PANTERRA GOLD LIMITED ABN 48 008 031 034

NOTICE OF GENERAL MEETING and EXPLANATORY MEMORANDUM and INDEPENDENT EXPERT’S REPORT

to be held at 10.00 am (AEDT) on Thursday, 24 November 2016

Meeting Room 3, Level 4, Heritage Wing The Westin Sydney 1 Martin Place Sydney NSW 2000

If you are unable to attend the meeting, please complete the form of proxy enclosed and return it in accordance with the instructions set out on that form.

PANTERRA GOLD LIMITED

ABN 48 008 031 034

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of the Shareholders of PanTerra Gold Limited ( PanTerra Gold or the Company ) will be held in Meeting Room 3, Level 4, Heritage Wing, The Westin Sydney, 1 Martin Place, Sydney NSW 2000 at 10.00am (AEDT) on 24 November 2016.

The Explanatory Memorandum and proxy form which accompany and form part of this Notice, describe in more details the matters to be considered. Please consider this Notice, the Explanatory Memorandum, Annexures (including the Independent Expert’s Report) and the proxy form in their entirety.

ORDINARY BUSINESS

Resolution 1: Issue of Options and Shares to ALCIP Capital LLC

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That for the purposes of section 611, item 7 of the Corporations Act, and for all other purposes, Shareholder approval is given for:
(a) the Company to issue 40,000,000 Options to ALCIP Capital LLC ( ALCIP );
(b) the Company to issue and ALCIP to acquire 40,000,000 fully paid ordinary Shares (subject to adjustment in the event of a reorganization in accordance with the ASX Listing Rules) on exercise of the Options by ALCIP; and
(c) the increase in the Voting Power of ALCIP and its Associates to up to 33.23% as a result of the issue of Shares under paragraph (b) of this Resolution,

as further described in and on the terms and conditions set out in the Explanatory Memorandum accompanying and forming part of the Notice of this Meeting.”

Resolution 2: Approval of Amended and Restated Agreement to Issue Redeemable Preference Shares

To consider and, if thought fit, pass the following resolution as a special resolution :

“ That, subject to Resolution 1 being passed, Shareholders approve the variation and restatement of the Agreement to Issue Redeemable Preference Shares dated 16 August 2013 between, among others, the Company and Central American Mezzanine Infrastructure Fund LP so as to incorporate the amended terms and conditions summarised in the Explanatory Memorandum accompanying and forming part of the Notice of this Meeting and consent to any variation or cancellation of any rights attaching to Ordinary Shares that may be effected by or result from the variation and restatement .”

Voting Exclusion Statement

The Company will disregard any votes cast in favour of Resolution 1 by or on behalf of ALCIP Capital LLC ( ALCIP ), Central American Mezzanine Infrastructure Fund LP ( CAMIF ) or any of their Associates.

Independent Expert’s Report:

Shareholders should carefully consider the accompanying Independent Expert’s Report prepared by HLB Mann Judd for the purposes of Shareholder approval of Resolution 1 under section 611 (Item 7) of the Corporations Act. The Independent Expert’s Report comments on the fairness and reasonableness of the transaction to the non-associated Shareholders in the Company.

By Order of the Board

Pamela Bardsley

Company Secretary

12 October 2016

PROXY AND SHAREHOLDER INFORMATION

Attendance and Voting

The Company has determined for the purposes of determining voting entitlements at this General Meeting ( GM ), that all the Shares of the Company recorded in the Company’s register at 7.00pm (AEDT), on Tuesday 22 November 2016, shall be taken to be held by the persons registered as holding the Shares at that time. Only those persons will be entitled to vote at the GM and transfers registered after that time will be disregarded in determining entitlements to attend and vote at the GM.

Shareholders may vote by attending the GM in person or by proxy (see below).

Ordinary resolutions require the support of more than 50% of the votes cast by those Shareholders voting in person, by proxy, by representative or by attorney.

Proxies

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

each Shareholder has the right to appoint a proxy;
the proxy need not be a Shareholder of the Company; and
a Shareholder who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

To vote by proxy, please complete and sign or authenticate the Proxy Form enclosed with this Notice of General Meeting as soon as possible and either:

send the Proxy Form by facsimile to Computershare Investor Services Pty Ltd on fax number (within Australia) 1800 783 447 (outside Australia) 61 3 9473 2555; or
post the Proxy Form to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001; or
lodge your proxy electronically by going to www.investorvote.com.au using the details printed on the personalized proxy form.

Relevant custodians may lodge their Proxy Forms online at www.intermediaryonline.com.

Proxy Forms must be received by Computershare not later than 48 hours before the time specified for the commencement of the GM.

Corporate Representatives

A corporate Shareholder or corporate proxy wishing to appoint a person to act as its representative at the meeting may do so by providing that person with the following information which the representative should bring to the meeting:

a letter executed in accordance with the Shareholder’s or proxy's constitution and the Corporations Act authorising that person as the corporate Shareholder’s or proxy's representative at the meeting; or
a copy of the resolution appointing the person as the corporate Shareholder’s or proxy's representative at the meeting, certified by the company secretary or a director of the corporate Shareholder or proxy.

PANTERRA GOLD LIMITED

ABN 48 008 031 034

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to vote in favour of Resolution 1. The Directors recommend that Shareholders read this Explanatory Memorandum in full before making any decision in relation to Resolution 1.

RESOLUTION 1 – Issue of Options to ALCIP Capital LLC

1. Background

On 9 December 2015 Macquarie Bank Limited ( MBL ) assigned the following agreements and associated security and subordination documents (together, the Assigned Documents ) between EnviroGold (Las Lagunas) Limited ( EVGLL ), the Company, and/or certain of the Company’s subsidiaries and MBL, to ALCIP Capital LLC ( ALCIP ):

the Project Loan;
Gross Smelter Return Royalty Agreement dated on or about 12 March 2010 pursuant to which a royalty is payable at 3% in respect of all gold produced from the Project based on agreed reference prices ( GSR ); and
Price Participation Agreement dated on or about 12 March 2010 pursuant to which a proportion of revenue from the Project is payable for the life of the Project in accordance with the Formula ( PP ).

At the time of the assignment the Project Loan was due to be repaid on 30 June 2016 together with capitalized quarterly payments due under the GSR and PP, with a final payment of approximately US$8.8 million falling due on that date. As announced to Shareholders previously, the Company had been in negotiations with ALCIP and its Associate, Central American Mezzanine Infrastructure Fund LP ( CAMIF ) to restructure the group’s finances since February 2016. This was due to the expectation that the Company would not be in a position to make this final payment on the due date, which would otherwise have potentially resulted in the Company being in default under the Project Loan.

On 24 June 2016, the Company announced that those refinancing negotiations had been concluded and the Company, ALCIP and CAMIF had reached agreement in principle on a mutually acceptable repayment program for the outstanding balance of the Project Loan, and redemption of US$10,000,000 of Redeemable Preference Shares ( RPS ) issued to CAMIF by the Company ( Refinancing Proposal ).

Documentation to give effect to the Refinancing Proposal has been completed. That documentation is subject to Shareholder approval under Resolution 1 for the issue of the Options, the subject of this Notice, and the acquisition of shares upon the exercise of such Options and the related increase in Voting Power of ALCIP and its Associates to up to 33.23% as a result of the issue of the Shares, Shareholder approval under Resolution 2 for the amendments to the terms of the RPS Agreement (defined below), the issue of the Options, payment of a restructuring fee of US$500,000 to CAMIF, and no default occurring under the Assigned Documents or the RPS Agreement, on or before 24 November 2016.

If these conditions and other minor administrative matters are satisfied, the key financing terms set out below will apply.

Some aspects of the Refinancing Proposal are more onerous from the Company’s perspective than the existing arrangements, for example the increased interest rate under the Project Loan (see below) and the removal from the RPS terms of the ability for the Company to convert outstanding dividend and redemption amounts to Shares (see below). On the other hand, provided the Company can service dividends and redemptions from cashflow, the potentially dilutive effect of issuing Shares to satisfy such liabilities will be reduced.

This outcome reflects a range of concessions agreed to by ALCIP and its Associates which included:

the extension of the term of the Project Loan to 31 December 2018;
deferral and capitalisation of certain interest payments;
removal of mandatory cash sweep requirements; and
other concessions including with respect to permitting the Company to make certain repayments to other unsecured lenders to the Company.

The Refinancing Proposal reflects the price for ALCIP and its Associates not requiring repayment of the Project Loan on the due date and enforcing their rights under the existing arrangements, which the Board believes would be likely to result in a materially worse outcome for Shareholders including potentially enforcement of security over key assets of the Company and its subsidiaries. As part of its assessment of the alternatives, the Board has fully considered alternative refinancing options and concluded that the Refinancing Proposal is the best available to the Company at this time.

Further information can be found in the Advantages and Disadvantages sections in paragraphs 5 and 6 below.

ALCIP Las Lagunas Project Loan

Project Loan repayments have been rescheduled to commence on 31 December 2016 by the payment of nine equal quarterly instalments with the final payment due on 31 December 2018. The amount outstanding has increased to approximately US$9.5 million due to the capitalization of the 2016 second quarter GSR and PP payments. Interest payments under the Project Loan have been increased by ALCIP from 4.25%pa plus LIBOR to 7.0%pa plus LIBOR from 1 July 2016 and are to be paid quarterly. The increased interest rate will result in more of the Company’s available cashflow being paid as interest which will reduce the Company’s profitability for the remaining repayment term (as extended under the Refinancing Proposal) and reduce the amount of cash available for other uses, including future distributions to Shareholders. If the Company is not able to make payments due from time to time it risks being in default under the Project Loan which could result in enforcement of security by ALCIP and the amount of assets available to Shareholders on a winding up being reduced.

CAMIF Redeemable Preference Share Agreement

The US$10.0 million of RPS issued to CAMIF under the Agreement to Issue Redeemable Preference Shares dated 16 August 2013 between, among others, the Company and CAMIF ( RPS Agreement ) will now be redeemed at quarterly intervals through to 31 December 2018 with quarterly dividends which include an interest component at 7.0%pa plus LIBOR on the outstanding RPS ( Outstanding RPS ), and a royalty component of 0.9% based on gold sales. The first redemption of 250,000 RPS

(US$500,000) was effected on 30 June 2016. As at the date of this Notice, a total of 4,750,000 RPS (US$9,500,000) remain outstanding.

The Company will no longer have the discretion or entitlement of converting outstanding dividends and redemptions under the RPS Agreement to Shares which was previously available to the Company. This could result in a greater proportion of the Company’s cashflow being paid as dividends or redemption payments to the RPS holder which will reduce the amount of cash available for other uses, including future distributions to Shareholders. If the Company has insufficient cash to pay any amount owing under the RPS, it may have to raise further capital which may include seeking to issue new Shares to other investors. If the Company is not able to do so it risks being in default under the RPS which could result in enforcement of guarantees by CAMIF and enforcement of security by ALCIP and the amount of assets available to Shareholders on a winding up being reduced.

Resolution 1 is in effect subject to Resolution 2 also being passed. Accordingly, if Resolution 2 is not passed, the proposed variation and restatement of the Assigned Documents and the Refinancing Proposal will not proceed.

Condition Precedent to Refinancing Proposal

The Refinancing Proposal is subject to Shareholder approval under Resolution 1 for the issue of the Options, the subject of this Notice, and the acquisition of shares upon the exercise of such Options and the related increase in Voting Power of ALCIP and its Associates to up to 33.23% as a result of the issue of the Shares, Shareholder approval under Resolution 2 for the amendments to the terms of the RPS Agreement, the issue of the Options, payment of a restructuring fee of US$500,000 to CAMIF, and no default occurring under the Assigned Documents or the RPS Agreement, on or before 24 November 2016, and certain other minor administrative matters.

The Options are to be issued for nil consideration with an exercise price of 15 cents each and expiry date of 31 December 2018, and will be on the same terms as the Company’s existing listed options (ASX code PGIOA). Please refer to Annexure A for the full terms and conditions of the Options. Any subsequent exercise of the Options could result in the total Voting Power of ALCIP and its Associates exceeding 20%. Without prior Shareholder approval, this increased total Voting Power would be prohibited under the Corporations Act.

Information about ALCIP and its Associates

ALCIP

ALCIP is a wholly owned subsidiary of Central American Mezzanine Infrastructure Fund II LP ( CAMIF II ). CAMIF II is a private investment fund whose participants include a number of leading institutional investors. The fund focuses on private sector infrastructure and natural resource investments in Central America, Mexico, Columbia and the Caribbean, and is managed by LAP Management II Ltd with offices in Washington, D.C., Mexico and Central America.

CAMIF

CAMIF, a separate but related fund to CAMIF II, is also a private investment fund and managed by EMPLA Management Ltd. CAMIF provides equity and mezzanine finance to private sector infrastructure projects, including natural resources in Central America, Mexico, Columbia and the Dominican Republic.

ARGIA

Argia Investments LLC ( Argia ) is a wholly owned subsidiary of CAMIF II and currently holds the Shares previously held by Macquarie Bank prior to the assignment of the Project Loan to ALCIP in December 2015.

2. Item 7 of Section 611 of the Corporations Act

Resolution 1 seeks Shareholder approval, for the purpose of Item 7 of Section 611 of the Corporations Act and for all other purposes to allow the Company to issue 40,000,000 Options to ALCIP and for ALCIP to be issued 40,000,000 Shares (as adjusted in accordance with the Option terms and ASX Listing Rules) on exercise of the Options, which must occur by 31 December 2018 or the Options will expire. The issue of Shares following exercise of all the Options, when aggregated with the existing Shares currently held by the Associates of ALCIP, would result in the Voting Power in the Company of ALCIP and its Associates increasing by 20.90% from 12.33% to a maximum of 33.23% (based on the key assumptions set out below under the heading “Key Assumptions”). If the Company issues additional Shares before such exercise, the maximum Voting Power of ALCIP and its Associates and the maximum extent of the increase of that Voting Power arising from the exercise of the Options will be lower. The likely advantages and disadvantages to the non-associated Shareholders in relation to the proposed issuance are set out in Item 5 and Item 6 (respectively), and are compared in the Independent Expert’s Report.

(a) Section 606 of the Corporations Act – Statutory Prohibition

Section 606(1) of the Corporations Act provides that a person must not acquire a Relevant Interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s Voting Power in the Company increases:

(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% to below 90%,

(Prohibition) .

(b) Voting Power

The Voting Power of a person in a company is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s Voting Power in a company involves determining the votes attaching to voting shares in the company in which the person and the person’s Associates have a Relevant Interest, expressed as a percentage of the total votes attached to all voting shares in the Company.

(c) Associates

For the purposes of determining Voting Power under the Corporations Act, a person ( second person ) will be an Associate of the other person ( first person ) if:

(i) the first person is a body corporate and the second person is:
(A) a body corporate the first person controls;
(B) a body corporate that controls the first person; or
(C) a body corporate that is controlled by an entity that controls the first person;
(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing

the composition of the relevant company’s board or the conduct of the company’s affairs; or

(iii) the second person is a person with whom the first person is acting, or proposes to act, in concert in relation to the relevant company’s affairs.

An entity controls another entity if it has the capacity to determine the outcome of decisions about that other entity’s financial and operating policies.

(d) Relevant Interests

Section 608(1) of the Corporations Act provides that a person has a Relevant Interest in securities if they:

(i) are the holder of the securities;
(ii) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(iii) have the power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the Relevant Interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

Pursuant to Section 608(3) of the Corporations Act, a person is deemed to have a “relevant interest” in securities that a company has if their voting power in the company is above 20% or they control the company.

