1,500,000 through the issue of a
further 42,857,142 Shares.  Where this occurs, the funds raised from the Offer
together with the Placement are planned to be used in accordance with the
table set out below:

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Item	Proceeds of the Offer	Amount Raised ($)	%
1.	Ongoing exploration at the Company’s existing projects1	1,800,000	56.9%
2.	Expenses of the Offer and Placement2	302,000	9.5%
3.	Working capital3	1,061,784	33.6%
	Total	3,163,784	100%

Notes:

1. As referred to above, as at the date of this Prospectus, the Proposed Directors intend to continue the previously planned exploration programmes at the Company’s Horseshoe and Fraser Range projects. The amount expended and the manner of that expenditure is subject to change as the Proposed Directors consider the previous exploration data available to the Company and ascertain the best way to expend the Company’s funds in the best interests of Shareholders.

2. Refer to Section 8.8 of this Prospectus for further details relating to the estimated expenses of the Offer.

3. Working capital will be utilised to meet the day to day expenses of the Company including rents, wages and other administrative costs. The Company may also rely on its working capital to consider additional acquisitions that, in time, the Proposed Directors consider should be investigated in the best interests of Shareholders.

The above tables are statements of current intentions as of the date of this
Prospectus.  As with any budget, intervening events (including exploration
success or failure) and new circumstances have the potential to affect the
manner in which the funds are ultimately applied.  The Board reserves the right
to alter the way funds are applied on this basis.

5.3 Effect of the Offer and the Placement

The principal effect of the Offer, assuming all Entitlements are accepted and no
Options are exercised prior to the Record Date, will be to:

• (a) increase the cash reserves by $1,663,599 (after deducting the estimated expenses of the Offer) immediately after completion of the Offer;

• (b) increase the number of Shares on issue from 47,536,676 as at the date of this Prospectus to 95,073,352 Shares following complete of the Offer; and

• (c) increase the number of Options on issue from 5,000,000 as at the date of this Prospectus to 52,536,676 Options following completion of the Offer.

Where the Placement is also completed, the principal effect of the Placement,
assuming that it is fully subscribed, will be to:

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• (a) increase the cash reserves by $2,676,784 (after deducting the estimated expenses of the Offer and the Placement) immediately after completion of the Offer and the Placement; and

• (b) increase the number of Shares on issue from 47,536,676 as at the date of this Prospectus to 137,930,494 Shares following completion of the Offer and the Placement.

5.4 Pro-forma balance sheet

The audited balance sheet as at 30 June 2012 and the unaudited pro-forma
balance sheet as at 30 June 2012 shown on the following page have been
prepared on the basis of the accounting policies normally adopted by the
Company and reflect the changes to its financial position.

The pro-forma balance sheet has been prepared assuming all Entitlements are
accepted, the Placement has completed, no Options are exercised prior to the
Record Date and including expenses of the Offer and the Placement.

The pro-forma balance sheet has been prepared to provide investors with
information on the assets and liabilities of the Company and pro-forma assets
and liabilities of the Company as noted below.  The historical and pro-forma
financial information is presented in an abbreviated form, insofar as it does not
include all of the disclosures required by Australian Accounting Standards
applicable to annual financial statements.

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	AUDITED 30/06/2012	PROFORMA 30/06/2012 (Completion of the Offer)	PROFORMA 30/06/2012 (Completion of the Offer and the Placement)
CURRENT ASSETS
Cash1	1,251,721	2,715,505	4,215,505
Other current assets	3,066	3,066	3,066
TOTAL CURRENT ASSETS	1,254,787	2,718,571	4,218,571
NON-CURRENT ASSETS
Other financial assets	72,000	72,000	72,000
Property, plant and equipment	101,439	101,439	101,439
Mining properties	1,230,333	1,230,333	1,230,333
TOTAL NON-CURRENT ASSETS	1,403,772	1,403,772	1,403,772
TOTAL ASSETS	2,658,559	4,122,343	5,622,343
CURRENT LIABILITIES
Trade and other payable	121,872	121,872	121,872
Provisions	10,537	10,537	10,537
TOTAL CURRENT LIABILITIES	132,409	132,409	132,409
TOTAL LIABILITIES	132,409	132,409	132,409
NET ASSETS (LIABILITIES)	2,526,150	3,899,934	5,489,934
EQUITY
Issued capital	5,856,691	7,420,475	8,820,475
Reserves	499,137	499,137	499,137
Accumulated losses	(3,829,678)	(3,829,678)	(3,829,678)
TOTAL EQUITY	2,526,150	3,889,934	5,489,934

5.5 Effect on capital structure

The effect of the Offer on the capital structure of the Company, assuming all
Entitlements are accepted and no Options are exercised prior to the Record
Date, is set out below.

Shares

	Number
Shares currently on issue	47,536,676
Shares offered pursuant to the Offer	47,536,676
Shares offered pursuant to the Placement	42,857,142

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Total Shares on issue after completion of the Offer

137,930,494

Options

	Number
Options currently on issue: (Unquoted exercisable at $0.30 on or before 2 August 2016) (Unquoted exercisable at $0.30 on or before 19 October 2016)	1,000,000 4,000,000
New Options offered pursuant to the Offer (Unquoted exercisable at $0.09 on or before 30 September 2015)	47,536,676
Total Options on issue after completion of the Offer	52,536,676

The capital structure on a fully diluted basis as at the date of this Prospectus
would be 52,536,676 Shares and on completion of the Offer and the Placement
(assuming all Entitlements are accepted and no Options are exercised prior to
the Record Date) would be 189,395,743 Shares.

8,633,333 Shares are subject to an escrow period which expires on 21 June 2013.

5.6 Details of substantial holders

Based on publicly available information as at 31 August 2012, those persons
which (together with their associates) have a relevant interest in 5% or more of
the Shares on issue are set out below:

Shareholder	Shares	%
Steven Crabbe	5,248,150	11.04%
Stephen Woods	2,378,333	5.00%

In the event all Entitlements are accepted there will be no change to the
substantial holders on completion of the Offer.

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6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES

6.1 Shares

The following is a summary of the more significant rights and liabilities attaching
to Shares being offered pursuant to this Prospectus.  This summary is not
exhaustive and does not constitute a definitive statement of the rights and
liabilities of Shareholders.  To obtain such a statement, persons should seek
independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in the
Constitution, a copy of which is available for inspection at the Company’s
registered office during normal business hours.

