ARK MINES LIMITED

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ABN: 31 123 668 717

OFFER UNDER SECTION 708AA(2) OF THE CORPORATIONS ACT

A NON-RENOUNCEABLE RIGHTS ISSUE TO ALL ELIGIBLE SHAREHOLDERS

TO RAISE APPROXIMATELY $1.66 MILLION

FOR EVERY 2 SHARES HELD: 1 NEW SHARE AT 10 CENTS EACH (AND AN ATTACHING OPTION)

This document is important and requires your immediate attention. This document is not a prospectus. It does not contain all the information that an investor would find in a prospectus or which an investor would expect to make an informed decision as to whether or not to accept this offer. If you do not understand its content or are in doubt as to the course of action you should follow, you should consult your stockbroker or professional advisor without delay.

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

TIMETABLE

The timetable for the issue is as follows:

Announcement of Rights Issue and Lodgement of Appendix 3B and Section 708AA Cleansing Notice with ASX	Tuesday 18 June 2013
Notice to security holders containing the information required by Appendix 3B and details of the timetable for the issue sent to shareholders	Thursday 20 June 2013
“Ex” date from which shares commence trading without entitlement to participate in the Rights Issue	Monday 1 July 2013
Record Date	Friday 5 July 2013
Offer and entitlement documents sent to shareholders	Monday 8 July 2013
Last day for acceptance (close date)	Friday 2 August 2013
ASX notified of under subscriptions	Tuesday 6 August 2013
Issue Date	Thursday 8 August 2013
Normal tradingcommences	Friday9 August 2013
Holding Statements sent to shareholders	Tuesday 13 August 2013

All dates are subject to change and accordingly are indicative only. In particular, the Company has the right to vary the dates of the offer, without prior notice. Investors are encouraged to submit their Entitlement and Acceptance Forms as soon as possible.

OFFER STATISTICS

Number of New Shares to be issued and offered to

Shareholders 16,600,000 Issue Price 10 cents per New Share

HOW TO ACCEPT ENTITLEMENTS TO NEW SHARES

Entitlements to New Shares can be accepted in full or in part by completing and returning the Entitlement and Acceptance Form which accompanies this Offer Document in accordance with the instructions set out below and on the Entitlement and Acceptance Form.

This Offer Document also is available in electronic form on the Internet at www.arkmines.com.au. If you wish to obtain a free copy of this Offer Document, please contact the Share Registry on 9032 3000

Investment Summary
Details of the Offer
Effects of Rights Issue on the Company
Risk Factors
Definitions & Glossary
Corporate Directory

IMPORTANT NOTICE

This document is dated 18 June 2013.

This Offer is being made without a Prospectus in accordance with Section 708AA of the Corporations Act, as modified by Class Order (CO 08/35). This Offer Document is not a Prospectus or any other form of disclosure document and has not been lodged with ASIC. Accordingly, this Offer Document does not contain all of the information which a prospective investor may require to make a decision as to whether to subscribe for New Shares. Further, this Offer Document does not contain all of the information which would otherwise be required to be disclosed in a Prospectus or other form of disclosure document.

The document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or professional advisor without delay. You should also read the accompanying information memorandum relating to the proposed placement of shares to fund part of the acquisition by the Company of Mining, Farm In and Joint Venture rights in the Mount Porter tenements.

This offer opens on 5 July 2013 and closes at 5:00pm EST on 2 August 2013.

Valid acceptances must be received before the closing date.

Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

The Company has not made investigation as to the regulatory requirements that may prevail in the countries, outside Australia and New Zealand, in which the Company’s Shareholders may reside. The distribution of this Offer Document in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Offer Document should seek advice on and observe those restrictions. Any failure to comply with such restrictions might constitute a violation of applicable securities laws.

It is the responsibility of overseas Applicants to ensure compliance with all laws of any country relevant to their Acceptance. A number of terms and abbreviations used in this Offer Document have defined meanings, which are explained in the Glossary. Money as expressed in this Offer Document is in Australian dollars or else as indicated.

No person named in this Offer Document, nor any other person, guarantees the performance of Ark, the repayment of capital or the payment of a return on the New Shares.

Information about the Company is publicly available and can be obtained from ASIC, ASX and other sources. Any such publicly available information is not incorporated into this Offer Document and does not form part of the Offer. This Offer Document is intended to be read in conjunction with publicly available information in relation to the Company that has been notified to ASIC and ASX. Investors should have regard to that information prior to making a decision to subscribe for New Shares pursuant to the Offer.

The information contained in this Offer Document is not and should not be considered to be financial product advice. The information is general only and has been prepared without any actual or implied knowledge or consideration of the investment objectives, financial situation, taxation position or other particular needs or requirements of you or any other person.

The information contained in this Offer Document is not a recommendation by the Company (or its officers, employees, agents or advisers) to any person that they should subscribe for New Shares pursuant to the Offer.