3. Reason Section 611 Approval is Required

Item 7 of Section 611 of the Corporations Act provides an exception to the Prohibition, whereby a person may acquire a Relevant Interest in a company’s voting shares with Shareholder approval.

As at the date of this Notice, the Associates of ALCIP hold 15,759,677 Shares which equates to a 12.33% interest in the Company.

If the Company issues the Options to ALCIP then ALCIP’s and its Associates’ current Voting Power in the Company will not increase, however if ALCIP exercises all the Options and is issued with Shares on or before the expiry date of 31 December 2018, then ALCIP and its Associates’ Voting Power in the Company would increase by 20.90% from 12.33% to a maximum of 33.23%. The key assumptions underlying this are set out below under the heading “Key Assumptions”.

below under the	heading “Key Assumptions”.
Party	Holding as at the date of this Notice of Meeting	Relevant Interest after the issue of the Options
CAMIF	11,745,036¹	11,745,036
Argia	4,014,641	4,014,641
ALCIP	Nil	Nil

¹ CAMIF also holds 1,500,000 unlisted options exercisable at 64 cents each on or before 31 December 2017 and 4,750,000 RPS redeemable, subject to their terms of issue, at US$2.00 each.

4. Specific Information required by Section 611 item 7 of the Corporations Act and ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders for the purposes of Item 7 of Section 611 of the Corporations Act and ASIC Regulatory Guide 74 in respect

of obtaining approval. Shareholders are also referred to the Independent Expert’s Report prepared by HLB Mann Judd attached to this Explanatory Memorandum as Annexure C.

(a) Identity of the person to whom the Options will be issued, and their Associates

(Subject to Shareholder approval) the Options will be issued to ALCIP

The Associates of ALCIP are:

CAMIF

Argia

Refer to Section 1 of this Explanatory Memorandum for background information regarding ALCIP and its Associates.

(b) Relevant Interest and Voting Power

The Relevant Interests of ALCIP and its Associates in voting shares in the capital of the Company and Voting Power of ALCIP and its Associates (current, following issue of the Options to ALCIP as contemplated by this Notice and on subsequent exercise of all the Options), are set out in the table below.

Party	Relevant Interest (no. of Shares and % of issued capital) as at the date of this Notice of Meeting	Voting Power as at the date of this Notice of Meeting	Relevant Interest (no. of Shares and % of issued capital) after the issue of the Options	Voting Power after the issue of the Options	Relevant Interest (no. of Shares and % of issued capital) upon the exercise of the Options	Voting Power upon the exercise of the Options
ALCIP	Nil	12.33%	Nil	12.33%	40,000,000 (23.84%)	33.23%
CAMIF	11,745,036 (9.19%)	12.33%	11,745,036 (9.19%)	12.33%	11,745,036 (7.00%)	33.23%
Argia	4,014,641 (3.14%)	12.33%	4,014,641 (3.14%)	12.33%	4,014,641 (2.39%)	33.23%

The maximum Voting Power that ALCIP will hold after the issue of the Options is 12.33% (as Voting Power is the aggregate of Relevant Interests held by ALCIP and its Associates, as detailed above). The maximum Voting Power ALCIP and its Associates will hold following exercise of all the Options would be 33.23%. This will represent an increase in Voting Power of 20.90%.

(c) Key Assumptions

Note that the following key assumptions have been made in calculating the above:

(i) the Company has 127,755,677 Shares on issue as at the date of this Notice of Meeting;
(ii) the Company does not issue any additional Shares;
(iii) none of the current listed and unlisted options are exercised, other than the 40,000,000 Options to be issued to ALCIP; and
(iv) ALCIP and its Associates do not otherwise acquire any additional Relevant Interests in Shares.

(d) Reasons for the proposed issue of Options

As set out in Section 1 of this Explanatory Memorandum, the reason for the issue of Options is to satisfy a condition precedent to the Refinancing Proposal including ALCIP agreeing to extend Project Loan repayments until 31 December 2018.

(e) Date of proposed issue of Options

Subject to Shareholder approval, the Options will be issued by close of business on 24 November 2016.

(f) Material terms of the proposed issue of Options

The Company is proposing to issue 40,000,000 Options to ALCIP for nil cash consideration, on the terms and conditions attached as Annexure A.

(g) ALCIP’s intentions in relation to the Company

Other than as disclosed in this Explanatory Memorandum, the Company understands that ALCIP:

(i) has no intention to change the business of the Company;
(ii) has no intention to inject further capital into the Company other than by way of possible exercise of the Options;
(iii) has no intention of making changes regarding the future employment of the present employees of the Company;
(iv) does not intend to transfer any property between the Company, itself, or any of its Associates;
(v) does not intend to redeploy the fixed assets of the Company; and
(vi) has no intention to change the Company’s existing policies in relation to financial matters or dividends.

The statements in this paragraph (g) are subject to:

(i) Shareholder approval under Resolution 1 and Resolution 2;
(ii) the Refinancing Proposal being implemented by the required date (including satisfaction of all conditions precedent to the Refinancing Proposal); and
(iii) there being no default under any of the Assigned Documents, which has not been waived by ALCIP in writing, either before or after the date of each Resolution.

(h) Identity, associations and qualifications of Nominee Director

ALCIP’s current intention is that it does not propose to nominate a director to the Board.

(i)

Interests and Recommendations of Directors

(i) The Directors do not have any material personal interest in the outcome of Resolution 1 other than in their capacity as holders (direct and indirect) of Shares and Options and unanimously recommend that Shareholders vote in favour of Resolution 1. The Directors’ recommendations are based on the reasons outlined in Section 5 below.
(ii) The Directors are not aware of any other information other than as set out in this Notice of Meeting that would be reasonably required by

Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 1.

(j) Capital Structure

Below is a table showing the Company’s current capital structure and the possible capital structure on completion of the issue, and subsequent exercise, of the Options the subject of this Notice.

	Shares	Dec 18 Options (quoted)	Dec 17 Options (unlisted)	RPS
Balance at the date of this Notice	127,755,677	36,092,133	1,500,000¹	4,750,000³
Balance after issue of Options to ALCIP	127,755,677	76,092,133	1,500,000¹	4,750,000³
Balance if Options issued to ALCIP are exercised	167,755,677	36,092,133	Nil²	4,750,000³

Notes:

1,500,000 unlisted options exercisable at $0.64 on or before 31 December 2017.
Assumes unlisted options have expired without being exercised and no other Options other than ALCIP Options issued to ALCIP as contemplated by Resolution 1 are converted.
RPS have a face value of US$2.00 each and have limited conversion rights into Shares: (a) where the Company is unable to meet a required RPS dividend payment or redemption obligation or (b) if there is a successful takeover of the Company which has become unconditional and the bidder has obtained 50.1% Voting Power. The conversion right does not apply to the extent conversion would result in the holder increasing its Voting Power to above 20% without shareholder approval.

Assumptions:

No additional Shares are issued by the Company; and
None of the existing Options expire, or are converted, prior to the date of the Meeting contemplated by this Notice.

5. Advantages of the Issue

The Directors have unanimously recommended Shareholders approve the issue to ALCIP, and their ability and right to exercise, 40 million Options in order to satisfy one of the key conditions precedent for the extension of the Project Loan (and the broader Refinancing Proposal) and thereby avoid a requirement for its immediate repayment and potential enforcement of securities and guarantees. Although the terms of the Refinancing Proposal are in some respects more onerous than the current arrangements (see above), the Board believes this is a far better outcome for Shareholders than the alternative, namely potential enforcement of guarantees in respect of the RPS and the acceleration and requirement to immediately repay the Project Loan and enforcement of the security held by ALCIP in respect of the Project Loan.

As referred to in Annexure B, changes to the RPS include rights of early redemption, which the Directors consider to be advantageous to the Company as early repayment would result in a reduction of dividends payable to CAMIF.

Overall, the Directors believe that the Refinancing Proposal is the best way forward for the Company and its subsidiaries in the current circumstances and its implementation should result in financial stability for the PanTerra Group and allow management to focus on Project operations.

The Directors are of the view that in addition to the advantage of an extended Project Loan, Shareholders should consider the Independent Expert’s conclusion that the issue of the Options is not fair but reasonable for non-associated Shareholders, as being relevant to their decision on how to vote on Resolution 1.

6. Disadvantages of the Issue

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on proposed Resolution 1:

(a) the issue of the Options to ALCIP would, if they are all exercised, increase the Voting Power of ALCIP and its Associates from 12.33% to a maximum of 33.23% provided no other Shares are issued, which would reduce the Voting Power of non-associated Shareholders in aggregate from 87.67% to 66.77%;
(b) dilution of the existing interest of Shareholders meaning existing Shareholders will receive less distribution of the Company’s profits;
(c) there is no guarantee that the Shares will not fall in value as a result of the issue;
(d) the Independent Expert’s conclusion that the issue of the Options is not fair but reasonable to non-associated Shareholders;
(e) the terms of the revised Project Loan are in some respects less favourable to the Company than the current arrangements, the key difference being that the interest rate will increase from 4.25%pa plus LIBOR to 7.0%pa plus LIBOR which will result in a greater proportion of the Company’s cash flow being paid in interest;
(f) the Company will no longer have the discretion or entitlement of converting outstanding dividends and redemptions under the RPS Agreement to Shares which was previously available to the Company;
(g) the Company will be paying to CAMIF a restructuring fee of US$500,000 if the Shareholders approve these resolutions on the date these resolutions are approved; and
(h) the Company is restricted by ALCIP from expending more than US$50,000 per month on certain new projects, and then only such projects which may lead to an extension of the Las Lagunas project.

7. ASX Listing Rule 7.1

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Options or the Shares on exercise of the Options as an issue of securities with approval pursuant to Section 611 (Item 7) is exempt from the requirements of Listing Rule 7.1 (the exception being Listing Rule 7.2 exception 16). Accordingly, the issue of the Options and Shares on exercise of the Options to ALCIP will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1 and any Shares issued on exercise of Options will, once issued, be included in the total number of equity securities against which the 15% capacity in Listing Rule 7.1 will be calculated.

8. Independent Expert’s Report

In accordance with the requirements of ASIC Regulatory Guide 74, the Directors engaged HLB Mann Judd to prepare and provide the Independent Expert’s Report which contains an analysis of whether the proposed issue of the Options to ALCIP is fair and reasonable for non-associated Shareholders.

The Independent Expert’s Report compares the likely advantages and disadvantages for the non-associated Shareholders if the proposed Option issue and subsequent exercise occurs, with the advantages and disadvantages to those Shareholders if it does not.

The Independent Expert has concluded that the proposed issue of Options to ALCIP is not fair but reasonable to the Shareholders of the Company not associated with ALCIP.

The Independent Expert has given, and not before the date of the Notice withdrawn, its consent to the inclusion of the Independent Expert’s Report in Annexure C of this Notice and to the references to the Independent Expert’s Report in this Explanatory Memorandum, being made in the form and context in which each such references is included.

RESOLUTION 2 - Approval of Amended and Restated Agreement to Issue Redeemable Preference Shares

Shareholders ratified and approved the issue of 50,000,000 unlisted RPS in the Company to CAMIF on 4 October 2013 on the terms and conditions contained in the RPS Agreement, the material terms of which were annexed to the Notice of Meeting at that time. The number of RPS was subsequently reduced to 5,000,000 on the consolidation of share capital of the Company which Shareholders approved on 29 May 2015.

The Company and CAMIF have agreed to a number of changes to the RPS Agreement pursuant to the Refinancing Proposal outlined above in relation to Resolution 1. These include changing dividend and redemption payments from six monthly to quarterly and the Company giving up the right to convert outstanding dividend and redemption payments to Shares prior to the repayment of the Project Loan in full where the Company is unable to make such payments from cash distributions from its subsidiaries or cash from all other sources. Due to the RPS having preferred dividend rights and preferred rights on a winding up, these changes could in some circumstances reduce the amount of any surplus assets that might otherwise have been available to Shareholders on a winding up and therefore potentially amount to a variation or cancellation of rights attaching to Shares for the purposes of the Corporations Act and the constitution of the Company. Accordingly, the Company is seeking the approval of Shareholders to the proposed changes.

To offset giving up the conversion right described above, the Company will gain the right to redeem early up to 4 million RPS as follows: (a) up to 2 million RPS may be redeemed early through equity raisings totaling US$4 million and (b) up to a further 2 million RPS may be redeemed early provided that in respect of any such redemption a contemporaneous principal repayment is made to ALCIP under the Project Loan in an amount equal to the amount of the redemption). To ensure the Company will not breach the Project Loan or related documentation by making these payments, ALCIP has consented to all such payments and waived its rights under the subordination deed between ALCIP, CAMIF and the Company in respect of such payments.

The proposed material terms and conditions of the varied and restated RPS Agreement are summarised in Annexure B, with the key changes agreed under the terms of the Refinancing Proposal having been marked-up in Annexure B for ease of identification.

Resolution 2 is subject to Resolution 1 being passed. Accordingly, if Resolution 1 is not passed, Resolution 2 will not be able to be passed and the proposed variation and restatement of the RPS Agreement will not proceed.

The amendments to the RPS Agreement are a key part of the Refinancing Proposal. Accordingly, if Resolution 2 is not passed, the Refinancing Proposal will not proceed. For further information see the explanatory notes above in relation to Resolution 1, including sections 5 and 6 of those notes.

Under the constitution, the rights attaching to Shares may be varied or cancelled by a special resolution passed at a separate general meeting of Shareholders. Assuming that some Shareholders do not vote (or vote against Resolution 2), any variation or cancellation of rights attaching to Shares as contemplated by Resolution 2 will take effect one month after Resolution 2 is passed (by operation of the Corporations Act). However, a court has the power, if an application is made by at least 10% of Shareholders, to set aside any variation or cancellation of rights attaching to Shares as contemplated by Resolution 2, if it is satisfied that such variation or cancellation of rights would unfairly prejudice the applicants. If such an application is made, the variation or cancellation will take effect when the application is withdrawn or finally determined. If the variations proposed by Resolution 2 were set aside, then the terms of the Refinancing Proposal will not be satisfied and there would be an immediate default under the Project Loan and the CAMIF RPS arrangements.

Recommendation : The Directors unanimously recommend that Shareholders vote in favour of Resolution 2. Noting the link between Resolution 2 and Resolution 1 (as part of the Refinancing Proposal), the Directors’ recommendations are based on the reasons outlined in Section 5 above.

GLOSSARY

$ means Australian dollars.

ALCIP means ALCIP Capital LLC.

Argia means Argia Investments LLC.

ASIC means the Australia Securities and Investments Commission.

Associate has the meaning given to the term “associate” in sections 12 and 16 (only) of the Corporations Act.

ASX means ASX Limited ACN 008 624 691.

ASX Listing Rules means the Listing Rules of the ASX as amended from time to time.

Board means the current board of Directors.

CAMIF means Central American Mezzanine Infrastructure Fund LP.

Company means PanTerra Gold Limited (ACN 008 031 034).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

EVGLL means EnviroGold (Las Lagunas) Limited.

Formula means:

o Price participation payment = (A – B) x G x 5.5%

where:

A is the average quarterly gold spot price on each calculation date (determined in accordance with the PPR)
B is the applicable base case gold price on each calculation date (determined in accordance with the PPR)
G is the number of ounces of gold product produced from the Project during the 3 month period immediately preceding the calculation date (determined in accordance with the PPR).