(a) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney
or representative to attend and vote at general meetings of the
Company.

Shareholders may requisition meetings in accordance with section 249D
of the Corporations Act and the Constitution of the Company.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any
class or classes of shares, at general meetings of shareholders or classes
of shareholders:

• (i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• (ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

• (iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for each Share held, but in respect of partly paid shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

(c) Dividend rights

Subject to the rights of any preference Shareholders and to the rights of
the holders of any shares created or raised under any special
arrangement as to dividend, the Directors may from time to time
declare a dividend to be paid to the Shareholders entitled to the
dividend which shall be payable on all Shares according to the
proportion that the amount paid (not credited) is of the total amounts
paid and payable (excluding amounts credited) in respect of such
Shares.

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The Directors may from time to time pay to the Shareholders any interim
dividends as they may determine.  No dividend shall carry interest as
against the Company.  The Directors may set aside out of the profits of
the Company any amounts that they may determine as reserves, to be
applied at the discretion of the Directors, for any purpose for which the
profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company
may, by resolution of the Directors, implement a dividend reinvestment
plan on such terms and conditions as the Directors think fit and which
provides for any dividend which the Directors may declare from time to
time payable on Shares which are participating Shares in the dividend
reinvestment plan, less any amount which the Company shall either
pursuant to the Constitution or any law be entitled or obliged to retain,
be applied by the Company to the payment of the subscription price of
Shares.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a
special resolution, divide among the Shareholders in kind the whole or
any part of the property of the Company, and may for that purpose set
such value as he considers fair upon any property to be so divided, and
may determine how the division is to be carried out as between the
Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution, vest the
whole or any part of any such property in trustees upon such trusts for
the benefit of the contributories as the liquidator thinks fit, but so that no
Shareholder is compelled to accept any shares or other securities in
respect of which there is any liability.

(e) Shareholder liability

As the Shares issued will be fully paid shares, they will not be subject to
any calls for money by the Directors and will therefore not become
liable for forfeiture.

(f) Transfer of shares

Generally, shares in the Company are freely transferable, subject to
formal requirements, the registration of the transfer not resulting in a
contravention of or failure to observe the provisions of a law of Australia
and the transfer not being in breach of the Corporations Act and the
ASX Listing Rules.

(g) Future increase in capital

The allotment and issue of any new Shares is under the control of the
Directors of the Company.  Subject to restrictions on the issue or grant of
Securities contained in the ASX Listing Rules, the Constitution and the
Corporations Act (and without affecting any special right previously
conferred on the holder of an existing share or class of shares), the
Directors may issue Shares as they shall, in their absolute discretion,
determine.

(h) Variation of rights

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Under section 246B of the Corporations Act, the Company may, with the
sanction of a special resolution passed at a meeting of Shareholders
vary or abrogate the rights attaching to shares.

If at any time the share capital is divided into different classes of shares,
the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class), whether or not the Company is being
wound up, may be varied or abrogated with the consent in writing of
the holders of three quarters of the issued shares of that class, or if
authorised by a special resolution passed at a separate meeting of the
holders of the shares of that class.

• (i) Alteration of constitution

In accordance with the Corporations Act, the Constitution can only be
amended by a special resolution passed by at least three quarters of
Shareholders present and voting at the general meeting.  In addition, at
least 28 days written notice specifying the intention to propose the
resolution as a special resolution must be given.

6.2 Options

The New Options to be issued pursuant to this Prospectus entitle the holder to
subscribe for Shares on the following terms and conditions:

• (a) Subject to paragraph (k) , each New Option gives the Optionholder the right to subscribe for one Share.

• (b) The New Options will expire at 5.00pm (WST) on 30 September 2015 ( Expiry Date ). Any New Option not exercised before the Expiry Date will automatically lapse.

• (c) The amount payable upon exercise of each New Option is 9 cents ( Exercise Price ).

• (d) The New Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.

• (e) An Optionholder may exercise their New Options by lodging with the Company, before the Expiry Date:

• (i) a written notice of exercise of New Options specifying the number of New Options being exercised ( Exercise Notice ); and

• (ii) a cheque or electronic funds transfer for the Exercise Price for the number of New Options being exercised.

• (f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

• (g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of New Options specified in the Exercise Notice.

• (h) All Shares allotted upon the exercise of New Options will upon allotment rank pari passu in all respects with other Shares.

• (i) Subject to the satisfaction of the requirements of the ASX Listing Rules,

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the Company will apply for quotation of the New Options on ASX.

• (j) The Company will apply for quotation of all Shares allotted pursuant to the exercise of New Options on ASX within 10 Business Days after the date of allotment of those Shares.

• (k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

• (l) There are no participating rights or entitlements inherent in the New Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their New Options prior to the date for determining entitlements to participate in any such issue.

• (m) Other than as contemplated by paragraph (k), a New Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the New Option can be exercised.

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7. RISK FACTORS

7.1 Introduction

The Securities offered under this Prospectus are considered highly speculative.
An investment in the Company is not risk free and the Directors strongly
recommend potential investors to consider the risk factors described below,
together with information contained elsewhere in this Prospectus and to consult
their professional advisers before deciding whether to apply for Securities
pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business.  In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors.  The risks identified in this section, or
other risk factors, may have a material impact on the financial performance of
the Company and the market price of the Securities.

The following is not intended to be an exhaustive list of the risk factors to which
the Company is exposed.

7.2 Company specific

(a) Potential for significant dilution

Upon implementation of the Offer, assuming all Entitlements are
accepted and no Options are exercised prior to the Record Date the
number of Shares in the Company will increase from 47,536,676 currently
on issue to 95,073,352.  This means that each Share will represent a
significantly lower proportion of the ownership of the Company.

It is not possible to predict what the value of the Company or a Share
will be following the completion of the Offer being implemented and
the Directors do not make any representation as to such matters.

(b) Limited interest and co-existence

The Company’s interest in certain tenements is limited to gold rights only,
and the Company does not have any contractual right to earn any
registrable interest in those tenements. Accordingly, the only right that
the Company has to protect its interest in the gold rights on those
tenements is by lodging a caveat over the tenements under the Mining
Act 1972 (WA). A caveat prevents the registration of any transfer or
mortgage over the tenements without first giving notice to the
Company.