To the maximum extent permitted by law, no representation, warranty or undertaking, express or implied, is made, and to the maximum extent permitted by law, no responsibility or liability is assumed by the Company or its related entities or by an of its officers, employees, agents or consultants or any other person as to the adequacy, accuracy, completeness or reasonableness of this Offer Document. To the maximum extent permitted by law, no responsibility is accepted for errors or omissions from this Offer Document.

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Chairman’s Letter

18 June 2013

Dear Shareholder,

On 18 June 2013 the Company announced a non-renounceable rights issue of fully paid ordinary shares in the capital of the Company (Shares) on the basis of one (1) Share for every two (2) Shares held at the record date of 5 July 2013 (Rights Issue).

The Rights Issue will raise approximately $1.66 million (before costs) through the issue of 16,600,000 new fully paid ordinary shares in the Company (New Ordinary Shares). The New Shares will be issued at a cost of 10 cents per share. Each new share will entitle the holder thereof to an attaching option to acquire a further new share at an exercise price of 10 cents per option. Such options will be exercisable within one year of the issue of new shares or will otherwise lapse.

Proceeds from the Rights Issue will be used to fund part of the mining and exploration costs on the Farm In rights on the Mt Porter tenements of Arafura Resources Limited and processing of ore therefrom as announced on 15 January 2013 and to fund the further exploration programme of the Company on its New South Wales tenements and for additional working capital requirements.

Full details of the Rights Issue are contained in the Offer Document dated 18 June 2013, which is attached to this letter. Key dates that shareholders should note are as follows:

1 July 2013 Ordinary Shares trade ex-Rights on ASX 5 July 2013 Record Date for determining Rights entitlements 2 August 2013 Closing date for acceptances 13 August 2013 Expected date sending of holding statements to shareholders.

The farm in agreement negotiated with Arafura Resources is the result of many months work undertaken by the Board. The agreement provides Ark Mines with a great deal of flexibility to suit prevailing circumstances including a right: to terminate the agreement after $200,000 has been spent; to acquire a 40% interest on spending $400,000; to acquire 70% on spending not less than $1.6M; and to acquire 100% for not less than $2M.

We believe that the Mt. Porter and Francis Creek opportunities are well suited to, and within the modest capabilities of, Ark Mines. The highly prospective tenements within Francis Creek, and the right to acquire these tenements through exploration expenditure, are the primary opportunity. In addition to the Frances Creek prospect, however, Ark

Mines has also negotiated an immediate right to mine the Mt. Porter gold resource, for no additional cost over and above the Frances Creek exploration commitments.

Mt. Porter provides the company a platform to generate, what is for the company significant revenue, within the next 18 to 24 months. This revenue will contribute to the satisfaction of our exploration commitments in Francis Creek and the Lachlan Fold Belt, the company's financial stability and our ability to secure and exploit larger projects for the benefit of our shareholders.

We urge you to carefully consider the accompanying information memorandum and if you are satisfied with our plans to fully support this offer by taking up all of your rights.

Yours faithfully

Antony Corel Chairman

1. INVESTMENT SUMMARY

The information set out in this section is not intended to be comprehensive and should be read in conjunction with the full text of this Offer Document.

1.1 The Offer

This Offer Document is for the non-renounceable rights issue of 16,600,000 New Shares at an issue price of 10 cents each, on the basis of One (1) New Share for every two (2) Shares held by Shareholders. Each new share will entitle the holder thereof to an attaching option (see paragraph 2.1 and 3.8 below).

Shareholdings are to be determined as at the Record Date of 5 July 2013.

The Company has applied for listing of the New Shares on the ASX.

1.2 Minimum Subscription

There is no minimum subscription to the Issue

1.3 New Share Terms

Each New Share will rank equally with all existing Shares then on issue and will have the same rights as attached to existing shares

1.4 Acceptance of Entitlement to New Shares

The number of New Shares to which each Shareholder is entitled is shown on the Entitlement and Acceptance Form accompanying this Offer Document. This Offer Document is for the information of Shareholders who are entitled and may wish to apply for the New Shares. Fractional entitlements will be rounded down to the nearest whole number.

Entitlements to New Shares (and attaching options) can be accepted in full or in part by completing and returning the Entitlement and Acceptance Form which accompanies this Offer Document in accordance with the instructions set out below and on the Entitlement and Acceptance Form.

1.5 Underwriting

This rights issue is not underwritten. The Directors may place any shortfall as they shall determine including, if applications are received for shortfall, to the Directors, their associates or existing shareholders of Ark. The Directors have indicated to the Company that they intend to take up their full rights entitlements and to encourage those associated with them to do so.

2. DETAILS OF THE OFFER

2.1 Offer to Shareholders

The Directors of Ark have approved a non-renounceable rights issue of 16,600,000 New Shares at 10 cents per New Share to raise approximately $1.66M (less expenses associated with the Issue).