Independent Expert means HLB Mann Judd Corporate (W.A.) Pty Ltd.

Independent Expert’s Report means the report of the Independent Expert attached as Annexure C.

Option means a quoted option to subscribe for a Share, on the terms set out in Annexure A.

Project means the Las Lagunas Gold and Silver Tailings project in the Dominican Republic.

Project Loan means the project loan for the Las Lagunas Gold and Silver Tailings project in the Dominican Republic recorded in the facility agreement dated on or around 12 March 2010 originally between, among others, MBL, EVGLL and the Company, as assigned to ALCIP under various deeds of assignment dated 9 December 2015 and as amended from time to time.

Relevant Interest has the meaning given to the term “relevant interest” in Section 608 of the Corporations Act (a summary of which is contained in Section 2(d) of this Explanatory Memorandum.

RPS means the redeemable preference shares issued to CAMIF under the RPS Agreement.

RPS Agreement means the Agreement to Issue Redeemable Preference Shares dated 16 August 2013 between, among others, the Company and CAMIF.

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

Shareholder means a holder of a Share.

US$ means United States dollars.

Voting Power has the meaning given to the term “voting power’ in section 610 of the Corporations Act.

ANNEXURE A

TERMS OF ISSUE OF LISTED OPTIONS

The Options entitle the holder to be issued Shares on the following terms and conditions:

(a) Each Option will entitle the holder to acquire one fully paid ordinary share (Share) in the Company.
(b) The Options may be exercised at any time on or before 31 December 2018. The Options will lapse at 5.00pm AEDT on 31 December 2018.
(c) The Options may only be exercised by notice in writing received at the registered office of the Company (Exercise Notice).
(d) The Options may be exercised in whole or in part. The Exercise Notice must specify the number of Options being exercised and the Option holder must pay to the Company the total applicable exercise price payable by the Option holder by electronic funds transfer.
(e) The amount payable on the exercise of the Options will be $0.15 for each Option exercised.
(f) The Company will within 5 Business Days of the receipt by it of an Exercise Notice from the Option holder and payment of an amount equal to the Option exercise price multiplied by the number of Options being exercised:
(i) issue and allot one Share for each Option exercised by the Option holder,
(ii) (if applicable) issue a new holding statement for the balance of Options that remain unexercised and
(iii) provide the Option holder a holding statement for the relevant number of Shares.
(g) The Company will immediately on the issue of the Shares arising from the exercise of the Options apply for official quotation on ASX of those Shares.
(h) Any Shares issued to an Option holder as a result of the exercise of an Option will rank pari passu in all respects with all other Shares then on issue. Shares issued upon the exercise of Options will only carry an entitlement to receive a dividend if they were issued before the record date for that dividend.
(i) The Options are transferable by an Option holder in accordance with the Listing Rules.
(j) The Option holder will not be entitled to participate in new issues of Shares offered to shareholders during the currency of the Options without exercising the Options. However, the Company will ensure that for the purposes of the proposed issue, notice of the new issue will be given to the Option holder before the record date and in accordance with the Listing Rules. This will give the Option holder the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
(k) If the Company makes a pro rata issue of Shares the Exercise Price for each Option will not be adjusted in accordance with Listing Rule 6.22.2.
(l) If there is a bonus issue to holders of Shares, the number of Shares over which an outstanding Option is exercisable will be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue and no change will be made to the exercise price.
(m) In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company, the rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

ANNEXURE B

SUMMARY OF THE TERMS OF THE RPS AND PROPOSED MATERIAL AMENDMENTS

Unless defined in this Notice or the context requires otherwise, capitalised terms used in this Annexure B have the meaning given to them in the RPS Agreement, including without limitation, under paragraph 1 of the Conditions.

1. Terms of Issue

~~505~~ ,000,000 RPS issued to CAMIF on 20 August 2013 ( Issue Date ). Each RPS is fully paid at $ ~~US0.20U~~ S2.00 each ( Issue Price ). As at the date of this Notice, a total of 4,750,000 RPS (US$9,500,000) remain outstanding.

2. Guarantee

The agreement between the Company and CAMIF is guaranteed jointly and severally by each of:

PanTerra Gold ~~Holdings I~~ nc.

PanTerra Gold (Latin America) Inc. and

PanTerra Gold (Dominicana) S.A.

3. Additional Guarantors

~~Upon the date on which the Company has repaid all amounts outstanding under the Macquarie Bank Limited (~~ “ ~~MBL~~ ” ~~) Facility Agreement and the MBL Hedge Program and no member of the PanTerra Group has any further obligations under the MBL Letter of Credit Facility Agreement, each of PanTerra Gold Technologies Pty Ltd and EnviroGold (Las Lagunas) Limited will become Additional Guarantors under the Agreement to Issue Redeemable Preference Shares (~~ “ ~~RPS Agreement~~ ” ~~) dated 16 August 2013.~~

PanTerra Gold Technologies Pty Ltd

EnviroGold (Las Lagunas) Limited

PanTerra Mining Finance Inc.

4. 3. Negative Pledge

The Company and each Guarantor have agreed not to create or allow to exist or to agree to any interest or encumbrance over any of its assets and/or shares in any subsidiary, other than an encumbrance permitted under the Project Loan or the RPS Agreement, until all RPS held by CAMIF are redeemed or cancelled, except with the prior written consent of CAMIF.

5.4 . Security

After the ALCIP Termination Date, being the date on which all amounts outstanding under the Project Loan have been paid, provided that there are Outstanding RPS the Company will provide CAMIF with first ranking security over its assets in a form satisfactory to CAMIF.

6.5 . Dividends

Dividends shall be paid ~~at six monthly intervalsq~~ uarterly from ~~311~~ October ~~20132~~ 016 to 31 ~~OctoberD~~ ecember 2018 on the Dividend Calculation Date ~~.~~ with the first such date being 31 December 2016. The last Dividend Payment under the previous six monthly payment

regime falls on 30 September 2016 (however, the payment date has been extended to 14 October 2016).

Dividend payments will be calculated as follows:

In respect of an RPS, a US$ amount (representing a preferential dividend) in respect of that RPS calculated in accordance with the following:

~~In respect of each Dividend Calculation Date after the MBL Termination Date, except (~~ a) where the relevant Dividend Payment is not made on or before ~~5 business days after that Dividend Calculation Date (~~ the DD Date ~~), an amount equal to the aggregate of:~~

~~the amount calculated pursuant to paragraph (b) of this definition in relation to that Dividend Calculation Date (DD Amount); and~~

A , the DD Amount multiplied by (LIBOR plus 10%) multiplied by B

where:

A = is the number of days from and including the DD Date to but excluding the actual date of payment of the Dividend Payment Date ~~andp~~ ursuant to this paragraph (a); and

B = is 365;

(b) in respect of each Dividend Calculation Date:

Royalty Component + Interest Component

where:

Royalty Component =

((0.009 x Gold Sales) ~~+ (OVPS x (~~ divided by the number of ~~weeks or part thereof fromO~~ utstanding RPS on the ~~Issue Date until 31 October 2013 divided by 26 in respect of the period up to the firstr~~ elevant Dividend Calculation Date ~~and one half thereafter)~~

Interest Component =

OVPS x 0.25 x (7% + LIBO ~~R))))~~ divided by the number of Outstanding RPS on the relevant Dividend Calculation Date

Gold Sales = the US$ net receipts from sales of gold from the Project (i.e. proceeds from such gold sales after deduction of freight, treatment, location swap, metal transfer, financing and transportation charges by the refiner calculated during the ~~six month periodR~~ elevant Period prior to that Dividend Calculation Date or, in the case of the first Dividend Calculation Date, during the period from the Issue Date to 31 October 2013;

OVPS = the number of Outstanding RPS multiplied by the Issue Price on that Dividend Calculation Date; and

LIBOR = ~~Average~~ In relation to a Relevant Period, the average floating ~~six month L~~ ondon Interbank Offered Rate ~~for the six months~~ expressed as a percentage for a period having the closest term to the Relevant Period.

(c) And in addition to any amount payable pursuant to paragraph (a) or (b), ~~on~~ calculated as at the Termination Date ~~(15 November 2018)~~ (or, of sooner, on the winding up of the Company, upon conversion or early redemption of all RPS), if the total quantity of gold produced from the Project from the Issue Date to the date of calculation has not equalled or bettered 300,000 ounces of gold, an amount equal to:

0.009 x Shortfall x Proceeds

where:

Shortfall = the amount in ounces of gold by which the total quantity of gold produced from the Project following the Issue Date falls below 300,000 ounces of gold as at the date of calculation; and

Proceeds = the average US$ proceeds per ounces of gold during the ~~six month periodR~~ elevant Period up to and including the date of calculation.

7. 6. Conditions to the payment of Dividends

~~(a) Prior to the MBL Termination Date, a Dividend Payment is respect of an RPS will only be payable by the Company if the Company has sufficient cash on a consolidated basis, has met its obligations to make payments to MBL under the terms of the MBL Facility Agreement and it is permitted to pursuant to the MBL Facility Agreement, after allowing for relevant liabilities and US$5.0 million of working capital.~~

~~(b) In the event the Company is not able to meet payments referred to in (a) above, CAMIF is obliged to convert any amounts owing into ordinary shares in accordance with paragraph 8.1(a)(i) and 8.1(c) below.~~

(a) On each Dividend Calculation Date, CAMIF has the right to receive the Interest Component of the relevant Dividend Payment and within 15 days of each Dividend Calculation Date, the Royalty Component in respect of each RPS.

~~(a)(~~ b) The right of CAMIF to be paid the Dividend Payment (including any accrued and unpaid Dividend Payment), in respect of an RPS ranks in priority to the rights of all holders of other classes of shares in the Company to receive dividends.

8.7 . Conversion

8.17 .1 Conversion Events

(a) If the Company is unable to meet a required Dividend Payment or Redemption Amount (the total Issue Price of the RPS to be redeemed on the Redemption Date), then CAMIF may convert any shortfall into ordinary shares ~~in the following circumstances~~ at any time:
(i) after the ALCIP Termination Dat ~~e~~ ~~by mandatory conversion.~~ ; or
- ~~(ii) After the MBL Termination Date, CAMIF has an option to convert.~~
(ii) pursuant to a demand in accordance with clause 8.3(c) of the RPS Agreement.
(b) In the event of a successful takeover of the Company which has become unconditional and the bidder has obtained 50.1% of the voting power, CAMIF has

the option to convert all remaining RPS, outstanding Dividend Payments and Redemption Amounts into ordinary shares.

(c) If the Company is unable to meet a required Dividend Payment or Redemption Amount under paragraph (a), the conversion price would be calculated as the arithmetic average of the daily volume weighted average sales price of all ordinary shares sold on the ASX in the ordinary course of trading during the 10 day trading period that ended on the relevant conversion dated multiplied by 0.85.
(d) In the event of a takeover under paragraph (b), the conversion price following the exercise of CAMIF’s option to convert would be calculated as the arithmetic average of the daily volume weighted average sales price of all ordinary shares sold on the ASX in the ordinary course of trading during the 3 day trading period on which shares were traded that ended on the day prior to the bidder having obtained at least 50.1% of the ordinary shares in the Company.

8.27 .2 Limits to Conversion

Any right to be issued or obligation to issue ordinary shares under this paragraph 7 will only take effect to the extent that:

(a) shareholder approval is not required or has already been obtained, including for the purpose of Listing Rule 7.1;
(b) without shareholder approval, CAMIF would not increase its voting power in the Company to above 20%;
(c) conversion is limited to ~~50~~ 5,000,000 ordinary shares until shareholders have ratified prior issues within the past twelve months ~~, with a general meeting for such purposes to be held no later than 4 October 2013..~~ .

9. 8. Consent Rights

Each of the following actions of the Company (including as applicable, by any subsidiary of the Company) shall require the written consent of CAMIF, which shall not be unreasonably withheld or delayed, until all RPS held by CAMIF are redeemed or cancelled:

(a) other than for purposes of upstreaming money, incurring any financial indebtedness other than permitted financial indebtedness for the Project (as each such term is defined in the Project Loan) or financial indebtedness (as defined in the Project Loan) with ALCIP for the Project to comply with its obligations;
(b) undertaking any intra-Group material asset transfers;
(c) any change or action that may alter or change any of the rights, privileges or preferences of the RPS held by CAMIF;
(d) any decision of the Company or its subsidiaries that would affect redemption of the RPS, and the ability to meet any payment obligations under this document excluding any decision of the Company or its subsidiaries or by the directors of the Company or its subsidiaries to recommend or otherwise facilitate a takeover bid for the Company or facilitate a takeover of the Company by way of a scheme of arrangement;
(e) creating, authorising, issuing or selling of RPS or any equity instrument with a senior and or equal ranking to the RPS;
(f) the sale, lease, license, transfer or other disposition of all or substantially all of the assets (including intellectual property rights) or business of the Company and/or the Guarantors;

(g) any amalgamation, merger, reorganization, consolidation, reconstitution, restructuring or similar transaction of the Company and/or the Guarantors with or into any person excluding in each case any takeover of the Company by way of either a takeover bid or scheme of arrangement;
(h) any action or transaction, or series of actions or transactions which in aggregate or individually would adversely affect the ability of the Company to make a payment or the performance of any obligation under this document;
(i) any liquidation, winding up or change of jurisdiction of incorporation of the Company; or
(j) the Company ceasing to be listed on the ASX other than where the Company ceases to be listed on ASX as a result of a takeover of the Company by way of either a takeover bid or scheme of arrangement.

10.9 . Redemption

(a) On:
- (i) each Redemption Date (at ~~six monthly~~ quarterly intervals from ~~31 October 20133~~ 0 September 2016 to 31 December 2018), the Company must redeem the following RPS:
  - 100,000 RPS ~~and the Outstandingo~~ n 30 September 2016 (however, this Redemption Date has been extended to 14 October 2016);
  - 350,000 RPS ~~at the Issue Pricee~~ ach quarter for four quarters ending on 30 September 2017; and
  - 650,000 RPS each quarter for five quarters ending on 31 December 2018; and
- (ii) upon written election by CAMIF to the Company following an event of default after the ALCIP Termination Date, the Company must redeem any Outstanding RPS at the Issue Price.
~~(d) The Company will only be required to redeem RPS if the Company is not prohibited from redeeming those RPS by the Corporations Act, any other law or the Listing Rules.~~
(b) The Company may at any time prior to the Termination Date redeem any Outstanding RPS by paying CAMIF the relevant Redemption Amount subject to redemption payments up to an amount not exceeding US$4,000,000 provided this amount is derived from equity raisings undertaken by the Company.
(c) As a separate and independent right to the Company’s ability to redeem Outstanding RPS in accordance with the terms set out in paragraph (c), the Company is also entitled to redeem Outstanding RPS by paying CAMIF an additional US$4,000,000 provided that EVGLL contemporaneously effects principal repayments under the Project Loan of the same amount.
(d) Other than as outlined above, the Company may not redeem Outstanding RPS without the consent of CAMIF.
(e) If an event of default under the RPS Agreement occurs and is subsisting:
- (i) the Company must, at CAMIF’s written election, immediately redeem all or any part of the RPS held by CAMIF (as notified by CAMIF);

(ii) CAMIF may assign its rights under the RPS Agreement and any other Transaction Document to any person without the prior consent of the Company; and
~~(i)~~ (iii) CAMIF may transfer all or part of its RPS to any person.

11.1 0. Meetings and voting rights

~~11.11~~ 0.1 Meeting rights

CAMIF has the same rights as the holder of an ordinary share to receive notices, reports and audited accounts and to attend meetings of members of the Company.

