ARIKA RESOURCES LIMITED — Capital/Financing Update 2014

Oct 29, 2014

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

ASX Code: PLD 30 October 2014

PLD Signs Agreement to Acquire World-Class Zinc Project

• Option Agreement to acquire world-class Admiral Bay Zinc Project, Canning Basin, WA

• Inferred Resource [1] of 72Mt @ 6% ZnEq [2] , comprising 3.1% Zn, 2.9% Pb, 18 g/t Ag

• Deposit hosted within 2.1km zone of an 18km length of mineralised strike

• Higher grade (8%+ Zn) zones recognised with high ratio of mineralised intersections

• Premium coarse-grained zinc concentrates with off-take uncommitted

• Comprehensive $35m+ database of exploration, development and mining studies

• Excellent infrastructure nearby including roads, gas, port and skilled labour

• Two granted mining leases and an exploration licence cover a 25km long target area

• Minimal upfront cash payments with consideration largely milestone driven

• Leading commodity analysts expecting significant Zinc supply gap to increase

• Acquisition subject to shareholder approval and re-compliance with Chapters 1 & 2

PLD Corporation Limited (ASX:PLD) (“PLD” or “the Company”) is pleased to announce it has signed an Option Agreement to acquire the Admiral Bay Project, considered one of the world’s more significant undeveloped zinc deposits, located in the Canning Basin, Western Australia.

In August 2008, previous owners published [1] an Inferred Mineral Resource estimate for the Admiral Bay Project of 72Mt @ 3.1% Zn, 2.9% Pb, 18 g/t Ag and 11% Ba within a 2.1km zone of an 18km strike extent, which has only partially been drill tested. Investors are cautioned that PLD has not yet completed a work program to verify the Admiral Bay resource estimate. For transparency, the extant public report is presented in Appendix 1 [1] .

The Admiral Bay Project is located in Western Australia, consistently ranked in the Top 10 mining jurisdictions in the world according to the Fraser Institute, and benefits from existing infrastructure including sealed roads, natural gas, a deep water port and skilled labour.

The comprehensive exploration, development and mining database has had A$35+ million invested, which comprises data produced by CRA Exploration Pty Ltd, Kagara Limited and various industry leading consultants such as Snowden and Coffey Mining.

The Company has signed an Option Agreement with Kagara Ltd (in liquidation)(Kagara) to acquire the Admiral Bay Project, via a combination of cash and shares, including $30,000 cash for an exclusive three month Due Dilgence Period, $1,000,000 in cash and convertible notes and up to $6,000,000 in milestone payments (where PLD can buy back a 1.5% NSR issued to Kagara).

1 This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

2 Zinc equivalent was calculated as ZnEq=Zn+(0.79Pb)+(0.02Ag) in 2008 by Kagara; metallurgical testwork has predicted recoveries in excess of 95%;

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Commenting on the agreement, PLD Managing Director Matt Gauci said:

“We consider Admiral Bay to be a potential Tier 1 base metal mine, located in the world-class mining jurisdiction of WA, which is a global leader in mining projects, people and technology.”

“The deposit is hosted within a 2.1km zone of an 18km primary target area with high grade zones only partially drill tested. This mineralisation has been shown to produce a very high premium coarse-grained zinc concentrate and, importantly, significant off-take opportunities.”

“The agreement contemplates minimal upfront cash payments with consideration largely milestone driven which, upon completion of due diligence, the company is keen to achieve. The agreement could be a company maker for PLD stakeholders.”

Commenting on the agreement, PLD Chairman Andrew Daley said:

“Zinc is the fourth most used metal in the world, with China’s consumption growing rapidly. Given that the economy currently uses only a quarter of the zinc used in western economies, that consumption will very likely grow as more steel is galvanised for production.”

“Importantly this agreement is executed at a time when leading commodity analysts expect the zinc market to move further into a supply shortage with several major operations in Australia and worldwide soon coming to the end of their life.”

“PLD senior management have broad experience with large scale underground mining projects and we believe Admiral Bay has enormous potential to become a major long life mining operation that will be a significant contributor to offset the looming global zinc supply shortage.”

Figure 1. Global Zinc Market Balance moving into deficit from 2015 onwards

==> picture [385 x 229] intentionally omitted <==

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

CRU Group International: Zinc Market Outlook
----- End of picture text -----

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Background

The Admiral Bay deposit was discovered in 1981 by Meridian Oil NL during petroleum exploration, and was subsequently acquired by CRA Exploration (the exploration arm of CRA Limited, now Rio Tinto Ltd), who undertook substantial exploration from 1986 to 1992. Kagara Ltd acquired the deposit from CRA Exploration in 2004 and completed an exploration programme that lead to an initial Inferred Resource, as well as a pre-feasibility study to test the viability of the project. Kagara Ltd entered into administration in 2012 and subsequently liquidation in 2013.

Location

The Admiral Bay Project is located in the central Canning Basin (Figure 1), on the southern edge of the Kimberley region some 140km south of Broome, Western Australia. Admiral Bay is an MVT (Mississippi Valley Type) zinc-lead-silver deposit, with mineralisation hosted mainly in the Nita Formation and, to a lesser degree, in the Carribuddy and Goldwyer Formations, over a mineralised strike extent of at least 18km.