Shareholders are entitled to subscribe for one (1) New Share for every two (2) Shares held. Only those Shareholders shown on the share register at 7:00pm (EST) on the Record Date will be entitled to participate in the Issue. Each new share will entitle the holder thereof to an attaching option to acquire a further new share of an exercise price of 10 cents per option. Such options will be exercisable within one year or will otherwise lapse. The options will only be listed on ASX after they are exercised.

When fractions arise in the calculation of Entitlements, they will be rounded down to the nearest whole number of New Shares.

Ark has applied to ASX for official quotation of the New Shares on the ASX. Official quotation of the New Shares is expected to occur on or about 9 August 2013. ASX Participating Organisations (as defined in the ASX Business Rules) cannot deal in the New Shares either as principal or agent until official quotation is granted. Options issued with new shares will only be listed on ASX when such options are exercised.

2.2 Important Dates

Record Date for the Offer	5 July 2013
Offer document sent to shareholders	8 July 2013
Opening Date of Offer	5 July 2013
Closing Date of Offer	2 August 2013
Expected date of sending out New	13 August 2013
Share holding statements

2.3 What to do with your Entitlement

Sections 2.3 and 2.7 inclusive DO NOT apply to Shareholders with registered addresses outside Australia or New Zealand. Such Shareholders should refer to Section 2.12 of this Offer Document.

The number of New Shares to which you are entitled under this Offer Document (Your Entitlement) is shown on the accompanying Entitlement and Acceptance Form.

Acceptances must not exceed your maximum Entitlement (as shown on the Entitlement and Acceptance Form), although you may accept for a lesser number of New Shares should you wish to take up only part of your Entitlement. If your acceptance exceeds your Entitlement, acceptance will be deemed to be for your maximum Entitlement and any surplus application monies will be returned to you.

2.4 No Rights Trading

The rights to New Shares under the Issue are non-renounceable. Accordingly, there will be no trading of rights (and the attaching options) on ASX and you may not dispose of your rights to subscribe for New Shares under the Issue to any other party. If you do not take up your Entitlement to New Shares under the Issue by the Closing Date, the Offer to you will lapse.

2.5 If your Entitlement is not taken up

If you do nothing, any part of your Entitlement that is not taken up by 2 August 2013 will lapse and the New Shares that would otherwise have been issued pursuant to the taking up of your Entitlement will form part of the shortfall.

2.6 Payment

The number of New Shares and options to which Shareholders are entitled is shown on the Entitlement and Acceptance Form which accompanies this Offer Document.

Entitlements to New Shares and options can be accepted in full or in part by completing and returning the Entitlement and Acceptance Form which accompanies this Offer Document in accordance with the instructions set out in this Offer Document (refer above) and on the Entitlement and Acceptance Form and forwarding the completed Form together with your cheque or bank draft for the full amount payable so as to reach the Share Registry by no later than 5:00pm (AEST) on the Closing Date.

The issue price of 10 cents per New Share is payable in full on acceptance of part or all of your Entitlement.

Cheques should be in Australian currency and made payable to “Ark Mines Limited – Non-Renounceable Rights Issue” and crossed “not negotiable”. Completed forms and accompanying cheques should be lodged at or forwarded to the following address:

Ark Mines Limited C/- Gould Ralph Pty Ltd Level 42, 259 George Street SYDNEY NSW 2000

No brokerage or stamp duty is payable by Applicants in respect of their applications for New Shares under this Offer Document. The amount payable

on acceptance will not vary during the period of the Offer and no further amount is payable on allotment. Acceptance Monies will be held in trust in a subscription account until allotment of the New Shares. The subscription account will be established and kept by the Share Registrar on behalf of the Applicants. Any interest earned on the Acceptance Monies will be retained by the Company irrespective of whether allotment takes place.

2.7 Allotment and Allocation Policy

Ark will proceed to allocate New Shares and options as soon as possible after the Closing Date. Successful Applicants will be notified in writing of the number of New Shares allocated to them as soon as possible following the allocation being made.

In the case that there is less than full subscription by Shareholders for their Entitlements under this Offer Document, the Directors reserve the right to place any Shortfall at their discretion within three months of the close of the offer at an issue price not less than that at which such shares were offered to shareholders under this rights issue.

In addition, the Directors reserve their rights to reject any Entitlement and Acceptance Form which is not complete in any particular or the processing of which would result in a contravention of any relevant law including, without limitation, any contravention of the takeover provisions set forth in the Corporations Act.

It is the responsibility of Applicants to confirm the number of New Shares allocated to them prior to trading New Shares. Applicants who sell New Shares before they receive notice of the number of securities allocated to them do so at their own risk. No New Shares will be allotted or issued on the basis of this Offer Document later than 13 months after the date of issue of the Offer Document.

2.8 ASX Listing

Ark has applied for the listing and quotation of the New Shares on ASX. If granted, quotation and trading of the New Shares will commence as soon as practicable after allotment.