~~11.21~~ 0.2 Voting rights
(a) Each RPS confers on CAMIF the right to vote at general meetings of the Company in each of the following circumstances and in no others:
- (i) during a period in which a Dividend Payment (or part of a Dividend Payment) in respect of that RPS is in arrears;
- (ii) on a proposal to reduce the Company’s share capital;
- (iii) on a resolution to approve the terms of a buy-back agreement;
- (iv) on a proposal that affects rights attaching to the RPS;
- (v) on a proposal to wind up the Company;
- (vi) on a proposal for the disposal of the whole of the Company’s property, business and undertaking;
- (vii) during the winding up of the Company; and
- (viii) in any other circumstances in which the Listing Rules require CAMIF to be entitled to vote.
(b) CAMIF shall have one vote on a show of hands and one vote on a poll for each of its RPS.

12. 11. Transfer of RPS

(a) Subject to paragraphs 11(b) to 11(d), CAMIF must not transfer all or part of its RPS without the prior written consent of the Company.
(b) CAMIF may only transfer its RPS to a person that satisfies the requirements of section 708(8) or 708(11) of the Corporations Act.
(c) At any time prior to the ALCIP Termination Date, CAMIF may transfer its RPS to an affiliate without the prior written consent of the Company. CAMIF may transfer all or part of its RPS to any person after the ALCIP Termination Date.
(d) Any transfers for the purpose of this paragraph must be in writing in a form approved from time to time by the Company.
(e) The Company is not required to register any transfers that do not comply with this paragraph.

(f) Paragraphs 11(a) to 11(e) will not apply to any transfer by CAMIF while an event of default under the RPS Agreement has occurred and is subsisting.

13.1 2. Assignment

(a) Subject to paragraphs 12(b) and 12(c), a party must not assign or deal with any right under the RPS Agreement without the prior written consent of the other parties.

(b) At any time before the ALCIP Termination Date, CAMIF may assign its rights under the RPS Agreement to an affiliate without the prior written consent of the Company.
(c) At any time after the ALCIP Termination Date or while an event of default under the RPS Agreement has occurred and is subsisting, CAMIF may assign its rights under the RPS Agreement without the prior written consent of the Company.
(d) Any purported dealing in breach of this paragraph is of no effect.

14.1 3. Governing Law

The Terms of the RPS Agreement are governed by the law in force in the State of New South Wales, Australia.

ANNEXURE C

INDEPENDENT EXPERT’S REPORT

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Independent Expert’s Report PanTerra Gold Limited

Opinion: Not fair, but reasonable

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HLB Mann Judd Corporate (WA) Pty Ltd AFSL 250903 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au

HLB Mann Judd Corporate (WA) Pty Ltd is a member of

International, a worldwide organisation of accounting firms and business advisers.

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FINANCIAL SERVICES GUIDE Dated 30 September 2016

1. HLB Mann Judd Corporate (WA) Pty Ltd

HLB Mann Judd Corporate (WA) Pty Ltd ABN 69 008 878 555 (“HLB Mann Judd Corporate” or “we” or "us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“ FSG ”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as a financial services licensee.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No. 250903 ;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

securities;
interests in managed investment schemes excluding investor directed portfolio services;
� superannuation; and
debentures, stocks or bonds issued or proposed to be issued by a government.

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4. General financial product advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

HLB Mann Judd Corporate (WA) Pty Ltd is a member of International, a worldwide organisation of accounting firms and business advisers.

Financial Services Guide

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You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product and there is no statutory exemption relating to the matter, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither HLB Mann Judd Corporate, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by us

HLB Mann Judd Corporate has no employees. All personnel who complete reports for HLB Mann Judd Corporate are partners of HLB Mann Judd (WA Partnership). None of those partners are eligible for bonuses directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

HLB Mann Judd Corporate is wholly owned by HLB Mann Judd (WA Partnership). Also, our directors are partners in HLB Mann Judd (WA Partnership). Ultimately the partners of HLB Mann Judd (WA Partnership) own and control HLB Mann Judd Corporate.

From time to time HLB Mann Judd Corporate or HLB Mann Judd (WA Partnership) may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

9. Complaints resolution

9.1. Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. Complaints must be in writing, addressed to The Complaints Officer, HLB Mann Judd Corporate (WA) Pty Ltd, Level 4, 130 Stirling Street, Perth WA 6000.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 7 days and investigate the issues raised. As soon as practical, and not more than one month after receiving the written complaint, we will advise the complainant in writing of the determination.

Financial Services Guide

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9.2 Referral to external disputes resolution scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited ( “FOS ”). FOS independently and impartially resolves disputes between consumers, including some small business, and participating financial services providers.

Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. Contact details

You may contact us using the details at the foot of page 1 of this FSG.

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30 September 2016

The Directors PanTerra Gold Limited 55 Kirkham Road BOWRAL NSW 2576

Dear Sirs

INDEPENDENT EXPERT’S REPORT

INTRODUCTION

On 9 December 2015, Macquarie Bank Limited (“MBL”) assigned the following agreements (and associated security and subordination documents) between PanTerra Gold Limited (“PanTerra” or “the Company”), EnviroGold (Las Lagunas) Limited (a wholly-owned subsidiary of PanTerra), and/or certain of the Company’s subsidiaries and MBL to ALCIP Capital LLC (“ALCIP”):

! Las Lagunas Project Loan (“Project Loan”);
! Gross Smelter Return Royalty Agreement dated on or about 12 March 2010 pursuant to which a royalty is payable at 3% on all gold produced from the Las Lagunas Gold and Silver Tailings project in the Dominican Republic (“Project”) based on agreed reference prices (“GSR”); and
! Price Participation Agreement dated on or about 12 March 2010 pursuant to which a proportion of revenue from the Project is payable for the life of the Project in accordance with the formula as set out in Section 3 of this Report (“PP”).

At the time of the assignment, the Project Loan was due to be fully repaid on 30 June 2016 together with capitalised quarterly payments due under the GSR and PP, with a final balloon payment of approximately US$8.8 million falling due on that date.

On 24 June 2016, the Company announced that refinancing negotiations with ALCIP and its associate, Central American Mezzanine Infrastructure Fund LP (“CAMIF”), had been concluded and the Company, ALCIP and CAMIF had reached agreement in principle on a mutually acceptable repayment program for the outstanding balance of the Project Loan and redemption of US$10.0 million of Redeemable Preference Shares (“RPS”) issued to CAMIF by the Company (“Refinancing Proposal” ) . The Refinancing Proposal is subject to the passing as a special resolution of Resolution 2 of the Notice of General Meeting for the meeting to be held on 24 November 2016 (“Notice”) and to the following occurring by 24 November 2016:

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HLB Mann Judd Corporate (WA) Pty Ltd is a member of

International, a worldwide organisation of accounting firms and business advisers.

PanTerra Gold Limited - Independent Expert’s Report

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! approval by the Company’s shareholders for the issue of the Options which are the subject of Resolution 1 of the Notice and potential issue of Shares should these Options be exercised; and
! payment of a restructuring fee of US$500,000 to CAMIF;

and no default occurring under the assigned agreements or associated security and subordination documents on or before 24 November 2016.

If these conditions and other minor administrative matters are satisfied, the following key financing terms will apply.

ALCIP Las Lagunas Project Loan

CAMIF Redeemable Preference Share Agreement (“RPS Agreement”)

The US$10.0 million of RPS issued to CAMIF under the RPS Agreement dated 16 August 2013 will now be redeemed at quarterly intervals through to 31 December 2018 with quarterly dividends including an interest component at 7.0%pa plus LIBOR on the outstanding RPS and a royalty component of 0.9% based on gold sales. The first redemption of 250,000 RPS (US$500,000) was effected on 30 June 2016. As at the date of the Notice, a total of 4,750,000 RPS (US$9,500,000) remains outstanding.

The Company will no longer have the discretion of converting outstanding dividends and redemptions under the RPS Agreement to shares which was previously available to the Company.

Conditions Precedent to Refinancing Proposal

The Refinancing Proposal is subject to the following occurring by 24 November 2016:

! approval by the Company’s shareholders for the issue of 40,000,000 Options to ALCIP and potential issue of Shares should these Options be exercised; and
! payment of a restructuring fee of US$500,000 to CAMIF;

and no default occurring under the assigned agreements or associated security and subordination documents on or before 24 November 2016.

The Options are to be issued for nil consideration with an exercise price of A$0.15 each and expiry date of 31 December 2018. Please refer to Section 3 of this Report for the full terms and conditions of the Options. These terms and conditions are the same as those that apply to the Company’s existing listed options. Any subsequent exercise of the Options could result in the total Voting Power of ALCIP and its associates exceeding 20%. Without prior Shareholder approval, this increased total Voting Power would be prohibited under the Corporations Act 2001.

Resolution 1 of the Notice seeks shareholder approval, for the purpose of Item 7 of Section 611 of the Corporations Act 2001 to allow the Company to issue 40,000,000 Options to ALCIP and for ALCIP to be issued 40,000,000 Shares on exercise of the Options, which must

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occur by 31 December 2018 or the Options will expire. The issue of Shares following exercise of the Options, when aggregated with the existing shares held by the associates of ALCIP, will result in the Voting Power in the Company of ALCIP and its associates increasing from 12.33% to 33.23% based on the key assumptions set out in the Explanatory Memorandum. If the Company issues additional shares before such exercise, the maximum Voting Power of ALCIP and its associates arising from the exercise of the Options will be lower. Section 606(1) of the Corporations Act 2001 provides that a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the Company increases:

(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% to below 90%.

The issue of 40,000,000 Options to ALCIP (and subsequent issue of Shares on exercise of these Options) is referred to in this Report as the “Proposed Transaction”.

Resolution 2 of the Notice seeks shareholder approval for the variation and restatement of the RPS Agreement in terms as set out in Annexure B of the Explanatory Memorandum accompanying the Notice. Resolution 2 is subject to Resolution 1 being passed.

STRUCTURE OF REPORT

This Report has been divided into the following sections:

Summary and opinion
Purpose of the Report
Key components of the issue of Options to ALCIP
Economic analysis
Industry analysis - PanTerra
Adopted basis of evaluation
Profile of PanTerra
Valuation of PanTerra prior to the Proposed Transaction
Valuation of PanTerra subsequent to the Proposed Transaction
Assessment of whether the Proposed Transaction is fair
Consideration whether the Proposed Transaction is reasonable
Sources of information
Qualifications, Declarations and Consents

Appendix 1 – Valuation of the Las Lagunas Project Appendix 2 – Glossary of Terms

1. SUMMARY AND OPINION

1.1 Fairness

Set out in the table below is a comparison of our assessment of the fair market value of a PanTerra share prior to the Proposed Transaction on a control basis with the value of a PanTerra share subsequent to the Proposed Transaction on a minority basis.

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		Report	Low	Preferred	High
		Reference	US$	US $	US $
Value of a PanTerra	share pre-
transaction		8.3.1	0.21	0.25	0.30
Value of a PanTerra	share post-
transaction		9	0.14	0.17	0.20

As the preferred value of a PanTerra share post-transaction on a minority basis is less than the preferred value pre-transaction on a control basis, it is our opinion that the Proposed Transaction is not fair.

1.2 Reasonableness

We have considered the analysis in Section 11 of this Report, in terms of both the advantages and disadvantages of the Proposed Transaction and the position of the nonassociated shareholders of PanTerra if the Proposed Transaction was to proceed.

In our opinion, the position of the non-associated shareholders of PanTerra if the Proposed Transaction was to proceed is more advantageous than if the Proposed Transaction was not approved by the shareholders.

1.3 Opinion

We are of the opinion that the Proposed Transaction is not fair but reasonable to the non-associated shareholders of PanTerra.

2. PURPOSE OF THE REPORT

2.1 General

The Directors of PanTerra have requested that HLB Mann Judd Corporate (WA) Pty Ltd (“HLB”) provide an independent expert’s report (“Report”) advising whether, in our opinion, the Proposed Transaction is fair and reasonable to holders of the Company’s ordinary shares whose votes are not to be regarded (“non-associated shareholders”).

This Report has been prepared to assist shareholders in their decision whether to vote for or against the resolution giving effect to the Proposed Transaction. PanTerra is seeking the approval of its shareholders under Item 7 of section 611 of the Corporations Act 2001 for the Proposed Transaction as it involves ALCIP potentially holding greater than 20% of the issued capital of PanTerra. At the date of this Report, ALCIP holds 12.33% of the Voting Power in the Company. The potential issue of Shares to those shareholders on exercise of the Options pursuant to the Proposed Transaction will result in those persons holding a relevant interest in PanTerra greater than 20%.

2.2 Regulatory Guidance

This Report is to be included in the Notice of General Meeting and Explanatory Memorandum (“Notice of General Meeting”) for the meeting to be held on 24 November 2016 (“General Meeting”) to consider the resolution giving effect to the Proposed

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Transaction, for the purpose of assisting shareholders in their consideration of that resolution. This Report should not be used for any other purpose.

We have prepared this Report having regard to the relevant Australian Securities and Investments Commission (“ASIC”) releases. ASIC Regulatory Guide 74 “ Acquisitions approved by members ” suggests that the obligation to supply shareholders with all information that is material to the decision on how to vote on the resolution giving effect to the Proposed Transaction can be satisfied by the non-associated directors of PanTerra, by either:

(a) undertaking a detailed examination of the Proposed Transaction themselves, if they consider that they have sufficient expertise; or
(b) by commissioning an independent expert’s report.
The directors of PanTerra have commissioned this Report to satisfy this obligation.

In determining the fairness and reasonableness of the Proposed Transaction, we have had regard to ASIC Regulatory Guide 111 “Content of expert reports” (“RG 111”), which states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price or consideration and the value of the securities the subject of the offer (fairness ) and an examination to determine whether there are sufficient reasons for security holders to accept the offer despite an offer not being fair ( reasonableness ) .

The concept of fairness is taken to be the value of the offer price, or the consideration, being equal to or less than the value of the asset proposed to be acquired. Furthermore, this comparison should be made assuming 100% ownership of the “target” (in this case, 100% of PanTerra) and irrespective of whether the consideration is scrip or cash.

RG 111 states that an offer is reasonable if it is fair. An offer may also be reasonable, if despite it not being fair, there are significant factors which in the expert’s opinion shareholders should consider in accepting the offer.

RG 111 also suggests that where the Proposed Transaction is a control transaction the expert should focus on the substance of the control transaction, rather than the legal mechanism used to effect it. RG 111 suggests that where a transaction is a control transaction it should be analysed on a basis that is consistent with a takeover bid.

In our opinion, the Proposed Transaction is a control transaction as defined by RG 111 and we have therefore assessed the Proposed Transaction to consider whether, in our opinion, it is fair and reasonable to the non-associated shareholders of PanTerra.

We have also had regard to ASIC Regulatory Guide 112 “Independence of experts”.

2.3 Compliance with APES 225 Valuation Services

This Report has been prepared in accordance with the requirements of the professional standard APES 225 Valuation Services (“APES 225”) as issued by the Accounting Professional & Ethical Standards Board.

In accordance with the requirements of APES 225, we advise that this assignment is a Valuation Engagement as defined by that standard as follows:

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“an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Member is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Member at that time.”