In addition, the Company has contractual rights and obligations in
relation to the co-existence, exploration and potentially mining on the
tenements. Pursuant to these rights and obligations, the Company is
required to notify the holder of the tenement in relation to its proposed
exploration programmes on the tenements to ensure that they do not
conflict or encroach on the exploration or mining areas of the tenement
holder. There is a risk that the Company may not be able to complete
all of its preferred exploration programmes in its preferred timetable or
at all, as a result of the exploration activities of the holder of the
tenement.

(c) No JORC compliant resource

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The Company has not currently defined a JORC compliant resource on
any of its tenements. Further exploration is required to determine the
extent of the Company’s potentially viable gold deposits on all of the
tenements.

There can be no assurance that exploration of the Company’s
tenements, or any other tenements that may be acquired by the
Company in the future, will result in the discovery of a JORC compliant
resource.

7.3 Mining Industry specific

(a) Exploration Success

The Company’s tenements are at various stages of exploration, and
potential investors should understand that mineral exploration and
development are high risk undertakings.

There can be no assurance that exploration of the Company’s
tenements, or any other tenements that may be acquired in the future,
will result in the discovery of an economic ore deposit. Even if an
apparently viable deposit is identified, there is no guarantee that it can
be economically exploited.

The future exploration activities of the Company may be affected by a
range of factors including geological conditions, limitations on activities
due to seasonal weather patterns, unanticipated operational and
technical difficulties, industrial and environmental accidents, native title
processes, changing government regulations and many other factors
beyond the control of the Company.

The success of the Company will also depend upon the Company
having access to sufficient development capital, being able to
maintain title to its Tenements and obtaining all required approvals for its
activities. In the event that exploration programmes prove to be
unsuccessful this could lead to a diminution in the value of the
tenements, a reduction in the cash reserves of the Company and
possible relinquishment of the Tenements.

(b) Failure to satisfy expenditure commitments

Interests in tenements in Western Australia are governed by the Mining
Act 1978 (WA) and are evidenced by the granting of licenses or leases.
Each licence or lease is for a specific term and carries with it annual
expenditure and reporting commitments, as well as other conditions
requiring compliance. Consequently, the Company could lose title to or
its interest in the Tenements if any licence conditions are not met or if
insufficient funds are available to meet expenditure commitments.

The Company considers that given the number of tenements that it
currently has an interest in, the Company will have sufficient funds to
meet the expenditure commitments on its Tenements.

(c) The Company may be unable to obtain environmental approvals

The Company's exploration programmes will, in general, be subject to
approval by State and Federal governmental authorities.  Development
of any of the Company's properties will be dependent on the project

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meeting environmental guidelines and, where required, being
approved by governmental authorities.

(d) Environmental Bonds

The Western Australian Department of Mines and Petroleum
(Department) from time to time reviews the environmental bonds that
are placed on tenements.  The Directors are not in a position to state
whether a review is imminent or whether the outcome of such a review
would be detrimental to the funding needs of the Company.

(e) A commercial return may not be achievable

Even if the Company discovers commercial quantities of minerals, there
is a risk that the Company will not achieve a commercial return. The
Company may not be able to transport the minerals at a reasonable
cost or may not be able to sell the minerals to customers at a price
which would cover its operating and capital costs. The Company will
also need to receive regulatory approval to convert its existing
exploration licenses into mining leases. There is a risk that this approval
may not be obtained.

(f)

Native Title

The Tenements extend over areas in which legitimate common law
native title rights of indigenous Australians exist. The ability of the
Company to gain access to its tenements and conduct exploration,
development and mining operations remains subject to native title rights
and the terms of registered native title agreements.

The Directors will closely monitor the potential effect of native title claims
involving the tenements in which the Company has or may have an
interest.

7.4 General risks

(a) Economic

General economic conditions, movements in interest and inflation rates
and currency exchange rates may have an adverse effect on the
Company’s exploration, development and production activities, as well
as on its ability to fund those activities.

(b)

Market conditions

Share market conditions may affect the value of the Company’s
quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:

• general economic outlook;

• introduction of tax reform or other new legislation;

• interest rates and inflation rates;

• changes in investor sentiment toward particular market sectors;

• the demand for, and supply of, capital; and

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• terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject
to varied and unpredictable influences on the market for equities in
general and resource exploration stocks in particular.  Neither the
Company nor the Directors warrant the future performance of the
Company or any return on an investment in the Company.

(c) Additional requirements for capital

The Company’s capital requirements depend on numerous factors.
Depending on the Company’s ability to generate income from its
operations, the Company may require further financing in addition to
amounts raised under the Offer.  Any additional equity financing will
dilute shareholdings, and debt financing, if available, may involve
restrictions on financing and operating activities.  If the Company is
unable to obtain additional financing as needed, it may be required to
reduce the scope of its operations and scale back its exploration
programmes as the case may be.  There is however no guarantee that
the Company will be able to secure any additional funding or be able
to secure funding on terms favourable to the Company.

(d) Dividends

Any future determination as to the payment of dividends by the
Company will be at the discretion of the Directors and will depend on
the financial condition of the Company, future capital requirements
and general business and other factors considered relevant by the
Directors.  No assurance in relation to the payment of dividends or
franking credits attaching to dividends can be given by the Company.

(e) Taxation

The acquisition and disposal of Shares will have tax consequences,
which will differ depending on the individual financial affairs of each
investor.  All potential investors in the Company are urged to obtain
independent financial advice about the consequences of acquiring
Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and
each of their respective advisors accept no liability and responsibility
with respect to the taxation consequences of subscribing for Shares
under this Prospectus.

(f) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the
strategic management of the Company depends substantially on its
senior management and its key personnel.  There can be no assurance
given that there will be no detrimental impact on the Company if one or
more of these employees cease their employment.

7.5 Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the risks
faced by the Company or by investors in the Company.  The above factors, and
others not specifically referred to above, may in the future materially affect the

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financial performance of the Company and the value of the Securities offered
under this Prospectus

Therefore, the Securities to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital or the
market value of those Securities.

Potential investors should consider that the investment in the Company is
speculative and should consult their professional advisers before deciding
whether to apply for Securities pursuant to this Prospectus.