2.9 Investment Risks

Investors should carefully read Risk Factors outlined in Section 4. An investment of this kind involves a number of risks, a number of which are specific to Ark and the industry in which it operates.

2.10 CHESS

Ark will apply to the ASX Settlement and Transfer Corporation Pty Ltd (ASTC) to have the New Shares issued under this Offer Document participate in the

Securities Clearing House Electronic Subregister System known as CHESS. After allotment of the New Shares, those who are issuer sponsored holders will receive an issuer sponsored statement and those who are CHESS holders will receive an allotment advice.

The CHESS statements, which are similar in style to bank account statements, will set out the number of New Shares allotted to each successful Applicant pursuant to this Offer Document. The Statement will also advise holders of their holder identification number. Further statements will be provided to holders which reflect any changes in their holding in Ark during a particular month.

2.11 Minimum Subscription

There is no minimum subscription to the Issue.

2.12 Overseas Shareholders

This Offer Document and accompanying Entitlement and Acceptance Form does not, and is not intended to, constitute an offer of New Shares in any place outside Australia and New Zealand in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Offer Document or the Entitlement and Acceptance Form. The distribution of this Offer Document and the accompanying Entitlement and Acceptance Form in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Offer Document and the accompanying Entitlement and Acceptance Form should seek advice on and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws.

The Company has decided that it is unreasonable to make offers under this Offer Document to Shareholders with registered addresses outside Australia and New Zealand having regard to the number of Shareholders in those places, the number and value of the New Shares they would be offered and the costs of complying with the legal and regulatory requirements in those places. Accordingly, the Issue is not being extended to, and does not qualify for distribution or sale, and no New Shares will be issued to Shareholders having registered addresses outside Australia and New Zealand. This Offer Document is sent to those Shareholders for information purposes only.

2.13 Electronic Offer Document

An electronic version of this Offer Document is available on the internet at www.arkmines.com.au.

The Entitlement and Acceptance Form may only be distributed accompanying a complete and unaltered copy of the Offer Document. The company will not accept a completed Entitlement and Acceptance Form if it has reason to believe that the Applicant has not received a complete paper copy or

electronic copy of the Offer Document or if it has been altered or tampered with in any way.

While the Company believes that it is extremely unlikely that in the Issue period the electronic version of the Offer Document will be tampered with or altered in any way, the Company cannot give any absolute assurance that it will not be the case. Any Applicant in doubt concerning the validity or integrity of an electronic copy of the Offer Document ought to immediately request a paper copy of the Offer Document directly from the Share Registry.

3 EFFECT OF RIGHTS ISSUE ON THE COMPANY

3.1 Principal Effects

Assuming the Rights Issue is fully subscribed the principal effects are as follows:

(a) The Company will issue 16,600,000 New Shares and the total number of Shares on issue will increase to 49,800,000. The New Shares will constitute approximately 33.33% of the expanded issued Share capital of 49,800,000 Shares.
(b) The Rights Issue will also increase the Company’s cash reserves by $1,660,000 assuming all rights are taken up and all shortfall placed (before expenses of the Rights Issue) to assist the Company to proceed with proposed acquisition of the Farm In Rights on the tenements, development thereof, exploration of its existing tenements and the provision of working capital.

3.2 Capital Structure on Completion of the Rights Issue

The pro-forma capital structure of the Company following the Rights Issue is set out below:

Shares	Number
Existing Shares	33,200,000
Maximum number of New Shares to be issued pursuant to this Offer	16,600,000
Total Shares on issue after Rights Issue	49,800,000

3.3 Purpose of the Offer and Use of Funds

The purpose of the Offer is to raise $1,660,000.

Directors plan to use the proceeds of the Offer in accordance with the table set out below:

Cost of further resource definition and metallurgical studies on the Mt Porter tenements 350,000 Drilling program on the Frances Creek tenements 250,000

Part cost of development of mining the Mt Porter
tenements	400,000
Exploration on NSW tenements	200,000
Expenses of Offer	20,000
Brokerage (Estimate)	49,800
Additional working capital	390,200
TOTAL	$1,660,000

However, in the event that circumstances change or other opportunities arise, the Directors reserve the right to vary the proposed use to maximise the benefit to Shareholders.

The amounts referred to in the above table are indicative only and are estimates based on the Company’s intentions at the date of this Offer Document.

3.4 Effect of the Offer

The principal effect of the Offer, will be to increase the cash reserves of the Company by $1,660,000 (before the expenses of the Offer) immediately after completion of the Offer.

3.5 Pro-forma Balance Sheet

Set out below is an unaudited pro-forma balance sheet of the Company after the completion of the Rights Issue prepared on the basis of the adjusted accounts of the Company as at 31 December 2012, and adjusted for the following transactions and assumptions:

A non-renounceable rights issue of approximately 16,600,000 new Ark Shares at an issue price of 10 cents each, on the basis of one (1) New Share for every two (2) Shares held, raising $1,660,000, before transaction costs of $69,800 (including brokerage).