3. KEY COMPONENTS OF THE ISSUE OF OPTIONS TO ALCIP

! Las Lagunas Project Loan (“Project Loan”);
! Gross Smelter Return Royalty Agreement dated on or about 12 March 2010 pursuant to which a royalty is payable at 3% on all gold produced from the Las Lagunas Gold and Silver Tailings project in the Dominican Republic (“Project”) based on agreed reference prices (“GSR”); and
! Price Participation Agreement dated on or about 12 March 2010 pursuant to which a proportion of revenue from the Project is payable for the life of the Project in accordance with the following formula (“PP”):
(A – B) x G x 5.5%

where:

A is the average quarterly gold spot price on the calculation date;
B is the applicable base case gold price on the calculation date; and
G is the number of ounces of gold product produced from the Project during the three month period immediately preceding the calculation date.

! approval by the Company’s shareholders for the issue of the Options which are the subject of Resolution 1 of the Notice and potential issue of Shares should these Options be exercised; and
! payment of a restructuring fee of US$500,000 to CAMIF;

and no default occurring under the assigned agreements or associated security and subordination documents on or before 24 November 2016.

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If these conditions and other minor administrative matters are satisfied, the following key financing terms will apply.

ALCIP Las Lagunas Project Loan

CAMIF Redeemable Preference Share Agreement (“RPS Agreement”)

The Company will no longer have the discretion of converting outstanding dividends and redemptions under the RPS Agreement to shares which was previously available to the Company.

Conditions Precedent to Refinancing Proposal

The Refinancing Proposal is subject to the following occurring by 24 November 2016:

! approval by the Company’s shareholders for the issue of 40,000,000 Options to ALCIP and potential issue of Shares should these Options be exercised; and
! payment of a restructuring fee of US$500,000 to CAMIF;

and no default occurring under the assigned agreements or associated security and subordination documents on or before 24 November 2016.

The Options are to be issued for nil consideration with an exercise price of A$0.15 each and expiry date of 31 December 2018. Please refer below for the full terms and conditions of the Options. These terms and conditions are the same as those that apply to the Company’s existing listed options. Any subsequent exercise of the Options could result in the total Voting Power of ALCIP and its associates exceeding 20%. Without prior Shareholder approval, this increased total Voting Power would be prohibited under the Corporations Act 2001.

Terms and Conditions of Issue of Listed Options

The Options entitle the holder to be issued Shares on the following terms and conditions:

Each Option will entitle the holder to acquire one fully paid ordinary share (Share) in the Company.
The Options may be exercised at any time on or before 31 December 2018. The Options will lapse at 5.00pm AEST on 31 December 2018.
The Options may only be exercised by notice in writing received at the registered office of the Company (Exercise Notice).

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The Options may be exercised in whole or in part. The Exercise Notice must specify the number of Options being exercised and the Option holder must pay to the Company the total applicable exercise price payable by the Option holder by electronic funds transfer.
The amount payable on the exercise of the Options will be A$0.15 for each Option exercised.
The Company will within 5 Business Days of the receipt by it of an Exercise Notice from the Option holder and payment of an amount equal to the Option exercise price multiplied by the number of Options being exercised:
(i) issue and allot one Share for each Option exercised by the Option holder;
(ii) (if applicable) issue a new holding statement for the balance of Options that remain unexercised; and
(iii)provide the Option holder a holding statement for the relevant number of Shares.
The Company will immediately on the issue of the Shares arising from the exercise of the Options apply for official quotation on ASX of those Shares.
Any Shares issued to an Option holder as a result of the exercise of an Option will rank pari passu in all respects with all other Shares then on issue. Shares issued upon the exercise of Options will only carry an entitlement to receive a dividend if they were issued before the record date for that dividend.
The Options are transferable by an Option holder in accordance with the Listing Rules.
The Option holder will not be entitled to participate in new issues of Shares offered to shareholders during the currency of the Options without exercising the Options. However, the Company will ensure that for the purposes of the proposed issue, notice of the new issue will be given to the Option holder before the record date and in accordance with the Listing Rules. This will give the Option holder the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
If the Company makes a pro rata issue of Shares the Exercise Price for each Option will not be adjusted in accordance with Listing Rule 6.22.2.
If there is a bonus issue to holders of Shares, the number of Shares over which an outstanding Option is exercisable will be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue and no change will be made to the exercise price.
In the event of any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Company, the rights of the Option holder will be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

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4. ECONOMIC ANALYSIS

At its meeting on 2 August 2016, the Reserve Bank of Australia Board (“Board”) decided to lower the cash rate by 25 basis points to 1.5 per cent, effective 3 August 2016. In support of this decision, the Board provided the following commentary:

“The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China's growth appears to be moderating.

Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.

Financial markets have continued to function effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.

In Australia, recent data suggest that overall growth is continuing at a moderate pace, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term.

Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.

Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in lending for housing purposes has slowed a little this year. All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished.

Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting”.

Source: www.rba.gov.au Statement by Glenn Stevens, Governor: Monetary Policy Decision 3 August 2016

5. INDUSTRY ANALYSIS - PANTERRA

The following analysis is provided in respect of PanTerra’s business.

5.1 PanTerra background

PanTerra is an Australian mining company producing gold and silver from refractory ore at Las Lagunas in the Dominican Republic, utilising Glencore Technology’s patented

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Albion oxidation process in association with standard carbon-in-leach technology. The Las Lagunas Project reprocesses high grade sulphide tailings from historical production at the Pueblo Viejo mine in the Dominican Republic. The Project represents the world’s first utilisation of the Albion process for oxidisation of refractory ore containing precious metals. The Company is a pioneer in the utilisation of the Albion/CIL process for the extraction of precious metals from sulphidic refractory ore and has developed substantial intellectual property in relation to the process, and reached a stage where this experience can be applied to future growth.

5.2 PanTerra’s recent results

Recent results of PanTerra’s Las Lagunas Project can be found in the Company’s Quarterly Report to 30 June 2016 which was lodged with ASX on 20 July 2016.

Highlights from that report are as follows:

Gold production for the quarter ended 30 June 2016 was 4% higher than the previous quarter, reflecting improved head grades of plant feed and recoveries.
Operating costs of US$651 per oz AU equivalent for the quarter ended 30 June 2016 were 3.7% lower than the previous quarter.
The Company is currently dredging in coarse, high grade material which results in reduced throughput but increased recovery and gold production.

Source: ASX announcement by PanTerra 20 July 2016

6. ADOPTED BASIS OF EVALUATION

6.1 Fairness

RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the securities the subject of the offer. The comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length. When considering the value of the securities the subject of the offer in a control transaction, the expert should consider the value inclusive of a control premium. We have assessed whether the Proposed Transaction is fair by comparing our assessment of the fair market value of a PanTerra share on a control basis prior to incorporating the effects of the Proposed Transaction with our assessment of the fair market value of a PanTerra share on a minority basis subsequent to incorporating the effects of the Proposed Transaction.

6.2 Reasonableness

RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable it despite it being “not fair’, the expert believes that there are sufficient reasons for shareholders to accept the offer in the absence of a higher bid. We have assessed the reasonableness of the Proposed Transaction by considering other advantages and disadvantages of the Proposed Transaction to the non-associated shareholders of PanTerra.

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6.3 Our approach

Having regard to the matters in Sections 6.1 and 6.2 above, we have completed our comparison on the following basis:

! A comparison between the value of a PanTerra share prior to the issue of Options to ALCIP on a control basis and the value of a PanTerra share following the issue of Shares upon exercise of those Options on a minority basis (see Section 10); and
! An investigation into other significant factors to which shareholders might give consideration, prior to approving the Proposed Transaction, after reference to the value derived above (see Section 11).

6.4 Individual circumstances

We have evaluated the Proposed Transaction for PanTerra shareholders as a whole. We have not considered the effect of the Proposed Transaction on the particular circumstances of individual shareholders. Due to their particular circumstances, individual shareholders may place a different emphasis on various aspects of the Proposed Transaction from those adopted in this Report. Accordingly, individual shareholders may reach different conclusions to ours on whether the Proposed Transaction is fair and reasonable. If in doubt, shareholders should consult an independent adviser.

6.5 Limitations and Reliance on Information

HLB’s opinion is based on economic, share market, business trading and other conditions and expectations prevailing at the date of this Report. These conditions can change significantly over relatively short periods of time. If these conditions did change materially the valuations and opinions could be different in these changed circumstances.

This Report is also based upon financial information and other information provided by PanTerra. HLB has considered and relied upon this information. HLB has no reason to believe that any material facts have been withheld. The information provided to HLB has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to whether the Proposed Transaction is fair and reasonable. However, in preparing reports such as this, time is limited and HLB does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or “due diligence” investigation might disclose. In any event, an opinion as to fairness and reasonableness is more in the nature of an overall review rather than a detailed audit or investigation.

An important part of the information used in forming an opinion of the kind expressed in this Report is comprised of the opinions and judgment of management. This type of information was also evaluated through analysis, enquiry and review to the extent practical. However, such information is often not capable of external verification or valuation.

Preparation of this Report does not imply that HLB has audited in any way the records of PanTerra for the purposes of this Report. It is understood that the accounting information that was provided was prepared in accordance with generally accepted

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accounting principles and in a manner consistent with the method of accounting in previous years except as otherwise noted.

The information provided to HLB included historical financial information for PanTerra. PanTerra is responsible for this information. HLB has used and relied on this information for the purpose of analysis. HLB has assumed that this information was prepared appropriately and accurately based on the information available to management at the time and within the practical constraints and limitations of such information. HLB has assumed that this information does not reflect any material bias, either positive or negative. HLB has no reason to believe otherwise.

7. PROFILE OF PANTERRA

7.1 Company History

PanTerra was registered on 9 February 1984 and is listed on the ASX.

PanTerra is an Australian mining company producing gold and silver from refractory ore at Las Lagunas in the Dominican Republic, utilising Glencore Technology’s patented Albion oxidation process in association with standard carbon-in-leach technology. The Las Lagunas Project reprocesses high grade sulphide tailings from historical production at the Pueblo Viejo mine in the Dominican Republic. The project represents the world’s first utilisation of the Albion process for oxidisation of refractory ore containing precious metals. The Company is a pioneer in the utilisation of the Albion/CIL process for the extraction of precious metals from sulphidic refractory ore and has developed substantial intellectual property in relation to the process, and reached a stage where this experience can be applied to future growth.

7.2 Legal Structure

PanTerra is a public company incorporated and domiciled in Australia. PanTerra has the following subsidiaries, which are all wholly-owned:

Name PanTerra Gold Technologies Pty Ltd EnviroGold (Las Lagunas) Limited (1) PanTerra Gold (Dominicana) S.A. (2) PanTerra Gold (British Columbia) Ltd (3) PanTerra Gold (Peru) S.A. (2) PanTerra Mining Finance Inc PanTerra Gold Inc PanTerra Gold (Latin America) Inc (3)	Country of incorporation
	Australia Vanuatu Dominican Republic Canada Peru BVI BVI BVI

(1) Investment held by PanTerra Gold Technologies Pty Ltd
(2) Investment held by PanTerra Gold (Latin America) Inc
(3) Investment held by PanTerra Gold Inc

The financial position of PanTerra at 30 June 2016 and its results for the half-year then ended are shown in Sections 7.6 and 7.7 of this Report.

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7.3 Management and Personnel

The Company’s current directors are:

Mr Brian Johnson Chairman and Chief Executive Officer Mr James Tyers Executive Director Mr Ugo Cario Non-Executive Director Ms Angela Pankhurst Non-Executive Director Mr Ruoshui Wang Non-Executive Director

The Company Secretary is Ms Pamela Bardsley.

7.4 Capital Structure and Shareholders

At the date of this Report, PanTerra had the following securities on issue:

Fully Paid Shares:

	Number
Balance at 31 December 2015 Shares issued to employee on 6 January 2016 following vesting of performance share rights Shares issued on conversion of shareholder loan on 18 March 2016 Exercise of listed options on 17 May 2016 Shares issued on vesting of performance share rights on 30 June 2016 Balance at 30 June 2016 Shares issued on partial conversion of shareholder loan on 2 August 2016 Shares issued to employee on 9 August 2016 following vesting of performance share rights Balance at the date of this Report	124,681,610 40,000 1,000,000 735 933,332
	126,655,677 1,000,000 100,000
	127,755,677

Listed Options (exercisable at A$0.15 before 31/12/18):

	Number
Balance at 31 December 2015 Exercise of options on 17 May 2016 Issue of options on 18 March 2016 Balance at 30 June 2016 Issue of options on 2 August 2016 Balance at the date of this Report	35,092,868 (735) 1,000,000
	36,092,133 1,000,000
	37,092,133

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Unlisted Options (exercisable at A$0.64 before 31/12/17):

	Number
Balance at 31 December 2015 Balance at 30 June 2016 and at the date of this Report	1,500,000
	1,500,000

Top 20 shareholders

The top 20 shareholders as at 31 July 2016 are set out below.

Shareholder	Number of Shares % of total shares on issue
Mercury Connection International Co Limited Central American Mezzanine Infrastructure Fund LP Moonstar Investments Pty Ltd (The Pemberley A/C) JP Morgan Nominees Australia Limited Argia Investments LLC Armco Barriers Pty Ltd Asia Pacific Global Investment (Everton Park Pastoral A/C) HSBC Custody Nominees (Australia) Limited Mr David Maurice Hodson Berne No 132 Nominees Pty Ltd (152417 A/C) Shairco for Trading Industry & Contracting Darren Bonker & Associates Pty Ltd Mr Allen Douglas Bowie Bryan Welch Pty Ltd (Bryan Welch S/F A/C) Marie Linnette Garcia Campos Connaught Consultants (Finance) Pty Ltd (Super Fund A/C) Mr Yung Wing Ho & Mrs Katherine Kam Ling Ho (Vic & Kathy Super Fund A/C) Mr Christopher Edward Gittens Mr John Michael Moore (The Mike Moore S/F A/C) Mrs Anna Vorontsova	20,000,000 15.79 11,745,036 9.27 10,376,119 8.19 4,677,750 3.69 4,014,641 3.17 2,650,000 2.09 2,500,000 1.98 2,452,762 1.94 2,050,000 1.62 2,000,000 1.58 2,000,000 1.58 2,000,000 1.58 1,600,000 1.26 1,600,000 1.26 1,400,000 1.11 1,170,000 0.93 1,005,575 0.79 851,000 0.67 800,974 0.63 791,546 0.63
	75,685,403 59.76

Shareholder

Number of
Shares
% of total
shares on
issue

Mercury Connection International Co Limited
Central American Mezzanine Infrastructure Fund LP
Moonstar Investments Pty Ltd (The Pemberley A/C)
JP Morgan Nominees Australia Limited
Argia Investments LLC
Armco Barriers Pty Ltd
Asia Pacific Global Investment (Everton Park Pastoral
A/C)
HSBC Custody Nominees (Australia) Limited
Mr David Maurice Hodson
Berne No 132 Nominees Pty Ltd (152417 A/C)
Shairco for Trading Industry & Contracting
Darren Bonker & Associates Pty Ltd
Mr Allen Douglas Bowie
Bryan Welch Pty Ltd (Bryan Welch S/F A/C)
Marie Linnette Garcia Campos
Connaught Consultants (Finance) Pty Ltd (Super Fund
A/C)
Mr Yung Wing Ho & Mrs Katherine Kam Ling Ho (Vic
& Kathy Super Fund A/C)
Mr Christopher Edward Gittens
Mr John Michael Moore (The Mike Moore S/F A/C)
Mrs Anna Vorontsova

20,000,000
15.79
11,745,036
9.27
10,376,119
8.19
4,677,750
3.69
4,014,641
3.17
2,650,000
2.09
2,500,000
1.98
2,452,762
1.94
2,050,000
1.62
2,000,000
1.58
2,000,000
1.58
2,000,000
1.58
1,600,000
1.26
1,600,000
1.26
1,400,000
1.11
1,170,000
0.93
1,005,575
0.79
851,000
0.67
800,974
0.63
791,546
0.63

75,685,403
59.76

7.5 Share Price Performance

PanTerra’s share price movements (in A$) for the period 24 June 2015 to 28 July 2016, together with volumes traded are presented in the graph below:

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==> picture [471 x 281] intentionally omitted <==

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

24/6/16
----- End of picture text -----

PanTerra’s share price on 24 June 2016 (the date of the announcement of the Refinancing Proposal) was $0.09.