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8. ADDITIONAL INFORMATION

8.1 Continuous disclosure obligations

The Company is a “disclosing entity” (as defined in section 111AC of the
Corporations Act) for the purposes of section 713 of the Corporations Act and,
as such, is subject to regular reporting and disclosure obligations.  Specifically,
like all listed companies, the Company is required to continuously disclose any
information it has to the market which a reasonable person would expect to
have a material effect on the price or the value of the Company’s securities.

This Prospectus is a “transaction specific prospectus”.  In general terms a
“transaction specific prospectus” is only required to contain information in
relation to the effect of the issue of securities on a company and the rights
attaching to the securities.  It is not necessary to include general information in
relation to all of the assets and liabilities, financial position, profits and losses or
prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available
information in relation to the Company which has been notified to ASX and does
not include all of the information that would be included in a prospectus for an
initial public offering of securities in an entity that is not already listed on a stock
exchange.  Investors should therefore have regard to the other publicly
available information in relation to the Company before making a decision
whether or not to invest.

Having taken such precautions and having made such enquires as are
reasonable, the Company believes that it has complied with the general and
specific requirements of ASX as applicable from time to time throughout the 3
months before the issue of this Prospectus which required the Company to notify
ASX of information about specified events or matters as they arise for the
purpose of ASX making that information available to the stock market
conducted by ASX.

Information that is already in the public domain has not been reported in this
Prospectus other than that which is considered necessary to make this
Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

• (a) it is subject to regular reporting and disclosure obligations;

• (b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and

• (c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:

• (i) the annual financial report most recently lodged by the Company with the ASIC;

• (ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC; and

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• (iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with the ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can
be inspected at the registered office of the Company during normal office
hours.

Details of documents lodged by the Company with ASX since the date of
lodgement of the Company’s latest annual financial report and before the
lodgement of this Prospectus with the ASIC are set out in the table below.

Date Description of Announcement 30/08/2012 $3.1 Million Capital Raising 28/08/2012 Trading Halt 24/08/2012 Management Restructure 20/08/2012 Annual Report to Shareholders

ASX maintains files containing publicly available information for all listed
companies.  The Company’s file is available for inspection at ASX during normal
office hours.

The announcements are also available through the Company’s website
http://naracoota.com.au/.

8.2 Market price of shares

The Company is a disclosing entity for the purposes of the Corporations Act and
its Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Shares on ASX during the
three months immediately preceding the date of lodgement of this Prospectus
with the ASIC and the respective dates of those sales were:

Highest	$0.065		31 May 2012
Lowest	$0.032	3	– 9 July 2012
Last	$0.04	30	August 2012

8.3 Material contracts

The following are summaries of the significant terms of the material agreements
which relate to the business of the Company.

8.4.1 Underwriting agreement

By an agreement between the Underwriter and the Company ( Underwriting Agreement ), the Underwriter agreed to conditionally underwrite the Offer for 47,536,676 Shares at a price of $0.035 per Share ( Underwritten Securities ).

The Underwriter may procure any person to sub-underwrite such portion of the
Shares as the Underwriter thinks fit, and subject to the terms of any sub
underwriting agreements the Underwriter has the right to nominate and
determine who is to receive the shortfall securities.

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Pursuant to the Underwriting Agreement, the Company has agreed to pay an underwriting fee of 6% of the underwritten amount – the underwritten amount being $1,663,783 – as consideration for its underwriting obligation. In addition the Company must pay a fee of $60,000 ( Corporate Advisory Fee ) to the Underwriter for its services in managing the issue. If the Company or the Underwriter terminates the Underwriting Agreement, the Company will pay the Underwriter the sum of the Corporate Advisory Fee as a termination fee, as well as reimbursing the Underwriter for any expenses incurred or accrued up to the date of termination.

The Underwriting Agreement is conditional upon:

• (a) ( Due diligence ): the Underwriter being satisfied with the due diligence investigations and the due diligence results by the lodgement date;

• (b) ( Underwriter's consent to be named ): the Underwriter being satisfied with the form of the Prospectus (in its absolute discretion) and having given its consent to be named in the Prospectus by the lodgement date as evidence thereof;

• (c) ( Legal sign off ): a legal sign off letter being provided to the Due Diligence Committee by the Company's solicitors, to the satisfaction of the Underwriter, and addressed to be for the benefit of the Underwriter, by the lodgement date;

• (d) ( Prospectus ): the Prospectus being lodged with the ASIC prior to 5.00 pm on the lodgement date;

• (e) ( Sub Underwriting ): the Underwriter entering into sub underwriting agreements with sub underwriters on terms and conditions satisfactory to the Underwriter (in its sole and absolute discretion) for the entire Offer.

The obligation of the Underwriter to underwrite the Offer is subject to certain
events of termination.  The Underwriter may terminate its obligations under the
Underwriting Agreement if:

• (a) ( Indices fall ): the All Ordinaries Index (IRESS XAO.ASX), the S&P/ASX 200 (IRESS:XJO.ASX) or the S&P/ASX 300 Metals and Mining (IRESS:XMM.ASX) Indicies as published by ASX is at any time after the date of the Underwriting Agreement 10% or more below its respective level as at the close of business on the business day prior to the date of the Underwriting Agreement; or

• (b) ( Share Price) : the ordinary fully paid shares of the Company finish trading on the ASX under the ASX code of “NRR” on any trading days with a closing price that is less than the issue price of the Rights Issue Shares.

• (c) ( Prospectus ): the Company does not lodge the Prospectus on the lodgement date or the Prospectus or the Offer is withdrawn by the Company; or

• (d) ( Copies of Prospectus ): the Company fails to provide to the Underwriter 25 copies of the Prospectus within 7 days of the lodgement date and such failure is not remedied within 2 days; or

• (e) ( No Official Quotation ): Official Quotation (as defined in the Listing Rules of ASX) has not been granted by ASX for all the Shares by the shortfall

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notice deadline date or, having been granted, is subsequently
withdrawn, withheld or qualified; or

• (f)

( Supplementary prospectus ):

• (i) the Underwriter, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of an occurrence as described in clause 8.4.1(r)(vi), forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or

• (ii) the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter; or

• (g) ( Non-compliance with disclosure requirements ): it transpires that the Prospectus does not contain all the information required by section 713 of the Corporations Act; or

• (h) ( Misleading Prospectus ): it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of section 713 of the Corporations Act) or if any statement in the Prospectus becomes or misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;

• (i) ( Restriction on allotment ): the Company is prevented from allotting the Shares within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority;