The Balance Sheet has been prepared to provide investors with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below.

The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

Current Assets Cash & Cash equivalents Other Assets	30-Dec-2012 Rights Issue Pro Forma
	$ 568,658 1,590,200 2,158,858 66,759 66,759
	635,417 1,590,200 2,225,617

Non-current Assets Exploration & evaluation expenditure Deposits Environmental Bonds Plant and equipment Total non-current assets Total Assets Current Liabilities Payables Total current liabilities Total liabilities Equity Contributed equity Accumulated losses Shares Issued Price Gross Cash Expenses of offer Brokerage Net Cash	2,040,345 262,764 80,000 3,477 2,386,586	2,040,345 262,764 80,000 3,477 0 2,386,586
	3,022,003	1,590,200 4,612,203
	42,154	42,154
	42,154	0 42,154
	42,154	0 42,154
	2,979,849	1,590,200 4,570,049
	8,192,670 -5,212,821	1,590,200 9,782,870 -5,212,821
	2,979,849	1,590,200 4,570,049
		16,600,000 1,660,000 $0.10 $0.10
		1,660,000 1,660,000 -20,000 -20,000 -49,800 -49,800
		1,590,200 1,590,200

3.6 Effects of Rights Issue on control of the Company

If all shareholders take up their entitlements under the Issue then the Issue will have no effect on the control of the Company. Because the Rights Issue is non-renounceable and it cannot be known with certainty which shareholders will take up their rights entitlements the effect on the control of Ark cannot be determined at this time.

Relevant matters which may determine any such effects are:

(i) The percentage of issued share capital held by the largest shareholders in the Company
(ii) The number and identity of large shareholders who take up their rights entitlements
(iii) The equity holdings associated with directors of the Company and whether the relevant rights entitlements are taken up: (The following directors have declared equity holdings in the Company):

Direct Indirect Antony Corel 208,010 -

Roger Jackson 441,262 530,000 Robert McLennan - 369,345 Ian Mitchell 976,422 -

(iv) The fact that New Shares issued pursuant to this Rights Issue will comprise 33.33% of the issued Share Capital of the Company after completion of the rights issue.
(v) There are presently 457 shareholders in the Company and the largest five shareholders, and the percentage of share capital owned by each, is as follows:

Name	Shares	%
SoloResourcesPtyLtd	7,644,000	23.02
Cobungra Holdings Pty Ltd	2,868,857	8.64
Ichiya Co Ltd	2,701,250	8.14
John Wardman&AssociatesPtyLtd	1,193,500	3.59
Global Mineral Resources Limited	1,000,000	3.01

Depending on which shareholders take up their rights entitlements, and the distribution of the shortfall the ability of certain shareholders to control the Company through their voting rights as shareholders may change.

3.7 Rights of Directors and their associates and shareholders to take up Shortfall

The Directors of the Company and their associates may nominate to the Company those shareholders and others who have indicated to the Directors their desire to take up any shortfall.

The Directors consider that there is a possibility that up to 50% of the issue may not be subscribed for under this issue.

Any Shortfall may be allocated by the Directors amongst such applicants for the shortfall as the Directors shall determine including Directors or their associates.

3.8 Options

(i) Each new share entitles the holder thereof to an option to purchase a further share in the Company at an exercise price of 10 cents per option exercisable within 12 months of the issue of each new share (the exercise date).
(ii) Any options not exercised by the exercise date will lapse.
(iii) Shares issued upon exercise of such options will be of the same class and have the same rights as all other ordinary fully paid shares in the Company.
(iv) The options will not be listed on ASX until exercised and such listing will be subject to ASX approval.

(v) The terms of issue of the options will allow the rights of an option holder to be changed to comply with ASX listing rules in the event of a reorganisation of the capital of the Company.
(vi) Option holders may only participate in new issues of capital in the Company if their options are exercised.
(vii) The terms of issue of the options will not permit a change in the exercise price thereof.

4 RISK FACTORS

4.1 General Risk Factors

An investment in the Company is not risk free and prospective investors should consider the risk factors detailed below, before deciding whether to apply for Shares.

Generally the Company’s Projects may be adversely affected by:

Local and international factors such as fluctuation in interest and inflation rates, rise and fall in metal, mineral and chemical prices, currency fluctuations, rise and fall in the world equity markets, and changes in demand for metals, minerals and chemicals.
Varying and changing governmental and regulatory factors, for example environmental regulations, both in Australia and internationally.
Changes of advances in exploration techniques
Operational and logistical risks in mobilisation, construction, commissioning or availability of plant or key personnel.
Variations in metallurgical behaviour of ores or concentrates from different mines.
Tenement conditions, restrictions or affectations.
Clearing planning procedures and obtaining approvals prior to the expiration of the Company’s Exploration Licences.
Eligible claimants may claim an interest in tenements.