The following key announcements were made by the Company to the market during the above period:

Date	Announcement	Closing share price after announcement A$ (movement)	Closing share price three days after announcement A$ (movement)
25/06/2015	Las Lagunas Project feed grass update	0.165 (�0%)	0.16 (�3%)
20/07/2015	New Polaris metallurgical test work results	0.13 (�7%)	0.13 (�7%)
06/08/2015	Close out of hedging program and reduction in project debt	0.11 (�0%)	0.11(�0%)
31/08/2015	Non-renounceable rights issue; variations to MBL agreement	0.084 (�20%)	0.085(�19%)
02/10/2015	Las Lagunas project update	0.082 (�0%)	0.081 (�0%)
27/10/2015	Resignation of director	0.08 (�0%)	0.078 (�2%)
27/11/2015	Appointment of director	0.094 (�9%)	0.094 (�9%)
04/12/2015	Las Lagunas gold production continues to meet forecast	0.094 (�1%)	0.09 (�3%)
17/12/2015	MBL replaced as financier of Las Lagunas project	0.088 (�2%)	0.085 (�1%))
18/01/2016	Las Lagunas project update	0.07 (�1%)	0.068 (�4%)
06/04/2016	Las Lagunas project update	0.098 (�0%)	0.10 (�2%)
02/05/2016	Gold production at Las Lagunas continues to improve	0.105(�9%)	0.098 (�15%)
03/06/2016	Las Lagunas project update	0.095 (�0%)	0.105 (�10%)
24/06/2016	Terms of group financing successfully negotiated	0.09 (�0%)	0.09 (�0%)
30/06/2016	Additional gold hedging established for Las Lagunas	0.10 (�11%)	0.10 (�11%)
05/07/2016	Las Lagunas project update	0.105 (�0%)	0.135 (�29%)

Source : ASX company announcements

The following facts are worthy of note:

(a) During the period up to the announcement of the Refinancing Proposal (24 June 2016), the PanTerra closing share price fluctuated from a low of A$0.06 to a high of

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A$0.165. The closing share price on the date of this announcement was A$0.09; and

(b) Following this announcement on 24 June 2016, the Company’s closing share price ranged from A$0.085 to A$0.15. The price as at the date of this Report is A$0.085.

7.6 Financial Performance

Extracts of the Company’s audited consolidated financial results for the year ended 31 December 2015 and reviewed consolidated financial results for the half-year ended 30 June 2016 are set out below:

	Audited Year to 31 Dec 2015 US$ Reviewed Half-year to 30 June 2016 US$
Revenue Net sales Interest received Net gain on adjustment to carrying amount of financial liability Gold hedge close out Insurance claim received Other Total revenue Cost of sales Cost of sales Royalties Total cost of sales Gross profit Indirect costs Insurance ASX/ASIC fees Directors’ fees Legal and professional fees Employee expenses Other office overheads Project costs Impairment – exploration costs Foreign currency loss/(gain) Exploration expenses written off Reversal of prior year impairment losses Finance charges, depreciation and amortisation Interest Depreciation and amortisation Profit/(loss) before income tax Income tax expense Profit/(loss) after income tax	46,628,204 26,869,181 21,338 4,014 890,519 1,005,225 12,357,872 - 309,927 - - 379
	60,207,860 27,878,799
	31,264,857 15,884,115 1,347,167 752,147
	32,612,024 16,636,262
	27,595,836 11,242,537
	988,549 451,210 102,482 45,142 481,631 245,826 456,027 189,401 1,663,478 737,018 488,213 233,045 1,640,306 472,840 3,789,625 - (259,784) 75,625 88,728 375 (20,647,312) -
	(11,208,057) 2,450,482
	9,383,223 3,495,946 8,845,183 7,148,731
	18,228,406 10,644,677
	20,575,487 (1,852,622) 9,213 -
	20,566,274 (1,852,622)

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7.7 Financial Position

Extracts of the Company’s audited consolidated financial position as at 31 December 2015 and reviewed consolidated financial position as at 30 June 2016 are set out below:

		Audited 31 Dec 2015 US$ Reviewed 30 June 2016 US$
	ASSETS Current Assets Cash and cash equivalents Trade and other receivables Prepayments and deposits Inventories Total Current Assets Non-Current Assets Las Lagunas project: Property, plant and equipment Development costs Total costs – Las Lagunas project Other plant and equipment Exploration and evaluation costs Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Employee benefits and provisions Borrowings ALCIP Capital loan facility BanReservas line of credit Shareholder loans CAMIF redeemable preference shares Finance leases Total borrowings Total Current Liabilities Non-Current Liabilities Employee benefits and provisions Borrowings ALCIP Capital loan facility BanReservas loan CAMIF redeemable preference shares Finance leases Total borrowings Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS	4,087,264 3,998,901 318,748 1,129,452 799,543 393,487 6,627,648 7,770,752
		11,833,203 13,292,592
		44,660,391 41,561,159 19,347,760 17,061,365
		64,008,151 58,622,524
		19,739 - 618,313 618,515
		64,646,203 59,241,039
		76,479,406 72,533,631
		7,793,722 8,193,792 275,607 402,571 14,429,356 11,330,477 5,000,000 5,000,000 2,477,750 2,447,709 4,285,714 3,649,305 37,292 38,704
		26,230,112 22,466,195
		34,299,441 31,062,558
		1,249,506 1,383,683 3,847,206 4,599,252 2,500,000 2,500,000 6,047,494 6,221,297 40,169 21,023
		12,434,869 13,341,572
		13,684,375 14,725,255
		47,983,816 45,787,813
		28,495,590 26,745,818

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	Audited 31 Dec 2015 US$ Reviewed 30 June 2016 US$
EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY 7.8 Tax Losses	78,293,962 78,330,497 (2,608,463) (2,542,147) (47,189,909) (49,042,532)
	28,495,590 26,745,818

At 31 December 2015, the Group has estimated carried forward revenue losses of US$17.7 million and carried forward capital losses of US$2.2 million which have not been recognised as a deferred tax asset as there is uncertainty that future taxable profits will be available against which the losses can be utilised. This potential asset is not included in the statement of financial position in Section 7.7 of this Report.

8. VALUATION OF PANTERRA PRIOR TO THE PROPOSED TRANSACTION

8.1 Valuation Summary

HLB has assessed the fair market value of PanTerra prior to the Proposed Transaction to be US$0.25 per share. This is based on our assessment of the fair market value on a control basis prior to incorporating the effects of the Proposed Transaction.

For the purpose of our opinion, fair market value is defined as the amount at which the shares would change hands between a knowledgeable willing buyer and a knowledgeable willing seller, neither being under a compulsion to buy or sell. We have considered the aspect of a premium for control in forming our opinion.

In determining this amount, we assessed the fair market value of PanTerra after considering the various valuation methods, which are discussed in further detail at Section 8.2 of this Report.

8.2 Valuation Methodology

Methodologies commonly used for valuing assets and businesses are as follows:

8.2.1 Capitalisation of future maintainable earnings (“FME”)

This method places a value on a business by estimating the likely future maintainable earnings, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

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The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (“EBIT”) or earnings before interest, tax, depreciation and amortisation (“EBITDA”). The capitalisation rate or "earnings multiple" is adjusted to reflect which base is being used for FME.

We do not consider this method to be appropriate for use in valuing PanTerra.

8.2.2 Discounted future cash flows (“DCF”)

The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present values at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start-up phase, or experience irregular cash flows.

We consider the DCF methodology to be appropriate to use in the valuation of PanTerra as the Company has a history of cash flows and has a robust cash flow forecast in place.

8.2.3 Net asset value

Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

! Orderly realisation of assets method
! Liquidation of assets method
! Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Where wind up or liquidation of the entity is not being contemplated, these methods in their strictest form are generally not appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

The net assets on a going concern method is usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

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Often the FME and DCF methodologies are used in valuing assets forming part of the overall net assets on a going concern basis.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when entities are not profitable, a significant proportion of the entity’s assets are liquid or for asset holding companies.

8.2.4 Quoted Market Price Basis

Another valuation approach that can be used in conjunction with (or as a replacement for) any of the above methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a “deep” market in that security.

8.2.5 Methodology Adopted

We consider that the most appropriate methods for the valuation of PanTerra shares are the DCF method and the quoted market price basis. We have used the DCF method for the valuation of the Las Lagunas Project on a pre-financing basis and have incorporated this valuation in the Company’s Statement of Financial Position. We have then assessed the valuation of the Company’s other assets and liabilities.

8.3 Valuation of PanTerra Shares

8.3.1 DCF method applied to the Las Lagunas Project, together with our valuation of other assets and liabilities (prior to incorporating the effects of the Proposed Transaction)

Our valuation of PanTerra is set out in our valuation calculations below. We have assessed the valuation of PanTerra prior to incorporating the effects of the Proposed Transaction and after incorporating certain proforma adjustments to reflect transactions which have occurred subsequent to 30 June 2016.

Statement of Financial Position Note	Proforma Reviewed 30 June 2016 US$ Valuation Low US$ Valuation Preferred US$ Valuation High US$
Current Assets Cash and cash equivalents 1 Trade and other receivables Prepayments and deposits Inventories Total Current Assets	2,884,923 2,884,923 2,884,923 2,884,923 1,129,452 1,129,452 1,129,452 1,129,452 393,487 393,487 393,487 393,487 7,770,752 7,770,752 7,770,752 7,770,752
	12,178,614 12,178,614 12,178,614 12,178,614

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Note	Proforma Reviewed 30 June 2016 US$ Valuation Low US$ Valuation Preferred US$ Valuation High US$
Non-Current Assets Las Lagunas Project: Property, plant and equipment Development costs Total – Las Lagunas Project 3 Exploration and evaluation costs 4 Total Non-Current Assets Total Assets Liabilities Current Liabilities Borrowings: ALCIP Capital loan facility BanReservas line of credit Shareholder loans 2 CAMIF redeemable preference shares Finance leases Total borrowings - current Trade and other payables Employee benefits and provisions Total Current Liabilities Non-Current Liabilities Borrowings: ALCIP Capital loan facility BanReservas loan CAMIF redeemable preference shares Finance leases Total borrowings – non-current Employee benefits and provisions Total Non-Current Liabilities Total Liabilities Net Assets Shares on issue 2 Value per share	41,561,159 42,466,841 46,366,134 50,265,427 17,061,365 17,433,159 19,033,866 20,634,573
	58,622,524 59,900,000 65,400,000 70,900,000 618,515 - - 618,515
	59,241,039 59,900,000 65,400,000 71,518,515
	71,419,653 72,078,614 77,578,614 83,697,129
	11,330,477 11,330,477 11,330,477 11,330,477 5,000,000 5,000,000 5,000,000 5,000,000 2,372,874 2,372,874 2,372,874 2,372,874 3,649,305 3,649,305 3,649,305 3,649,305 38,704 38,704 38,704 38,704
	22,391,360 22,391,360 22,391,360 22,391,360 8,193,792 8,193,792 8,193,792 8,193,792 402,571 402,571 402,571 402,571
	30,987,723 30,987,723 30,987,723 30,987,723
	4,599,252 4,599,252 4,599,252 4,599,252 2,500,000 2,500,000 2,500,000 2,500,000 6,221,297 6,221,297 6,221,297 6,221,297 21,023 21,023 21,023 21,023
	13,341,572 13,341,572 13,341,572 13,341,572 1,383,683 1,383,683 1,383,683 1,383,683
	14,725,255 14,725,255 14,725,255 14,725,255
	45,712,978 45,712,978 45,712,978 45,712,978
	25,706,675 26,365,636 31,865,636 37,984,151
	127,755,677 127,755,677 127,755,677 127,755,677 0.21 0.25 0.30

We have made the following adjustments to the net assets and issued capital of PanTerra as at 30 June 2016 in determining our valuation. These adjustments relate to matters which have effect prior to the effects of the Proposed Transaction.

Adjustments to the “Proforma Reviewed 30 June 2016” column above:

The payment of dividends totalling US$1,113,978 on 1 July 2016 to CAMIF in accordance with the RPS Agreement.
The issue of 1,000,000 fully paid ordinary shares on partial conversion of a shareholder loan on 2 August 2016. These shares have been issued at A$0.10 per share (A$100,000; equivalent US$74,835 at A$1 = US$0.74835). The balance of shareholder loans has been reduced by US$74,835. In addition, 1,000,000 listed options exercisable at A$0.15 each on or before 31 December 2018 were also issued as partial conversion of the shareholder loan, however for the purposes of our calculations, we have not taken this into account due to the immaterial effect this would have.

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Valuation Adjustments above:

For the purposes of our valuation, we have assessed the carrying values of all assets and liabilities at 30 June 2016 and note the following:

Las Lagunas Project

The carrying value of the Las Lagunas Project in the Company’s Statement of Financial Position comprises development costs, mine buildings, mine plant and equipment and mine leasehold improvements. We have undertaken a valuation of the Project as set out in Appendix 1 of this Report and have determined that certain valuation adjustments are required to be made to the carrying value of the Project for the purposes of our Report. We have made certain assumptions in arriving at out valuation and have applied certain sensitivities to those assumptions to arrive at a range of values (high and low), together with a preferred valuation. Full details are contained in Appendix 1 which are summarised below:

Las Lagunas Project	Proforma Reviewed 30 June 2016 US$ Valuation Low US$ Valuation Preferred US$ Valuation High US$
Property, plant and equipment Development costs Total – Las Lagunas Project	41,561,159 42,466,841 46,366,134 50,265,427 17,061,365 17,433,159 19,033,866 20,634,573
	58,622,524 59,900,000 65,400,000 70,900,000

We have not considered it necessary to commission a separate independent technical specialist report to value the Las Lagunas Project for the following reasons:

(a) The Las Lagunas project involves the reprocessing of high grade gold/silver refractory tailings from the Pueblo Viejo mine located approximately 105km to the north of Santo Domingo, the capital of the Dominican Republic in the Caribbean. The tailings were derived from open pit operations at the mine between 1992 and 1999, and are impounded in a purpose-built valley-catchment dam.

The tailings were originally generated through the processing of refractory ores by Rosario Dominicana S.A, a State owned mining corporation. The refractory nature and metallurgical complexity of the ore resulted in poor recoveries (<30%) of gold and silver when treated by the conventional carbon-inleach/cyanidation process plant in place for oxide ore that had been mined earlier. This resulted in significant tonnages of refractory tailings with +3.5g/t gold being deposited in the Las Lagunas dam.

PanTerra Gold's subsidiary, EnviroGold (Las Lagunas) Limited, was successful in an international tender and signed a Contract with the Dominican State in 2004 granting it the right to reprocess the tailings under a profit sharing arrangement with the Government.

The project involves the reclamation of the existing tailings by dredging, ultrafine grinding, concentration of gold bearing sulphides through flotation, followed by sulphide oxidation using the Albion process, prior to extraction of gold and silver utilising standard carbon-in-leach cyanidation.