Infrastructure

The project area is well located (Figure 1), being only 70km east of the all-weather Great Northern Highway that connects Port Hedland to Broome. Power is present nearby with the Broome Natural Gas Pipeline servicing the West Kimberley Power Project. The Ports of Broome and Derby provide port options servicing Western Australia's Kimberley region and currently support various exports.

Tenure

The Admiral Bay deposit is located within two granted Mining Leases (ML04/244 and ML04/249), which are valid until 20/3/2033 and one granted Exploration Licence (EL04/1610), which is valid until 3/9/2017. The minimum annual expenditure commitment is $248,100 and annual rents are $46,910. ML4/249 and EL4/16010. The tenements are currently held in good standing with the WA Department of Mines and Petroleum (DMP).

Table 1. Tenement Schedule

	Expiry Date	Rates and Rent	Min Expenditure
E4/1610	3/9/2017	$20,491	$84,000
M4/244	20/3/2033	$12,831	$79,700
M4/249	20/3/2033	$13,588	$84,400

Geology, Mineralisation, Resources and Potential

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Within the Admiral Bay project area, the surface geology is dominated by Quaternary Aeolian sand. Sand sheets in the northwest grade into 2–10m high dunes towards the southeast.

The stratigraphy is comprised of a thick sequence of Cretaceous-Jurassic-Permian sandstones / siltstones (up to 1,200m thick), which overlies a variably dolomitised siltstone / shale / limestone – the Nita Formation – which is host to an upper zinc-rich zone and a lower lead-rich zone of mineralisation.

Previous drilling indicates that the upper high-grade Zn-rich zone is up to 20m thick, whilst the lower high-grade Pb zone is up to 15m thick. The high-grade zones described above are hosted within a broad, moderately Zn-Pb mineralised, zone up to 110-120m thick.

In general, base metal mineralisation occurs in the lower parts of the Siluro-Devonian Caribuddy Formation and the Ordovician-age Nita and Goldwyer Formations over depths of around 1,250m to 1,700m. Mineralisation is most typically associated with calcareous rocks, commonly with appreciable barite.

Quite limited drilling, (only 41 holes including petroleum wells) so far at the entire Admiral Bay Project area (Figure 2), has intersected zinc-lead mineralisation along an 18km zone, making Admiral Bay one of the more significant undeveloped zinc projects globally.

The ratio of mineralised hits in the historical drilling is actually very high for this style of mineralisation, and considered important in terms of understanding and improving resources. Furthermore, grades of 4.3–4.5% Zn (Figure 3 and Figure 4) have been encountered at multiple drill sites with intersections of up to 8.3% zinc, highlighting the potential for higher grade zones within the deposit [2] . The mineralised zones at Admiral Bay are approximately tabular and flat lying (Figure 3) at a nominal depth of 1,350m below the surface.

A number of development options will be evaluated during and after the Due Diligence period for taking the project forward, including consideration for a resource upgrade and scoping study from desktop and field work. A number of financing options will also be evaluated during and after the Due Diligence Period for taking the project forward, including consideration for Project Equity Sales, Joint Ventures and Off-Take Agreements.

Whilst we progress the Admiral Bay transaction, the Company remains excited by the anticipated results from the Deep Penetrating EM to detect massive sulphides and the assays for NickelCopper from the recently completed drilling program at the Rocky Gully Project, located in the Albany Fraser Belt, where the company is seeking Nova-type Nickel-Copper deposits, to be released in early November.

If the Option Agreement over Admiral Bay and/or Rocky Gully is exercised, the company will seek shareholder approval and re-compliance with Chapters 1 & 2 of the ASX Listing Rules. Terms of Agreement

Option Agreement Terms:

3 Analytical results from past explorers are presented in the cross and long sections in this report. PLD notes that these results are taken directly from Kagara material and PLD have not yet completed any work to verify these results.

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

1. PLD agrees to pay to Kagara a Non-Refundable Option Fee of $30,000 cash in consideration of Kagara granting to PLD an exclusive 3 month option period (Option Period) to acquire a 100% unencumbered interest in the Project.

2. At any time during the Option Period, PLD may give a written notice to Kagara electing to exercise the option and acquire a 100% unencumbered interest by:

3. a) granting a 1.5% Net Smelter Royalty (NSR) on production from the Project

4. b) paying A$500,000 cash at Completion; and

5. c) Issue of a Convertible Note (CN) at Completion for A$500,000, convertible at the holder’s election on the maturity date, 2[nd] Anniversary from date of issue. The CN can be acquired by PLD at any time at face value ($500,000 prior to maturity.)

6. PLD will have the right to buy back the NSR via the following mechanism:

7. (1) 0.5% of the NSR buy back for $1,000,000 cash and/or shares (at PLD election) upon successful completion of a scoping study; and

8. (2) 1.0% of the NSR buy back for $2,500,000 cash and/or shares (at PLD election) upon successful commencement of production.