4.2 Operational and technical difficulties

Possible operational and technical difficulties might unexpectedly be encountered in achieving the Company’s objectives.

These difficulties may be caused by failure to achieve the economic grades postulated by geological interpretations to be used by the Company at any of the Company’s Projects and may result in downgrading, termination or writing

off of the respective exploration Project, the cost of processing and suitability for processing of recovered ore and the availability of suitable treatment facilities for such ore.

4.3 Investment risks

Mining and exploration is subject to various factors and uncertainties and accordingly an investment in Shares should be considered speculative. Investors interested in capital gains should consider that the value of the Company’s Shares might fluctuate. Investors interested in an income stream from dividends should recognize that the Company will have no revenue stream until a discovery is found, and a decision made to either sell the tenements or develop and commission a mine into production. Investors should also appreciate that exploration in particular involves selecting a portfolio of projects where expenditure is applied to test a prospect progressively during exploration programmes, unless a resource is delineated or an anomaly worthy of further testing is discovered, sufficient to increase value as an exploration project, a business decision might be made that the prospect is not worthy of further testing or further testing is too expensive and the prospect should be written off.

4.4 Mining and exploration risks

Geological exploration activity, project development and mining by its nature contains risks.

Exploration is a speculative activity and success in ascertaining economic recoverable resources can never be guaranteed.

Where exploration is conducted, drilling operations can be affected by adverse weather conditions, industrial disputes, government regulations, environmental issues and unforeseen increases in establishment costs.

Accordingly, there is no assurance that the exploration and drilling projects described in this Offer Document, or any other projects that the Company may acquire in the further, can be profitably exploited.

Development of existing resources may involve stages of resources assessment leading pre-feasibility and feasibility studies. In addition, the Exploration Licences are subject to standard licence conditions, which may restrict or affect the Company’s operations. In some sensitive parts of the Tenements, the Exploration Licences may overlay various state forests, reserves or other zones which are also subject to government conditions and regulations which may prevent, restrict or affect the ability of the Company to explore in those areas of the Exploration Licences.

There may be heritage sites throughout the Tenements, which may restrict activity. The Directors of the Company do not consider that any such

conditions or regulations constitute a significant risk to the carrying out of the Company’s exploration programmes in respect of its existing tenements

4.5 Economic Factors

Investors should consider the impacts of supply and demand for commodities, fluctuations in commodity prices and exchange rates, Australia’s inflation rate and interest rates. All of these factors have a bearing on operating costs, potential revenue and Share prices. As the Company is an exploration company, market perceptions of the value of its Shares alter significantly from time to time. Fluctuations may also occur as a result of factors influencing the price of Shares in exploration and mining companies or Share prices generally.

Investors should also consider that if a resource is discovered, development of a mine will require obtaining further approvals and will involve additional expenditure. The Company may need to raise additional capital for this purpose or seek joint venture partners. There is a risk that such approvals may not be granted and that capital or joint venture partners may not be available.

4.6 Resource estimates

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates, which were valid when originally calculated, may alter significantly when new information or techniques become available.

In addition, by their very nature, resources estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans, which may, in turn adversely affect the Company’s operations.

4.7 Commodity Prices and Exchange Rate Risks

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include world demand for base and other metals, forward selling by producers, and production cost levels in major metal producing regions.

Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and regional demand for, and supply of, the commodity as well as general economic conditions.

These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

Furthermore, the international prices of most commodities are denominated in United States dollars, while the Company’s cost base is in Australian dollars. Consequently, the Company is exposed to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in the international markets.

4.8 Exploration Licence conditions

While the Company intends on meeting the conditions of the Exploration Licences the conditions of the Exploration Licences, namely unnecessary disturbance to the environment, non-consent of landowners to access, failure to lodge reports, or failure to meeting minimum expenditure commitments could result in cancellation or relinquishment of the Exploration Licences.

4.9 Financing Risks

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising, Any additional equity financing will dilute Shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be.

4.10 Rehabilitation of Tenements

In relation to the Company’s planned exploration programmes, issues could arise from time to time with respect to abandonment costs, consequential clean up costs, environmental concerns and other liabilities. In most of these instances, the Company could become subject to liability if, for example, there is environmental pollution or damage from the Company’s exploration activities and there are consequential clean up costs at a later point in time. It is not possible to quantify any such contingent liability and, whilst no guarantee can be given, the Company has received no claims or advices which would suggest that there is any particular exposure in relation to any of its present interests.

4.11 Mt Porter Native Title Agreement

By an agreement dated 6 December 2004 between Arafura and the Northern Land Council (Council) and various Native Title Parties, the Parties to the Agreement agreed that Arafura may conduct mining operations on Mineral Leases 23839 upon the usual terms and conditions governing use of land the subject of a native title claim upon payment of consideration therefor together with payment of a royalty to Council of 3.5% of nett profits derived from mining. The agreement makes provision for its assignment and for assumption of the obligations thereunder by any assignee. The Company has

submitted a draft Consent to Assignment agreement for execution by the Council and knows of no reason why it will not be executed.