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(b) The Company commissioned Cube Consulting, geological and mine engineering consultants, of Perth Western Australia (“Cube”) to interrogate the resource block model created in August 2005 and to report the tonnes and grade of the material remaining within that block model on areas that were still to be mined. Cube also reported on material that was outside the original block model, which constituted material that was previously mined and stockpiled on top of the insitu tailings or fill material that had washed down from stockpiles onto areas that from earlier surveys were known to have been previously mined. Cube’s reporting of the tonnes and grade of this material was carried out in accordance with The Australian Code for Reporting of Exploration, Mineral Resources and Ore Reserves (“JORC”).
(c) At each six-monthly period thereafter, Cube has provided the Company with reports reconciling the amount that has been dredged and the tonnes and grade of material that remains. This information as at 30 June 2016 has been incorporated into the valuation model.
(d) The operations of the Las Lagunas Project are in a steady state in terms of gold and silver recoveries, operating costs and indirect costs. In addition, the other key inputs into the valuation model are inputs that are readily obtainable from external independent sources (such as the gold and silver prices, hedging arrangements and the salvage value of the plant).

We have taken the above matters into account in concluding that it is not necessary to commission a separate independent technical specialist report to value the Las Lagunas Project.

Exploration and evaluation costs

In accordance with the Company’s accounting policy, exploration and evaluation costs incurred are accumulated in respect of each identifiable area of interest and are carried forward in the Statement of Financial Position where:

(a) Rights to tenure of the area of interest are current or pending, with a high expectation of final grant of rights to be imminent; and
(b) One of the following conditions is met:
! Such costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively, but its sale; or
! Exploration and/or evaluation activities in the area of interest have not, at reporting date, yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the areas are continuing.

Exploration and evaluation costs carried forward at 30 June 2016 amount to US$618,515 and comprise costs in relation to the Las Lagunas extension and the new Polaris Project in British Columbia. Whilst these costs qualify to be carried forward as an asset for accounting purposes, the valuation of this asset is difficult to assess at this early stage. For the purposes of our valuation we have taken a high valuation of the carrying value at 30 June 2016 for accounting purposes and a low value of NIL. For our preferred valuation, we have adopted a conservative approach and used a preferred valuation of NIL. This is summarised below:

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	Proforma
	Reviewed 30	Valuation	Valuation	Valuation
	June 2016	Low	Preferred	High
Exploration and evaluation costs	US$	US$	US$	US$
Costs carried forward	618,515	-	-	618,515

Other matters:

(a) Income tax

We have not taken into account the potential income tax effect of the uplift in valuation of the Las Lagunas Project above due to the availability of income tax losses to offset any such uplift in value, as discussed in Section 7.8 of this Report.

(b) Inventories

Inventories comprise metal on hand and in circuit, processing consumables and maintenance spares and are stated at cost. All inventories relate to the Las Lagunas Project. It is arguable as to whether the valuation of the Project above should take into account the value of this inventory relating to the Project. For the purposes of our Report, we have not incorporated the valuation of inventories into our valuation of the Las Lagunas Project. The carrying value of inventories has been included as a separate asset at 30 June 2016 (US$7.8m). We also note that the Company’s trade and other payables amount to approximately US$7.8m at 30 June 2016. It is assumed that the acquisition of the inventory has been funded by these payables.

8.3.2 Quoted Market Price Basis - Shares

To provide a comparison to our valuation of PanTerra in Section 8.3.1, we have also assessed the value of PanTerra on the quoted market price basis.

The quoted market value of a company’s shares is reflective of its value on a minority interest basis. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

RG 111.25 suggests that when considering the value of a company’s shares for the purposes of approval under Item 7 of section 611 of the Corporations Act 2001, the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain control of another company. These advantages include the following:

! control over policy, decision making and strategic direction;
! access to cash flows;
! control over dividend policies; and
! potentially, access to tax losses.

Whilst ALCIP would not acquire 100% of the issued capital of PanTerra if the Proposed Transaction was approved, RG 111 states that the expert should calculate the value of a “target’s” (ie PanTerra) shares as if 100% control was being obtained. RG 111.3 states that the expert can then consider an acquirer’s practical level of control when considering reasonableness. We have considered reasonableness in Section 11 of this Report.

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Our valuation calculation has been prepared in two parts. First, we have calculated the quoted market price on a minority interest basis. Secondly, we have added a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

Minority interest value

A chart of the share price movements of PanTerra for the period 24 June 2015 to 28 July 2016 is included in Section 7.5 of this Report.

The PanTerra closing share price fluctuated from a low of A$0.06 to a high of A$0.15 during the 12 months prior to 28 July 2016. For the 12 months prior to the date of the announcement of the Refinancing Proposal (24 June 2016), the PanTerra closing share price fluctuated from a low of $A0.06 to a high of A$0.165.

To provide further analysis of the market prices for a PanTerra share, we have also calculated the volume weighted average market price for 10, 30, 60 and 90 trading day periods prior to 24 June 2016 as follows:

	24 June	10 Days	30 Days	60 Days	90 Days
	2016	$A	A$	A$	A$
	A$
Closing price	0.094
Volume weighted average		0.096	0.099	0.1	0.1

For the quoted market price basis to be reliable there needs to be an adequately liquid and active market for the securities. We consider the following characteristics to be representative of a liquid and active or “deep” market:

! Regular trading in a company’s securities;
! At least 50% of a company’s securities are traded on an annual basis;
! The spread of a company’s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and
! There are no significant and unexplained movements in the company’s share price.

A company’s shares should meet all of the above criteria to be considered as trading in a “deep” market, however, failure of a company’s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares determined on this basis cannot be considered relevant.

An analysis of the volume of trading in PanTerra shares for the 12 months prior to 24 June 2016 is set out below:

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	Low	High	Cumulative	As a % of
	A$	A$	Volume Traded	issued capital
				as at 31 Dec
			No	2015
10 days	0.09	0.105	513,700	0.41%
30 days	0.087	0.15	3,277,900	2.63%
60 days	0.087	0.15	7,519,700	6.03%
90 days	0.087	0.15	9,477,100	7.60%
180 days	0.06	0.15	13,420,900	10.76%
365 days	0.06	0.165	20,835,800	16.71%

This table indicates that the Company’s shares display a low level of liquidity, with only 16.71% of the Company’s issued capital at 31 December 2015 being traded in the 12 month period to 24 June 2016 and only 7.6% over the last 90 days. We do not consider this level of trading in the Company’s shares to be sufficiently adequate and to otherwise meet the criteria in order for the trading in the Company’s shares to be considered as “deep”.

Notwithstanding our opinion that the quoted market price basis is not a reliable valuation basis for our assessment, for the purpose of comparison, in our opinion a range of values for PanTerra shares based on market pricing, after disregarding postannouncement pricing, is between A$0.06 and A$0.165 per share, with a preferred pricing of A$0.11 per share.

Control Premium

Share prices from share market trading do not reflect the market value for control of a company as they are in respect of minority interest holdings. Traditionally, the premiums required to obtain control of companies range between 15% and 25% of the minority interest values.

Quoted market price including control premium

Applying these control premiums to PanTerra’s quoted market share price results in the following quoted market price values including a premium for control:

			Low	Preferred	High
			A$	A$	A$
Quoted market price value			0.06	0.11	0.165
Control premium			15%	20%	25%
Quoted market	price	value
inclusive of a control premium			0.069	0.13	0.206

Therefore, our valuation of a PanTerra share based on the quoted market price method and including a premium for control is between A$0.069 and A$0.206 with a preferred value of A$0.13 per share.

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8.3.3 Assessment on the Fair Market Value of a PanTerra Share

The results of the net asset and quoted market price valuations performed are summarised in the table below:

	Low	Preferred	High
	US$	US$	US$
DCF method applied to the Las
Lagunas Project, together with our
valuation of other assets and liabilities
(Section 8.3.1)	0.21	0.25	0.30
	Low	Preferred	High
	A$	A$	A$
Quoted market price (Section 8.3.2)	0.069	0.13	0.206

As it is our opinion that the trading in PanTerra shares is illiquid, we believe the most appropriate method of valuation of PanTerra shares in accordance with RG 111 is the DCF method applied to the Las Lagunas Project, together with our valuation of other assets and liabilities.

Based on the results above we consider the preferred value of a PanTerra share to be US$0.25.

9. VALUATION OF PANTERRA SUBSEQUENT TO THE PROPOSED TRANSACTION

Following is our assessment of the fair market value of a PanTerra share on a minority basis subsequent to incorporating the effects of the Proposed Transaction.

Report Reference	Valuation Low US$ Valuation Preferred US$ Valuation High US$
Value of PanTerra - pre-transaction 8.3.1 Cash to be received upon potential exercise of the Options to be issued to ALCIP(Note 1) Cash to be received upon potential exercise of existing listed options on issue(Note 2) Payment of restructuring fee of $US500,000 to CAMIF(Note 3) Net assets	26,365,636 31,865,636 37,984,151 4,490,100 4,490,100 4,490,100 4,163,685 4,163,685 4,163,685 (500,000) (500,000) (500,000)
	34,519,421 40,019,421 46,137,936

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	Valuation Low No. Valuation Preferred No. Valuation High No.
Shares on issue – pre-transaction Issue of shares under the Proposed Transaction(Note 1) Issue of shares pursuant to potential exercise of existing listed options on issue(Note 2) Total shares on issue (Number) Net assets per share (US$) Minority interest discount(Note 4) Value post-transaction per share (US$)	127,755,677 127,755,677 127,755,677 40,000,000 40,000,000 40,000,000 37,092,133 37,092,133 37,092,133
	204,847,810 204,847,810 204,847,810
	0.17 0.20 0.23 20% 17% 13% 0.14 0.17 0.20

Note 1 – Increase in assets pursuant to the Proposed Transaction

Under the Proposed Transaction, PanTerra will issue ALCIP 40,000,000 listed Options in the Company, exercisable at A$0.15 on or before 31 December 2018. If these Options are exercised, 40,000,000 Shares in the Company will be issued to ALCIP which will generate cash to the Company of A$6,000,000. Using an exchange rate of 1A$ = US$0.74835 (as at 28 July 2016), the proceeds in $US would be US$4,490,100.

Note 2 – Increase in assets pursuant to exercise of existing listed options

The Company currently has 37,092,133 listed options on issue. These options are exercisable under the equivalent terms as the Options which are the subject of the Proposed Transaction, namely at A$0.15 on or before 31 December 2018. In our opinion, it is reasonable to factor into our calculations above the exercise of these options as they have equivalent terms to the Options which are the subject of the Proposed Transaction. If these options are exercised, 37,092,133 shares in the Company will be issued to these optionholders which will generate cash to the Company of A$5,563,820. Using an exchange rate of 1A$ = US$0.74835 (as at 28 July 2016), the proceeds in $US would be US$4,163,685.

Note 3 – Restructuring fee payable to CAMIF

A restructuring fee of US$500,000 is payable to CAMIF as part of the Refinancing Proposal.

Note 4 – Minority interest discount

The above “Net assets per share (cents)”of a PanTerra share have been determined on a controlling interest basis. If the Proposed Transaction is approved, together with all other resolutions included in the Notice of General Meeting, non-associated shareholders would become minority shareholders in the Company.

We have therefore adjusted our valuation of a PanTerra share to reflect a minority interest holding. As noted in Section 8.3.2 of this Report, we assessed an appropriate premium for control to range from 15% to 25%. We have therefore assessed a range for an appropriate minority interest discount (which is the inverse of a premium for control) of 13% to 20%.

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10. ASSESSMENT OF WHETHER THE PROPOSED TRANSACTION IS FAIR

RG 111 defines an offer as being fair if the value of the offer price is equal to or greater than the value of the securities being the subject of the offer.

		Report	Low	Preferred	High
		Reference	US$	US$	US$
Value of a PanTerra	share pre-
transaction		8.3.1	0.21	0.25	0.30
Value of a PanTerra	share post-
transaction		9	0.14	0.17	0.20

11. CONSIDERATION WHETHER THE PROPOSED TRANSACTION IS REASONABLE

In accordance with RG 111, an offer can be reasonable even though it is not fair. In determining whether the Proposed Transaction is reasonable, we have also considered the advantages and disadvantages of the Proposed Transaction, as follows:

Advantages

! The Directors have unanimously recommended shareholders approve the Proposed Transaction in order to extend the Project Loan and avoid a requirement for its immediate repayment and enforcement of securities and guarantees.
! Changes to the RPS Agreement, as contemplated by Resolution 2 of the Notice, include rights of early redemption, which are considered to be advantageous to the Company as early repayment would result in a reduction of dividends payable to CAMIF.
! If the Refinancing Proposal is not implemented, the Company and its subsidiaries would face an uncertain future resulting from the enforcement of guarantees in respect of the RPS Agreement, the acceleration and requirement to immediately repay the Project Loan and the enforcement of the security held by ALCIP in respect of the Project Loan.
! The loan extension, which will be enabled via the Proposed Transaction, will establish financial stability for the Company and allow management to focus on the Company’s operations.

PanTerra Gold Limited - Independent Expert’s Report -30-

Disadvantages

! The issue of the Options to ALCIP would, upon their conversion to Shares, increase the voting power of ALCIP and its associates from 12.33% to a maximum of 33.23% provided no other shares are issued, which would reduce the voting power of nonassociated shareholders in aggregate from 87.67% to 66.77%.
! Dilution of the existing interest of shareholders will result in existing shareholders receiving less distribution of the Company’s profits in future.
! There is no guarantee that the Company’s share price will not fall as a result of the approval of the Proposed Transaction.
! the terms of the revised Project Loan are in some respects less favourable to the Company than the current arrangements, the key difference being that the interest rate will increase from 4.25%pa plus LIBOR to 7.0%pa plus LIBOR which will result in a greater proportion of the Company’s cash flow being paid in interest.
! the Company will no longer have the discretion or entitlement of converting outstanding dividends and redemptions under the RPS Agreement to Shares which was previously available to the Company.
! the Company will be paying to CAMIF a restructuring fee of US$500,000 on the date the resolutions being considered in the Notice are approved.
! the Company is restricted by ALCIP from expending more than US$50,000 per month on certain new projects, and then only such projects which may lead to an extension of the Las Lagunas project.

We have considered the above factors. We consider that, on balance, the advantages of the Proposed Transaction outweigh the disadvantages. We are therefore of the view that the position of non-associated shareholders if the resolution giving rise to the Proposed Transaction is passed, would be more advantageous than if the resolution was not passed.

Accordingly, we are of the opinion that the Proposed Transaction is reasonable to the non-associated shareholders.

12. SOURCES OF INFORMATION

In preparing this report we have had access to the following principal sources of information:

! Draft Notice of General Meeting and Explanatory Memorandum concerning the Proposed Transaction;
! PanTerra’s annual audited financial report for the year ended 31 December 2015;
! PanTerra’s reviewed half-year financial report for the half-year ended 30 June 2016;
! Discussions with officers of PanTerra;
! Publicly available information;
! Share registry information; and
! ASX Announcements concerning the Proposed Transaction.

PanTerra Gold Limited - Independent Expert’s Report -31-

13. QUALIFICATIONS, DECLARATIONS AND CONSENTS

HLB, which is a wholly owned entity of HLB Mann Judd Chartered Accountants, is a Licensed Investment Adviser and holder of an Australian Financial Services Licence under the Act and its authorised representatives are qualified to provide this Report. The authorised representative of HLB responsible for this Report has not provided financial advice to PanTerra.