• (j) ( Withdrawal of consent to Prospectus ): any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent;

• (k) ( ASIC application ): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the Shortfall Notice Deadline Date has arrived, and that application has not been dismissed or withdrawn;

• (l) ( ASIC hearing ): ASIC gives notice of its intention to hold a hearing under section 739 or any other provision of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 or any other provision of the Corporations Act;

• (m) ( Takeovers Panel ): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are

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unacceptable circumstances under Pt 6.10 of the Corporations Act, or
an application for such a declaration is made to the Takeovers Panel;

• (n) ( Hostilities ): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, or the Peoples Republic of China, Israel or any member of the European Union, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world;

• (o) ( Authorisation ) any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

• (p) ( Indictable offence ): a director or senior manager of a Relevant Company is charged with an indictable offence;

• (q) ( Sub-underwriters ): any of the Company sub-underwriters that are introduced by the Company do not comply with its obligation under the sub-underwriting agreements or threaten to not comply with all of its respective obligations under the sub-underwriting agreements with the Underwriter;

• (r) ( Termination Events ): any of the following events occurs:

• (i) ( Default ): default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;

• (ii) ( Incorrect or untrue representation ): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;

• (iii) ( Contravention of constitution or Act ): a contravention by a subsidiary of the Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;

• (iv) ( Adverse change ): an event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of this Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time;

• (v) ( Error in Due Diligence Results ): it transpires that any of the due diligence results or any part of the verification material was false, misleading or deceptive or that there was an omission from them;

• (vi) ( Significant change ): a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;

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• (vii) ( Public statements ): without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer, the Issue or the Prospectus;

• (viii) ( Misleading information ): any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Issue or the affairs of any subsidiary of the Company is or becomes misleading or deceptive or likely to mislead or deceive;

• (ix) ( Official Quotation qualified ): the Official Quotation granted by ASX is qualified or conditional other than as set out in the definition of "Official Quotation";

• (x) ( Change in Act or policy ): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;

• (xi) ( Prescribed Occurrence ): a Prescribed Occurrence occurs;

• (xii) ( Suspension of debt payments ): the Company suspends payment of its debts generally;

• (xiii) ( Event of Insolvency ): an Event of Insolvency occurs in respect of a Relevant Company;

• (xiv) ( Judgment against a Relevant Company ): a judgment in an amount exceeding $25,000 is obtained against a Relevant Company and is not set aside or satisfied within 7 days;

• (xv) ( Litigation ): litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against any Relevant Company, other than any claims foreshadowed in the Prospectus;

• (xvi) ( Board and senior management composition ): there is a change in the composition of the Board or a change in the senior management of the Company before the date on which allotment of the last of the Shares occurs in accordance with the Prospectus without the prior written consent of the Underwriter;

• (xvii) ( Change in shareholdings ): there is a material change in the major or controlling shareholdings of a Relevant Company or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to a Relevant Company;

• (xviii) ( Timetable ): there is a delay in any specified date in the Timetable which is greater than 3 Business Days;

• (xix) ( Force Majeure ): a Force Majeure affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of 7 days occurs;

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• (xx) ( Certain resolutions passed ): a Relevant Company passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter;

• (xxi) ( Capital Structure ): any Relevant Company alters its capital structure in any manner not contemplated by the Prospectus;

• (xxii) ( Investigation ): any person is appointed under any legislation in respect of companies to investigate the affairs of a Relevant Company; or

• (xxiii) ( Market Conditions ): a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets.

• (xxiv) ( Material Breach ): if the Underwriter fails to rectify any material breach of the Patersons Mandate having been given 10 business days notice in writing by the Company of such breach having occurred.

The Underwriting Agreement also contains a number of indemnities,
representations and warranties from the Company to the Underwriter that are
considered standard for an agreement of this type.

8.4.2 Patersons Mandate

Patersons Securities Limited ( Patersons ) has entered into a mandate to act as lead manager to a placement; and lead manager and underwriter to a rights issue with the Company ( Patersons Mandate ). The Company’s intention is to raise approximately $3,200,000 through a contemporaneous placement ( Placement ) and a non-renounceable rights issue – the rights issue being the Offer to which this Prospectus relates ( Rights Issue ).

Patersons’ appointment as Underwriter to the Rights Issue will only take effect
upon the execution of a formal Underwriting Agreement which is summarised in
Section 8.4.1 of this Prospectus.

Pursuant to the Patersons Mandate, the Company has agreed to pay:

• (a) a facilitation fee of $25,000 for the introduction and process management of the restructure transaction payable on completion of the Placement and Rights Issue;

• (b) the Corporate Advisory Fee referred to in Section 8.4.1 of this Prospectus for the amount of $60,000, with $30,000 of the fee due and payable on execution of the Patersons Mandate;

• (c) a lead manager fee of 1% on the amount raised by the Placement; and

• (d) an underwriting / placement fee of 5% on the amount raised by the Placement.

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The Patersons Mandate also contains a number of indemnities, representations
and warranties from the Company to Patersons that are considered standard for
a mandate of this type.

8.4 Litigation

The Company has been served with a claim in the Perth Magistrates Court by a
drilling contractor seeking payment of approximately $27,500 for services
provided by the contractor to the Company. The Company is defending this
claim in the Perth Magistrates Court.

8.5 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director holds,
or has held within the 2 years preceding lodgement of this Prospectus with the
ASIC, any interest in:

• (a) the formation or promotion of the Company;

• (b) any property acquired or proposed to be acquired by the Company in connection with:

• (i) its formation or promotion; or

• (ii) the Offer; or

• (c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to a Director or proposed Director:

• (a) as an inducement to become, or to qualify as, a Director; or

• (b) for services provided in connection with:

• (i) the formation or promotion of the Company; or

• (ii) the Offer.

Security holdings

The relevant interest of each of the Directors and Proposed Directors in the
securities of the Company as at the date of this Prospectus, together with their
respective Entitlement, is set out in the table below.