4.12 Environmental issues

Before exploration activities are undertaken, environmental studies may need to be carried out. Whilst the Company cannot guarantee that there will not be environmental difficulties, the Company is not aware of any particular concern with respect to its planned exploration activities in relation to its existing tenements.

4.13 Personal Risk Factors

The investment detailed in this Offer Document may not be suitable for all its recipients. Potential investors should consider carefully whether an investment in the Company is suitable for them in the light of their personal circumstances and the financial resources available to them and their personal taxation obligations.

Prospective investors should be aware that the market price of Shares may be influenced by many unpredictable factors and that subscribing for Shares involves various risks. While some of the risks can be minimised by the use of safeguards and appropriate systems, some are outside the control of the Company. The value of the Company’s securities on ASX may rise and fall depending on factors beyond the control of the Company.

4.14 Share Market and Liquidity Risk

Investors will be able to offer their shares for sale freely on ASX, however, there is no assurance of the price at which listed shares will trade or that there will be any buyers at all. New investors should therefore be prepared to hold their shares for extended periods pending the development of the Company and potential opportunities emerging in the future.

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

The market price of shares may be subject to general movements in local and international stock exchanges, economic conditions, prices of gold and base metals, currency fluctuations and interest rates. The Shares may trade at a price above or below the issue price depending on a range of factors including the performance of the securities market generally, the performance of the mining sector of the market, national and international economic performance, market perceptions of the Company, the degree of success in the Company’s exploration endeavours, results of future development for minerals by the Company and the financial performance of the Company.

4.15 Other Risks

Other risks may occur, the nature of which are described below. Such risks might unfavourably impact Australian Share market conditions, the value of shares in this Company or the Company’s operating profit and ability to pay a dividend.

5 THE MT PORTER AND FRANCES CREEK TENEMENTS

(a) Gemmell Report on Metallurgy of the Mt Porter Tenements

The company has commissioned Mr Steve Gemmell of Gemmell Mining Engineers (Gemmell) to advise on the metallurgy and mining potential of the Mt Porter tenements.

The report was based on metallurgical recoveries in the oxide of 93% and primary ore ranging from 52% to 92%. Ark will be looking at maximizing the recovery with follow up Metallurgical test work and a detailed study of the spatial arrangement of the bands of recoverable gold.

In consequence it was decided to use three models for Metallurgical recoveries The optimisation exercise undertaken by Gemmell was conducted for three primary ore metallurgical recovery values: 60%, 65% and 70%. in the Primary zone.

(b) Mt Porter Mine Earnings

In Summary, depending on the Primary Ore recovery, Ark will receive a nett cash flow from the operation of $2 Million to $6 Million over a twelve month period.

To determine commerciality of the project Ark commissioned Australian Mine Design and Development Pty Ltd (AMDAD) to update the Arafura testwork and prepare a optimisation table.

This table is set out below

Sulphide Gold Recovery	Mill Feed (‘000t)	Grade (g/t Au)	Waste /Ore	Revenue ($ million)	Op Surplus ($ million)
60% 65% 70%	309,000 349,000 405,000	2.73 2.61 2.49	4.4 4.3 4.1	28.4 32.6 38.0	9.1 11.0 13.1

Indicative cut off grades are

0.8 g/t Au (oxide),
1.4 g/t Au (sulphide at 60% metallurgical recovery),
1.3 g/t Au (sulphide at 65% metallurgical recovery) and
1.2 g/t Au (sulphide at 70% metallurgical recovery).

Based on classifications provided in the existing resource model, approximately 80,000 to 90,000 tonnes (depending on the sulphide gold recovery model selected) 1.83 to 1.74 g/t Au of the mining inventory is oxide ore, the remainder being sulphide. Only 10,000 to 15,000 tonnes of the mining inventory is inferred, the balance has been classified as indicated.

No allowance (in terms of changes to mining inventory and waste-to-ore ratio) has been incorporated for future conversion of the optimized pit to an actual pit design.

(c) Mt Porter Indicative Cash Flow

Gemmell prepared an indicative cash flow of potential open pit operation, as it would appear at a gold price of Au$1,600 per ounce. The company will keep under consideration the current gold price and the Australian dollar when assessing the appropriate timing for commencement of mining this resource and will seek to augment the Mt Porter known resource by further exploration of the Frances Creek tenements.

The summarised results for the scenario reflecting 60%, 65% and 70% sulphide gold recovery are provided in the table below and assume that the existing resource will be issued within a twelve month period.