9. Further Milestone Payment of $2,500,000 cash and/or shares (at PLD election) upon the 3[rd] Anniversary of the commencement of production.

10. The issue of shares in PLD under this letter agreement will be at the 20 day VWAP after a notice is given to buy back the NSR or the Milestone Payment in clause 4 is made.

11. PLD agrees to expend not less than $5,000,000 on the Project over a period of 3 years after completion (subject to land access). If this expenditure commitment is not met by PLD, Kagara has the election to request payment by PLD of an additional sum of $1,000,000 to Kagara or to transfer to Kagara 100% of its then legal and beneficial interest in the Project.

12. Milestone payments can be on-sold by Kagara with prior written consent from PLD which is not to be unreasonably withheld.

13. Kagara covenants in favour of PLD to keep the tenements that form the Project in good standing until the Acquisition is complete.

14. PLD has the right to pay an additional $20,000 per month to extend the Option Period, capped at 6 additional months (total of 9 months). If the Company extends the Option Period, the ASX may at that time apply Listing Rules 11.1.2 and 11.1.3

15. The Acquisition is subject to, amongst other things:

16. a) Approval of PLD shareholders in general meeting;

17. b) Approval of ASX to the terms of the Acquisition and the completion by PLD of any ASX imposed requirements; and

18. c) Finalisation of a formal Tenement Option and Sale Agreement with terms normally included in agreements of this nature.

19. d) Kagara obtaining court approval, up to a total of 9 months

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Exercise of Option, Acquisition and Change in Nature and Scale of Activities

The potential acquisition of Admiral Bay will constitute a change in nature and scale of the Company’s activities.

As part of satisfying its requirements to re-comply with Chapters 1 and 2 of the ASX Listing Rules, the potential acquisition must be approved by PLD’s Shareholders at a general meeting (Meeting). The company’s shareholders will receive a notice of meeting setting out various resolutions relating to the acquisition (Notice of Meeting). A detailed explanatory statement will accompany the Notice of Meeting, together with an independent experts report (if required) and will be distributed to all shareholders prior to the Meeting.

In addition to the Notice of Meeting, PLD will issue a prospectus that will provide full disclosure of the material matters to enable PLD to comply with Chapters 1 & 2 of the ASX Listing Rules (Prospectus).

The Company’s securities will be suspended on the date of the Meeting at which Shareholder approval for the Acquisition contemplated will be sought. Subject to approval being obtained, the Company’s securities will remain suspended until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and completion of the Acquisition has taken effect.

Further details will be included in the Notice of Meeting.

An Indicative Timetable for the Completion of the Acquisition, Consolidation and the Capital Raising is set out below.

Action	Target Days
Successful Due Diligence & Notice of Acquisition	Mid-January*
Notice of Meeting	+5 days
Independent Experts Report	+30 days
General Meetingof Shareholders	+35 days
Approval of Acquisition	+35 days
Suspension from OfficialQuotation	+36 days
Prospectus Lodged with ASIC and ASX	+40 days
OpeningDate for Prospectus	+47 days
ClosingDate for Prospectus	+61 days
Completion of Acquisition	+65 days
Satisfaction of Requirements of Chapter 1 & 2	+65 days
Re-instatement to tradingon the ASX	+70 days

* Mid-January is an indicative date to complete Due Diligence, Exercise the Option and Notice of Acquisition.

The above timetable is indicative only and is subject to change without notice.

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Matt Gauci Managing Director T: +61 3 9606 3888

James Harris / Colin Jacoby Professional Public Relations T: +61 8 9388 0944

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Information contained in this announcement has been presented in accordance with the JORC Code and references to “Measured, Indicated and Inferred Resources” are to those terms as defined in the JORC Code.

This announcement refers to previously released information, completed and announced under JORC 2004. There has been no material change to this information since original announcement. If the option is exercised the Company will investigate a programme to enable reporting of these results against the JORC 2012 standard.

==> picture [394 x 52] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Appendix 1: Figures and Photos

Figure 1: Admiral Bay Location

==> picture [669 x 304] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Figure 2: Admiral Bay Deposit and Drill Hole Location within M4/249

==> picture [669 x 325] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Figure 3: Admiral Bay East-West Section within M4/249

==> picture [669 x 323] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Figure 4: Admiral Bay North-South Section within M4/249

==> picture [669 x 317] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Figure 5: Admiral Bay High Grade Zinc Diamond Core

==> picture [493 x 318] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Figure 6: Admiral Bay Project Site

==> picture [299 x 173] intentionally omitted <==

==> picture [300 x 180] intentionally omitted <==

==> picture [198 x 360] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

Appendix 2 Admiral Bay Deposit Mineral Resource Estimate 22/08/08

==> picture [383 x 529] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

==> picture [391 x 242] intentionally omitted <==

==> picture [394 x 299] intentionally omitted <==

Level 9 575 Bourke Street Melbourne VIC 3000 Phone: +61 3 9606 3888 | Fax: +61 8 9606 3800

==> picture [391 x 175] intentionally omitted <==

==> picture [391 x 276] intentionally omitted <==