AUSQUEST LIMITED — Capital/Financing Update 2013

Oct 16, 2013

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

AusQuest Ltd ABN 35 091 542 451

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to a) Ordinary Shares be issued b) Options 2 Number of[+] securities issued or to a) Up to 137,500,000 Shares be issued (if known) or maximum b) Up to 68,750,000 Options number which may be issued 3 Principal terms of the[+] securities a) Shares – fully paid ordinary shares (eg, if options, exercise price and b) Options – exercise price of $0.04 per expiry +securities, the amount outstanding date; if partly paid option, expiry date 30 November 2016 and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 4 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities?

If the additional securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

a) Yes

b) Options – the options will be a new class of quoted securities.

Shares to be issued upon exercise of the Options will rank equally with all other fully paid ordinary shares on issue.

The Options do not give the holder the right to participate in any future dividends or receive interest payments.

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 5 Issue price or consideration

• a) $0.02 per share b) Nil – one free attaching Option is being granted for every two Shares subscribed for under the placement and the securities purchase plan, referred to in paragraph 6 below

• See chapter 19 for defined terms.

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6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1	a) Issue of up to 100,500,000 Shares is part of a placement to raise a total of $2.01m, in two tranches. No shareholder approval is required for the issue of the first tranche, of 26,500,000 Shares. Shareholder approval is required for the issue of the second tranche, of up to 74,000,000 Shares (out of the total 100,500,000 Shares), to be sought at the Company’s AGM on 26 November 2013. Issue of up to 37,000,000 Shares is under a Securities Purchase Plan to raise $740,000 pursuant to a prospectus dated 17 October 2013. b) Issue of up to 50,250,000 Options is part of a share placement to raise a total of $2.01m, in two tranches. No shareholder approval is required for the issue of the first tranche, of 13,250,000 Options. Shareholder approval is required for the issue of the second tranche, of up to 37,000,000 Options (out of the total 50,250,000 Options), to be sought at the Company’s AGM on 26 November 2013. Issue of up to 18,500,000 Options is under a Securities Purchase Plan to raise $740,000 pursuant to a prospectus dated 17 October 2013. The purpose of the placement and the securities purchase plan is to raise funds to continue exploration and drilling at the Company’s Fraser Range and Peru Projects and to strengthen the Company’s working capital position.
	Yes (this is relevant only to the issue of 15,750,000 shares which are included in the first tranche of the placement)
	27 November 2012
	a) 10,750,000 Ordinary Shares b) 13,250,000 Options

• See chapter 19 for defined terms.

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6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)	a) 15,750,000 Ordinary Shares b) Nil	a) 15,750,000 Ordinary Shares b) Nil
	a) Up to 74,000,000 Ordinary Shares b) Up to 37,000,000 Options To be approved at AGM on 26 November 2013
	a) 37,000,000 Ordinary Shares under the Securities Purchase Plan b) 18,500,000 Options under the Securities Purchase Plan
	Yes Issue Price on 17 October 2013: $0.02 15 day VWAP as at 16 October 2012: $0.023 Source: IRESS
	a) Not applicable b) Not applicable
	Refer to Annexure 1
	a) 26,500,000 Shares under tranche 1 of the placement, on17 October 2013 b) 13,250,000 Options under tranche 1 of the placement, on 17 October 2013
	Number	+Class
	297,503,444 68,750,000	Ordinary shares Options exp 30/11/16, exercise price $0.04

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (including the securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	500,000 2,250,000 1,350,000 1,150,000 2,900,000	$0.30 options exp. 30/11/13 $0.40 options exp. 30/11/13 $0.20 options exp. 01/12/13 $0.40 options exp. 01/12/13 $0.07 options exp. 30/11/15
	No policy currently

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_ through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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1/1/2003

Appendix 3B New issue announcement

• 32 How do[+] security holders dispose of N/A their entitlements (except by sale through a broker)?

• 33 +Despatch date N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a) Securities described in Part 1

• (b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

To be provided in due course

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 17 October 2013.......... (Company secretary) Print name: .......Darren Crawte..................................................

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

==> picture [391 x 379] intentionally omitted <==

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

Insert number of fully paid ordinary 228,312,235
securities on issue 12 months before date
of issue or agreement to issue
Add the following:
• Number of fully paid ordinary securities Nil
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid ordinary securities Nil
issued in that 12 month period with
shareholder approval
• Number of partly paid ordinary securities Nil
that became fully paid in that 12 month
period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid ordinary (68,308,791)
securities cancelled during that 12 month
period
“A” 160,003,444
----- End of picture text -----

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A” “B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15 24,000,517 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of equity securities issued or 10,750,000 Ordinary Shares agreed to be issued in that 12 month period not counting those issued: 13,250,000 Unlisted Options • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items “C” 24,000,000 Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1 “A” x 0.15 24,000,517 Note: number must be same as shown in Step 2 Subtract “C” (24,000,000) Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 517 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 160,003,444 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 16,000,344

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of equity securities issued or 15,750,000 agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items “E” 15,750,000

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	16,000,344
Subtract“E” Note: number must be same as shown in Step 3	(15,750,000)
Total[“A” x 0.10] – “E”	250,344 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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