(d) Summary of Gemmell Report

Table 4: Mt Porter – Indicative Joint Venture Cash Flow

Cash Flow Classification	Category Detail	60% Rec (A$m)	65% Rec (A$m)	70% Rec (A$m)
Revenue		28.38	32.63	38.04
Operating Costs	Mining	6.69	7.34	8.23
	Processing	12.58	14.23	16.57
	Selling	0.09	0.10	0.12
OperatingSurplus		9.02	10.96	13.12
Initial Capital Costs		4.05	4.05	4.05
Closure Costs		1.22	1.22	1.22
Royalty	NativeTitle	0.16	0.23	0.34
	Northern Territory	0.65	0.98	1.35
Net Cash Flow		2.95	4.48	6.16

Note: Figures are rounded

The Gemmell report discloses that:

i. Metallurgical testwork indicates high gold recovery from the oxide component of the resource, but substantially less recovery from primary mineralisation. Although not definitive, investigations indicate that the refractory component is mostly caused by gold being locked up within arsenopyrite and other sulphides. Whilst the recoveries are lower, Ark has

no acquisition costs in relation to a mine and effectively only pays a 5% royalty on gold sales and therefore the project is commercially viable.

ii. No local operating processing facility has a circuit designed for the recovery of refractory gold. However the Union Reef Mill, 12 kilometres distant, has been effectively processing oxide and primary ore with some refractory components with reasonable results and has advised Ark that it would be prepared to process such ore.

(e) Economic viability of projects

There is no assurance that the exploration of the tenements in which the Company has an interest in (Tenements), or any tenements acquired in the future, will result in the discovery of a mineral deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

(f) Future performance and forward looking statements

Neither the Company nor its offices or any other person warrants or guarantees the future performance of the New Shares. Forward looking statements, opinions and estimates provided in the Offer Document are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions.

Forward looking statements including projections and estimates are provided as a general guide only and should not be relied on as an indication or guarantee of future performance. They are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of the Company, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by the forward looking statements in this Offer Document.

6. DEFINITIONS AND GLOSSARY

Terms and abbreviations used in this Offer Document have the following meanings:

Acceptance	Anacceptance of Entitlements
Acceptance Monies	The Issue Price multiplied by the number of NewShares accepted
Applicant	A person who submits an Entitlement and Acceptanceform
Arafura	ArafuraResourcesLimited (ACN080 933455)
ASX	ASX Limited
Board	The board ofdirectors of Ark MinesLimited
Closing Date	The date bywhich valid acceptancesmust be

	received by the Share Registry being 2 August 2013 or such other date determined by the Board
Company or Ark	Ark MinesLimited (ACN 123 668717)
Corporations Act	CorporationsAct2001(Cth)
Directors or Board	The board ofdirectors of Ark fromtime to time
Eligible Shareholder	A shareholder of the Company that holds sharesinthe Company ontheRecordDate
Entitlement and Acceptance Formor Form	An entitlement or acceptance form in the form attached to this Offer Document
Entitlements	The entitlement to accept New Shares under this Offer Document
EST	EasternStandardTime
Issue or Offer	The issue of New Shares in accordance with this Offer Document
Issue Price	13 cents for each New Share for which application ismade
Listing Rules	The official listingrules oftheASX
Offer	The offer to subscribe for New Shares as providedforunderthe Offer Document
Offer Document	This Offer Document dated 18 June 2013 and any electronic copy ofthis Offer Document
Official List	The official list of entities that ASX has admitted andnotremoved
Official Quotation	Quotationonthe Official List
Opening Date	The date of commencement of Offer in respect of NewShares, (5 July2013)
Options	Means the options referred to in Paragraph 3.8 inthis offerdocument.
Record Date	5 July2013 at 5:00pm(EST)
Securities	Has the same meaning as in section 92 of the CorporationsAct
Share Registry	GouldRalph PtyLtd
Shares	The fully paid ordinary shares on issue in Ark fromtime to time
Shareholders	Theholders ofSharesfromtime to time
Shortfall	Those New Shares for which the Entitlement lapses
Tenements	MA23839 (the whole) EL10137, EL22270, EL23237 (right to earn up to70%interest)

7. CORPORATE DIRECTORY

Directors

Antony Corel, Diploma Law, LL.M (Chairman) Roger Jackson, BSc, Dip. Ed, Grad Dip Fin Man, MAusIMM, AICD, ADIA (Managing Director)

Robert Mclennan, BSc, BSc (Hons.) MSc, AIG, FAusIMM (Director)

Ian Mitchell, BA Dip Law (Director)

Company Secretary Ian Mitchell

Registered Office

Level 11, 37 Bligh Street SYDNEY NSW 2000

Phone: +61.400 408 550 Fax: +61.2 9233 3828

Share Registrar

Gould Ralph Pty Limited Level 42, 259 George Street SYDNEY NSW 2000

Phone: +61 2 9032 3000 Fax: +61 2 9032 3088

AI assistant

ARK MINES LIMITED — Capital/Financing Update 2013

64339_rns_2013-06-17_7d5946ae-6a86-4ca0-a05d-fe8b2e3bf74d.pdf