The author of this Report is Lucio Di Giallonardo. He is a Fellow of Chartered Accountants Australia and New Zealand, holds a Bachelor of Business, and has considerable experience in the preparation of independent expert reports and valuations of business entities in a wide range of industry sectors.

Prior to accepting this engagement, HLB considered its independence with respect to PanTerra with reference to ASIC Regulatory Guide 112 and APES 225. In HLB’s opinion, it is independent of PanTerra.

This Report has been prepared specifically for the shareholders of PanTerra. It is not intended that this Report be used for any other purpose other than to accompany the Notice of General Meeting to be sent to the PanTerra shareholders. In particular, it is not intended that this Report should be used for any purpose other than as an expression of the opinion as to whether or not the Proposed Transaction is fair and reasonable to the non-associated shareholders of PanTerra. HLB disclaims any assumption of responsibility for any reliance on this Report to any person other than those for whom it was intended, or for any purpose other than that for which it was prepared.

The statements and opinions given in this Report are given in good faith and in the belief that such statements and opinions are not false or misleading. In the preparation of this Report, HLB has relied on and considered information believed, after due inquiry, to be reliable and accurate. HLB has no reason to believe that any information supplied to it was false or that any material information has been withheld.

HLB has evaluated the information provided to it by PanTerra and other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially misstated or would not provide a reasonable basis for this Report. HLB has not, nor does it imply that it has, audited or in any way verified any of the information provided to it for the purposes of the preparation of this Report.

In accordance with the Corporations Act 2001, HLB provides the following information and disclosures:

! HLB will be paid its usual professional fee based on time involvement at normal professional rates, for the preparation of this Report. This fee, estimated not to exceed $20,000 excluding GST, is not contingent on the conclusion, content or future use of this Report.
! Apart from the aforementioned fee, neither HLB, nor any of its associates will receive any other benefits, either directly or indirectly, for or in connection with the preparation of this Report.
! HLB and its directors and associates do not have any interest in PanTerra.

PanTerra Gold Limited - Independent Expert’s Report -32-

! HLB and its directors and associates do not have any relationship with PanTerra or any associate of PanTerra.

Yours faithfully HLB MANN JUDD CORPORATE (WA) PTY LTD Licensed Investment Advisor (AFSL Licence number 250903)

L DI GIALLONARDO Authorised Representative

PanTerra Gold Limited - Independent Expert’s Report

APPENDIX 1 Valuation of the Las Lagunas Project

1. Background

The Las Lagunas project involves the reprocessing of high grade gold/silver refractory tailings from the Pueblo Viejo mine located approximately 105km to the north of Santo Domingo, the capital of the Dominican Republic in the Caribbean. The tailings were derived from open pit operations at the mine between 1992 and 1999, and are impounded in a purpose-built valley-catchment dam.

The tailings were originally generated through the processing of refractory ores by Rosario Dominicana S.A, a State owned mining corporation. The refractory nature and metallurgical complexity of the ore resulted in poor recoveries (<30%) of gold and silver when treated by the conventional carbon-in-leach/cyanidation process plant in place for oxide ore that had been mined earlier. This resulted in significant tonnages of refractory tailings with +3.5g/t gold being deposited in the Las Lagunas dam.

The Company commissioned Cube Consulting, geological and mine engineering consultants, of Perth Western Australia (“Cube”) to interrogate the resource block model created in August 2005 and to report the tonnes and grade of the material remaining within that block model on areas that were still to be mined. Cube also reported on material that was outside the original block model, which constituted material that was previously mined and stockpiled on top of the insitu tailings or fill material that had washed down from stockpiles onto areas that from earlier surveys were known to have been previously mined. Cube’s reporting of the tonnes and grade of this material was carried out in accordance with The Australian Code for Reporting of Exploration, Mineral Resources and Ore Reserves (“JORC”).

At each six-monthly period thereafter, Cube has provided the Company with reports reconciling the amount that has been dredged and the tonnes and grade of material that remains. This information as at 30 June 2016 has been incorporated into the valuation model.

The operations of the Las Lagunas Project are in a steady state in terms of gold and silver recoveries, operating costs and indirect costs. In addition, the other key inputs into the valuation model are inputs that are readily obtainable from external independent sources (such as the gold and silver prices, hedging arrangements and the salvage value of the plant).

2. Approach

In valuing the Las Lagunas Project, we have reviewed the Company’s financial model which has been utilised in the past to assess the value of the Project and for impairment testing for financial reporting purposes. The financial model incorporates the following major statistics and assumptions (as at 1 July 2016):

PanTerra Gold Limited - Independent Expert’s Report

Remaining resource balance 1	2.512 Mt
Remaining project life	38 months
Average gold grade	3.6 g/t
Average gold recovery	49.4%
Remaining project gold production	143,524 oz
Gold hedge price per oz (21,442 oz)	US$1,220
Average gold price per oz (for non-hedged production)	US$1,300
Average silver grade	35 g/t
Silver recovery	33%
Remaining project silver production	937,930 oz
Average silver price per oz	US$18
Discount rate	10%

1 The remaining resource balance was established by an independent survey of the surface level of the remaining tailings resource from which the volume and tonnage of the balance was calculated by Cube as noted above.

We have not considered it necessary to commission a separate independent technical specialist report to value the Las Lagunas Project as we believe that the approach adopted above is appropriate in determining a valuation of the Las Lagunas Project for the purposes of our Report.

The following valuation methods have been adopted:

! We have adopted a set of cash flow forecasts for the period 1 July 2016 to the anticipated end of the Project’s life (September 2019).
! We have performed a discounted cash flow calculation based on the anticipated cash flows at an appropriate discount rate to calculate the Net Present Value (“NPV”) of the Project.

3. Cash Flows

The cash flows utilised in the NPV valuation (for the remaining life of the Project) are summarised as follows:

Total revenue (net of refining costs) Direct operating costs Indirect operating costs Head office allocated costs Government royalty Government PUN Salvage value of plant Total net cash flows (prior to financing)	US$ (million) 201.0 (98.4) (7.0) (9.9) (6.6) (12.6) 10.0
	76.5

These cash flows are based on the statistics and assumptions noted above. In addition, the following matters are also considered to be relevant to the valuation:

! EnviroGold (Las Lagunas) Limited ("EVGLL") has negotiated a hedging agreement with MKS (Switzerland) S.A., which is the parent company of EVGLL's refiner, Produits Artistiques Metaux Precieux (P.A.M.P). EVGLL may at its election, hedge up to 35,000

PanTerra Gold Limited - Independent Expert’s Report

oz Au with MKS over a rolling 24 month period. The program is available for the life of the Las Lagunas Project subject to continuation of the existing refining contract. MKS’s risks will not be secured. The MKS hedging arrangement provides flexibility for the Company and potential protection from falling gold prices. It is assumed that all gold production will be sold into the remaining hedge book (approximately 21,442oz) at a weighted average price of $1,220.50/oz until the hedge contract is fully utilised and then at an assumed spot price of $1,300/oz for the remaining duration of the project.

! The plant’s salvage value represents the estimated salvage value of the Las Lagunas process plant mechanical and electrical components, mobile plant and dredges, and the estimated scrap steel value of all the tankage, structure and copper cable.

4. Prices of Gold and Silver

As noted above, the valuation of the Las Lagunas Project has assumed the following prices for gold and silver (for non-hedged production):

Gold US$1,300/oz Silver US$18/oz

We consider these assumptions to be reasonable for the purposes of our valuation. The following tables set out the movement in gold and silver prices over the last 12 months:

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PanTerra Gold Limited - Independent Expert’s Report

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Source: www.goldprice.org

We consider the above price assumptions to be reasonable for the purposes of our valuation.

5. Discount rate

The discount rate used in the above model to discount the future cash flows to present values is 10%. This discount rate has been based on the following:

! A risk free rate of return – typically based on a long-term government bond rate.
! A beta of the asset being valued, being the sensitivity of its returns to the returns generated by the market.
! The expected return on the market.
! A specific risk premium, reflecting factors not captured by the beta.

We consider the discount rate of 10% to be reasonable for the purposes of our valuation.

6. NPV calculation

The NPV calculation of the value of the Las Lagunas Project using the above assumptions is US$65.4m.

7. Sensitivity analysis

As the above valuation is highly sensitive to changes in certain key assumptions, we have considered it necessary to review the impact that these changes would have on our valuation. We consider that the most sensitive of the assumptions made above relate to the gold price and the discount rate. We have calculated the effect on our valuation using the following ranges:

! Gold price (per oz) US$1,250 – US$1,350 (for non-hedged production) ! Discount rate 8% - 12%

PanTerra Gold Limited - Independent Expert’s Report

The combination of the above sensitivities that result in high and low valuations is as follows:

! Low valuation Gold price of US$1,250/oz and discount rate of 12% US$59.9m ! High valuation Gold price of US$1,350/oz and discount rate of 8% US$70.9m

We consider the mid-point of the above ranges, namely a gold price of US$1,300/oz (for non-hedged production) and discount rate of 10%, to be the basis for the preferred valuation of the Las Lagunas Project.

As a result, our preferred valuation of the Project is US$65.4m.

8. Allocation of valuations (high, low and preferred) to components of the Project’s assets

Our valuation of the Las Lagunas Project has been incorporated into the valuation of all assets and liabilities of the Company in Section 8.3.1 of this Report. In doing so, we have allocated our preferred valuation of US$65.4m for the Project against the two categories of assets pertaining to the Project, namely:

! Property, plant and equipment; and
! Development costs.

This allocation was made on a pro-rata basis based on carrying valued of these respective assets at 30 June 2016.

We have also considered the value of inventories pertaining to the Project as well as trade and other payables. This is discussed in Section 8.3.1 of this Report.

PanTerra Gold Limited - Independent Expert’s Report

APPENDIX 2 Glossary of Terms

TERM DEFINITION ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange Limited DCF Discounted cash flows Directors Directors of PanTerra EBIT Earnings before Interest and Tax EBITDA Earnings before Interest, Tax, Depreciation and Amortisation FME Future maintainable earnings HLB HLB Mann Judd Corporate (WA) Pty Ltd PanTerra or the Company PanTerra Gold Limited Notice of General Meeting The Notice of General Meeting and Explanatory Memorandum for the meeting to be held on 24 November 2016 Proposed Transaction The issue of 40,000,000 options to ALCIP as outlined in Section 3 of this Report Refinancing Proposal The completed refinancing negotiations with ALCIP as outlined in Section 3 of this Report Report Independent expert’s report prepared by HLB Non-associated shareholders Existing shareholders in PanTerra who are not associated with ALCIP

ABN 48 008 031 034

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Lodge your vote:

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
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Online:

www.investorvote.com.au



By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

PGI

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

XX

Vote and view the Notice of Meeting online



Go to www.investorvote.com.au or scan the QR Code with your mobile device.
• Follow the instructions on the secure website to vote.

Your access information that you will need to vote:

Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

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 For your vote to be effective it must be received by 10.00am (AEDT) on Tuesday 22 November 2016

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions for Postal Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

Samples/000001/000001/i12

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

I 9999999999 I ND

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Proxy Form

Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of PanTerra Gold Limited hereby appoint

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the Chairman of the Meeting

OR

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the General Meeting of PanTerra Gold Limited to be held in Meeting Room 3, Level 4, Heritage Wing, The Westin Sydney, 1 Martin Place, Sydney NSW 2000 on Thursday, 24 November 2016 at 10.00am (AEDT) and at any adjournment or postponement of that Meeting.

Items of Business



PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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For Against Abstain
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1 Issue of Options and Shares to ALCIP Capital LLC
2 Approval of Amended and Restated Agreement to Issue Redeemable Preference Shares

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

SIGN

Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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P G I

9 9 9 9 9 9 A

AI assistant

ANTILLES GOLD LIMITED — Proxy Solicitation & Information Statement 2016

64277_rns_2016-10-23_62a3bb76-5fca-457c-b538-3f3f638208bb.pdf

PANTERRA GOLD LIMITED ABN 48 008 031 034

NOTICE OF GENERAL MEETING and EXPLANATORY MEMORANDUM and INDEPENDENT EXPERT’S REPORT

PANTERRA GOLD LIMITED

ABN 48 008 031 034

NOTICE OF GENERAL MEETING

ORDINARY BUSINESS

Resolution 1: Issue of Options and Shares to ALCIP Capital LLC

Resolution 2: Approval of Amended and Restated Agreement to Issue Redeemable Preference Shares

Voting Exclusion Statement

Independent Expert’s Report:

By Order of the Board

Pamela Bardsley

12 October 2016

PROXY AND SHAREHOLDER INFORMATION

Attendance and Voting

Proxies

Corporate Representatives

PANTERRA GOLD LIMITED

ABN 48 008 031 034

EXPLANATORY MEMORANDUM

RESOLUTION 1 – Issue of Options to ALCIP Capital LLC

1. Background

CAMIF Redeemable Preference Share Agreement

Condition Precedent to Refinancing Proposal

ALCIP

CAMIF

ARGIA

2. Item 7 of Section 611 of the Corporations Act

(a) Section 606 of the Corporations Act – Statutory Prohibition

(Prohibition) .

(b) Voting Power

(c) Associates

(d) Relevant Interests

3. Reason Section 611 Approval is Required

4. Specific Information required by Section 611 item 7 of the Corporations Act and ASIC Regulatory Guide 74

(a) Identity of the person to whom the Options will be issued, and their Associates

(b) Relevant Interest and Voting Power

(c) Key Assumptions

(d) Reasons for the proposed issue of Options

(e) Date of proposed issue of Options

(f) Material terms of the proposed issue of Options

(g) ALCIP’s intentions in relation to the Company

(h) Identity, associations and qualifications of Nominee Director

(i)

Interests and Recommendations of Directors

(j) Capital Structure

Notes:

Assumptions:

5. Advantages of the Issue

6. Disadvantages of the Issue

7. ASX Listing Rule 7.1

8. Independent Expert’s Report

RESOLUTION 2 - Approval of Amended and Restated Agreement to Issue Redeemable Preference Shares

GLOSSARY

ANNEXURE A

TERMS OF ISSUE OF LISTED OPTIONS

ANNEXURE B

SUMMARY OF THE TERMS OF THE RPS AND PROPOSED MATERIAL AMENDMENTS

1. Terms of Issue

2. Guarantee

~~3. Additional Guarantors~~

PanTerra Gold Technologies Pty Ltd

~~4.~~ 3. Negative Pledge

~~5.4~~ . Security

~~6.5~~ . Dividends

A , the DD Amount multiplied by (LIBOR plus 10%) multiplied by B

Royalty Component + Interest Component

where:

Royalty Component =

Interest Component =

~~7.~~ 6. Conditions to the payment of Dividends

~~8.7~~ . Conversion

~~8.17~~ .1 Conversion Events

~~8.27~~ .2 Limits to Conversion

~~9.~~ 8. Consent Rights

~~10.9~~ . Redemption

~~11.1~~ 0. Meetings and voting rights

ANTILLES GOLD LIMITED Proxy Solicitation & Information Statement 2016

3. Additional Guarantors

4. 3. Negative Pledge

5.4 . Security

6.5 . Dividends

7. 6. Conditions to the payment of Dividends

8.7 . Conversion

8.17 .1 Conversion Events

8.27 .2 Limits to Conversion

9. 8. Consent Rights

10.9 . Redemption

11.1 0. Meetings and voting rights

12. 11. Transfer of RPS

13.1 2. Assignment

14.1 3. Governing Law