Director	Shares	Options	Entitlement	$
Steven Crabbe1	5,248,150	1,000,000	5,248,150	$183,686
Stephen Woods	2,378,333	1,000,000	2,378,333	$83,242
Wayne Fernie2	1,333,000	1,000,000	1,333,000	$46,655
George Cameron- Dow3	Nil	Nil	Nil	Nil

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Christian Cordier4	Nil	Nil	Nil	Nil
Gavin Wates	100,000	Nil	100,000	$3,500

Notes:

1. Mr Crabbe holds 2,000,000 Shares directly, 3,108,950 Shares and 1,000,000 Options are held by SJ Crushing Pty Ltd (an entity of which Mr Crabbe is a director and shareholder) and 139,200 Shares are held by Mr Crabbe’s wife, Janette Crabbe.

2. Mr Fernie holds 500,000 Shares directly and 833,000 Shares and 1,000,000 Options are held by Mr Fernie and his wife Leslie Fernie as trustees for the W&L Fernie Super Fund.

3. Mr Cameron-Dow is a director and 33% shareholder in Fleming, which is the manager of the SG Fund. The SG Fund has agreed with the Company to subscribe for such number of Shares under the Placement (assuming Shareholder approval) so as to give it a 19.94% interest in the Company after the Offer and the Placement. Mr Cameron-Dow does not control Fleming (as that term is defined in the Corporations Act) and does not hold any direct interest in the SG Fund. Fleming will not be paid a fee for taking up Shares under the Placement.

4. Mr Christian Cordier has agreed to subscribe for a total of 8,571,429 under the Placement, subject to Shareholder approval. As the Placement will occur after the Record Date, Mr Cordier will not be entitled to participate in the Offer.

Remuneration

The remuneration of an executive Director is decided by the Board, without the
affected executive Director participating in that decision-making process.  The
total maximum remuneration of non-executive Directors is initially set by the
Constitution and subsequent variation is by ordinary resolution of Shareholders in
general meeting in accordance with the Constitution, the Corporations Act and
the ASX Listing Rules, as applicable.  The determination of non-executive
Directors’ remuneration within that maximum will be made by the Board having
regard to the inputs and value to the Company of the respective contributions
by each non-executive Director.  The current amount has been set at an
amount not to exceed $250,000 per annum.

A Director may be paid fees or other amounts (i.e.  non-cash performance
incentives such as Options, subject to any necessary Shareholder approval) as
the other Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director.  In addition, Directors are also entitled to be paid reasonable travelling,
hotel and other expenses incurred by them respectively in or about the
performance of their duties as Directors.

The following table shows the total (and proposed) annual remuneration paid to
both executive and non-executive directors as well as the Proposed Directors.

Director	Year ended 30 June 2011	Year ended 30 June 2012	Year ended 30 June 2013 (to date)
Steven Crabbe	$145,123	$348,286	$1,667

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Stephen Woods	$146,844	$235,875	$7,500
Wayne Fernie	$54,942	$147,582	$9,999
George Cameron-Dow	Nil	Nil	Nil
Christian Cordier	Nil	Nil	Nil
Gavin Wates	Nil	Nil	Nil

8.6 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no:

• (a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;

• (b) promoter of the Company; or

• (c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with
the ASIC, any interest in:

• (a) the formation or promotion of the Company;

• (b) any property acquired or proposed to be acquired by the Company in connection with:

• (i) its formation or promotion; or

• (ii) the Offer; or

• (c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to any of these persons for services provided
in connection with:

• (d) the formation or promotion of the Company; or

• (e) the Offer.

Patersons Securities Limited will be paid an underwriting fee of approximately
$99,827 together with a $60,000 management fee in respect of this Offer.  During
the 24 months preceding lodgement of this Prospectus with the ASIC, Patersons
Securities Limited has been paid fees totalling $376,440 by the Company.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the
Offer.  The Company estimates it will pay Steinepreis Paganin $15,000 (excluding
GST and disbursements) for these services.  During the 24 months preceding
lodgement of this Prospectus with the ASIC, Steinepreis Paganin has been paid
fees totalling $63,172.49 (excluding GST and disbursements) for legal services
provided to the Company.

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8.7 Consents

Each of the parties referred to in this Section:

• (a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and

• (b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Patersons Securities Limited has given its written consent to being named as
underwriter to the Offer in this Prospectus, in the form and context in which it is
named.

Patersons Securities Limited (including its related entities) is not a Shareholder of
the Company and currently has no relevant interest in any of the Company’s
securities.

Steinepreis Paganin has given its written consent to being named as the solicitors
to the Company in this Prospectus.  Steinepreis Paganin has not withdrawn its
consent prior to the lodgement of this Prospectus with the ASIC.

Stantons International Audit & Consulting Pty Ltd ( Stantons ) has given its written consent for:

• (a) being named as auditors to the Company in this Prospectus; and

• (b) the inclusion in this Prospectus of the audited balance sheet for the year ended 30 June 2012 which was prepared by Stantons,

Stantons has not withdrawn its consent prior to the lodgement of this Prospectus
with the ASIC.

8.8 Expenses of the offer

In the event that all Entitlements are accepted, the total expenses of the Offer
are estimated to be approximately $200,000 (excluding GST) and are expected
to be applied towards the items set out in the table below:

ASIC fees ASX fees Underwriting fees Legal fees Printing and distribution Miscellaneous Total	$ 2,171 16,621 159,827 10,000 6,000 5,381
	200,000

8.9 Electronic prospectus

Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain
provisions of the Corporations Act to allow distribution of an electronic
prospectus and electronic application form on the basis of a paper prospectus
lodged with the ASIC, and the publication of notices referring to an electronic
prospectus or electronic application form, subject to compliance with certain
conditions.

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If you have received this Prospectus as an electronic Prospectus, please ensure
that you have received the entire Prospectus accompanied by the Application
Forms.  If you have not, please phone the Company on +61 9200 5858 and the
Company will send you, for free, either a hard copy or a further electronic copy
of the Prospectus, or both.  Alternatively, you may obtain a copy of this
Prospectus from the Company’s website at www.naracoota.com.au.

The Company reserves the right not to accept an Application Form from a
person if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any
of those documents were incomplete or altered.

8.10 Financial forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170
and believe that they do not have a reasonable basis to forecast future earnings
on the basis that the operations of the Company are inherently uncertain.
Accordingly, any forecast or projection information would contain such a broad
range of potential outcomes and possibilities that it is not possible to prepare a
reliable best estimate forecast or projection.

8.11 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share or option certificates.  The Company is a
participant in CHESS, for those investors who have, or wish to have, a sponsoring
stockbroker.  Investors who do not wish to participate through CHESS will be
issuer sponsored by the Company.  Because the sub-registers are electronic,
ownership of securities can be transferred without having to rely upon paper
documentation.

Electronic registers mean that the Company will not be issuing certificates to
investors.  Instead, investors will be provided with a statement (similar to a bank
account statement) that sets out the number of Shares allotted to them under
this Prospectus.  The notice will also advise holders of their Holder Identification
Number or Security Holder Reference Number and explain, for future reference,
the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any
changes in their security holding in the Company during the preceding month.

8.12

Privacy Act

If you complete an application for Securities, you will be providing personal
information to the Company (directly or by the Company’s share registry).  The
Company collects, holds and will use that information to assess your application,
service your needs as a holder of equity securities in the Company, facilitate
distribution payments and corporate communications to you as a Shareholder
and carry out administration.

The information may also be used from time to time and disclosed to persons
inspecting the register, bidders for your securities in the context of takeovers,
regulatory bodies, including the Australian Taxation Office, authorised securities
brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold
about you.  Please contact the Company or its share registry if you wish to do so
at the relevant contact numbers set out in this Prospectus.

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Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (Cth) (as amended), the
Corporations Act and certain rules such as the ASX Settlement Operating Rules.
You should note that if you do not provide the information required on the
application for Securities, the Company may not be able to accept or process
your application.

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9. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a
resolution of the Directors and Proposed Directors.

In accordance with section 720 of the Corporations Act, each Director and
Proposed Director has consented to the lodgement of this Prospectus with the
ASIC.

_______________________________ Steven Crabbe For and on behalf of Naracoota Resources Limited

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10. GLOSSARY

• $ means the lawful currency of the Commonwealth of Australia.

Applicant means a Shareholder who applies for Shares pursuant to the Offer or a Shareholder or other party who applies for Shortfall Shares pursuant to the Shortfall Offer.

Application Form means an Entitlement and Acceptance Form or Shortfall Application Form as the context requires.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the listing rules of the ASX.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Board means the board of Directors unless the context indicates otherwise.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day.

Closing Date means the date specified in the timetable set out at the commencement of this Prospectus (unless extended).

Company means Naracoota Resources Limited (ACN 143 142 410).

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company as at the date of this Prospectus.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Prospectus.

Event of Insolvency means:

• (a) a receiver, manager, receiver and manager, trustee, administrator, Controller or similar officer is appointed in respect of a person or any asset of a person;

• (b) a liquidator or provisional liquidator is appointed in respect of a corporation;

• (c) any application (not being an application withdrawn or dismissed within 7 days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of:

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• (i) appointing a person referred to in paragraphs (a) or (b);

• (ii) winding up a corporation; or

• (iii) proposing or implementing a scheme of arrangement;

• (d) any event or conduct occurs which would enable a court to grant a petition, or an order is made, for the bankruptcy of an individual or his estate under any Insolvency Provision;

• (e) a moratorium of any debts of a person, or an official assignment, or a composition, or an arrangement (formal or informal) with a person's creditors, or any similar proceeding or arrangement by which the assets of a person are subjected conditionally or unconditionally to the control of that person's creditors or a trustee, is ordered, declared, or agreed to, or is applied for and the application is not withdrawn or dismissed within 7 days;

• (f) a person becomes, or admits in writing that it is, is declared to be, or is deemed under any applicable Act to be, insolvent or unable to pay its debts; or

• (g) any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to any asset of a person.

Force Majeure means any act of God, war, revolution, or any other unlawful act against public order or authority, an industrial dispute, a governmental restraint, or any other event which is not within the control of the parties.

Material Adverse Effect means:

• (a) a material adverse effect on the outcome of the Offer or on the subsequent market for the Rights Shares (including, without limitation, matters likely to have a material adverse effect on a decision of an investor to invest in Rights Shares); or

• (b) a material adverse effect on the assets, condition, trading or financial position, performance, profits and losses, results, prospects, business or operations of the Company and its subsidiaries either individually or taken as a whole; or

• (c) the Underwriter's obligations under this Agreement becoming materially more onerous than those which exist at the date of this Agreement; or

• (d) a material adverse effect on the tax position of either;

• (i) the Company and its subsidiaries either individually or taken as a whole; or

• (ii) an Australian resident shareholder in the Company.

New Option means an Option issued on the terms set out in Section 6.2 of this Prospectus.

Offer means the non-renounceable entitlement issue the subject of this Prospectus.

Official Quotation means official quotation on ASX.

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Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Placement has the meaning set out in Section 5.1.

Prescribed Occurrence means:

• (a) a Relevant Company converting all or any of its shares into a larger or smaller number of shares;

• (b) a Relevant Company resolving to reduce its share capital in any way;

• (c) a Relevant Company:

• (i) entering into a buy-back agreement or;

• (ii) resolving to approve the terms of a buy-back agreement under section 257C or 257D of the Corporations Act.

• (d) a Relevant Company making an issue of, or granting an option to subscribe for, any of its shares, or agreeing to make such an issue or grant such an option, other than an issue or agreement to issue in accordance with the Offer or the terms of this Agreement;

• (e) a Relevant Company issuing, or agreeing to issue, convertible notes;

• (f) a Relevant Company disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;

• (g) a Relevant Company charging, agreeing to charge, the whole, or a substantial part, of its business or property;

• (h) a Relevant Company resolving that it be wound up;

• (i) the appointment of a liquidator or provisional liquidator to a Relevant Company;

• (j) the making of an order by a court for the winding up of a Relevant Company;

• (k) an administrator of a Relevant Company, being appointed under section 436A, 436B or 436C of the Corporations Act;

• (l) a Relevant Company executing a deed of company arrangement; or

• (m) the appointment of a receiver, or a receiver and manager, in relation to the whole, or a substantial part, of the property of a Relevant Company.

Proposed Director means a person named as such in Section 5.1.

Prospectus means this prospectus.

Record Date means the date specified in the timetable set out at the commencement of this Prospectus.

Relevant Company means the Company and each of the Company’s subsidiaries.

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Securities means Shares and/or New Options offered pursuant to the Entitlement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Shortfall means the Shares not applied for under the Offer (if any).

Shortfall Application Form means the shortfall application form either attached to or accompanying this Prospectus.

Shortfall Offer means the offer of the Shortfall on the terms and conditions set out in Section 4.8 of this Prospectus.

Shortfall Securities means those Securities issued pursuant to the Shortfall.

WST means Western Standard Time as observed in Perth, Western Australia.

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DO NOT COMPLETE UNLESS INSTRUCTED TO DO SO BY THE DIRECTORS

BEFORE COMPLETING THIS APPLICATION FORM YOU SHOULD READ THE ACCOMPANYING PROSPECTUS AND THE INSTRUCTIONS OVERLEAF

SHORTFALL APPLICATION FORM NARACOOTA RESOURCES LIMITED

ACN 143 142 410

APPLICANT’S DETAILS:

Full name (PLEASE PRINT)

==> picture [513 x 252] intentionally omitted <==

----- Start of picture text -----

Title, Given Name(s) & Surname or Company Name
Joint Applicant #2 or
Joint Applicant #3 or
Postal Address (PLEASE PRINT)
Street Number Street
Suburb/Town State Post Code
ABN, Tax File Number or Exemption Applicant #2 Applicant #3
----- End of picture text -----

CHESS HIN or Existing SRN (where applicable)

Number of Shares applied for	Application Money enclosed at 3.5 cent per Share
	A$……………………………

Please note that participants in the Shortfall will receive 1 free Option for every 1 Share allotted and issued pursuant to the Shortfall.

I/We whose full name(s) and address appear above hereby apply for the number of Shares shown above (to be allocated to me/us by the Company in respect of this Application) under the Prospectus on the terms set out in the Prospectus. Cheque Details:

PLEASE ENTER Drawer Bank BSB or Branch Amount CHEQUE DETAILS THANKYOU My/Our contact numbers in the case of inquiry are: Telephone ( ) . . . . . . . . . . . . . . . . . . . . . . . . . Fax ( ) . . . . . . . . . . . . . . . . . . . . . . . NOTE : Cheques should be made payable to Naracoota Resources Ltd – Entitlement Issue Account , crossed “ NOT NEGOTIABLE ” and forwarded to the address outlined on the back of this Shortfall Application Form to arrive no later than 5.00pm (WST) on that date which is 3 months after the Closing Date (or such earlier date as directed by the Company) .

Declaration

This Shortfall Application Form does not need to be signed. By lodging this Shortfall Application Form and a cheque for the application money this Applicant hereby:

(1) applies for the number of Shares and Options specified in the Shortfall Application Form or such lesser number as may be allocated by the Directors;

(2) agrees to be bound by the constitution of the Company;

(3) authorises the Directors to complete or execute any documentation necessary to effect the issue of Shares to me/us.;

(4) confirms receipt of a copy of the Prospectus accompanied by or attached to this Application Form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Shares;

(5) acknowledges that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus;

(6) acknowledges that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in the Company and that no notice of acceptance of the application will be provided.

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 31 AUGUST 2012 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

INSTRUCTIONS TO APPLICANTS

Please post or deliver the completed Shortfall Application Form together with a cheque to the Company. If an Applicant has any questions on how to complete this Shortfall Application Form, please telephone the Company on (08) 9200 5858 or your professional adviser. The Form must be received by the Company no later than 5.00pm (WST) on that date which is 3 months after the Closing Date (or such earlier date as directed by the Company).

A. Name of Applicant / Joint Applicants or Account Designation

Write the Applicant’s FULL NAME. This must be either an individual’s name or the name of a company. Please refer to the bottom of this page for the correct form of registrable title. Applications using the incorrect form of registrable title may be rejected. If JOINT APPLICANTS are applying, up to three joint Applicants may register. If applicable, please provide details of the Account Designation in brackets. Please refer to the bottom of this page for instructions on the correct form of registrable title.

• B. Address

Enter the Applicant’s postal address for all correspondence. If the postal address is not within Australia, please specify Country after City/Town.

C. Contact Details Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Shortfall Application Form.

D. TAX FILE NUMBERS

The collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the law not to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfranked dividend distribution at the maximum tax rate.

If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from the Australian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contact your taxation adviser or any Taxation Office.

E. CHESS HIN or existing SRN Details

The Company participates in CHESS. If the Applicant is already a participant in this system, the Applicant may complete this section with their existing CHESS HIN and the name and address as recorded in the CHESS system. If the applicant is an existing shareholder with an Issuer Sponsored account, the SRN for this existing account may be used. Otherwise leave the section blank and the Applicant will receive a new Issuer Sponsored account and statement.

• F. Cheque Details

Make cheques payable to Naracoota Resources Ltd – Entitlement Issue Account in Australian currency and cross them “Not Negotiable”. Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown on the Shortfall Application Form.

If a Shortfall Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept a Shortfall Application Form, and how to construe, amend or complete it, shall be final. A Shortfall Application Form will not however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque.

Forward your completed application together with the application money to:
Computershare Investor Services Pty Ltd	Naracoota Resources Ltd
Level 2, 45 St Georges Terrace	75 King Street
PERTH WA 6000	PERTH WA 6000

CORRECT FORMS OF REGISTRABLE TITLE

Note that ONLY legal entities are allowed to hold securities. Shortfall Application Forms must be in the name(s) of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each natural person. Shortfall Application Forms cannot be completed by persons under 18 years of age. Examples of the correct form of registrable title are set out below.

Type of Investor	Correct Formof Registration	Incorrect Formof Registration
IndividualUse given namesin full,not initials	MrJohn Alfred Smith	JASmith
Company Usethe company’sfull title,notabbreviations	ABCPtyLtd	ABCP/Lor ABC Co
Joint Holdings Use full and complete names	Mr Peter Robert Williams & Ms Louise Susan Williams	Peter Robert & Louise S Williams
Trusts Usethetrustee(s) personal name(s).	Mrs Susan Jane Smith	Sue Smith Family Trust
Deceased Estates Use the executor(s) personal name(s).	Ms Jane Mary Smith & Mr Frank William Smith	Estate of late John Smith or JohnSmith Deceased
Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation.	Mr John Alfred Smith	Master Peter Smith
Partnerships Use the partners personal names.	Mr John Robert Smith & Mr Michael John Smith	John Smith and Son
Long Names.	Mr John William Alexander Robertson-Smith	Mr John W A Robertson-Smith
Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s).	Mr Michael Peter Smith	ABC Tennis Association
Superannuation Funds Use the name of the trustee of the fund.	Jane Smith Pty Ltd	Jane Smith Pty Ltd Superannuation Fund